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Date: Tue, 19 Dec 2000 06:43:00 -0800 (PST)
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Subject: Alliance Info Alert
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---------------------- Forwarded by Vince J Kaminski/HOU/ECT on 12/19/2000=
=20
02:45 PM ---------------------------


"The Alliance of Energy Suppliers" <alliance@eei.org>@ls.eei.org on=20
12/19/2000 02:08:58 PM
Please respond to "The Alliance of Energy Suppliers" <alliance@eei.org>
Sent by: bounce-app-ippexecs-33275@ls.eei.org
To: "Generation and Power Marketing Executives" <app-ippexecs@ls.eei.org>
cc: =20
Subject: Alliance Info Alert


Dear Generation/Power Marketing Executive:

This Alliance Info Alert includes three items of interest:
1)  The weekly Alliance Express newsletter
2)  Listing of recent filings at FERC
3)  Timeline for FERC action on California Markets  (attached)


                       Alliance of Energy Suppliers Express=02=05December 1=
9, 2000

INSIDE WASHINGTON  =02=05 FEDERAL AFFAIRS

***FERC De-Federalizes California Markets, Adopts Other Structural Reforms*=
**

At a special meeting Friday afternoon, FERC unanimously approved its eagerl=
y=20
awaited final order reforming the California wholesale markets, adopting th=
e=20
major outlines of its November 1 proposed order and sending back to=20
California the responsibility for addressing state-related matters.  At the=
=20
same time, FERC deferred consideration of retroactive refund issues as well=
=20
as the imposition of region-wide price caps.  FERC reiterated their earlier=
=20
conclusions that under certain circumstances, California ratepayers were=20
subjected to unjust and unreasonable power rates due to California's=20
"seriously flawed" market structure and rules in conjunction with tight=20
demand and supply conditions throughout the West.

FERC adopted the November proposal to eliminate, effective immediately, the=
=20
state's mandatory requirement that the state's investor-owned utilities buy=
=20
and sell electricity through the PX, and allow these utilities to purchase=
=20
electricity through forward contracts and other alternative mechanisms to=
=20
manage supply risks.  FERC terminated the PX's rate schedules effective at=
=20
the close of business on April 30, 2001.  In effect, as Chairman James=20
Hoecker stated, the order de-federalizes 60 percent of the California=20
wholesale market established under the state's restructuring law, returning=
=20
ratemaking authority over company-owned generation to the California Public=
=20
Utilities Commission (CPUC).

The agency also modified the effective period of the $150/MWh "soft cap"=20
proposal, limiting its application through April 2001, whereupon a=20
"comprehensive and systematic monitoring and mitigation program which=20
incorporates appropriate thresholds, screen and mitigation measures" must b=
e=20
in place.  In a related move, FERC ordered a technical conference early nex=
t=20
year to develop such a program by March 1, 2001, so that these measures can=
=20
be place by the May 1, deadline.

***Energy Secretary Issues Order to Power Generators and Marketers To Bolst=
er=20
California's Supplies***

Energy Secretary Bill Richardson has responded to the severely constrained=
=20
power supply situation in California by issuing an order, pursuant to Secti=
on=20
202(c) of the Federal Power Act, to require generators and marketers to mak=
e=20
power available to meet the state's electricity needs.  The emergency=20
directive requires that, if the California independent system operator (ISO=
)=20
certifies that there is an inadequate supply of electricity, certain=20
suppliers would be required to make power available to the ISO if they have=
=20
power available in excess of the amount needed to satisfy service to firm=
=20
customers. Those suppliers that have provided power to the California power=
=20
exchange (PX) and the ISO over the last 30 days that have firm capacity=20
available would be subject to the order.

Under the order, the ISO is required to provide notice to each supplier=20
subject to the order of the amount and type of service requested by 9:00 pm=
=20
EST on the day before the requested service.  The ISO must, to the extent=
=20
feasible, allocate the requests in proportion to the amount of each=20
supplier's available power.  The price for the power provided pursuant to t=
he=20
order will be set by an agreement between the ISO and the supplier.  If no=
=20
agreement is reached, FERC is to determine the just and reasonable rate at =
a=20
later date.   The order will remain in effect until 3:00 am EST on December=
=20
21, 2000 unless modified.

***EPA Sets Plans to Regulate Plants' Mercury Emissions***

EPA Administrator Carol Browner, in a long-awaited announcement, indicated=
=20
last week that the Administration will require reductions of mercury=20
emissions from coal- and oil-fired power plants.  The agency stated that it=
=20
plans to propose new regulations in December 2003, and hopes to finalize ne=
w=20
rules by December 2004.

In the wake of the decision, EEI called on EPA to make certain that any=20
program to control utilities' mercury emissions be based on the best=20
scientific information available in order to assure the protection of publi=
c=20
health.  "EEI urges EPA to maintain its commitment to resolving the key=20
scientific and technological issues," said Paul Bailey, EEI Vice President,=
=20
Environmental Affairs.  Given these uncertainties, EEI is disappointed that=
=20
the regulatory determination includes statements regarding public health=20
threats and hazards that are unsupported by current science," said Mr. Bail=
ey.

