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Cc: anna.mehrer@enron.com, bernadette.hawkins@enron.com, beverly.aden@enron.com,
binky.davidson@enron.com, bridget.maronge@enron.com, carol.moffett@enron.com, cindy.derecskey@enron.com, debra.davidson@enron.com, dolores.fisher@enron.com, emy.geraldo@enron.com, esmeralda.hinojosa@enron.com, ginger.dernehl@enron.com, jan.king@enron.com, janette.elbertson@enron.com, joseph.alamo@enron.com, karen.heathman@enron.com, kathryn.sheppard@enron.com, kay.chapman@enron.com, kimberly.hillis@enron.com, leasa.lopez@enron.com, leticia.botello@enron.com, lora.sullivan@enron.com, lysa.akin@enron.com, marcia.linton@enron.com, maureen.mcvicker@enron.com, mercy.gil@enron.com, mollie.gustafson@enron.com, paula.warren@enron.com, robert.hermann@enron.com, rosalinda.tijerina@enron.com, rosario.boling@enron.com, rubena.buerger@enron.com, ruth.brown@enron.com, ruth.mann@enron.com, sharon.purswell@enron.com, sharron.westbrook@enron.com, stephanie.harris@enron.com, stephanie.truss@enron.com, susan.skarness@enron.com, twanda.sweet@enron.com, vscruggs@wyattfirm.com Mime-Version: 1.0 Content-Type: text/plain; charset=ANSI_X3.4-1968 Content-Transfer-Encoding: 7bit Bcc: anna.mehrer@enron.com, bernadette.hawkins@enron.com, beverly.aden@enron.com, binky.davidson@enron.com, bridget.maronge@enron.com, carol.moffett@enron.com, cindy.derecskey@enron.com, debra.davidson@enron.com, dolores.fisher@enron.com, emy.geraldo@enron.com, esmeralda.hinojosa@enron.com, ginger.dernehl@enron.com, jan.king@enron.com, janette.elbertson@enron.com, joseph.alamo@enron.com, karen.heathman@enron.com, kathryn.sheppard@enron.com, kay.chapman@enron.com, kimberly.hillis@enron.com, leasa.lopez@enron.com, leticia.botello@enron.com, lora.sullivan@enron.com, lysa.akin@enron.com, marcia.linton@enron.com, maureen.mcvicker@enron.com, mercy.gil@enron.com, mollie.gustafson@enron.com, paula.warren@enron.com, robert.hermann@enron.com, rosalinda.tijerina@enron.com, rosario.boling@enron.com, rubena.buerger@enron.com, ruth.brown@enron.com, ruth.mann@enron.com, sharon.purswell@enron.com, sharron.westbrook@enron.com, stephanie.harris@enron.com, stephanie.truss@enron.com, susan.skarness@enron.com, twanda.sweet@enron.com, vscruggs@wyattfirm.com X-From: Bernadette Hawkins X-To: Alan Comnes, Andre Cangucu, Andrew S Fastow, cbone@wyattfirm.com, ceklund@llgm.com, Christian Yoder, Christopher F Calger, Cliff Baxter, Dan Leff, David W Delainey, Donald M- ECT Origination Black, Elizabeth Tilney, Eric Letke, Gordon Savage, Greg Wolfe, Harold G Buchanan, Harry Kingerski, jklauber@llgm.com, James D Steffes, James Derrick, Jeff Dasovich, Jennifer Rudolph, Jeremy Blachman, Joe Hartsoe, John J Lavorato, Karen Denne, Keith Holst, Linda Robertson, Karen S Owens@ees, Mark E Haedicke, Mark Koenig, Mark Metts, Mark Palmer, Mark S Muller, Marty Sunde, Marty Sunde, Mary Hain, Michael Moran, Michael Tribolet, Mike D Smith, Mike Grigsby, Mitchell Taylor, Paul Kaufman, Phillip K Allen, Richard B Sanders, Richard Causey, Richard Shapiro, Rick Buy, Robert Badeer, Robert Johnston, Robert C Williams, Roger Yang, Sandra McCubbin, Sarah Novosel, Scott Stoness, Shari Stack, Shelia Benke, Shelley Corman, Stephen Swain, Steve C Hall, Steven J Kean, Susan J Mara, Thomas E White, Tim Belden, Travis McCullough, Vicki Sharp, Wanda Curry, William S Bradford X-cc: Anna Mehrer, Bernadette Hawkins, Beverly Aden, Binky Davidson, Bridget Maronge, Carol Moffett, Cindy Derecskey, Debra Davidson, Dolores Fisher, Emy Geraldo, Esmeralda Hinojosa, Ginger Dernehl, Jan M King, Janette Elbertson, Joseph Alamo, Karen K Heathman, Kathryn Sheppard, Kay Chapman, Kimberly Hillis, Leasa Lopez, Leticia Botello, Lora Sullivan, Lysa Akin, Marcia A Linton, Maureen McVicker, Mercy Gil, Mollie Gustafson, Paula Warren, Robert Hermann, Rosalinda Tijerina, Rosario Boling, Rubena Buerger, Ruth Ann Brown, Ruth Mann, Sharon Purswell, Sharron Westbrook, Stephanie Harris, Stephanie Truss, Susan Skarness, Twanda Sweet, vscruggs@wyattfirm.com X-bcc: X-Folder: \Mark_Haedicke_Jun2001\Notes Folders\California X-Origin: Haedicke-M X-FileName: mhaedic.nsf FYI ----- Forwarded by Bernadette Hawkins/Corp/Enron on 03/20/2001 03:55 PM ----- "Jackie Gallagher" <JGallagher@epsa.org< 03/20/2001 02:30 PM To: <bhawkin@enron.com<, <bmerola@enron.com<, <christi.l.nicolay@enron.com<, <donna.fulton@enron.com<, <janelle.scheuer@enron.com<, <jeff_brown@enron.com<, <jhartso@enron.com<, <jsteffe@enron.com<, <Mary.Hain@enron.com<, <rshapiro@enron.com<, <sarah.novosel@enron.com<, <tom.hoatson@enron.com< cc: Subject: Commission Actions to Remove Obstacles in Western US- Key Points for EPSA Comments, Due MARCH 30TH MEMORANDUM TO: Regulatory Affairs Committee Power Marketers Working Group FROM: Joe Hartsoe, Regulatory Affairs Committee Chair Bob Reilley, Power Marketers Working Group Chair Julie Simon, Vice President of Policy Mark Bennett, Senior Manager of Policy Erin Perrigo, Manager of Policy DATE: March 20, 2001 RE: Commission Actions to Increase Supply and Decrease Consumption in the Western United States--Key Points for EPSA Comments Due MARCH 30TH As we previously reported, on March 14, 2001, FERC announced