RE: Alliance Bridgeco acquisition of MAIN assets

I don't know if we need to do anything. Seems like they are just acquiring=
the MAIN facilities, not market design material. Have you spoken to anyon=
e at ARTO to inquire?

Jim

-----Original Message-----
From: =09Stroup, Kerry =20
Sent:=09Tuesday, October 30, 2001 9:01 AM
To:=09Steffes, James D.; Nicolay, Christi L.
Cc:=09Roan, Michael; Migden, Janine
Subject:=09Alliance Bridgeco acquisition of MAIN assets

Jim and Christi,

The attached document is a contract, approved by ARTO's members, covering t=
he sale of MAIN's facilities and transfer of assets to ARTO. The document =
raises the question of whether the Alliance is violating FERC's July 12 ord=
er by making "business decisions" that should be made by an independent boa=
rd. You'll recall the language in the July 12 Order -- "We further direct t=
hat from the date of this order an independent board be established to make=
all business decisions for the RTO." The footnote following that statemen=
t references the Grid Florida order, in which the Commission stated: Leasin=
g office space, establishing employee benefit plans, putting accounting sys=
tems into place and other basic intrastructure tasks....clearly do not pose=
independence concerns. Regarding the acquisition of transmission faciliti=
es...., any agreements for such acquisitions that are entered into before t=
he independent Board is selected will be carefully scrutinized." Thereafte=
r the Commission identified several "more problematic' steps necessary for =
implementing market design, including the acquisition of software and other=
systems implementing market design as significant to the future operatioin=
of the RTO, and required that any acquisition of software or other systems=
implementing market design not be undertaken until the independent Board h=
as been seated and given approval.

To the extent the facilities conveyed to ARTO via the Asset Purchase Agreem=
ent impact market design, the transaction is problematic. The purchased as=
sets include certain software licenses, but these may not be "market design=
"-sensitive.

Please let me know if you want the Midwest team to pursue this issue.

<< File: ARTO MAIN.doc <<