VEPCO Interconnect Discussions

fyi
---------------------- Forwarded by Kay Mann/Corp/Enron on 09/26/2000 01:20
PM ---------------------------

Reagan Rorschach
09/26/2000 01:08 PM
To: Jeffrey Keenan/HOU/ECT@ECT, John Moore/Corp/Enron@Enron, Ben
Jacoby/HOU/ECT@ECT, Heather Kroll/HOU/ECT@ECT, Ozzie Pagan/HOU/ECT@ECT, Kay
Mann/Corp/Enron@Enron, Larry Soderquist/HOU/ECT@ECT, Reagan
Rorschach/NA/Enron@Enron, Terri Austin/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc:

Subject: VEPCO Interconnect Discussions

I spoke with Wayne Duman last Thursday (9/21/00) to schedule a Enron VEPCO
meeting for September 29, 2000 to discuss VEPCO progress with the Facility
Study and processing/negotiating the Interconnect Agreement. Wayne cancelled
that meeting later that same afternoon. I spoke with him today in regarding
the reasons for cancellation.

As it turns out, his group--Bulk Power Delivery--is not the group executing
the PPA with Enron. That group is Tim Talmadge's group--Capacity
Acquisition. Once Wayne tried to schedule the 9/29 meeting, he was told not
to talk with Enron. Further investigation on his part uncovered some
internal VEPCO issues. He is calling an internal meeting with Capacity
Acquisition, Bulk Power Delivery, Bulk Power Operations and the Transmission
Group to discuss these issues and establish a consistent "game plan" for
going forward.

The Transmission Group is scheduled to finish the Facility Study on Monday,
October 2, 2000. The study will include switchyard needs, network needs,
construction costs, and construction schedule. He knows we have a June 2001
commercial operation date, and he knows that Capacity Acquisition is
responsible for the associated construction costs. He is nervous that the
Facility Study will forecast construction schedules that do not coincide with
the commercial operation date. He further indicated that acquisition of
necessary equipment--breakers, transformers, etc. specified by the Facility
Study--could be a significant challenge for VEPCO. He understands that this
is his challenge, not ours. He also noted that VEPCO is very sensitive and
careful to operate within FERC guidelines regarding interconnection and the
various time frames--this includes not making any special considerations to
the Capacity Acquisition guys since they are in the same company.

Wayne Duman is very involved in VEPCO's effort to develop an Interconnection
Agreement consistent with FERC. They are within days of completing this
task--it is in legal review right now. The current version of the
Interconnection Agreement is a subsequent generation of the document we
reviewed at the beginning of August. Wayne understands that the PPA which
VEPCO and Enron are negotiating is contardictory to the "boiler plate"
Interconnection Agreement and needs to be changed to reflect the PPA defined
scopes for Enron and VEPCO. He indicated that part of VEPCO's "to do list"
to get ready to meet with Enron includes modification of the latest
generation of the VEPCO Interconnection Agreement to be consistent with the
Enron PPA.

He is optimistic that we would be able to meet late next week to get the
Interconnect Agreement process underway. He assured me that he would keep
Enron informed of the progress.

In summary, VEPCO is doing the following:
getting all stakeholders on the same page,
finishing the Facility Study, and
getting their Interconnection Agreement to agree with the PPA.

Reagan