certain actions to address the energy problems in California and other areas of the West in an Order Removing Obstacles to Increased Electric Generation and Natural Gas Supply in the Western United States and Requesting Comments on Further Actions to Increase Energy Supply and Decrease Energy Consumption. The following is an overview of the steps the Commission proposes to "immediately help increase supply from existing power sources and to provide regulatory incentives to build new electric and natural gas infrastructure." The Commission also invited comments on certain proposals. This memo includes a list of key points we intend to make in comments that are due by March 30th. Overview of Order The Order reflects a thorough review of "all of [FERC's] rate and facility certification authorities in the areas of electric energy, natural gas, hydroelectric and oil to determine how it can increase electric energy supply"; however, the Commission noted that its authority is "somewhat limited." While the Commission believes state regulators must assume the lead role due to their authority over siting of generation and transmission, as well as demand reduction measures, the Commission noted that the impact of California's energy shortage on the Western Interconnection "underscores the regional, interstate nature of the energy marketplace." Accordingly, it encouraged the formation of a single regional transmission organization for western markets. EPSA appreciates the Commission's effort to exercise the full extent of its authority to help ease the West's energy problems. Taken together, the Commission's proposed actions represent positive steps toward rational solutions to the difficult circumstances in the West. Most importantly, the Order highlights the importance of promoting infrastructure investment, including increased generation, transmission and natural gas pipeline facilities. The Commission's immediate actions, which will expire on December 31, 2001, include: -Requiring the California ISO and transmission owners within the WSCC to provide FERC with a list of short-term grid enhancements. -Extending and broadening waivers of operating and efficiency standards and fuel use requirements for qualifying facilities (QF). -Providing wholesale power sales from generation used primarily for backup and self-generation for businesses with prior notice waivers and market-based rate authorization. -Allowing wholesale and retail load reduction to be resold at wholesale market-based rates. The Commission seeks comment on several other proposals, including: -Rolling in new supply interconnection and upgrade costs. -Increasing the rate of return on equity for projects that significantly increase transmission on constrained and new routes in the near term. -10-year depreciation for short-term transmission projects, and 15-year depreciation for upgrades involving new rights of way that can be in service by November 1, 2002. -Use of the interconnection authority set forth in FPA o210(d) to help alleviate obstacles to electric supply reaching load. EPSA's Comments In its conclusion, the Commission stated that comments should be "concise and focused." Accordingly, we suggest that EPSA's comments focus on the following areas: ? Applaud the Commission's effort to increase supplies from QFs, but encourage it to provide relief from existing contracts by allowing QFs to sell to creditworthy parties. ? We understand that there are ongoing differences of opinion regarding the relative merits of an incremental versus a "rolled in" approach to interconnection and upgrade costs. Therefore, while we may lack a consensus on the question as a final policy position, we believe that the extreme circumstances surrounding the Order, and the urgent need to move power quickly into the Western system, make it wise to endorse FERC's instant recommendation. ? The Commission's proposed actions to create and enhance incentives relating to expanding and improving the transmission infrastructure through higher ROEs and accelerated depreciation schedules are positive steps. The Commission normally conditions such premiums on meaningful participation in regional transmission organizations. However, given the current situation and the immediate impact of any projects that might be entitled to the higher ROE, EPSA could support this proposal. ? Constraints on the gas infrastructure have a generally adverse impact on the energy supply system. Therefore, the Commission's proposed waivers of blanket certificates and rate incentives to expedite construction projects, are favorable developments. We will discuss the Order and EPSA's comments during tomorrow's Regulatory Affairs/Power Marketers' conference call. In addition, we have been asked to consider what type of short-term relief could be included in federal legislation. We will discuss this question as well. To access the call, dial 1-800-937-6563 and ask for the Julie Simon/EPSA call. In the meantime, if you have any questions, please contact either Julie Simon, jsimon@epsa.org or Mark Bennett, mbennett@epsa.org at (202 628-8200).
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