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Date: Thu, 24 May 2001 08:19:00 -0700 (PDT)
From: sarah.novosel@enron.com
To: kevin.presto@enron.com, mark.davis@enron.com, jeff.ader@enron.com, 
	edward.baughman@enron.com, joe.gordon@enron.com, 
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	sarah.novosel@enron.com, christi.nicolay@enron.com, 
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Subject: NSTAR Complaint and Northeast RTOs
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On May 14, NSTAR filed a complaint against Sithe and PG&E Trading, arguing=
=20
that both have generation market power in the Northeastern Massachusetts Ar=
ea=20
(NEMA) during times of transmission constraints and should not be permitted=
=20
to sell power at market based rates in that region during times of=20
constraint.  NSTAR contends that when transmission congestion occurs, the=
=20
market in NEMA cannot be considered workably competitive since Sithe and PG=
&E=20
own almost 90 percent (2,725 MW of the total 3,036 MW) of existing generati=
on=20
in NEMA.  NSTAR alleges that, had competition existed from September 1, 199=
9=20
=01) May 31, 2000, the cost of congestion relief in NEMA would have been ar=
ound=20
$2.3 million.  Due to Sithe=01,s and PGE=01,s market power, however, the co=
st was=20
actually $56 million.

Due to this market power, NSTAR asks the Commission to:  1)  revoke Sithe=
=01,s=20
and PG&E=01,s market-based pricing authority during periods of transmission=
=20
constraint in NEMA; 2)  require Sithe and PG&E to divest some of their=20
generation if they wish to have market-based rates during these times of=20
constraint; 3) develop a formula based on unit operation characteristics an=
d=20
fuel costs in order to calculate the marginal cost of each unit for Sithe a=
nd=20
PG&E; during times of constraint, these generators would be paid the higher=
=20
of the energy market clearing price (ECP) or their marginal cost; 4)  requi=
re=20
NE ISO to make all bid data, including unit operating characteristics,=20
available 90 days after the fact and allow for public disclosure of data,=
=20
mitigation processes, and implementation of mitigation agreements; and 5)=
=20
order Sithe and PG&E to refund all money collected by them in excess of the=
=20
applicable NEPOOL ECP from the time when congestion became a problem in NEM=
A.

The Commission is requesting comments and protests to be filed by June 4.  =
We=20
will intervene in this proceeding in order to monitor it, but please let me=
=20
know if you have any concerns or thoughts or would like us to take an activ=
e=20
role in this proceeding.

Also, PJM (including PJM West), New England and New York RTO proposals are =
on=20
FERC's agenda for Wednesday.  Interestingly, FERC's agenda shows the New=20
England and New York RTO cases as being considered in one order.  This may=
=20
just be a typo on FERC's part, but we will research it.

We'll keep you posted.

Sarah