At the October 24, 2001, FERC Sunshine meeting, the following items were discussed:

Kern River Firm Customers' Rehearing Request Denied (C-6, C-8 on agenda):

Called by Linda Breathitt, these are two Kern River expansion applications [CA. Action Project, CP01-69; 2002 Expansion, CP01-106] that have received certificates.  The draft orders deny rehearing requests by Firm Customers who charge that additions will cause further  pro rata allocations at Wheeler Ridge.  The draft order states that the benefits of the project outweigh "any potential adverse impact to existing customers?" and that "the solution to the problem of pro rata curtailments at Wheeler Ridge lies not with interstate pipelines, but with resolving the problems of take-away capacity on SoCalGas?."  Hence, the orders reason that Kern River has satisfied its obligations to its customers, and the current lack of intrastate capacity "cannot be laid at [Kern River's] door."

Breathitt is filing concurrences to these two orders to highlight the important issue of FERC's response to intervener allegations of insufficient take-away capacity related to interstate expansions.  Though Breathitt doesn't dissent from the rehearing denial, she wants to underscore the importance of the Commissions' acknowledgement of the role that possible degradation of existing rights plays in the determination of the public need and necessity for pipeline expansions.  She also states that she is "uneasy" about FERC's "strident policies" in favor of adding pipeline facilities despite possible inefficiencies and constraints, and she reiterates that FERC's mandate under the NGA goes beyond making sure pipeline gets into the ground.  She notes that the Commission will revisit the take-away capacity issue in another Kern River expansion application, CP01-422 [2003 Expansion Project].

Brownell Calls for Development of Regional State Relations Panels under Auspice of "Electricity Market Design and Structure" NOPR, RM01-12 (E-5 on agenda)

Though  the issuance of a NOPR is not apparently imminent, under this discussion item Nora Brownell announced that she has sent a memo to the other three Commissioners recommending the development of some internal structure to coordinate communications between FERC and state commissions.  The need for such coordination emerged from obvious frustration expressed by state commissioners during RTO Week.  To get this process going, Commissioner Brownell asked staff to pursue a structure, perhaps a type of regional panel, with the mission to strengthen federal/sate relationships.  Considering the magnitude of RTO development, FERC likely will need to have dedicated staff work on this.  Chairman Wood requested that Dan Larcamp, Director of OMTR, bring a proposal to the Commission at the next meeting on how to implement a structure.  While all three other Commissioners supported Brownell's proposal, Commissioner Massey noted that there's already been seven years of "process" and input on RTO formation and that any new structure should be developed "in a way that gets us to an endgame" concretely and clearly.

Western Infrastructure Reports Lay Baseline for FERC Adequacy Conference in Seattle

Staff presented multiple detailed reports on data and background material gathered to lay the groundwork for discussions at next month's Western Infrastructure Adequacy Conference in Seattle on November 2 [similar conferences will be held regionally across the country].    The conference is a FERC "fact-finding mission" which will seek to answer three primary questions:
(1)		Is the current energy infrastructure in the West adequate?
(2)	What are the infrastructure needs for the region?
(3)	What factors inhibit investment in the development of adequate energy infrastructure?

While the presentations seem to focus primarily on electric transmission, the conference will cover all energy delivery systems.  The overriding question on all fronts is what needs to be done, and who needs to do it.  The powerpoint presentations made by Staff are already available on FERC's website at <http://www.ferc.gov/calendar/commissionmeetings/discussion_papers.htm>
 
"RTO Week" Update 

Staff updated the Commissioners and public on the week of RTO panels held at FERC last week.  Staff is preparing and organizing a document outlining "what Staff heard," which will be posted on FERC's website this week.  The document is intended to give focus to reply comments from stakeholders.  Staff also suggested that there may be a need to hold smaller, more focused Staff sessions to "dig deeper?."  According to Staff, while there seemed to be some consensus at the 10.000 mile high level, more specific issues emerged which may require further discussion.

Lengthy Updates and Discussion on Two RTO Mediations (Southeast, Northeast), Midwest RTO Progress

In the Northeast and Southeast RTO mediation cases, Staff and the mediating Judges briefed the Commissioners on where the ordered mediations left off, what proposals and options are now on the table, and what next steps may be necessary.  These mediation reports will be available online (by end of week).  What is not clear is when the Commission is going to vote on RTOs - there were no votes at the meeting, only discussion.

In the Midwest, both MISO and ARTO are ready for operations, and MISO and SPP are also prepared to merge.  While Commissioners discussed specifics of all the Midwest proposals, again no vote was taken or any indication given as to when a vote may occur.

ETS Draft Orders Issued:

?	Northern Natural, RP00-223-005:  Northern's Limited Firm Transportation ["LFT"] tariff sheets were approved, including two additional LFT sheets concerning the Carlton surcharge.
?	Calypso, CP01-444-000:  Letters issued to Secretary of State, Secretary of Defense requesting review of draft Presidential Permit for Calypso to construct, own and operate pipeline facilities at the boundary of the U.S. Exclusive Economic Zone [EEZ] and the Bahamas EEZ.