Jim, I agree - lets put a plan in place to ensure appropriate representation 
at these ISO's (not unlike PAC) and ensure that FERC is not abdicating their 
responsibilities.

The three of us probably need to get together and discuss tactics around a 
number of issues.  

Jim, I am also curious where you are in your thoughts and plans given your 
new role.

Regards
Delainey
---------------------- Forwarded by David W Delainey/HOU/ECT on 06/29/2000 
06:48 PM ---------------------------


James D Steffes@EES
06/29/2000 04:06 PM
To: David W Delainey/HOU/ECT@ECT
cc: Richard Shapiro/HOU/EES@EES 
Subject: Re: california  

Dave --

To your direct question of should Enron take a more active role in supporting 
or nominating Board members, I agree fully.

I would add the following thoughts:

First, I think that Enron's key position in terms of ISO / RTO governance 
should be that Boards (or the leadership and staff of transmission providers) 
should be indifferent to the price at which the commodity trades.  ISOs and 
RTOs should only worry about transmission, not the price of the commodity 
they are transmitting.   Winning on this issue will be critical as RTOs are 
proposed throughout the country to meet Order 2000 obligations.   

Also, Enron needs to really go after FERC for abdicating its wholesale market 
authority to ISOs, especially ISOs like in California that are dominated by 
state political figures.  FERC is responsible for ensuring just and 
reasonable rates, not some stakeholder Board established by state 
legislation.  We need to argue strongly that FERC must take back this 
authority in the near term and utilize its administrative procedures to 
impose any market changes.  

Finally, given that it will be some period of time before there is truly a 
"financially indifferent" transmission provider under Order 2000, Enron must 
take an active role in working within and through the Boards of the current 
ISOs.   A good example is the way that Dan Allegretti works within the 
NE-ISO.  These Boards and the ISOs are fundamentally political 
organizations.  Our representatives must take the time to get to know the 
people so that when key issues arise, we are able to influence the decisions.

Thanks, 

Jim




David W Delainey@ECT
06/29/2000 12:22 PM
To: Richard Shapiro/HOU/EES@EES, David Parquet/SF/ECT@ECT
cc: John J Lavorato/Corp/Enron@Enron, Tim Belden/HOU/ECT@ECT, James D 
Steffes/HOU/EES@EES, Kevin M Presto/HOU/ECT@ECT 
Subject: california

Guys, good job with the California issues - we didn't get everything but we 
managed the position in a very effective manner.

Jim, given our view to support the growth of the ISO structures as a 
necessary evil and given the socio-political leaning of these entities, 
should we be more actively or aggressively supporting or nominating directors 
on these boards?

Jim/Rick, we need a full court press on this NEPool ICAP issue - Allegretti 
is putting plan in place.

Regards
Delainey