Per my voice mail.
---------------------- Forwarded by Christi L Nicolay/HOU/ECT on 05/22/2001 
04:28 PM ---------------------------


"Dan Watkiss" <dwatkiss@bracepatt.com> on 05/22/2001 10:43:59 AM
To: <christi.L.nicolay@enron.com>
cc: <Sarah.Novosel@enron.com> 

Subject: Arizona Public Service v. FERC


I think that you should intervene and possibly take an active role for a 
number of reasons.  Only if Enron were to win outright in the S.Ct. would 
petitioners' challenge in Arizona become moot.  But as we have always 
cautioned, the likelihood of overturning FERC and getting an S. Ct. decision 
putting all transmission on the OATT remains a long shot.  It is more likely 
that FERC will be affirmed and the DC Circuit's deference to FERC will remain 
as to what it must be unbundled.  In that scenario, it will be important to 
Enron that the Arizona precedent be upheld against challenge.  Specifically, 
that precedent is that once retail choice is implemented, all transmission 
becomes unbundled and subject to the OATT, even if later bundled in a default 
standard offer.   Absent legislation, this precedent and the lackadaisical  
RTOs are the only apparent vehicles for expanding open-access in the near 
term.

For these reasons, Enron should intervene at minimal cost and monitor how 
well FERC defends itself.  If FERC does a good job, that will be the end of 
its.  However, if FERC does a poor job, Enron should then consider filing a 
supporting brief.