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Enron Mail |
Charles --
Very well put. This is another example why it is so important for you and = Andy R. to be out with the RTO teams helping us to be more precise. We nee= d to blend our NERC and FERC advocacy. Of course, you realize that ELCON will never support a PJM model central ma= rketplace for balancing energy. At the last EPSA meeting, ELCON really bla= sted centralized pools. =20 Jim -----Original Message----- From: =09Yeung, Charles =20 Sent:=09Monday, August 06, 2001 2:47 PM To:=09'"John P. Hughes" <jhughes@elcon.org<@ENRON' Cc:=09janderson@elcon.org; Steffes, James D.; Shapiro, Richard; Novosel, Sa= rah; Maurer, Luiz; Nicolay, Christi L. Subject:=09RE: SE RTO INTERREGIONAL COORDINATION John=20 You are correct in your observations concerning market dynamics and the nee= d for flexibility by the marketplace. "Control area consolidation risks re= bundling the industry and this would stifle innovation and market dynamics." Enron agrees with this observation and does not endorse an RTO = structure that perpetuates the advantages control areas enjoy today in the = marketplace. We fully support your statement: "Our efforts should be directed at ensurin= g adequate independence of balancing, security and interchange authorities.= " Enron's desire for consolidation of control areas can be misconstrued to ad= vocate the old bundled control area structures. I want to clarify this is = absolutely NOT the case and Enron DOES support the CACTF model. Specifical= ly, the Interchange Authority functions called for in the CACTF model must = NOT be rolled up into a single entity. The Security Authority(SA), the Tra= nsmission Service Provider(TSP), and the Balancing Authority(BA) all need = to be separated from today's transmission owner/generation owner/load servi= ng/control area operator entities. Independence of these functions from ma= rket interest are critical to ensure fair and competitive markets. =20 The Interchange Authority (IA) functions do not require centralization or i= ndependence from market participants - but rather the scheduling advantages= that the IA functions provide for must be available to every market partic= ipant. Today, the entities that operate a "control area" are advantaged by= the capabilities NERC rules provide under the Interchange Authority. Unde= r a contract path transmission model, control areas do not have to keep day= -ahead balanced schedules and can "play" in the energy market with unbalanc= ed portfolios up until the schedule ramping times. Non-control areas can o= nly get transactions approved for scheduling under specific source and sink= requirements that forces them to submit balanced interchange schedules. T= his is a major reason why competitive generators have sought to become NERC= certified control areas. The CACTF model allows for the scheduling functi= ons required of an IA to be disaggregated from the other "control area" fun= ctions without detriment to reliability - thus levelizing the playing field= for all competitive PSEs. To levelize the playing field, Enron supports 2 issues. 1) Consolidation of control areas - to provide independence to eliminate th= e market advantages.=20 2) Elimination of day ahead balanced schedules requirements - to effectivel= y provide the benefits of the IA function for all market players. If there= are no day-ahead balanced scheduling requirements, most of the competitive= advantages of control areas will be eliminated. In the same stroke, all m= arket participants will compete on the same data and timing requriements al= lowing for the trading of energy up until the ramping times as control area= s enjoy today. This is the scheduling flexibility Enron seeks to create a = dynamic energy trading environment. Charles Yeung Enron Corp, Director Gov't Affairs (NERC) 713-853-0348 -----Original Message----- From: =09"John P. Hughes" <jhughes@elcon.org<@ENRON [mailto:IMCEANOTES-+22J= ohn+20P+2E+20Hughes+22+20+3Cjhughes+40elcon+2Eorg+3E+40ENRON@ENRON.com]=20 Sent:=09Monday, August 06, 2001 12:59 AM To:=09Maurer, Luiz; Yeung, Charles Cc:=09Linxwilerj@safferassoc.com; Jregnery@calpine.com; Mado@dynegy.com; ro= n_lanclos@oxy.com; hobday@hhlaw.com; sowens@entergy.com; BOBg@sepa.doe.gov;= jphill8@entergy.com; Paul.savage@nrgenergy.com; cpmccart@llgm.com; Jane.mu= dgett@williams.com; Nicolay, Christi L.; ndaggs@mwe.com; Pauline.foley@pseg= .com; bmacguineas@dykema.com; leer@sepa.doe.com; janderson@elcon.org; SScho= tland@cgsh.com Subject:=09SE RTO INTERREGIONAL COORDINATION Luiz: I have reviewed the documents you distributed on Friday regarding Enron's position on interregional coordination. In general, we agree with Enron's position with the following exceptions. We do believe that the consolidation of "control areas" is a useful objective in the context of creating a greater SE RTO, and, in fact, is inconsistent with Enron's support of the CACTF's reliability model. The RTO should also not be a central dispatcher. Its control of generation should be limited to redispatch for congestion management and the maintenance of short-term reliability. The basic premise behind the CACTF model is that control areas are becoming obsolete and unbundled. Control area consolidation risks rebundling the industry and this would stifle innovation and market dynamics. Our efforts should be directed at ensuring adequate independence of balancing, security and interchange authorities. This should be done by FERC because NERC has no authority (or inclination) to do so. John Hughes Industrial Consumers
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