Message-ID: <7862713.1075844244205.JavaMail.evans@thyme> Date: Thu, 24 May 2001 19:57:00 -0700 (PDT) From: thane.twiggs@enron.com To: james.steffes@enron.com, richard.shapiro@enron.com Subject: RE: ERCOT Board Meeting Cc: jean.ryall@enron.com Mime-Version: 1.0 Content-Type: text/plain; charset=ANSI_X3.4-1968 Content-Transfer-Encoding: quoted-printable Bcc: jean.ryall@enron.com X-From: Thane Twiggs X-To: James D Steffes, Richard Shapiro X-cc: Jean Ryall X-bcc: X-Folder: \Richard_Shapiro_June2001\Notes Folders\Discussion threads X-Origin: SHAPIRO-R X-FileName: rshapiro.nsf First of all, we did not have any advanced notice of the appeal to the ERCO= T=20 Board. Mark Walker from ERCOT called me regarding their application and to= ld=20 me that it would probably be denied and at that point nobody, I doubt, knew= =20 that TNPC would appeal. The rules appear to be cut and dry. Basically,= =20 for them to have a full corporate membership Enron would have to own less= =20 than 5% to avoid the common ownership criteria for EPMI. I spoke to Marianne after the Board Meeting. She felt uncomfortable when I= =20 told her the I was upset because I did not know about the appeal and that t= he=20 way that the appeal was handled at the board. Short answer is that Mariann= e=20 did not feel at liberty to tell us about the appeal for whatever reason. It appears that we will be the only representation that TNPC will have for= =20 their REP. I will bridge the gap with Susan Burton in the Austin office to= =20 try and help them with their issues. One problem is that in her attempts t= o=20 =01&show=018 that they are not controlled by ENRON, I sense a reluctance on= her=20 part to be forth coming with their issues. I have spoken to others at TNPC= =20 that are willing to discuss issues and how we can support them.=20 -----Original Message----- From: Steffes, James =20 Sent: Thursday, May 24, 2001 7:08 AM To: Shapiro, Richard Cc: Twiggs, Thane; Ryall, Jean Subject: Re: ERCOT Board Meeting First, I agree that there is a basic conflict when our attorney represents= =20 TNPC. If Marianne was instructed not to inform Jean, etal than there is a= =20 real problem. If it was an oversight, we should simply make sure that=20 Marianne understands the importance of keeping all of her clients happy. I don't have any problem with TNPC wanting to have a seat at ERCOT. They a= re=20 supporting many of the same issues, and may take a stronger stand then us. Finally, if we are the only rep at ERCOT for TNPC, I think that we need to= =20 make sure that we understand their issues and can "fit" them in to our agen= da. Jim Richard Shapiro@ENRON 05/23/2001 07:50 PM To: Thane Twiggs/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT cc: Jean Ryall/NA/Enron@Enron@ENRON_DEVELOPMENT, James D=20 Steffes/NA/Enron@Enron@ENRON_DEVELOPMENT=20 Subject: Re: ERCOT Board Meeting << OLE Object: StdOleLink >>=20 I am greatly disturbed by Marianne Carroll's role in this episode...Were we= =20 given advance warning? Should we revisit her continued representation of bo= th=20 us and New Power? Jim- Is this latter issue one we should revisit nationall= y? Thane Twiggs@ENRON_DEVELOPMENT 05/16/2001 01:36 PM To: Stacey Bolton/NA/Enron@Enron, Leslie Lawner/NA/Enron@Enron, Ron=20 McNamara/NA/Enron@Enron, Gloria Ogenyi/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT,= =20 Lance Cunningham/NA/Enron@Enron, Thane=20 Twiggs/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Nancy Hetrick/NA/Enron@Enron,= =20 clandry@enron.com, pochsner@enron.com, bevin.hunter@enron.com, Jean=20 Ryall/NA/Enron@Enron, Joe Allen/NA/Enron@Enron, Patrick Keene/NA/Enron@Enro= n,=20 Doug Gilbert-Smith/Corp/Enron@ENRON, Christopher Ahn/Enron@EnronXGate, Jame= s=20 D Steffes/NA/Enron@Enron, Christi L Nicolay/HOU/ECT@ECT, Mike=20 Curry/Enron@EnronXGate, Drew Tingleaf/Enron@EnronXGate, Larry=20 Jester/Corp/Enron@ENRON cc: Richard Shapiro/NA/Enron@Enron, dietrich janet=20 Subject: ERCOT Board Meeting The ERCOT Board met yesterday in Austin to discuss among other things the= =20 implementation of the Texas Choice Pilot and the single control area under= =20 the control of the ERCOT ISO. Below are the primary items of interest. 