---------------------- Forwarded by Mary Hain/HOU/ECT on 10/06/2000 01:41 PM 
---------------------------
To: Edward D Baughman/HOU/ECT@ECT, Joseph Wagner/NA/Enron@Enron, Raymond 
Bowen/HOU/ECT@ECT, Dennis Benevides/HOU/EES@EES, George 
Wood/Corp/Enron@Enron, John Llodra/Corp/Enron@ENRON, Janelle 
Scheuer/HOU/ECT@ECT, Tom Swank/HOU/ECT@ECT, David Fairley/HOU/ECT@ECT, Mike 
Curry/HOU/ECT@ECT, Terri Clynes/HOU/ECT@ECT, Oscar Dalton/HOU/ECT@ECT, Joe 
Gordon/Corp/Enron@Enron, Mike E Kelly/NA/Enron@Enron, Joseph 
Piotrowski/NA/Enron@Enron, Zachary Sampson/NA/Enron@ENRON, Dave 
Mangskau/Corp/Enron@ENRON, Doug Sewell/HOU/ECT@ECT, Posey 
Martinez/HOU/ECT@ECT, Sheila Tweed/HOU/ECT@ECT, Bob Carter/HOU/ECT@ECT, James 
E Keller/HOU/EES@EES, Robert Frank/NA/Enron@Enron
cc: Richard Shapiro/NA/Enron@Enron, James D Steffes/NA/Enron@Enron, Mary 
Hain/HOU/ECT@ECT, Sarah Novosel/Corp/Enron@ENRON, Joe 
Hartsoe/Corp/Enron@ENRON, Donna Fulton/Corp/Enron@ENRON, Harry 
Kingerski/NA/Enron@Enron 
Subject: Buying power from Industrials

Below is information about a FERC order allowing a power marketer, like EES 
or EPMI, to file to effectively act as an industrials "agent" when buying an 
industrial's excess power to insert into the grid.  Generally, an industrial 
would be required to obtain its own FERC power marketer license (takes about 
60 days) in order to sell into the grid.  EPMI and EES have not requested the 
"Impower" type agent authority yet, but I have been asked to file this for 
EPMI (and, Dennis, we could file for EES too, let me know). 

If FERC allows EPMI and EES to do this, then we would make quarterly filings 
on behalf of any industrials from whom we buy power at wholesale and they 
would not have to make their own FERC power marketer filings.  (Also, Enron 
generally has to also file for "EWG" Exempt Wholesale Generator status due to 
utility rules; however, if the industrial is primarily an industrial business 
in something other than power generation, an EWG determination is not 
required.)

I will keep you advised on the status of the filing(s) once made.

 
Subject: In Power Marketing --FERC order

On 3/30/2000, FERC issued an order accepting InPower's market based rates 
schedule that would permit entities that own generation to meet their own 
loads or for back up purposes (IPPs) to sell power at market based rates to 
InPower (on a profit share basis).  InPower made the filing stating it 
estimated that IPPs in MAIN (and, specifically, Wisconsin) could supply a 
substantial portion of the summer energy shortfalls (FERC did not limit 
ImPower to IPPs in MAIN).  InPower did not name any specific IPPs; however, 
to be eligible under ImPower's program, an IPP must control generation 
primarily for the purpose of meeting on-site demand or providing back-up 
generation and have such generation located on its premises or premises 
approved by the local utility.  Further, the generation must be capable of 
producing electricity either synchronous with the local utilities' grid or 
commensurate with agreements with the local utility.  Total sales made by 
IPPs in ImPower's program would not exceed 1000 MW/ hour.  The IPPs are in 
businesses other than the sale of electricity and are simply seeking 
"incremental return on the often-unused capacity of their generation assets."

When an IPP participates in ImPower's program, it becomes subject to FERC's 
jurisdiction as a "public utility."  

Jacksonville Electric Authority (JEA) protested ImPower's filing stating it 
allows retail customers to arbitrage retail and wholesale power markets by 
purchasing power at average, embedded cost retail rates and simultaneously 
using their generating facilities to sell power at wholesale to ImPower (at 
peak times).  FERC addressed JEA's concerns by saying that the IPPs cannot 
violate any rules and requirements properly imposed on the retail sales made 
to those suppliers.

This order allows ImPower (as an aggregator) to make the required quarterly 
filings for the IPPs and the IPPs do not have to apply for separate market 
based rates authority.  The are some additional reporting requirements FERC 
waived for the IPPs: accounting and reporting, issuance of securities and 
interlocking directorates (an affidavit is still needed). 

Please let me know if you would like a copy of the filing or order.