I have a pretty major philosophical disagreement with AMendment 30.  I come 
from the camp that says we want an ISO that has minimal duties.  If the ISO 
is able to enter into forward contracts, well ... how is that any different 
from a vertically-integrated utility? Let's see, so the ISO controls all the 
T and now will control some G.  Aren't we concerned about that? I have heard 
from some that this is the "best solution" -- I need someone to explain to me 
why.


To: Susan J Mara/SFO/EES@EES, Mary Hain/HOU/ECT@ECT, Jeff 
Dasovich/SFO/EES@EES, Jeff Brown/HOU/EES@EES, Sarah Novosel/Corp/Enron@Enron, 
Joe Hartsoe/Corp/Enron@Enron, James D Steffes/HOU/EES@EES, Janine 
Migden/DUB/EES@EES
cc:  
Subject: Cal ISO Amendment 30 & Alliance RTO Filing

EPSA needs feedback on Cal and Alliance filings and what position EPSA can 
take.  Thoughts?
---------------------- Forwarded by Christi L Nicolay/HOU/ECT on 09/20/2000 
03:32 PM ---------------------------


"Jackie Gallagher" <JGallagher@epsa.org> on 09/20/2000 03:07:06 PM
To: <bhawkin@enron.com>, <bmerola@enron.com>, <christi.l.nicolay@enron.com>, 
<janelle.scheuer@enron.com>, <jhartso@enron.com>, <mary.hain@enron.com>, 
<sarah.novosel@enron.com>, <tom.hoatson@enron.com>
cc:  

Subject: Cal ISO Amendment 30 & Alliance RTO Filing


MEMORANDUM

TO: Regulatory Affairs Committee
       Power Marketers Working Group

FROM: Don Santa, Regulatory Affairs Committee Chair
            Joe Hartsoe, Power Marketing Working Group Chair
            Julie Simon, Vice President of Policy
            Mark Bennett, Senior Manager of Policy

DATE: September 20, 2000

RE:  ? Cal ISO Amendment 30
       ? Alliance RTO Filing

Two issues arose on the weekly conference call today on which we need your 
assistance and feedback.  Please forward comments to Julie Simon at 
202-789-7200 or jsimon@epsa.org by close of business on Monday, September 
25th.

1. Cal ISO Amendment 30

On September 11, 2000 the Cal ISO filed Amendment No. 30 to its ISO Tariff at 
FERC.  In this filing, the Cal ISO is "reluctantly" asking FERC for authority 
to buy forward contracts to meet its real-time balancing obligations.  Costs 
of the forward contracts would be allocated to Scheduling Coordinators who 
deviate in real time from their schedules.  Interventions and protests are 
due on October 2nd.

While EPSA has consistently opposed an ISO role as market participant, there 
are concerns here about the lack of alternatives available in California.  
While an ISO's role in the real-time balancing market should be small, as a 
practical matter, the Cal ISO has been forced to procure thousands of 
megawatts in the real time markets.  Thus, deciding how to approach this 
filing balances difficult competing goals.  Please let us know how you would 
like EPSA to proceed.

2. Alliance RTO

On September 15th the Alliance RTO made a compliance filing at FERC seeking 
to address all of FERC's concerns about its earlier proposals and purporting 
to meet all the requirements of Order No. 2000.  The filing retains a transco 
structure, with a 5 percent ownership limitation for individual market 
participants and a 15 percent ownership limitation on each class of market 
participants.  It also eliminates pancaked rates in favor of zonal, or 
license plate, rates for deliveries within the Alliance and postage-rates for 
through or out deliveries.  While the geographic scope is unchanged, the 
scope will be larger than any operating RTO.  The filing includes a pro-forma 
inter-RTO coordination agreement to address seams issues such as security 
coordination, market monitoring, regional planning ATC and TTC calculations 
and pricing reciprocity.

Until now, EPSA has not been a party to the Alliance proceeding.  With this 
latest filing it may be appropriate for EPSA to intervene, raising issues of 
support or opposition to the filing.  To determine how to proceed, however, 
we need input from those companies that have been more closely involved in 
the development of the Alliance.  Please let us know how EPSA should proceed 
with respect to this latest filing.

Jacqueline Gallagher
Research/Policy Assistant
Electric Power Supply Association
1401 H Street, NW
Suite 760
Washington, DC  20005
202.789.7200
202.789.7201
jgallagher@epsa.org