I spoke with Phil Harris today.

My key messages -

1. Commercial interest does not appear high on partnering / investing with 
PJM Technologies right now.  Doesn't mean that this is forever, but probably 
will want to gauge the markets reaction to your activities before .

2. We've drafted a Stipulation for Enron and PJM that gets most of Enron on 
board that I'm happy to send to your lawyers, but I want to be realistic 
about its chances of success -  

a)  appointment of a Settlement Judge (not Technical Staff) to oversee the 
consolidation process with quarterly updates and right to comment from all 
parties;
b) PJM will agree to modify its system including 1) FTR system, 2) eliminate 
ICAP obligation, and 3) discussion about central market making functions (day 
ahead markets).
c) a more specific obligation to move forward with the ability for Enron file 
at FERC on Nov.1.02 to repeal this status with PJM pre-approval on our filing 
(I went beyond the agreeing not to oppose such a filing).

He agreed with me that PJM wouldn't be able to sign.  We talked a little 
about a middle ground, but he and I did not see any real options.  

Given the time commitments for his lawyers, he is going to file something 
that would (a) agree to a Settlement Judge, (b) ask FERC not to predetermine 
any outcomes, especially a merger, and (c) don't hold his RTO hostage to our 
demands.

I think that given the Alliance RTO and GridSouth RTO language, he'll get his 
Order.

We agreed to keep talking.  I told him that we are trying to enter into 
discussions with the PA PUC about moving their market further ahead and I'd 
keep him in the loop.

He told me that he would be on C-SPAN this Wed am to discuss competition.  He 
really is a big believer in this market.

Finally, and most interestingly, he did not oppose the idea of minimizing the 
central market making functions of PJM.  He does not have a philosophy that 
the Sys Op must manage all of the markets (I specifically asked about Day 
Ahead).  He does see  a need for a workable solution that can shore up public 
confidence right now.  He would like to migrate to a more market driven 
environment in a reasonable timeframe.  He fully agrees that the market is 
better than a Sys Op in determining what happens - his limitations are 
technology and systems.  Ultimately the Sys Op should do nothing more than 
manage the network within the last 10 minute interval.