No action needed on your part, but just in case you hear something through the grapevine, here is current situation:

Summary

- AEP/CP&L have economic interests in the Brownsville area which are best served if we do not locate our tie in Brownsville Public Utility Board's (BPUB's) service territory and BPUB does not obtain the  system upgrades which would be justified by our tie.
- AEP is trying to stall our Presidential Permit Application and to coerce us into moving the tie onto their system.
- BPUB sees this as an attack on their interests and is planning to challenge AEP.
- 5 MOU's have been signed with customers and discussions are continuing with 12 others, who have all been met and have expressed interest.
- We are optimistic that the PP will be issued and standard Ercot treatments will prevail, but we will likely be delayed to sometime early next year.


History

- Enron filed Presidential Permit (PP) Application
- CP&L (owned by AEP) intervened against the application and raised some technical issues
- DOE asked Enron and CP&L/AEP to meet and resolve issues
- Meeting occurred between Enron and CP&L/AEP. General technical solutions were identified, with specific solutions to be determined through a SPS study.
- Enron drafted a letter outlining the points covered in our meeting with CP&L/AEP, intending to have the letter signed by both of us and forwarded to DOE, requesting that DOE proceed with issuing the PP.
- AP&L/AEP refused to sign the letter and are now arguing that an SPS scheme is not sufficient for the proposed tie location (although AEP operates under SPS elsewhere within Ercot, they argue that ours is a special case. Independent opinion (and our own) is that there is little merit to the CP&L/AEP position).
- AEP have told us that if we move the tie to a location West of Brownsville (on AEP's proposed line expansion), that they would drop all opposition.
- AEP/CP&L have since approached the Ercot Board arguing that cost studies should be done on alternate tie locations and the system cost impact thereof.
- AEP/CP&L have submitted to the Ercot Board that Enron should be responsible for any costs associated building the tie at anything other than the least-cost (system perspective) location.

Current Status
- Brownsville (BPUB) are incensed at AEP/CP&L's behaviour and are planning the following actions:
	- Making submission to Ercot that:
		-  BPUB informed Ercot of the project 14 months ago and no further studies or committee reviews by Ercot should be necessary.
		- No changes to current Ercot procedures should be contemplated and the tie should be viewed as a firm, native BPUB load 
	- BPUB lawyer is drafting letter to go to AEP demanding that AEP honor their previous agreement with BPUB to be supportive of BPUB projects.
	- BPUB CEO, engineer and lawyer will visit PUC-T next week to make the case that no special arrangements should be made with regard to Enron or BPUB 	needing to pick up additional system costs
- At this point, BPUB is highly motivated and is striking out with an aggressive representation of their position as there are implications for them which go beyond the current project. Furthermore, there is little love lost between BPUB and AEP.
- Although moving to the AEP-proposed location would remove AEP as an obstacle, we would lose the work done to date preparing with BPUB and would probably make an enemy of BPUB.
- Bob Franks (regulatory), Scott Laidlaw (engineering/technical) and myself are coordinating with Bracewell Patterson (regulatory advisors) on Enron's strategy and level of support for BPUB.