Subject: Update - Jeff Skilling Conference Call with John Q Anderson
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Date: Thu, 2 Aug 2001 12:43:26 -0700 (PDT)

Thursday morning, August 2nd, Jeff Skilling held a conference call with John Q Anderson, one of 9 independent Board members of NERC, to discuss Enron's position on the NERC version of reliability legislation.  Rick Shapiro and Jim Steffes were present on the call.

John Anderson's purpose for the call with Jeff was to find out what Enron wanted to see in legislation in order for Enron to give deference to NERC to become a Self-Regulated Organization for setting reliability standards.

Jeff explained that the PJM version has a more likeable approach than the NERC version, PJM's is less prescriptive and relies more on FERC participation in establishing a "SRO".  Additionally, funding concerns are not addressed in either version and a viable funding mechanism that does not rely on Regional Councils is needed.

Jeff also would like to make a presentation (as soon as possible) to the NERC Board of Trustees of the key items Enron would like to see resolved that would provide Enron enough confidence that the NERC/NAERO organization would be independent enough from the stakeholders and be willing enough to tackle the industry's toughest issues concerning competitive markets in electricity.  

I will be working with the Enron-NERC team on a breifing paper of what we want NERC to fix in current NERC rules and processes for NERC to demonstrate it is worthy of the "SRO" status.  Some example issues include:
1) Indpendence requirements for operators and Security Coordinators
2) competitive advantages of control areas - parking and hubbing
3) competitive advantages of native and network service - source and sink data requirements

Charles Yeung
713-853-0348