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Enron Mail |
My only addition would be to strengthen the answer to #5 - RTOs, even if fo=
rmed, do not explicity resolve the question of the Native Load Exception. = I think that this is critical to highlight if this issued is raised. =20 Jim -----Original Message----- From: Novosel, Sarah=20 Sent: Friday, August 24, 2001 4:31 PM To: Hartsoe, Joe; Robertson, Linda; Shapiro, Richard; Steffes, James D.; Ni= colay, Christi L.; Kean, Steven J. Subject: FW: Order 888 Argument Please see Lou's email below. It's rather lengthy, and we will be working = with him to help him prepare for oral argument, but to the extent any of yo= u have the time or inclination to read his questions and add your thoughts,= your comments would certainly be welcome. =20 Thanks =20 Sarah -----Original Message----- From: Palansky, IJay [mailto:IPalansky@wilmer.com] Sent: Friday, August 24, 2001 4:43 PM To: Cohen, Louis; 'Jeffrey D. (Dan) Watkiss (E-mail)'; Plotnick, Michael Cc: Novosel, Sarah; Killory, Ted; Frankel, Jonathan; Palansky, IJay Subject: RE: Order 888 Argument See comments below -----Original Message----- From: Cohen, Louis=20 Sent: Thursday, August 23, 2001 11:17 AM To: Jeffrey D. (Dan) Watkiss (E-mail); Palansky, IJay; Plotnick, Michael Cc: Sarah Novosel (E-mail); Killory, Ted; Frankel, Jonathan; Cohen, Louis Subject: Order 888 Argument Please think about the following: =20 In a 20-minute Supreme Court argument [the limit will be strictly observed]= , one needs to be ready to answer questions of all sorts, but one cannot co= unt on being able to make more than 2-3 points, and each of them needs to b= e clear from the first sentence; points that require development don't work= . In light of that: =20 1. Should I plan to spend any minutes on the "New York" side of the case= , i.e., arguing that *all transmissions over the grids are in interstate co= mmerce and FERC has jurisdiction whether the ensuing sale is wholesale or r= etail*? On the one hand, the "NY issue" is more important to Enron than th= e "Enron issue"; on the other hand, my sense is that we are way ahead on th= e NY issue after the briefs, and the SG will likely do a good job on it in = argument. My sense is that I should be prepared, if necessary, to utter so= mething like the starred portion of the first sentence of this paragraph, a= nd to defend it against any questions, but should not otherwise plan to get= into these issues.=20 We should probably also have a canned sentence ready to address NY's wacky = preemption argument, which the one that it relied on most heavily in its op= ening brief. =20 2. I think my most important tasks are to make clear that (i) this case = is about FERC's power to require nondiscriminatory access to the interstate= grids (and not about rates or state regulation of retail sales) and (ii) i= t is important to the nation that FERC have such power. I need to make the= se points quickly and vividly, in a way that the Justices will carry away. = That is going to be hard, because theoretical abstractions are not vivid, = examples take too long to develop and provoke quarrels about details, and m= etaphors are generally too inexact. Please consider whether I am right abo= ut the two points being most important, and think about how to make them. I think these points are the most important, along with making the Court c= omfortable with the idea that if they adopted our position they would not b= e turning upside down a federal/state regulatory division that's been in pl= ace for 60 years. =20 =20 3. Although in a formal sense our case turns on the Chevron issue (plain= language, no ambiguity, hence no room for discretion), my instinct (but I = am not at all sure about this) is that I should not plan to devote time to = these matters. First, they are covered well in the briefs. Second, whethe= r one sees "ambiguity" does not really depend on staring at the language bu= t on understanding what "transmission in interstate commerce" necessarily c= overs in the present age. In other words, the way to win the Chevron point= is to win the points in the previous paragraph. Hence I ought to prepare = to get the word "unambiguous" in there somewhere in the middle of a sentenc= e, and defend it if necessary, but not do more. Does this seem right?=20 I think it's worth giving a little more attention since this is the key iss= ue below and, ultimately, the issue on which the Court must rest its decisi= on. We don't want to lose the trees for the forest. That said, since we'v= e dealt with it at length in the briefs, I don't know that we need much mor= e than a reminder of the issue and the arguments: FERC asserts that sectio= n 201(b) does not unambiguously determine whether transmission bundled with= retail sale is a transmission or a "sale of electric energy at wholesale".