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Enron Mail |
Cc: richard.sanders@enron.com, jeffrey.hodge@enron.com, awm@blakes.com,
glf@blakes.com, dwm@blakes.com Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit Bcc: richard.sanders@enron.com, jeffrey.hodge@enron.com, awm@blakes.com, glf@blakes.com, dwm@blakes.com X-From: Robert Hemstock X-To: Richard Shapiro, Aleck Dadson X-cc: Richard B Sanders, Jeffrey T Hodge, awm@blakes.com, glf@blakes.com, dwm@blakes.com X-bcc: X-Folder: \Richard_Sanders_Oct2001\Notes Folders\Project stanley X-Origin: Sanders-R X-FileName: rsanders.nsf Priveleged and Confidential The Alberta Department of Resource Development (ADRD) released a draft Market Surveillance Amendment Regulation today which contains proposed amendments to the current Market Surveillance Regulation that will be in force prior to the PPA Auction later this month. A number of changes have been made in response to: (i) concerns raised by potential Power Purchase Arrangement Bidders about PPA Owners intentionally witholding capacity, and (ii) other apparent deficiencies with the original MSA Regulation. We may wish to use the opportunity to informally advocate for a specific change to the MS Regulation (Enron Canada will be filing formal written comments on other unrelated issues) that would mitigate one of the risks of a negative outcome on Project Stanley. I understand that Blakes has undertaken a review of the EUA or Market Surveillance Regulation to determine what sanctions could result from a negative outcome on Project Stanley and therefore they can confirm whether I have identified all the applicable sections of the EUA and Regulations that address this issue. Based on my quick review I see a conflict between the Market Surveillance Regulation and the Power Pool Rules. Section 15 of the current Market Surveillance Regulation provides the Power Pool Council with the authority to impose sanctions on market participants that are found to be in contravention of the Electric Utilities Act, the Regulations, the rules of the power pool, etc. There are four specific sanctions including: (i) fine, (ii) imposition of terms and conditions on the market participants activitives, (iii) direction to the market participant not to engage in certain activity, and (iv) direction to the market participant to pay the costs of an investigation and hearing. None of these specific sanction include suspension or revocation of a market participants Power Pool Registration. In contrast to Section 15 of the Market Surveillance Regulation, Section 9(1)(d) of the EUA authorizes the Power Pool Council to change the rules of the Power Pool. Rule 2.5.3 of the Power Pool Rules allows for the Power Pool Council to revoke a Participant's registration for having contravened the Power Pool Rules. I believe it is necessary to at least consider whether Enron Canada should call Sid Carlson (the ADRD Official responsible for the Market Surveillance Amendment Regulation) and verbally advocate for an amendment to the Market Surveillance Regulation that would serve to expressly remove any conflict between the MS Regulation and the Power Pool Rules in relation to the authority of the Power Pool Council to revoke a participants registration. An amendment that would limit the authority of the Power Pool Council to the four sanctions in the MS Regulation would have the postive effect of eliminating the risk of Enron Canada being suspended from the Power Pool (and therefore remove one of the risks inherent in Enron Canada's participation in the PPA Auction). Admittedly, there is also a risk that our raising the issue could backfire and result in the ADRD entrenching such authority of the Power Pool Council into the Regulation and therefore deprive Enron Canada of arguing (in the event of a negative result on Project Stanley) that the Power Pool Council does not have the authority to revoke Enron Canada's Participant registration. Aleck advises that the IMO in Ontario has the authority to revoke the registration of a market participant and he is of the view that it is reasonable for the Power Pool Council in Alberta to have recourse to such a sanction. I understand from Dalton McGrath that Blakes is of the view that there is a very low probability of Enron Canada being sanctioned by way of suspension or revocation of its Power Pool registration in the event of a negative outcome on Project Stanley. While I appreciate there are pros and cons to saying anything on this issue, the MS Regulation is not frequently amended and the prospect of there being another opportunity to influence its amendment in this regard prior to the resolution of Project Stanley is very remote. It is for this reason that I raise the matter now as the ADRD has indicated it will accept comments only until 12:00 p.m. Wednesday July 12. Regards, Rob
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