Responses by GridSouth and Southern RTO

(1) As expected, GridSouth and Southern oppose EPMI's request to condition
market based rates on RTO participation.

GridSouth argues that this is a collateral attack on the "voluntary" nature
of Order No. 2000.
Southern also makes the same argument, but adds that the argument is
premature due to Southern's "significant progress" in developing an RTO.
Southern also attacks our citations to the FERC Staff Investigation stating
that the Investigation is based on "perception," not fact, and contains
conclusions that are "ill-formed." Southern concludes that the "Southeastern
bulk power market worked quite well" this summer because there were no price
spikes. Finally, Southern disputes our request for a settlement judge
stating that the Commission should give Southern guidance first.

(2) GridSouth responds to the Joint Muni, EPMI, etal. motion to hold the RTO
filing in abeyance:

Grid South does not oppose additional stakeholder meetings during a 60 day
period. It would like the assistance of FERC Dispute Resolution staff and
additional guidance from the Commission during that period. GridSouth will
provide the Commission a report on the process within 20 days after the
conclusion of the this period.

(3) Southern requests that the Commission grant its declaratory order
request that it can be an RTO

States that delays were due to discussions with investment community about
spin off of transmission assets. Southern would still like to have separate
transmission company (Jim S. is looking into an Etrans opportunity with this.)

(4) GridSouth response to protests

It contains alot of responses to Santee Cooper's protest about the ownership
structure of the LLC
GridSouth argues that its expansion possibilities are limited by TVA to the
West and VEPCO to the north (note: Grid South states that VEPCO joined
Alliance because it is subject to the Virginia Electric Utility Restucturing
Act that requires all suppliers to have access to the electric transmission
system by 1/1/01 and retail choice by 1/1/02. Any insights on this thinking
by Grid South would be helpful. Will all of VEPCO native load be under an
OATT?)
Grid South will file interconnection procedures by 2/01.