MISO outlasts the Alliance: It's the politics, stupid

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Energy Insight News for Tuesday, January 15, 2002
MISO outlasts the Alliance: It's the politics, stupid

The Midwest Independent System Operator a year ago was looked upon as the
also-ran in the race to be the Midwest's dominant regional transmission
organization, today it is the "big dog" in an area stretching from the
Rockies to PJM, Canada to nearly the Gulf of Mexico.

Weathering the loss of three of its largest and oldest members to its
closest rival, the exit of its chief executive, and strong talk of the need
to convert to a for-profit entity to keep up with the times, MISO has risen
Phoenix-like to command its territory.
Following a flurry of Mid-December Federal Energy Regulatory orders, the
nonprofit MISO was selected as the Midwest's super-regional RTO, while its
for-profit rival, the Alliance, effectively was thanked for its time, effort
and the estimated $75 million spent on startup costs, and shown the door.

Oh, and by the way, you (Alliance members) have 60 days to tell FERC your
plans for joining an RTO, be it MISO, PJM, whatever.

Why the turnaround? How did the MISO go from also-ran to the man, from a
symbol of the old way of ISOs in control, to the shape perhaps of things to
come?

In two words: political reality.

The new FERC, with Pat Wood III in charge, followed closely by Nora Mead
Brownell and William Massey, have, since Wood became chairman in September,
shaken up the once sedate commission. Now, according to many FERC watchers,
it is "ready, fire, aim," throw a grenade or two to loosen things up and see
where the pieces fall. Read the entire story at
http://www.energyinsight.com.
Also, catch the latest news headlines on Energy Insight Executive, updated
twice daily.
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Market Brief Monday, January 14
Stocks Close Change % Change
DJIA 9,891.42 (96.1) -0.96%
DJ 15 Util. 293.84 3.1 1.07%
NASDAQ 1,990.74 (31.72) -1.57%
S&P 500 1,138.40 (7.0) -0.61%

Market Vols Close Change % Change
AMEX (000) 136,023 9,975.0 7.91%
NASDAQ (000) 1,789,205 163,454.0 10.05%
NYSE (000) 1,258,917 52,578.0 4.36%

Commodities Close Change % Change
Crude Oil (Feb) 18.84 (0.84) -4.27%
Heating Oil (Feb) 0.516 (0.023) -4.34%
Nat. Gas (Henry) 2.244 0.040 1.81%
Propane (Feb) 27.50 (1.50) -5.17%
Palo Verde (Feb) 22.50 0.00 0.00%
COB (Feb) 22.00 0.00 0.00%
PJM (Feb) 25.25 0.00 0.00%

Dollar US $ Close Change % Change
Australia $ 1.935 0.016 0.83%
Canada $ 1.60 0.000 0.00%
Germany Dmark 2.19 (0.006) -0.27%
Euro 0.8937 0.002 0.26%
Japan ?en 131.9 (0.100) -0.08%
Mexico NP 9.22 0.020 0.22%
UK Pound 0.6899 (0.0009) -0.13%

Foreign Indices Close Change % Change
Arg MerVal 343.22 0.00 0.00%
Austr All Ord. 3,350.40 (9.70) -0.29%
Braz Bovespa 13121.72 (465.77) -3.43%
Can TSE 300 7623.30 (78.63) -1.02%
Germany DAX 5065.84 (144.13) -2.77%
HK HangSeng 11209.43 42.97 0.38%
Japan Nikkei 225 10441.59 0.00 0.00%
Mexico IPC 6388.27 (31.88) -0.50%
UK FTSE 100 5,113.50 (85.10) -1.64%

Source: Yahoo!, TradingDay.com and NYMEX.com
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Executive News
Abraham discussed Enron troubles with Lay
U.S. Energy Secretary Spencer Abraham spoke with Enron Chairman Kenneth Lay
in November after reading news reports that the giant energy trader was
having difficulties, a Department of Energy spokeswoman said Monday.
Abraham, concerned about the company's situation, telephoned Lay on Nov. 2
in an "information gathering" exercise, the spokeswoman said. She said
Abraham was attempting to determine whether Enron's troubles would harm
energy markets. The phone call was brief and Lay did not ask Abraham for any
assistance, she said. Lay told Abraham that Enron's situation was improving,
but did not provide any details, according to the spokeswoman.

FERC to rehear order on utilities' rate authority
The U.S. Federal Energy Regulatory Commission Monday granted a rehearing on
its controversial ruling that would have revoked market-based rate authority
for American Electric Power, Entergy and Southern Company. In an order
issued Monday, FERC said it will hold a technical conference at a later date
before issuing a final decision on the issue. The commission in November
threatened to strip the three companies of their market-based rate authority
because they failed to meet strict market-power standards called the Supply
Margin Assessment. All three companies filed for rehearing, and the
commission at its last meeting in December said it would rehear the issue as
well as convene a technical conference, which has not yet been scheduled.

To subscribe to our Executive News Service, which is updated twice daily,
log on to http://www.energyinsight.com, or contact Platt's Direct Response
Team at 1-800-424-2908 (if outside the United States call 1-720-548-5700).
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