Your ideas about decertifying the Cal ISO are very interesting but I question 
your likelihood of success given FERC's lack of political will (thanks to 
George W.'s new leadership ) to sue the ISO to get rid of the newly-appointed 
ISO board.


   
	Enron Capital & Trade Resources Corp.
	
	From:  Carl Imparato <cfi1@tca-us.com>                           01/28/2001 
02:42 PM
	

Please respond to cfi1@tca-us.com
To: Mary.Hain@enron.com
cc: Alan.Comnes@enron.com, Chris.H.Foster@enron.com, Robert.Badeer@enron.com, 
James.D.Steffes@enron.com, Steve.Walton@enron.com, Sean.Crandall@enron.com, 
Tom_Delaney@enron.com 
Subject: Re: More on the Future of the CAISO


Hi Mary,

Here's the situation as I see it:

DSTAR does indeed still have the bad governance problem to which you
alluded. On the other hand, it's turned out that the independent
Governing Board members have (except in a few cases) been pretty
reasonable and pro-markets.  So on the key issue of governance, what I
think we need to do is get DSTAR filed, and then protest at FERC that
the Advisory Committee is fatally flawed (by definition, it will always
be 10 incumbents vs. 2 non-incumbents, with 2 more
likely-to-side-with-incumbents) - so FERC should order the Bylaws
regarding the Advisory Committee to be changed to something more
equitable - e.g., what we have in RTOWest.

But aside from the governance, there are a lot of good things about
DSTAR (which have resulted from our pushback at the Board since the
fall).  recall that the two key flaws of RTOWest are that (i) FTRs are
all preallocated to incumbents with no obligation to bring them to
market; and (2) RTOWest would not have jurisdiction over all FERC
services and associated facilities.  On both of these issues, we are
much better off in DSTAR.  In DSTAR, FTR auction REVENUES, not FTRs, are
being preallocated - so we've won in DSTAR on this important issue.  And
as to scope of jurisdiction, while the jury is still out (we don't know
what the PTOs are going to do), the counsel to the Board is basically in
agreement with our position.

In most other ways, DSTAR and RTOWest are pretty much the same (the
result of Enron's sponsorship of my work and Tom Delaney's advocacy of
the Enron physical rights model over the years).

There are still a number of important DSTAR issues to be resolved... but
overall, we stand to win on most of them.

So: the advantages of pushing FERC to decertify the CAISO and require
the CA IOUs to join DSTAR (or else lose their market-based rate
authority for themselves and their subsidiaries)are: (1) DSTAR+CA could
be up and running within 12 months; (2) FERC doesn't have to get into
pitched battle with CA over the CAISO governance issues.  It simply gets
rid of the CAISO, and with it, the xenophobic control over the ISO by
the state of California; (3)DSTAR - which plans to file its Tariff in
March/April, becomes a model for RTOWest.

Carl
______

Mary.Hain@enron.com wrote:
>
> I thought we did not like the government of Desert Star (because it's ruled
> by the publics and the federal government) and did not like other aspects
> of it as much as we liked aspects of RTO West.  Why not wait until we get
> RTO West formed and then argue that the rest should be consolidated into
> it?  If we try to argue that California should join Desert Star it would be
> sort of like the tail wagging the dog and I would be concerned that
> California would try to take over.  Besides with RTO West, we have an
> organization that at least one Federal Power Marketer has said they could
> join.
>
> Alan Comnes
> 01/24/2001 07:40 AM
>
> To:   Mary Hain/HOU/ECT@ECT
> cc:
> Subject:  More on the Future of the CAISOChris.H.Foster@enron.com,
>       Robert.Badeer@enron.com, James.D.Steffes@enron.com
>
> This seems like an idea that you would like ...
> ---------------------- Forwarded by Alan Comnes/PDX/ECT on 01/24/2001 07:41
> AM ---------------------------
>
> Carl Imparato <cfi1@tca-us.com> on 01/22/2001 06:56:14 PM
>
> Please respond to cfi1@tca-us.com
>
> To:   Susan.J.Mara@enron.com
> cc:   Alan.Comnes@enron.com, Chris.H.Foster@enron.com,
>       Robert.Badeer@enron.com, James.D.Steffes@enron.com
>
> Subject:  More on the Future of the CAISO
>
> Sue,
>
> I am amending my previous statement about the 2-year delay in creating a
> multi-state RTO.  If FERC were to decertify the CAISO and order the CA
> utilities to join a regional RTO, I believe that DSTAR, the California
> IOUs and the CAISO infrastructure/staff/systems could easily merge and
> be up and running as a large Desert Southwest + California RTO before
> the end of the year.  This was basically what I had been trying to
> achieve last summer when I was facilitating talks between CAISO and
> DSTAR parties about merging the two.
>
> Why not lobby for that as the FERC-preferred solution to the state's
> illegal takeover of CAISO governance?
>
> Carl
> _______________________
>
> Susan.J.Mara@enron.com wrote:
> >
> > Carl,
> >
> > It looks like CDWR is having some problems related to buying Operating
> > Reserves.  SHould we worry about what the ISO is doing?
> >
> > Sue
> > ----- Forwarded by Susan J Mara/NA/Enron on 01/23/2001 02:28 PM -----
> >
> >                     "Katie
> >                     Kaplan"              To:     <kaplan@iepa.com>, "Mark
> Smith"
> >                     <kaplan@iepa.        <Mark.J.Smith@fpl.com>, "Bill
> Carlson"
> >                     com>                 <wcarlson@wm.com>, "Bill Woods"
> >                                          <billw@calpine.com>, "Bob
> Escalante"
> >                     01/23/2001           <rescalante@riobravo-gm.com>,
> "Carolyn Baker"
> >                     01:46 PM             <cabaker@duke-energy.com>, "Cody
> Carter"
> >                     Please               <cody.carter@williams.com>,
> "Curt Hatton"
> >                     respond to           <curt.hatton@gen.pge.com>, "Dean
> Gosselin"
>
>     ---------------------------------------------------------------
>
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