Message-ID: <21417535.1075846716991.JavaMail.evans@thyme>
Date: Fri, 1 Dec 2000 01:59:00 -0800 (PST)
From: jeffery.fawcett@enron.com
To: susan.scott@enron.com
Subject: Upcoming FERC meeting
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X-From: Jeffery Fawcett
X-To: Susan Scott
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Susan,
I'm assuming that Ms. Corman is "all over this."  I was wondering whether y=
ou=20
intended to go to D.C. also to represent TW's interest in the proceeding?  =
If=20
not, may we assume that Shelley will give us a complete report on the meeti=
ng=20
and FERC's next steps?

I note with curiosity the reference in the GD article to the fact that=20
parties apparently were asking whether pipelines "needed" to offer new=20
services?  Do you know the background behind this issue?  It may have some=
=20
bearing on the Transport Options filing as at least one party I believe=20
questioned why TW was even offering this new service.  In addition to the=
=20
question of affiliate relationship/behavior, the question of market power=
=20
(ie. capacity hoarding) apparently is ripe for discussion also during the=
=20
Jan. 31 meeting. =20

Do you know if we are working to prepare comments or a position paper to=20
submit to FERC by Jan. 5?

One last thing, how should we proceed with respect to coordinating the timi=
ng=20
of our technical conference on Transport Options with this pending meeting =
at=20
FERC?  Do we gain more by attempting to schedule a technical conference=20
before the FERC meeting or after?   It seems to me that if the technical=20
conference was held before the FERC meeting, all protest issues related to=
=20
affiliate marketing rules and/or capacity hoarding questions could easily b=
e=20
set aside pending the outcome of the FERC meeting and/or any subsequent FER=
C=20
rulemaking on the matter.  However, I question FERC's appetite to conduct t=
he=20
technical conference prior to the Jan. 31 meeting when it is known in advan=
ce=20
that the affiliate marketing rules figure so prominently in the case.  What=
=20
do you think?

Regulatory roundup
FERC is getting ready to resume the industry dialogue on promoting=20
competitive interstate
transportation markets. In an order issued last week, the commission fixed=
=20
the date for a
staff conference on one of the most contentious topics in the industry:=20
affiliate transactions.
The meeting =01* the second in a series of three =01* is scheduled for Jan.=
 31.=20
Comments
and requests to participate are due by Jan. 5.

Commission staff will have their hands full with this one. At the first=20
roundtable on
Sept. 19, FERC tackled efforts to promote greater market liquidity followin=
g=20
the introduction
of Order 637 (GD 9/20).  The discussions were polite, but they failed to=20
yield a consensus
over the extent to which FERC needs to overhaul rate design.  Likewise, man=
y=20
in the
energy industry are not in agreement about the need for new pipeline servic=
es.
A discussion of affiliate issues promises to be more rancorous.  At the Sep=
t.=20
19 meeting,
in fact, some audience participants were eager to call attention to affilia=
te=20
problems on certain
interstate pipelines.  FERC staff, however, kept a lid on those discussions=
,=20
and did not
allow comment on any ongoing case.

On Jan. 31, the discussion will focus on =01&whether the regulatory policy =
with=20
respect to
pipeline affiliates and non-affiliates, as well as asset managers and agent=
s,=20
should be revised
to reflect the changing nature of the gas market=018 and =01&whether there =
needs to=20
be revisions to
the regulations relating to pipeline affiliates.=018

At present, affiliate relationships are governed by certain standards of=20
conduct.  Other
market participants can monitor those transactions through various posting=
=20
and reporting
requirements.  But not all pipelines are subject to the same requirements,=
=20
and the upcoming
discussion is intended to open a dialogue about the market power implicatio=
ns=20
of transactions=20
between pipelines and their affiliates.  The panel will also examine the=20
relationship
between non-pipeline capacity holders and their affiliates.