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 anyone at ARTO to inquire?

Jim

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

Jim and Christi,

The attached document is a contract, approved by ARTO's members, covering the 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 order by making "business decisions" that should be made by an independent board. You'll recall the language in the July 12 Order -- "We further direct that from the date of this order an independent board be established to make all business decisions for the RTO."  The footnote following that statement references the Grid Florida order, in which the Commission stated: Leasing office space, establishing employee benefit plans, putting accounting systems into place and other basic intrastructure tasks....clearly do not pose independence concerns.  Regarding the acquisition of transmission facilities...., any agreements for such acquisitions that are entered into before the independent Board is selected will be carefully scrutinized."  Thereafter 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 has been seated and given approval.

To the extent the facilities conveyed to ARTO via the Asset Purchase Agreement impact market design, the transaction is problematic.  The purchased assets 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 >>