1. ERCOT proposed the following plan to implement the Pilot program and t= he=20 wholesale: May 25, 2001 ERCOT begins to transfer security analysis to the ESCA system Participants able to start viewing network conditions, preliminary load=20 forecasts, preliminary A/S market requirement analysis, and retail load=20 profiles ERCOT begins to manage and publish participant information and process=20 customer service requests June 1, 2001 ERCOT initiates switch processing from competitive retailers starting with= =20 small volumes and to be completed by July 1, 2001 (this is only the switch= =20 request, power does not "flow" from the REP until the billing cycle after= =20 July 6, 2001). ERCOT begins to process retail meter read information. Participants begin to enter outages in ERCOT systems (this will be parallel= =20 to current outage system entry). ERCOT will begin to publish distribution and transmission loss factors to t= he=20 market. June 8, 2001 ERCOT Begins to complete data aggregation functions and initiates UFE=20 calculations/analysis. ERCOT's A/S market requirements and QSE obligation Calculations are ready f= or=20 sing control area operations ERCOT begins to execute the production settlement algorithms. The settleme= nt=20 results are not binding. ERCOT begins to transfer grid security decisions to the new systems Data aggregation allows initial calculations of UFE to be made visible to t= he=20 market providing energy accounting information July 6, 2001 Frequency Control. ERCOT begins single control area operation and=20 controlling frequency. The existing control area replaced with the single= =20 control area run by ERCOT. Wholesale Markets. ERCOT administers the regulation, balancing energy, and= =20 reserve markets. ERCOT starts clearing prices as part of single control ar= ea=20 operations. The wholesale competitive market, as defined by the protocols = is=20 initiated with ERCOT settling A/S markets centrally. ERCOT begins to execute financial transfer processes as a result of binding= =20 settlement with participants QSEs must have completed qualification activities While the proposal satisfies many of the competing concerns of the=20 Stakeholders and the PUCT, there are a few outstanding issues that remain. ERCOT will begin switching load transfer requests on June 1 2001, but actua= l=20 settlement and energy flow will not occur until after the wholesale market= =20 opens on July 6, 2001. Enron has submitted a proposal that would allow the= =20 retail market to decouple from the wholesale market which would allow the= =20 wholesale market time to remedy the system limitations and the retail marke= t=20 could begin June 1, 2001. Under the ERCOT timeline if the wholesale market= =20 is not ready by July 6, 2001 and the switch requests have already begun, th= en=20 there is no method to serve a customer full requirements without the abilit= y=20 of the REP to purchase balancing energy and other A/S other than purchasing= =20 under current tariff. I can provide a copy of the Enron proposal to those= =20 who are interested. Another concern is for reliability of the system. Some parties question th= e=20 wisdom of opening the wholesale market in the middle of the summer peak,=20 rather than waiting until the summer peak has passed. =20 2. Credit Standards. The Board also voted on language for the surety bonds= . =20 There has been a debate as to whether ERCOT should allow security bonds in= =20 light of what has happened in California and the surety bond that was=20 underwritten by AIG. At this point, the PUCT order requires ERCOT to accep= t=20 a surety bond, however, ERCOT is trying to tighten the payment language. T= he=20 language that the board approved will be forwarded when I get the correct= =20 language. The board approved the addition of BBB- credit to the credit lim= it=20 matrix. 3. New Power Company made an unsuccessful appeal for corporate membership. = =20 New Power argued that they were technically not an affiliate of EPMI who=20 holds the Corporate Membership. EES for example has associate member=20 status. It was pointed out by ERCOT that EPMI listed New Power as a=20 corporate affiliate on their application for corporate membership. Mariann= e=20 Carroll, represented New Power in the appeal, and stated that EPMI did not= =20 ask her advice prior to listing New Power as affiliate. An additional=20 rationale cited by New Power was that in the future Reliant Energy wants to= =20 "spin off" their generation company and that when they do, they should be= =20 allowed a Corporate membership as well. I am concerned about the appearanc= e=20 of the appeal by New Power, it looked like an attempt by Enron to sway the= =20 process in "their" favor by getting additional votes on ERCOT issues. Thane Thomas Twiggs Enron Corp 1400 Smith Street Houston, Texas 77002 713-853-3199 Voice 713-408-4463 Mobile 713-646-8272 Fax 877-968-8967 Digital Pager or 8779688967@skytel.com