---------------------- Forwarded by Linda J Noske/HOU/ECT on 07/05/2001 10:00 AM ---------------------------
From:	Joe Connor@ENRON on 07/02/2001 10:43 AM
To:	James D Steffes/NA/Enron@Enron, Christi L Nicolay/HOU/ECT@ECT, Sarah Novosel/Corp/Enron@ENRON, Donna Fulton/Corp/Enron@ENRON
cc:	 

Subject:	Re: Southern  RTO   

I met with Andy Dearman and Bill Newman of Southern on Friday.  They talked about what is going on with the non-jurisdictional utilities that have signed a MOU to develop a RTO.  The group has met a couple of times to discuss the process they will use.  Confidentiality agreements have been signed, so no details are available, but they have agreed to a voting structure for the development.  Southern has about one third of the votes (and 65%of the assets) and it takes at least two other parties agreeing with Southern to carry a vote.  Southern says they spent a lot of time convincing the other parties that Southern was not going to run, or dominate, the process.  After that, Southern said the group started to pull together and get organized for the development.  

They said everyone in the group appeared to be ready to find ways to make the RTO work and resolve the hurdles the non-jurisdictional utilities have been expressing with the development of other RTOs.  They said there were some rough spots that had to be resolved and they couldn't be sure agreement would be reached, but at this point there was a lot of cooperation. 

Andy and Bill wanted to convince me that this was not a delaying tactic by Southern and they were doing everything possible to ensure that a complete RTO filing could be ready by 12/15/01.  They also said they thought this is what Ed Holland wanted to discuss with Steve Kean.  

We talked about how other stakeholders could have input to the development.  They said that it was too early to make any commitment, but the group had started thinking about it and they expected an input process to be available by late summer. 
They said Southern was in favor of some process that would provide stakeholders the opportunity to look at what was being considered and advise the development group as early as possible.  They said they understood the difficulty stakeholders had with the approach Southern used in its initial filing and wanted to do it different, but they pointed out again that Southern could not dictate the process that would be allowed by the group.  In the meantime, they said if we wanted to provide position papers on any part of the RTO development they would make sure the papers were circulated in the group or we could continue to hold bilateral discussions with them or other members of the development group.

Jim, I still think it would be worthwhile to have a meeting between Ed and Steve Kean, and I would include you and invite Andy and Bill to come.  I don't think they want to discuss anything technical at this point; they just want to convince Enron that the approach Southern is taking provides the quickest development of a RTO for the Southern area, and they want any help we can give in convincing FERC to let this process run.  

I also think we need to pass on filing a response to Southern's May 15th status report, either alone or with Alabama Municipal Electric Authority ( Donna, I guess that's who you meant in the memo below, since AEC has signed a MOU with Southern?).  I will get in touch with Bob Reilley to find out why we haven't heard from EPSA on its filing.  I still think that's the best approach.






	Donna Fulton 06/28/2001 12:02 PM 	   To: Joe Connor/NA/Enron@Enron, Tom Chapman/HOU/ECT@ECT  cc: James D Steffes/NA/Enron@Enron, Christi L Nicolay/HOU/ECT@ECT, Sarah Novosel/Corp/Enron@ENRON  Subject: Southern  supplemental status report	


I am attaching the supplemental status report that Southern filed in its RT01-77 on June 20.  They have included MOUs with Georgia Transmission Corp, Santee Cooper and Alabama Electric Coop to work on development of an RTO.  These are really general, more of the same of what we've seen from Southern.

Also we had talked  about possible comments on the May 15 Southern filing; Coral was working on comments through EPSA.  Nothing has been filed by EPSA yet.  

Alabama did file comments on the May 15 status report and they have asked that the FERC establish a technical conference to "publicly air and evaluate the alleged governance concerns and the concerns regarding significant delay..."  Following a technical conference, they ask for a judge to convene a settlement conference at FERC to "undertake a properly supervised and serious development of an RTO for the SE without further wasted time."

At this point we could consider filing comments in support of the Coop comments.  






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