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Enron Mail |
Here it is.
Thanks Gary -----Original Message----- From: Jeffrey Watkiss [mailto:dwatkiss@bracepatt.com] Sent: Thursday, December 14, 2000 11:35 AM To: gfergus@brobeck.com; linda.robertson@enron.com Cc: Ronald Carroll Subject: Response to ISO Dispatch Orders As of noon EST, the DOE still had not issued any order under section 202©. Thus, at least for now, Enron's obligations are a function of the ISO Tariff and the Participating Generator Agreement. Last Friday, the ISO filed with FERC Amendment No. 33 to its tariff. Among other things, the Amendment adds to the section 5 of the tariff new provisions empowering the ISO to assess a penalty against Participating Generators that refuse to operate in response to an ISO Dispatch instruction during a System Emergency or when the ISO is acting to avoid an imminent or threatened System Emergency. The penalty is stiff: (1) a charge for each MWh of the Dispatch instruction with which the Participating Generator does not comply equal to twice the highest price for Energy, per MWh, paid in each hour by the ISO to any other entity to produce Energy; and (2) if the ISO is required t call for the involuntary curtailment of firm Load to maintain Applicable Reliability Criteria during the System Emergency, then an additional charge equal to $1,000 for each MWh of the Dispatch instruction with which the Participating Generator does not comply. The only defense to these penalties is to provide proof that the generating unit in question was physically incapable of running or it would have violated state or federal law to run it (e.g., air emission allowance limits). The ISO asked FERC for an immediate effective date of December 8, which FERC granted in a December 8 order. The ISO Tariff defines "Participating Seller or Generator" to mean "A generator or other seller of Energy or Ancillary Services through a Scheduling Coordinator over the ISO Controlled Grid and which has undertaken to be bound by the terms of the ISO Tariff." If Enron is a Participating Generator (Mary Hain informs me that Enron is not one), then it risks incurring the new penalty if it fails to respond to an ISO order to sell ancillary services to the ISO. I believe Enron might also risk incurring the penalty in cases where it controls or has rights to all or a portion of a generating capacity of a Participating Generator's unit. If that capacity is called on and the call is not answered because Enron is making some other use of the capacity, the Enron may incur the penalty . This seems to be contemplated by section 4.1.1 of the Participating Generator Agreement which obliges a Participating Generator to comply with the tariff (section 5.3) by identifying the Generating Units that it owns, operates or has a contractual entitlement to in Schedule 1, as required by Section 5.3 of the ISO Tariff. (emphasis added). As far as I know, it is that Schedule 1 that the ISO consults when making decisions as to which Participating Generator to call on. I will forward to you Secretary Richardson's order as soon as it is issued. Please call me if you have any questions. ======================================================= This email message is for the sole use of the intended recipient(s) and may contain confidential and privileged information. Any unauthorized review, use, disclosure or distribution is prohibited. If you are not the intended recipient, please contact the sender by reply email and destroy all copies of the original message. To reply to our email administrator directly, send an email to postmaster@brobeck.com BROBECK PHLEGER & HARRISON LLP http://www.brobeck.com
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