First EPSA FERC Lunch

A couple of months ago, we formed a new group within EPSA called the
Regulatory Affairs, Washington Staff, group (the name needs some help). We
discussed many things the group can do to increase our EPSA presence at FERC,
including establishing monthly lunches featuring a different FERC
guest/speaker per lunch.

Yesterday, Donna and I attended the first lunch of the group, sponsored by
Mirant (Enron will be sponsoring the July lunch). The FERC guest speaker was
Don Gelinas. (We believe Don had a big part in the Entergy Source & Sink
order, so he is an important person to know.) There were about 12 people at
the lunch, which was a good number because it gave us all a chance to speak
with Don and get to know him a little better. The group was relaxed and
festive, and I think this put Don at ease as well.

Don made a few remarks at the end of the lunch. He said the Commission's
main focus (other than California) was on the RTOs and getting them up and
running by the end of the year. He said FERC's main concerns are on:
1)independence, 2) appropriate incentives, and 3) appropriate scope.

Don acknowledged that having sufficient scope is a problem with a voluntary
program, but he believes the Commission, under Hebert's leadership, will be
able to gradually expand the scope of the RTOs so that ultimately there are
only a handful of RTOs in the country. Furthermore, Don said there are
certain issues he believes must be included in RTO filings, including putting
native load under the RTO tariff. However, he says that phase-in may be
necessary, and the trick will be in finding a reasonable phase-in period.

Other issues that Don said may require actual FERC decisions (FERC calling
balls and strikes) will be on issues such as ATC, CBM and curtailment. Don
said ATC should be calculated the same way by all RTOs and that the question
of retaining CBM must be decided by FERC.

Based on these comments, these three areas may be places where we could get
some FERC support for our views. We should keep this in mind as we comment
on future RTO filings.

Let us know if you have any questions or comments.

Sarah and Donna