Some things to consider --

A. Enron Response to Alliance Compliance Filing (pre-MISO/ARTO discussions)

1. Stakeholder Process
 a. Getting better, more meetings post EPSA letter
2. Day One Congestion Management (not much to discuss, already approved by 
FERC)
3. Key Issue - Many details left uncertain until ARTO filing 120 days prior 
to 12/15/01

RECOMMENDATION - Don't file right now.  Talk with FERC staff about our Wish 
List for RTOs. Work through RTO process to implement.

B. National Grid Operation of ARTO (Comments June 14/01)

1. Should Enron Oppose NG?

Yes a. Unclear about how much control NG has in the process (complete tariff 
control?).
 b. There are issues about NG independence from market (NE and NY assets).

No a. NG wants to be a Transco in the ultimate state.
 b. This is a mid-term solution that could work.
 c. If done right, better opportunity to deal with transmission issues than 
current structure.

RECOMMENDATION - Enron should file comments on key open policy issues with 
for-profit Gridco model.  

We don't oppose, but we are concerned that controls must be in place to 
ensure well functioning markets.
The Transco model is the best model for transmission operation.  If this 
action by NG leads ultimately to a Transco, it is a good outcome.
The operator of RTO tariff must be independent of all market players (NG owns 
generation and has distribution in New England).  Transelect wrote "I believe 
quite strongly that FERC should deny this petition because the Grid is a 
significant owner of both distribution and generation assets in the Northeast 
(New England Electric and Niagara Mohawk).  It is a very small step from this 
decision to one that would allow Southern to operate GridSouth, or one that 
would allow Entergy to operate the Florida RTO in exchange for FP&L operating 
the Entergy RTO.  As a matter of National policy, transmission operators 
should be independent of either the wholesale or retail electric markets.  As 
a business issue, many transmission owners are reluctant to divest of 
transmission because they retain hope that their transmission can be used to 
protect above market native generation.  How would you like to try shipping 
power into the Northeast with the Grid, a major retail supplier and a 
significant generator, controlling access to the market?"  We  should make 
this argument very strongly.  NG must have a plan to divest itself of the 
generation and distribution side of the business because NE and NY are 
economically viable markets impacted by the Alliance RTO.
The Operator of RTO must have full authority to modify the tariff and 
operations of the RTO.  The Transmission Providers should not be able to 
restrict or limit in any fashion the for-profit Gridco Operator beyond 
ensuring (1) technical proficency, (2) assets returned in reasonable manner, 
and (3) recovery of FERC approved revenue requirement.