We have been getting questions about the ability of potential customers to 
sell power onto the grid to EPMI.  Below is a brief outline of the FERC 
licenses required.  Customers other than those listed below (including non-QF 
industrial on site generators) need a power marketer license from FERC.  In 
most cases, such customers do not need to file for EWG status (unless their 
primary business is as a utility, like Enron).  

In addition, both EPMI and EES filed at FERC for authorization to perform 
certain power marketer license functions on behalf of industrial on-site 
generation customers.  We expect the authorization within a month.  I'll let 
you know when we receive it and what we can do for customers.

---------------------- Forwarded by Christi L Nicolay/HOU/ECT on 04/18/2001 
05:22 PM ---------------------------


"Andrea Settanni" <asettanni@bracepatt.com> on 04/18/2001 05:17:11 PM
To: <christi.l.nicolay@enron.com>
cc: "Dan Watkiss" <dwatkiss@bracepatt.com> 

Subject: Entities that do not need power marketing authorization


Christi-

This email briefly responds to your question whether state agencies or 
municipalities and qualifying facilities ("QFs") must obtain power marketing 
authorization.  The answer is no.

With regard to state agencies or municipalities, section 201(f) of the 
Federal Power Act ("FPA") states that no provision of Part II of the FPA, 
which governs the regulation of electric utility companies engaged in 
interstate commerce, "shall apply to, or be deemed to include, the United 
States, a State or any political subdivision of a state, or any agency, 
authority, or instrumentality of any one or more of the foregoing, or any 
corporation which is wholly owned, directly or indirectly, by any one or more 
of the foregoing, or any officer, agent, employee of any of the foregoing 
acting as such in the course of his official duty, unless such provision 
makes specific reference thereto."

Section 205 of the FPA, which would would otherwise require an entity to have 
rates for wholesale sales of power on file with FERC, does not apply to state 
agencies and municipalities.

With regard to whether QFs need power marketing authorization, most QFs are 
exempt (some small power production facilities are not exempt) from most 
provisions of the FPA, including section 205, which requires public utilities 
making sales of electric energy for resale in interstate commerce to file 
rate schedules with FERC.  QFs are instead regulated under PURPA, which 
authorizes utilities to purchase power from QFs at the purchaser's avoided 
cost.  FERC decisional precedent indicates that a QF can lawfully sell at 
market-based rates without seeking market-based rate authorization from FERC, 
but that it may nevertheless be prudent for a QF to seek FERC acceptance of a 
market-based rate schedule that would provide protection in the event QF 
status is lost.

Let me know if you need anything else.



Andrea M. Settanni
Bracewell & Patterson, L.L.P.
2000 K Street, N.W.
Suite 500
Washington, D.C.  20006-1872
(202) 828-7631 (phone)
(202) 857-2128 (fax)
asettanni@bracepatt.com