= It concluded that such transmission is a sale. The D.C. Circuit erroneou= sly held that FERC's interpretation was permissible. But transmission does= n't stop being transmission merely because it is sold together with generat= ion: it is both transmission and a necessary component (query whether "com= ponent" is the best word to use) of a retail sale. Therefore, under the cl= ear language of section 201(b), jurisdiction over all transmissions, includ= ing transmissions bundled with retail sales, is vested in FERC. =20 On the related point of NY's position that the wholesale/retail bright line= applies to transmission: in particular light of NY's interpretive gymnast= ics in its reply (re: 201(a), at p.6), isn't a good one-liner simply that i= f Congress intended to limit FERC's transmission jurisdiction to transmissi= ons for wholesale, then s. 201(b) would read "The provisions of this subcha= pter shall apply to the sale of electric energy at wholesale and all associ= ated transmissions" (or something to that effect)? =20 Note: this issue opens the door to discussion of, among other things, whet= her the exclusive purpose of section 201(b) was to fill the Attleboro gap; = and questions about the structure of the FPA, e.g., the relationship betwee= n 201(b) and 211/212, 206(d), etc. =20 4. What do I do in argument with LP&L? I find the NGA parallel very comp= elling, and IF the Court decides to go with us it will have no problem citi= ng and following that case. On the other hand, the argument does not seem = to have persuaded anybody but our team (not CADC for example). On balance,= I am inclined to say "The Court has already decided this issue under the p= arallel provision of the NGA" and use some time to press that point. One r= eason for doing so is that in general it will be much EASIER for the Court = just to affirm FERC and CADC than to push thru the complexities and agree w= ith us, but LP&L gives them both a precedent for overruling FERC on its own= jurisdiction and a comparatively easy way thru the case.=20 Agreed. =20 =20 5. I need to understand why FERC's powers and plans to create regional tra= nsmission organizations do not fully solve the problem. I need to get a de= tailed understanding of the facts, and a one-sentence answer to why there i= s still a problem. =20 The primary answer in our reply is that Order 2000 does not require RTOs, i= t only encourages their voluntarily formation; and that there's no indicati= on that monopolists will give up their market power unless compelled. (p. = 19) =20 6. Most important: What other points (in addition to 2 and 4) does anyone= think I need to be sure to make? Even more important, what points made by= NY, SG, EEI, California are most likely to trouble the Court and provoke q= uestions? Which of them should I plan to answer even if I get no question? We might also need to address whether our position runs against 60 years of= history: Didn't the states regulate all aspects of bundled retail sales u= ntil Order 888? Does our position mean that FERC historically abdicated it= s responsibility and the states were regulating without authority? What is= the effect of section 201(a) if not to allow states to continue to regulat= e the matters that they regulated in 1935? This may be an issue to broach = only if the Court indicates interest, though, since I think it's the toughe= st one for us to answer. =20 We might also reconsider our position that unbundling is merely an accounti= ng issue. It seems to me that reversing the position we took in our initia= l brief will basically hedge our bets: it makes our affirmative argument a= little harder (since we can't simply say that it's crazy to base FERC's ju= risdiction on an accounting technique), but it also makes NY's argument har= der, since they can't simply say that but for a change in the accounting fo= r electric service the states would still be regulating interstate transmis= sions for retail sale. This would also dovetail with some of the other bri= efs that made a strong argument that unbundling is a major change in electr= ic service necessary to support competition among generators, and something= over which the states have never exercised jurisdiction. =20 Thanks to all for thinking about this.
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