Message-ID: <7909445.1075862240518.JavaMail.evans@thyme> Date: Wed, 24 Oct 2001 15:31:46 -0700 (PDT) From: sarah.novosel@enron.com To: j..kean@enron.com, richard.shapiro@enron.com, d..steffes@enron.com, linda.robertson@enron.com, l..nicolay@enron.com, donna.fulton@enron.com, ray.alvarez@enron.com, tom.hoatson@enron.com, howard.fromer@enron.com, daniel.allegretti@enron.com, susan.lindberg@enron.com, sue.nord@enron.com, m..landwehr@enron.com, janel.guerrero@enron.com Subject: FERC Meeting on Northeast RTO Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: quoted-printable X-From: Novosel, Sarah X-To: Kean, Steven J. , Shapiro, Richard , Steffes, James D. , Robertson, Linda , Nicolay, Christi L. , Fulton, Donna , Alvarez, Ray , Hoatson, Tom , Fromer, Howard , Allegretti, Daniel , Lindberg, Susan , Nord, Sue , Landwehr, Susan M. , Guerrero, Janel X-cc: X-bcc: X-Folder: \RSHAPIRO (Non-Privileged)\Shapiro, Richard\Deleted Items X-Origin: Shapiro-R X-FileName: RSHAPIRO (Non-Privileged).pst Northeast RTO Mediation Report The Commissioners heard a report from the ALJ who presided over the Northea= st RTO mediation. As you may recall, the Judge did not support our positio= n (which was to get a single Northeast RTO up and running, with PJM leaders= hip and based on the PJM system) by no later than November 2003 (the PJM pr= oposal). As expected, the Judge reiterated his disagreement with the PJM p= roposal and urged the Commission to take a "go slower" approach that includ= es a minimum 12 month up-front assessment of technology and "best practices= " determinations. =20 Pat Wood first questioned why the Board makeup should consist of existing I= SO board members. He acknowledged that the existing ISO board members have= experience but questioned whether the benefit of having their experience i= s outweighed by the possibility of continued parochial interests that may b= e retained by these board members. He thinks perhaps the board should be m= ade up of totally new board members. Ironically, in the mediation only a c= ouple of consumer advocate-types supported this type of approach. Everyone= else believed that using the existin ISO board members makes more sense si= nce they all have experience. We supported a board makeup weighted in favo= r of PJM so that implementation of the PJM system would be assured. Pat se= ems to think this presents too much of a political problem. Pat also expressed concern that FERC not take action that would upset the e= xisting, functioning markets. He said FERC should not force a result if it= does not know what the outcome will be and could disrupt the existing mark= ets. He questioned whether they should take a different, slower approach i= n the northeast, perhaps putting some regional functions into place soon (e= .g., interregional transmission planning and expansion) and put off other i= ssues (a single real time balancing market) that may be harder to implement= at first. Pat says that technology assessment is a big issue and can be a= show stopper if it is not done correctly. Under the PJM proposal, the new= RTO would form by the end of the year and would start market design (based= on the PJM system) immediately. Doing an upfront assesment could delay im= plementation significantly. He said perhaps some things can be done sooner= than 18-24 months. If he is thinking that long-term is 18-24 months, then= we could be okay because the PJM plan takes 24 months to implement. But, = his statements on technical assessment are troubling and sound like he may = be willing to delay the startup of market design until this takes place. On the positive side, Nora Brownell reminded everyone that New York and PJM= have very similar systems but they have a lot of problems working together= and that these problems may be a hindrance to the developing retail market= s. She seems to think that things cannot remain as they are. Nothing was decided and it is unclear when FERC will issue an order in this= proceeding. We will keep you posted. Sarah