Market Participants:
  The CAISO has posted its draft Congestion Management Reform
(CMR) recommendation on its web site at
http://www.caiso.com/clientserv/congestionreform.html
<http://www.caiso.com/clientserv/congestionreform.html> . This document
recommends changes to the CAISO's current Congestion Management process and
related features of its business practices and operations. This is a draft
document, albeit one that we believe reflects significant effort and thought
on the part of both the stakeholders who provided the initial input and the
interdisciplinary design team that drafted this document.
  This CMR recommendation represents an essential milestone in
the broader Congestion Management Reform Project.  The first stage involved
soliciting stakeholder input regarding the problems to be solved,
alternative solutions to address these problems, and criteria for evaluating
reform proposals. The second stage involved the CAISO's crafting an
integrated, internally consistent reform package utilizing the ideas
developed with and/or by Stakeholders in stage one. This document contains
the CAISO's draft recommendation. We emphasize that, although we believe
this recommendation package to be a necessary milestone in the Congestion
Management Reform Project, it is not intended to predispose the final
design. We are actively soliciting Stakeholders' comments and critiques
concerning this recommendation over the coming weeks (stage three of the CMR
project).
  Once the next round of stakeholder input has been assessed,
the CAISO will revise this CMR recommendation. The revised recommendation
will be presented to the CAISO Governing Board for discussion and review
only on August 1 (no Board action requested). The CMR recommendation will
continue to be developed through August and the final recommendation will be
submitted to the CAISO Governing Board for approval at the September 6th and
7th meeting.  The approved CMR recommendation will be prepared (in
conjunction with Stakeholders) for the final Tariff filing to FERC in
November (stage four). A revised, detailed calendar will be presented at the
CMR Stakeholder meetings on July 13 and 14.
  At the July 13 and 14 Stakeholder meetings, the CAISO will
present the entire recommendation, section-by-section and provide the
opportunity for Stakeholders to clarify their understanding of what is being
proposed. Shortly thereafter, we will hold additional Stakeholder meetings
to facilitate detailed discussion of individual elements of the
recommendation. Additional meeting dates will be discussed on July 14 at the
meeting.
  We look forward to reviewing this proposal with you and
receiving your comments. The CAISO welcomes any and all comments and
critiques of this recommendation. We appreciate your attention and efforts
in this endeavor to reform the Congestion Management process.
  Byron Woertz
  Director, Client Relations