I would like to keep you informed on the issue of small generation 
interconnection to the BPA transmission network. I am trying to find sites to 
locate some mobile generators that Enron has available. There are several 
Public Power utilities (BPA customers)  in the Region that are interested in 
having these units located in their service areas. My understanding is that 
BPA is requiring small generators to go through an interconnect process if 
they want to sell the power on the market. But, if the utility owns the 
generation, or if the utilities industrial customer owns it, and they are 
displacing BPA power then they don't have to go through this interconnection 
process.  That seems to me like self-dealing in that BPA's Power Business 
Line gets the benefit of this load that the Transmission Business Line is 
allowing to slip in, but other marketers, such as Enron, has to play by 
different rules if we want to have access to this power.

I have a meeting Thursday with one of BPA's VP's in  theTransmission Business 
Line to talk about this issue. I will send you other email and correspondence 
I receive on this. At some point Enron may want to take a stand on BPA's 
activity if they are not going to be cooperative with our efforts.


Jeff
---------------------- Forwarded by Jeff Shields/PDX/ECT on 03/21/2001 11:14 
AM ---------------------------


"Paschke, Al - TM" <afpaschke@bpa.gov> on 03/21/2001 10:18:31 AM
To: "'Jeff.Shields@enron.com'" <Jeff.Shields@enron.com>
cc: "Bennett, Ruth - TM-DITT1" <rbbennett@bpa.gov>, "Peterson, Edward A - 
TOC-DITT2" <eapeterson@bpa.gov> 

Subject: FW: Small scale generation


Jeff--Thanks for your e-mail.  I have responded to your questions below.  My
responses are in BOLDFACE.  Also, please note that I am sending to you two
relevant documents via separate e-mail.  These documents are noted in my
response to your first question below.

As I mentioned in the voice mail that I left with you this morning, you may
want to come in and talk to us concerning your plans. Engineering staff
would be available to discuss BPA-TBL's interconnection requirements.  Take
care.

Al Paschke
(360)418-8283

-----Original Message-----
From: Jeff.Shields@enron.com [mailto:Jeff.Shields@enron.com]
Sent: Saturday, March 17, 2001 3:58 PM
To: rbbennett@bpa.gov; Alburns@bpa.gov
Subject: Small scale generation


I realize you are not permitted to talk directly with each other about this
subject, but I find myself in the middle of this policy issue and need
clarity on how to respond to requests I have received from customers in the
past few weeks. At issue is how to connect new "small scale" generation in
order to get generation on-line as quickly as possible. If we set aside
local and state permit requirements for the sake of this conversation, I
would like to ask about the process for working with Public Power
utilities, or their end-use consumers that have expressed an interest in
installing small-scale generation with the idea of selling the output to
Enron.

I have access to several turbine technologies ranging in size from 75 kW to
as large as 22 MW. These units are available in the next 4-20 weeks. I have
been contacted by various BPA utility customers, or in two cases,
industrial customers served by Public Power utilities that would like to
have Enron install these units at their facilities. The basic idea is that
Enron would install units and operate them and sell the out-put. The host
end-user and/or host utility will be paid a fee in return for supporting
this installation. In some instances the host would own the generation
asset and Enron would have a toll, in other instances Enron may own the
asset.

Questions that I have include:

What is the process for interconnection with BPA's transmission system? SEE
THE DRAFT DOCUMENT ENTITLED, "BPA TRANMSISSION BUSINESS LINE PROCESS FOR
SMALL GENERATION INERCONNECTIONS WITH UTILITY SYSTEMS WITHIN THE BPA LOAD
CONTROL AREA."  ALSO, SEE THE DRAFT DOCUMENT ENTITLED, "BPA TRANSMISSION
BUSINESS LINE PRELIMINARY QUESTIONS FOR SMALL GENERATION INTERCONNECTIONS
LESS THAN 50 MW."  I AM SENDING COPIES OF THESE DOCUMENTS TO YOU VIA
SEPARATE E-MAIL.

Is a traditional interconnection request necessary? YES.

If the host utility effectively takes this energy to load and virtually
consumers all of the power can Enron pay BPA a transmission few as though
the power were delivered over the federal transmission system? TO THE EXTENT
THAT POWER IS TO MOVE OVER THE FEDERAL TRANSMISSION SYSTEM, TRANSMISSION AND
ANCILLARY SERVICES MUST BE ACQUIRED FROM BPA-TBL.  (UNDER SOME
CIRCUMSTANCES, CERTAIN ANCILLARY SERVICES CAN BE SELF OR THIRD
PARTY-PROVIDED.)  TO THE EXTENT THAT THE PROJECT WOULD BE INTERCONNECTED
WITH THE SYSTEM OF ONE OF BPA'S REQUIREMENTS CUSTOMERS, (WHO PURCHASES NT
TRANSMISSION SERVICE)AND THE POWER SERVES THAT CUSTOMER'S LOAD REQUIREMENTS,
THE CUSTOMER IS OBLIGATED TO PURCHASE TRANSMISSION AND ANCILLARY SERVICES
ASSOCIATED WITH SUCH LOAD REQUIREMENTS.  THE CUSTOMER IN BPA'S CONTROL AREA
WOULD HAVE TO ENTER INTO ARRANGEMENTS WITH BPA-TBL FOR METERING, ET AL.

Would this power have to be sold in the Northwest?  NO.

Is BPA interested in a 3-5 yr toll on these smaller generation
technologies? IF YOU ARE ASKING WHETHER BPA WOULD BE INTERESTED IN
PURCHASING SUCH GENERATION FOR A PERIOD OF 3-5 YEARS, YOU SHOULD DISCUSS
THIS WITH BPA'S POWER BUSINESS LINE.  OTHERWISE, PLEASE CLARIFY YOUR
QUESTION.  THANKS.


I have had conversations with Scott Wilson about tolls on larger production
units and advised Scott that Enron has these smaller units available. I
expect to talk with him further this week about siting a 22 MW natural-gas
fired generator in the region. The tricky part is understanding how we get
the power to BPA and/or the market within the rules for interconnection
with the Federal Transmission System. Any help that you can offer on
expediting this process would be greatly appreciated.

I am sure there are more questions and I suspect you will have some as
well. Please feel free to contact me.


Jeff