To add to Charles memo..

1) The Trustees were all present to listen the debate at the stakeholders committee. That was very positive.

2) The agenda order was changed to allow ample time to discuss the issues. 

3) Time and time again it was stated that NERC was running out of time to make the required transition. If not alternatives would be pursued; example EISB

4) Time and time it was stated that the Goulding task force Recommendations should be taken as a package, as a necessary first step.  These include:

1. Committee Representation . The Task Force recommends that the NERC Board direct the standing committees to modify the standing committees representation and voting to reflect the Task Force's attached "Initial Sectors and Criteria Model." This Model is based on the Task Force's preference for representation by "sector," and incorporates the Task Force's general recognition that an RTO sector should be included. The Task Force recognizes that some work remains to be done to refine the definitions of each sector and the criteria for belonging, but believes that the Initial Sectors and Criteria Model is an appropriate next step and should be taken immediately. Assuming that it may take some months to put in place the details of the new Model, including the new weighted voting procedures, the Task Force recommends that two ISO/RTO representatives be added immediately to each of the existing standing committees to provide formal representation and a voting role for ISOs/RTOs until the Initial Sectors and Criteria Model has been implemented.

2. Committee Participation and Voting . The Task Force recommends open participation in each sector, subject to certain criteria and qualifications. The Task Force has evaluated the qualification criteria and voting procedures used in several Regions (ERCOT and MAAC), and has incorporated features of those procedures into the recommended participation and voting procedures. Specifically, the Task Force recommends weighted voting by and within each sector, similar to what is done in MAAC.

3. Due Process . The new Organization Standards Process, which will be presented to the Board in October, addresses most due process issues and concerns. The Task Force recommends implementing this new process immediately.

4. One-Stop Shop . The Task Force favors having a single organization for developing Reliability Standards, Market Interface Practices, and Commercial Practices. The Task Force believes that NERC has an opportunity to reinvent itself to become this organization, and should take definitive steps in that direction at its October 2001 Board and Stakeholders Committee meetings.

5. Funding . The Task Force recommends that steps be taken immediately to decouple the funding of NERC from the Regional Reliability Councils. The Funding Task Group recommendations, adopted by the Board in February 2001, should be pursued.

6. MIC Role in Standards Approval . The Task Force recommends, as an immediate step to address concerns with the current NERC Standards Approval Process, and to provide a "bridge" until the new Organization Standards process is implemented, requiring the MIC to vote on all new/proposed NERC Operating Policies and Planning Standards and report results to the Board, including consideration of any minority positions.

5) Lots of discussion about EISB and how NERC may interface with it as a possible alternative.

6) Silence on the issue of "self regulating organization" . No one advocating that position.

7) Good opportunity to speak with Trustees one-on-one at dinner.

Jose 





From:	Charles Yeung/ENRON@enronXgate on 10/15/2001 06:01 PM
To:	mbennett@epsa.org@SMTP@enronXgate, mfgildea@duke-energy.com@SMTP@enronXgate
cc:	James D Steffes/ENRON@enronXgate, Richard Ingersoll/ENRON@enronXgate, Jose Bestard/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT 

Subject:	Stakeholder Committee Notes

Here are some bullet points of what transpired at the NERC meeting in Vancouver this Monday.

The customers met for almost 2 hours before the start of the SHC meeting.  Reps from Enron, Mirant, Dynegy, DENA, APPA and ELCON were present.

All agreed that a unified voice is needed to show strong direction from the customer side.  This may mean putting aside some internal positions.  Customers need to show support of the Goulding Task Force recommendations which offers a package deal to move NERC forward as a single standards setting organization for both reliability and commercial issues. The Goulding Task Force recommendations do fall short of asking for NERC action.

Agenda Item 5 - Scope of NERC over Commercial Issues
To ensure unity in appearance, customers agreed to maintain discussions in front of the Independents at a higher policy level.   Many details are needed to get individual entities "on board" however, such details should not impede on the ability for customers to show strong support on principles, i.e.-one-stop-shop, balance of membership, etc.  Therefore, all agreed to keep details out of the discussion, i.e.-funding, seats, charter, etc.

The actual SHC discussion was constructive, and persons articulated the need for a package deal to the room. The debate brough the expected concerns of the transmission providers to the surface.  TVA (Terry Boston) was most vocal about keeping NERC out of the commercial side.   Dominion Resources (Glenn Ross) supported the customers' position.  PJM (Phil Harris was also supportive).  

Agenda Item 6 - Independence of Security Coordinators
Comments made that this is a long standing stalemate at NERC and that NERC does not have the authourity to require corporate independence. Suggestions made to perform better and more audits.  Dave Penn brought up the memo from Roy Thilly.  Need to ask the Board to bring this issue to FERC for resolution.  Good arguments made by customers on need for independence in a new competitive market structure.  FRCC (Wiley) made arguments that the NERC should not revamp policies to police the few bad apples.  Should deal directly and specifically with the problem. 

A straw poll was taken of the persons in the room over recommending actions:
1) NERC should require corporate indepdence and ask FERC to address it.
2) NERC should focus in on the problem Security Coordinators and take specific actions to safeguard independent judgement (audits)

The vote was 21/24.  There were strong comments that this vote was not intended to be an industry representative vote, only to show how split the industry is over this issue.

The meeting adjourned for lunch and the Independents left after the meeting reconvened.
The SHC agreed to ask the BOT the following:

?	Establish a goal/vision to become the one stop shop for development of wholesale electric industry standards.  
?	Add words that "we need to go forward from where we are.
?	Take immediate action to adopt the initial recommendations contained in new Board agenda item 22.
?	Actively solicit cooperation collaboration and support from Canadian and US government entities.
?	Facilitate - jointly with interested trade associations; federal, state and provincial regulators, and other stakeholder organizations - an open and inclusive process to achieve consensus on the definitions and attributes of the functions necessary for the development of wholesale electric industry standards and practices, an on a course of action to institute such capabilities.
?	Interface with state and provincial regulators to address retail operation issues as they affect wholesale operations.

Agenda Item 9 -Transmission Expansion
Reference to "incentive rates", and "accelerated amortization", should be removed, not a reliability policy need. 
The reference to these expansion solutions are intended to be tutorial and does not assume NERC will begin to undertake rate issues.  APPA - public perception will be different.  Must remove this language.  Glen Ross will present this report to the Independents outlining the strong opinions on both sides.