Jim

As per your request, I examined the attached doc (Response of National Grid US to Questions posed by the comission)

My initial reaction is:

1) The simple answer to your question is: yes, I think the proposed governance and organization structure can live with an LMP model. I am not familiar with other MISO CM model, but at least in terms of LMP, my feeling is that those are not mutually exclusive. It may be worth asking Ashley Brown

2) National Grid and other proponents of For-Profit-Transcos may have other ideas on how to manage congestions (e.g. different reliability level products by customer segment). However, the attached paper makes no allusion to avoid LMP and to introduce other congestion management models. The paper does not imply a physical model either. Your feeling may be right, but it does not surface from the paper per se.

3) National Grid proposal is, in fact, an expanded version of the Southeast Model proposed at the Mediation. It reinforces the role of the Transco Company, preempting, to some extent, the role of the System Admininstrator. This was a very controversial topic in the mediation: the System Adminstrator was in charge of some functions to avoid potential bias.  (particularly from transmission companies who are not willing/able to transfer their T assets)

4) National Grid will face a lot of resistance when selling this idea; Your concerns on generation redispatch and long term transmission planning are "surfaced" in the paper, by creating a concept of "core vs. additional" functions and a chinese wall, if necessary.  But the perception of potential bias does exist. National Grid will probably face a lot of difficulty in " selling"  this idea. Particularly when we get to the details

LM


 -----Original Message-----
From: 	Steffes, James D.  
Sent:	Monday, November 05, 2001 4:50 PM
To:	Maurer, Luiz; Stroup, Kerry; Roan, Michael; Nicolay, Christi L.
Subject:	FW: Alliance

FYI.  If we were to ask NG, could they live with the MISO CM/market model??

Thanks.

 -----Original Message-----
From: 	Steffes, James D.  
Sent:	Monday, November 05, 2001 12:40 PM
To:	Nicolay, Christi L.; Roan, Michael; Novosel, Sarah
Cc:	Shapiro, Richard
Subject:	FW: Alliance

NG proposal for "splitting" work between Transco and other parties.  Don't think they do a great job of managing the key fears - (1) generation redispatch and (2) long-term transmission plant over generation investments.  

As I read this document, I get the strange feeling that NG is a physical-right player.  Meaning, NG needs to build a model based on physical flows so they can control (a) TTC/ATC and (b) use of non-firm transmission.  

While the NG letter states that the "functions related to energy markets can be performed by a disinterested third-party", NG specifically reserves as a Core Function the "Ability to propose congestion pricing methodology".  Sure APX could go in and operate the balancing and CM system, but NG has the right to design subject to FERC procedures.

Not sure what you guys think?  

I will probably get back to Ashley Brown later this week.

Jim

 -----Original Message-----
From: 	"ASHLEY BROWN" <ACBROWN@LLGM.COM>@ENRON  
Sent:	Monday, November 05, 2001 9:18 AM
To:	dennis.flaherty@cinergy.com; david.a.svanda@cis.state.mi.us; gary.r.kitts@cis.state.mi.us; greg.r.white@cis.state.mi.us; janet.c.hanneman@cis.state.mi.us; laura.chappelle@cis.state.mi.us; michael.a.fielek@cis.state.mi.us; michel.l.hiser@cis.state.mi.us; robert.b.nelson@cis.state.mi.us; william.j.celio@cis.state.mi.us; harvey.reed@constellation.com; Mfgildea@dukeenergy.com; rfahey@edisonmission.com; Steffes, James D.; airobbins@gkase-law.com; rrismill@icc.state.il.us; Snaumer@icc.state.il.us; tharvill@icc.state.il.us; diane.munns@iub.state.ia.us; gforman@mail.state.ky.us; gwgillis@mail.state.ky.us; rgraff@mail.state.ky.us; rsphillips@mail.state.ky.us; rkind01@mail.state.mo.us; wsmith@max.state.ia.us; skelly@mbolaw.com; Jim.mayhew@mirant.com; mina.turner@mirant.com; susann.felton@mirant.com; Srandazzo@mwncmh.com; ervin@ncuc.net; richard.doying@neg.pge.com; clane@psc.state.wv.us; dellis@psc.state.wv.us; don.howard@puc.state.oh.us; judy.jones@puc.state.oh.us; Kim.wissman@puc.state.oh.us; nicci.crocker@puc.state.oh.us; eckenrod@puc.state.pa.us; levin@puc.state.pa.us; jcrowley@pwrteam.com; jorr@reliant.com; cwalker@scc.state.va.us; boyntonh@state.mi.us; bborum@urc.state.in.us; Bpauley@urc.state.in.us; dhadley@urc.state.in.us; dziegner@urc.state.in.us
Cc:	Paul Connolly; nick.winser@us.ngrid.com; paul.halas@us.ngrid.com
Subject:	Alliance

Attached please find a copy of the paper entitled "Response of National Grid USA to Questions Posed by the Commission" for your review.




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