TO:????????????  IEP RESTRUCTURING/TRANSMISSION TASK FORCE AND IEP POLICY 
COMMITTEE
FROM:???????STEVEN KELLY, IEP POLICY  DIRECTOR
DATE:??????  OCTOBER  30, 2000
?
RE:? IEP Restructuring/Transmission  Special Fund Solicitation:??November 2000
?
During the past summer, IEP circulated to the IEP  Restructuring/Transmission 
Task Force a number of Special Fund  Solicitations.? Overall, the response to 
these solicitations were lukewarm  at best.? Given this response, IEP 
inferred that the task force membrship,  while perhaps interested in the 
issues, was not interested  in?funding?additional IEP involvement in 
restructuring/transmisison  related matters.
?
Given this?recent history,?IEP circulated  via email about 10 days ago to the 
IEP Policy Committee (i.e. the Board) and  the? Restructuring/Transmission 
Task Force?a Notice regarding?a  proposal for IEP to move forward in 
responding to recent filings at FERC related  to price caps and wholesale 
market structures in California.? In that email  notice, however, IEP also 
indicated plans to?respond to recent?filings  at FERC?through the IEP Market 
Response Project.? The rationale for  using the IEP Market Response Project 
was twofold:? first, the planned  response and recommendations that would be 
contained in the FERC filing(s)  essentially would build on the work already 
accomplished through the Market  Response Project, and second, the 
RestructuringTransmission Task Force funding  was essentially depleted to 
conduct this type? of work.? 
?
While agreening that the work contemplated needed  to be accomplished, the 
Market Response Committee, comprised primarily of Public  Relations 
representatives from the? individual companies, believe that the  better 
vehicle for an IEP response is through the IEP Restructuring and  
Transmission Task Force, comprised primarily of regulatory affairs  
representatives from the individual companies.? Accordingly, IEP is once  
again planning on using the IEP Restructuring/Transmission Task force as the  
vehicle to respond to allegations of generator market power abuse and market  
structure dysfunction.? Howeever, to accomplish this activity, IEP must  
conduct a significant solicitation of the task force members to raise funds 
to  engage IEP at the FERC and the CPUC, as necessary, to provide a unified 
industry  response to the many allegations filed against the industry and the 
California  market structure.? As a reminder, as was made clear  during the 
most recent CAISO vote lowering price caps to approximately $65/MWH  
increasing to $250/MWH depending on load conditions, many important market  
participants are seeking to totally re-regulate the generation and 
transmission  business in California.? Note the CMUA/muni filing at FERC to 
create and  implement a cost-based TRANSCO; the IOU proposal to the EOB/CPUC 
to build the  next generation of generation at "cost-based" rates.
?
ATTACHED IS A MEMO DESCRIBING THE ISSUES AT  THE FERC AND PROVIDING AN 
OUTLINE OF AN IEP RESPONSE TO RECENT FERC FILINGS  RELATED TO MARKET POWER 
ABUSE AND A DYSFUNCTION MARKET STRUCTURE.?  
?
To accomplish these filings, IEP must raise funds  to pay for consultants.? 
To date, IEP already has  filed in four proceedings.? These include the 
following: 
?
o????  FERC:? IEP Motion To  Intervene on CAISO Amendment No. 31 (&price caps 
and forward markets8)
o????  CPUC:? IEP Comments on  Assigned Commissioner Ruling (Wood) 
Investigating Wholesale Electric  Markets
o????  CPUC:IEP Motion To  Intervene on SCE/PG&E/SDG&E Motion To End-Rate 
Freeze
o????  CPUC:? IEP Comments on  Proposed and Alternate Decisions of 
Commissioners Wood and Duque, respectfully,  in the Investigation on 
Wholesale Markets (OII)
?

Accordingly, IEP is issuing this IEP  Restructuring/Transmission Special Fund 
Solicitation to fund our FERC and CPUC  interventions on market structure 
matters.? We believe it is critical that  we respond collectively as a 
California based industry.? As indicated in  the attached memo, we also 
believe that the this response will be directly  linked now and in the future 
to the work being accomplished through the Market  Response Project, 
particularly as regards message, themes, and  recommendations.? The primary 
difference will be the audience:?  whereas the Market Response Project is 
primarily targeted at legislators,  editorial board members, and key 
policymakers; the IEP  Restructuring/Transmisison Task Force effort will be 
targeted primarily at  regulators such as the FERC, the? CPUC, and the EOB.
?
To accomplish a successful outcome in this  endeavor, we are seeking?at least 
$10,000 from large companies and $5,0000  from smaller companies.? This will 
help defray some of the cost already  borne by IEP to date on regulatory 
related matters, and position us to?  continue this activity through the 
forseeable future.? 

IF YOUR COMPANY IS INTERESTED IN PARTICIPATING IN  THIS EFFORT, PLEASE SO 
INDICATE BY RESPONDING TO THIS EMAIL AND INDICATING THE  LEVEL OF YOUR 
SPECIAL FUND COMMITMENT.? AS NOTED, WE ARE ATTEMPTING?  TO RAISE AT LEAST 
$10,000 FROM LARGE COMPANIES AND AT LEAST $5,000 FROM SMALLER  COMPANIES.? 
HOWEVER, EVERYTHING WILL HELP.

If you have any questions or comments, please contact  IEP.? We need a 
response as soon as possible.

 - 001026 IEP FERC Response Effort_fin.doc