"In the meantime, the electric power industry will continue to work with al=
l=20
stakeholders to determine the extent to which additional mercury reductions=
=20
from power plants may be needed, and how those cuts should be achieved," Mr=
.=20
Bailey concluded.

MERGERS & ACQUISITIONS

 ***Calpine Completes Acquisition of EMI Power Assets***

Calpine Corporation has announced that it has completed the acquisition of=
=20
power assets from Energy Management, Inc. (EMI).  In the deal, Calpine=20
acquired the remaining interest in three recently constructed, combined-cyc=
le=20
power generating facilities located in New England, as well as a joint=20
marketing venture between Calpine and EMI.  Prior to the transaction, Calpi=
ne=20
held a 50 percent net interest in the projects.

"We are very pleased to have completed the acquisition of these new and=20
highly efficient power plants.  The Dighton, Tiverton, and Rumford faciliti=
es=20
were among the first merchant power plants to enter commercial operation in=
=20
New England," said Calpine Senior Vice President Bob Alff.  "Combined with=
=20
our other announced project in the Northeast, we have created a coordinated=
=20
system of low-cost assets, with excellent geographic diversity, to provide=
=20
power to a very attractive New England market," added Alff.

***Exelon Completes Acquisition of 49.9 Percent of Sithe***

Exelon Corporation and Sithe Energies have announced the completion of=20
Exelon's acquisition of 49.9 percent of the stock of Sithe.  The completion=
=20
of the acquisition finalizes an agreement in which PECO Energy Company agre=
ed=20
to purchase 49.9 percent of Sithe's assets in North America for $682=20
million.  PECO has since merged with Unicom Corporation to form Exelon=20
Corporation.

Under the terms of the agreement, Exelon has the option to purchase the=20
remaining 50.1 percent of Sithe within two to five years at a price based o=
n=20
prevailing market conditions when the purchase option is exercised.  Exelon=
=20
and Sithe will continue to operate independently, said the companies.

ENERGY DATA

*** Weekly Electric Output (Week 50)***

Electric output reached 74,737 GWh for the week ending December 9 (Week 50)=
,=20
with the highest increase over 1999 levels in the Mid-Atlantic region, whic=
h=20
had a 15.8 percent increase over 1999.  Looking at year-to-date information=
,=20
the Pacific Southeast leads the nation in growth of output.  For more=20
information, email alliance@eei.org.

WHO'S WHO

***Allegheny Energy Announces Leadership Change***

Allegheny Energy, Inc. this week announced the appointment of Michael=20
Morrell, Senior Vice President and CFO, as President of its unregulated=20
supply business, Allegheny Energy Supply Company, effective February 1,=20
2001.  Morrell will replace Peter Skrgic, current President, who will be=20
retiring on that date after 37 years of service to the company.

In his new position, Mr. Morrell will direct and continue the growth of=20
Allegheny's energy supply business, which operates and markets competitive=
=20
retail and wholesale electric generation throughout the eastern US. =20
Additionally, Morrell will identify new opportunities to expand the Company=
's=20
generation holdings, announced a press release.

The Alliance Express is a free news service sponsored by the Alliance of=20
Energy Suppliers.  This document can be redistributed.  Please send=20
questions, comments, or requests to alliance@eei.org, or telephone=20
202/508-5680.


***Due to the holidays, the Alliance Express will not be published next=20
Tuesday, December 26.



                                             =3D=3D RECENT FERC FILINGS =3D=
=3D

(1)  RTO DEVELOPMENTS

*  The following entities filed comments regarding the California wholesale=
=20
electric market.  EL00-95-000, et. al.  Filed December 13, 2000.

-  AMERICAN PUBLIC POWER ASSOC.:  "Market Power: Will We Know It When We Se=
e=20
It?  The California Experience"
-  SOUTHERN CALIFORNIA EDISON CO.: "Proof that Soft Price Caps Do Not Resul=
t=20
in Lawful Rates" and request for rehearing
-  SOUTHERN CALIFORNIA EDISON CO.: Request for immediate modification of th=
e=20
December 8, 2000 Order
-  SAN DIEGO GAS & ELECTRIC: Motion to clarify the record

*  The following entities filed motions for an immediate modification and t=
o=20
intervene regarding the Commission's emergency order December 8 approving t=
he=20
CA ISO's tariff amendments.  ER01-607-000, ER00-95-000 et. al.  Filed=20
December 13, 2000.

-  WESTERN POWER TRADING FORUM
-  RELIANT ENERGY POWER GENERATION
-  PACIFIC GAS AND ELECTRIC
-  CA ISO
-  DYNEGY POWER MARKETING

*  SOUTHERN ENERGY COMPANIES filed a supplemental protest regarding PJM's=
=20
Order 2000 Compliance Filing.  RT01-2-000.  Filed December 14, 2000.


