From: John Shafer/ENRON@enronXgate on 09/16/2001 09:07 PM CDT
To: Phil Lowry/ENRON@enronXgate, Jerry D Martin/ENRON@enronXgate
cc: Louis Soldano/ENRON@enronXgate, William Kendrick/ENRON@enronXgate, Larry 
Campbell/ET&S/Enron@ENRON, Ruth Jensen/ENRON@enronXgate, Richard 
Melton/ENRON@enronXgate 

Subject: RE: Red Rock Air Permits Heads up!

Phil,
I agree with your assessment, but would offer some additional information.; 
After returning from Austin on Wednesday and learning that Larry Campbell 
had;received a negative reaction from EPA Region IX concerning a possible 
meeting with them, I worked on this issue most of Thursday and Friday.; The 
strategy I discussed with Lou was to locate a local Arizona or California 
"political/lawyer" type;who would have the necessary contacts to get us in 
there and get the permits moving.; Lou agreed and we have been working on 
that strategy while gathering more information related to the "right" contact 
that could get this job done.; I personally have had lengthy discussions 
(Thursday and Friday) with Lou, Larry Campbell, Bill Kendrick and several key 
consultants that have extensive contacts within both Arizona and 
California.;We are closing in on a;local law firm and also a "high level;air 
consultant";who will be able to get us in at the Director or Air Permit Chief 
level;to present (1) our;situation, (2) clean air needs for Arizona and CA, 
and (3) how long these permits have already been on file.; We should have 
someone identified early this next week.; 
;
Let me present the following information to;complement yours:
* ;The permitting timeline;being used;was based on historical 
timelines;encountered;while processing prior Arizona projects.; No indication 
of backlogs or slower processing in the beginning.; A familiar consultant 
(Argent);was used for the air permit applications and no indication was 
offered by the AZ DEQ or EPA Region IX that normal processing was not 
occurring.; Applications filed in March, 2001 and by letter from the agencies 
were deemed complete by mid-April.
* Within the last two weeks, the Arizona DEQ Permit Engineer assigned to the 
applications for Station 1 and 2 has stated that he is overloaded and working 
on the applications as they are in the "que".; He told Larry Campbell (and I 
have verified;it also by talking to outside consultants that permit in 
Arizona) that this is true and the AZ DEQ have been very slow lately in 
getting permits out. (Caveat: One of the suggestions we want to carry in to 
AZ DEQ is that we would be willing to pay for a third-party contractor to 
take the permits and work them up;for release to the publishing firm so they 
can be sent out for public comment.; AZ DEQ is willing to meet with us and 
discuss our applications.);; Even if we get this part going, this is only 
part of the problem.; Bottom line is;we must play our cards;correctly at this 
juncture to be able to get our applications moved up in the que, typed, and 
out for public comment; but EPA Region IX will still have thirty days after 
that for their review of those two state issued permits.
* EPA Region IX is a different story.; It is most difficult to put pressure 
on them, more so than AZ DEQ.; The applications for Stations 3 and 4 are on 
tribal land and these;applications are not delegated to any state air quality 
department.;;After the technical meetings in the office last week, Larry made 
a couple of calls;to the Permit Engineer;in Region IX and received a negative 
response.; Larry was told that the;permits would issue in one to four months 
and that;there was no need for a meeting with them.; Again,;my advice at this 
point is to find the right person with the right contacts at a very high 
level and get the meeting set.; It's one thing to pressure the State of 
Arizona and get a permit applications moving; but if we are not very careful 
with Region IX we could damage our ability to not only get Sun Devil's 
permits, but create audits and compliance situations that are far reaching.; 
Again, we must first get a personal meeting with them;to enable us to 
present;the need, circumstances, and how long these permits have already been 
on file.; Locating the;correct person to help us do that is of upmost 
importance!
* Clarifying the complicated point, EPA Region IX has responsibility 
to;review and publish not only the permits for Stations 3 and 4, but to also 
review the AZ DEQ permits for stations 1 and;2 for 30 days.; Therefore, if we 
anger EPA Region IX over permits for Stations;3 and 4, they could delay the 
issuance of the permits for Stations 1 and 2 that;have been expedited with 
the AZ DEQ.; It's a two-edged sword.
Our Strategy:
* Continue to work on the technical staff permit engineers, but very 
carefully.; Indications are that our phone calls are beginning to annoy them.
* Locate a political/lawyer type that has connections at the top of AZ DEQ 
and EPA Region IX to help us get the;desired meeting with key;people in order 
to;move;the permits.; This should be done within the next week.
* Offer to assist in any manner (e.g., funding a third party) to get the 
permit applications moving out of AZ DEQ and EPA Region IX for public comment.
I have some strategic ideas that will increase the;probability that this type 
of circumstance will not occur in the future.; I will be glad to discuss any 
of this with you on Monday morning.; John Shafer
;
-----Original Message----- 
From: Lowry, Phil 
Sent: Sun 9/16/2001 8:56 AM 
To: Martin, Jerry D. 
Cc: Shafer, John 
Subject: Red Rock Air Permits Heads up!


At Stan,s staff meeting last week, the discovery of a delay in the issuance 
of Air Permits was discussed.; Stan indicated that this was unacceptable.; I 
requested that you conduct a meeting that afternoon with key people to 
outline a plan of attack to get the permit schedule back on track.; I am 
aware that you did such and you provided a voice mail update that indicated a 
plan.
;
Here is the problem.; Apparently the matter was further discussed at the 
weekly Red Rock status meeting on Friday and the following feedback was 
provided by a &little birdie8.; We can expect another unpleasant discussion 
at Monday,s 8am meeting with Stan.
;
* Joe Hartsoe has been unable to pursue any discussion with Washington 
officials to put pressure on Arizona.; WTC attacks! 
* Operations is unwilling to put much pressure on Arizona/EPA out of concern 
for future responsiveness from the agency Re: Sun Devil 
* Sun Devil is a bird in the bush and Red Rock is a bird in the hand. 
* There is no way that we can get the Red Rock project completed as promised 
because we waited until it was too late to find out what was going on with 
the Air Permits. 
* The agency will not allow a bifurcation of the project and let us proceed 
with on site construction prior to a permit and delay delivery of the 
compressor to the site. 
* We haven,t yet had any contact with the agency after the discussion last 
Monday. 
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