Message-ID: <32115478.1075852480613.JavaMail.evans@thyme> Date: Sat, 20 Oct 2001 09:44:05 -0700 (PDT) From: harry.kingerski@enron.com To: d..steffes@enron.com Subject: RE: ComEd wants to limit power purchase option Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Kingerski, Harry X-To: Steffes, James D. X-cc: X-bcc: X-Folder: \JSTEFFE (Non-Privileged)\Steffes, James D.\Deleted Items X-Origin: Steffes-J X-FileName: JSTEFFE (Non-Privileged).pst First, I think the gig may soon be over since at least one commissioner is catching on to our chirade. Second, since that's not a particularly helpful observation, I think we ought to be very blunt that the reason we had to play the chirade is that the PPO price is far and away better than anything we can match and that it is a subsidized price because it does not explicitly recognize ancillary service, imbalance, and retailer costs except for the pittances we got added in the case a year ago. So we can ask that the same subsidies be maintained for customers wo have chosen thusfar (grandfathered, in other words). Going forward, it seems that elimination of the PPO would be helpful to market development so it's hard to argue against that. So maybe we offer a trade - support for elimination of PPO in exchange for grandfathered treatment of existing contracts we have on PPO. -----Original Message----- From: Steffes, James D. Sent: Friday, October 19, 2001 2:17 PM To: Kingerski, Harry Subject: FW: ComEd wants to limit power purchase option What do you think?? Jim -----Original Message----- From: Migden, Janine Sent: Friday, October 19, 2001 12:43 PM To: Ader, Jeff; Allegretti, Daniel; Baughman, Edward D.; Bernstein, Mark; Boston, Roy; Burrows, John; Clynes, Terri; Courtney, Mark; Decker, Charles; Detina, Ken; Frazier, J Ryan; Gahn, Scott; Hueter, Barbara A.; Kingerski, Harry; Letke, Eric; Lewis, James; Mastrangelo, Lino; Merola, Jeff; Migden, Janine; Nicolay, Christi L.; Persson, Roger; Roan, Michael; Sewell, Doug; Shapiro, Richard; Sharfman, Guy; Sharp, Greg; Snyder, Brad; Steffes, James D.; Stoness, Scott; Landwehr, Susan M.; Ulrich, Marc; Whalan, Jubran; Wood, James; Young, Ress Subject: FW: ComEd wants to limit power purchase option fyi...We may want to consider going in and talking with ComEd again soon, assuming we know what are needs are from a physical delivery standpoint. Janine -----Original Message----- From: "Fein, David I. - CHI" @ENRON Sent: Wednesday, October 17, 2001 12:19 PM To: 'jmigden@enron.com'; Landwehr, Susan M.; Hueter, Barbara A.; 'rboston@enron.com' Cc: Townsend, Christopher J. - CHI Subject: ComEd wants to limit power purchase option Attached is an article that appeared in the Chicago Tribune this morning regarding Edison's presentation to yesterday's ICC Electric Policy Committee Meeting that we thought you would find to be of interest. From the Chicago Tribune ComEd wants to limit power purchase option By Melita Marie Garza Tribune staff reporter October 17, 2001 Commonwealth Edison Co. on Tuesday proposed weaning its largest commercial and industrial customers from a power purchase plan that the company asserts stifles competition in the state's emerging market for electricity. Under the proposal, the utility would differentiate between industrial customers that use less than 400 kilowatts of electricity at any given moment and those that use more, Pamela Strobel, ComEd's chairman, told the Illinois Commerce Commission. A standard Jewel or Dominick's grocery store uses about 400 kilowatts of electricity at a given moment, Strobel said. Under deregulation, corporate customers have three options: Stay with ComEd's standard regulated electricity service based on rates set in 1996, pick an alternative supplier or opt for ComEd's so-called Power Purchase Option. Customers who pick the last option get ComEd's market rate but are allowed to choose ComEd competitors as their primary power suppliers. ComEd's proposal would bar its largest customers from that option, which the utility says has stymied deregulation because it allows competing suppliers to merely resell the power that ComEd produced. "So long as the utility is providing this option, real competitive markets won't work," said Arlene Juracek, ComEd's vice president for regulatory and strategic services. "Some suppliers have taken the easy way out by telling their customers to sign up for the plan." Terry Harvill, an ICC member, agreed. "There was an unintended problem ... rather than alternative suppliers coming into Illinois with diverse sources of energy, essentially you have them just taking power from ComEd and reselling it to customers," Harvill said. Specifically, ComEd proposes to limit the Power Purchase Option to non-residential customers paying competitive transition charges, effective June 2002. The transition charges cover costs incurred by the utility prior to deregulation. "I think it's a step in the right direction, but the details remain to be worked out," Harvill said. He noted that companies still would have the option to fall back on ComEd's traditional regulated plan. But Marty Cohen, executive director of the Citizens Utility Board, was skeptical. "There are certain inherent conflicts in the way that Edison sees the world because they are a subsidiary of a much larger company--Exelon--which is, in fact, the largest producer and seller of electricity in this market," Cohen said. "So you have ComEd on the one hand being the largest buyer of electricity, and you have Exelon, its parent company, being the largest seller of electricity. This proposal doesn't address that issue." David I. Fein Piper Marbury Rudnick & Wolfe 203 North LaSalle Street Suite 1500 Chicago, Illinois 60601 phone: 312-368-3462 fax: 312-630-7418 e-mail: david.fein@piperrudnick.com ____________________________________________________________________________ The information contained in this communication may be confidential, is intended only for the use of the recipient named above, and may be legally privileged. 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