RE: Summary of Commission Meeting ,
 Could you please send some insight into the Gas Pipeline Operational flow i=
tem?

 -----Original Message-----
From: =09Butler, Janet =20
Sent:=09Thursday, September 27, 2001 9:12 AM
To:=09Bagot, Nancy; Benner, Martha; Blair, Lynn; Boatman, Jack; Butler, Jan=
et; Cordes, Bill; Corman, Shelley; Culwell, Christi; Daniel, Shonnie; Darve=
aux, Mary; Dietz, Rick; Dornan, Dari; Dushinske, John; Farrell, Sharon; Fos=
sum, Drew; Fulton, Donna; Goodpasture, John; Harris, Steven; Hartsoe, Joe; =
Hass, Glen; Hayes, Robert; Hayslett, Rod; Heckerman, Bambi; Hess, Theresa; =
Hill, Robert; Holmes, Bradley; Holtzman, Staci; Horton, Stanley; Janousek, =
Martha; January, Steven; Kilmer III, Robert; King Jr., Frazier; Kirk, Steve=
; Kissner, Tim; Lantefield, Laura; Lichtenwalter, Blair; Loeffler, Michael;=
 Lowry, Phil; Mann, Ruth; Martens, Donna; McCoppin, Dorothy; McGowan, Mike =
W.; Miller, Mary Kay; Nacey, Sheila; Nelson, Kimberly (ETS); Neppl, Ray; Ne=
ubauer, Dave; Neufeld, Eva; Novosel, Sarah; Paladino, Ranelle; Paschal, Zel=
da; Patterson, Geneva; Pavlou, Maria; Petersen, Keith; Place, Janet; Porter=
, Gregory J.; Pribble, Dan; Pryor, Tony; Raker, Colleen; Rice, Randy; Ringb=
lom, Kathy; Saunders, James; Sawyer, Lisa; Scott, Donna; Soldano, Louis; St=
anton, Lon; Talcott, Jim; Taylor, Gina; Tu, Denis; Van Norden, Mike; Veatch=
, Stephen; Vignaroli, Donald; Warner, Jody; Watson, Kimberly; Wilkie, Kim; =
Wilson, Rob; Winckowski, Michele
Subject:=09Summary of Commission Meeting



The Commission meeting yesterday, chaired by Pat Wood, consisted of discuss=
ions on FERC's:

Administrative Issues
?=09Strategic and 2002 Business Plan
Priorities for the strategic plan for 2001 through 2005 were outlined yeste=
rday and include a) promoting secure, high-quality environmentally responsi=
ble energy infrastructure with consistent policies; b) encouraging competit=
ive markets in lieu of traditional regulation; c) protection of markets/cus=
tomers through fair market oversight; and d) efficiently running FERC. In r=
eaching these goals, FERC intends several initiatives such as removing impe=
diments to market investment, encouraging use of new technology; continuing=
 to advance competitive markets; addressing landowner, safety and environme=
ntal concerns and striving for clarity not only in specific areas such as c=
ost recovery but also in communications to stakeholders. Shortly, Staff wil=
l be recommending a twelve-month plan as part of the overall strategic plan=
.
?=09Infrastructure Adequacy
There will be a series of open commission meetings held throughout the U.S.=
 beginning in November in the West; in December or early spring a meeting w=
ill be held in the northeast and later in 2002 for the Midwest and south. T=
he intent is to reach out to the states for greater cohesion.
?=09California Infrastructure Update
Staff concluded that the California natural gas market for take-away capaci=
ty was insufficient to accept delivery of all interstate capacity. The Cali=
fornia Energy Commission released a report on September 24 that agrees that=
 more expansion in California is needed.=20

Constraint Study
FERC will complete a constraint study with associated costs that should be =
completed by November 7, 2001. Staff cited constraints in central New York =
state and California. Massey asked if the study was to provide solutions or=
 recommendations. It is a study to identify the constrained areas and the r=
esulting costs to consumers.

RTO
FERC is imposing additional "incentives" to encourage the formation or join=
ing in RTOs. The Midwest, Northeast and Southeast RTOs will be considered a=
t a FERC meeting in October. There will be a series of meetings in "RTO wee=
k" to focus on congestion management, cost recovery, marketing monitoring, =
transmission planning, reliability standards and transmission rights. A NOP=
R is expected to be issued on market design and structure.

Marketing Affiliate NOPR, RM01-10
The Notice of Propose Rulemaking would apply one set of rules across both n=
atural gas pipelines and electric utilities. Under the proposal, transmissi=
on providers must operate independently and treat all customers on a nondis=
criminatory basis.  The rules would be codified in a new section of the reg=
ulations and would broaden the definition of affiliate to include all "ener=
gy affiliates."  The only exception noted in the discussion was the exclusi=
on of Regional Transmission Organizations (RTOs) from the definition of ene=
rgy affiliates.   =20

The Commission was presented two options to address the applicability of th=
e rule to public utilities' native load merchant functions.     =20

Option A:  Status Quo - the rule would not apply to the bundled retail merc=
hant function.
Option B:  The rule applies to the bundled retail merchant function and wou=
ld prohibit merchant employees from having access to the control room of th=
e utility.=20

After extensive discussion, the NOPR was approved 4-0 with additional langu=
age added on behalf of Commissioner Breathitt to state that Option B may no=
t be included in the final rule and encourage comments by affected parties =
and the States.

Massey questioned whether the NOPR is primarily focusing on broadening the =
definition of "energy" affiliate and whether there are any energy-type affi=
liates that would be exempt. Staff responded that the emphasis is on broade=
ning the definition to include all "energy affiliates" and no energy-type m=
arketing affiliates would be exempt, except RTO's.

The proposed rule extents the current prohibition against disclosing certai=
n information to all "energy affiliates".  The rules do not directly govern=
 energy affiliates, but they govern the disclosure of information and the s=
eparation of transmission employees, officers and directors from other busi=
nesses.=20

Under the proposal, waivers may be requested, if operationally required or =
under emergency protocols particularly for small systems.

Gas Pipeline Operational Flow
FERC has tabled this item for the next public meeting on October 11.=20
janet.butler@enron.com