(2) OATT/TRANSMISSION

*  UGI UTILITIES filed an interconnection agreement with ALLEGHENY ENERGY=
=20
SUPPLY CO.  ER01-617-000.  Comments due by December 28, 2000.

*  PUBLIC SERVICE COMPANY OF NEW MEXICO filed proposed revisions to its FER=
C=20
Electric Tariff, a statement of Policy and Code of Conduct governing the=20
relationship between itself and wholesale power marketing affiliates and a=
=20
notification of a change in status relating to its authorization to sell=20
power at market-based rates.  ER01-615-000.  Comments due by December 28,=
=20
2000.

*  AMERICAN ELECTRIC POWER SERVICE CORP. (AEP) filed an executed=20
interconnection agreement between INDIANA MICHIGAN POWER CO. and DUKE ENERG=
Y=20
BERRIEN.  The agreement is pursuant to AEP COMPANIES' OATT.  ER01-626-000. =
=20
Comments due by December 29, 2000.

*  COMMONWEALTH EDISON CO. filed revisions to its OATT to reflect the=20
creation of a new generation subsidiary of EXCELON CORP., COMED's holding=
=20
company.  ER01-628-000.  Comments due by December 29, 2000.

*  DETROIT EDISON COMPANY filed a Service Agreement for Network Integration=
=20
Transmission Service under the Joint OATT between itself and CONSUMERS=20
ENERGY.  The Service Agreement is between itself and NORDIC MARKETING. =20
ER01-622-000.  Comments due by December 28, 2000.

*  DETROIT EDISON COMPANY filed service agreements for short-term firm and=
=20
non-firm point-to-point transmission service under the joint OATT between=
=20
itself and CONSUMERS ENERGY. The Service Agreement is between itself and H.=
Q.=20
ENERGY SERVICES.  ER01-621-000.  Comments due by December 28, 2000.

*  LOUISIANA GENERATING filed a motion to intervene and protest regarding=
=20
SOUTHWESTERN ELECTRIC POWER COMPANY's Restated and Amended Electric System=
=20
Interconnection Agreement between SOUTHWESTERN and LOUISIANA GENERATING. =
=20
ER01-504-000.  Filed December 13, 2000.

*  ALLIANT ENERGY CORPORATE SERVICES filed a response to several protests=
=20
regarding its proposed amended OATT.  ER01-312-000.  Filed December 14, 200=
0.

*  ELECTRICITIES OF NORTH CAROLINA, PIEDMONT MUNICIPAL POWER AGENCY and the=
=20
CITIES OF ORANGEBURG and SENECA, SC filed a motion to intervene and protest=
=20
regarding DUKE ENERGY, CAROLINA POWER & LIGHT and SOUTH CAROLINA ELECTRIC &=
=20
GAS' proposed accounting and rate treatment of start-up costs associated wi=
th=20
establishing a new RTO.  EL01-13-000.  Filed December 14, 2000.

*  SOUTHERN COMPANY SERVICES filed a proposed amendment to its OATT in orde=
r=20
to incorporate creditworthiness criteria, interconnection procedures and=20
source and sink requirements.  ER01-668-000.  Filed December 14, 2000.

*  BONNEVILLE POWER ADMINISTRATION filed a petition for declaratory order=
=20
stating that its proposed OATT satisfies the Commission's reciprocity=20
compliance principles.  NJ01-1-000.  Filed December 14, 2000.

*  AMERICAN TRANSMISSION CO. filed proposed Open Access Transmission rates=
=20
and requested expedited consideration.  ER01-677-000.  Filed December 15,=
=20
2000.


(3) MARKET COMPLAINTS

*  H.Q. ENERGY SERVICES filed for an Order directing the NY ISO to restore=
=20
the original market clearing prices for energy on May 8, 2000.  EL01-19-000=
. =20
Comments due January 2, 2001.

*  NEW ENGLAND POWER CO. filed an answer to the RHODE ISLAND ATTORNEY=20
GENERAL's protest regarding the application of the joint owners of the=20
undivided interest in the Millstone 3 nuclear plant to transfer ownership t=
o=20
the DOMINION Applicants.  EC00-137-000 and ER00-3639-000.  Filed December 1=
3,=20
2000.


(4) MERGERS/CORPORATE RESTRUCTURING


(5) MISCELLANEOUS

*  CA ISO filed an amendment to schedule 1 of the Participating Generator=
=20
Agreement between CA ISO and SIERRA PACIFIC INDUSTRIES.  ER01-619-000. =20
Comments due by December 28, 2000.

*  AUTOMATED POWER EXCHANGE filed a new rate schedule under which it will=
=20
provide its auction and scheduling service in its California market. =20
ER01-658-000.  Filed December 14, 2000.

*  AUTOMATED POWER EXCHANGE filed a new rate schedule under which it will=
=20
provide its auction and scheduling service in a new geographic market, know=
n=20
as the APX Midwest Market.  ER01-659-000.  Filed December 14, 2000.


Nancy Tarr
Manager, Business Development
ntarr@eei.org
202-508-5680


_________________________________________________________

 - Timeline.doc