Re: BENEFITS OF OPEN ACCESS - EXPANSION OF SUPPLY

here is our update. i think we should have this adequately documented by
Monday night.

----- Forwarded by Linda Robertson/NA/Enron on 04/15/2001 10:43 PM -----

Sarah Novosel
04/13/2001 06:05 PM

To: James D Steffes/NA/Enron@Enron, Linda Robertson/NA/Enron@ENRON, Richard
Shapiro/NA/Enron@ENRON
cc:
Subject: Re: BENEFITS OF OPEN ACCESS - EXPANSION OF SUPPLY

Linda:

Attached are some examples of ways in which open access will help increase
supply. It's a work in progress, but here are my initial thoughts.

Also, Jim and I spoke with Tabors and Pickle and got clarification on the
numbers we used in making the point that supply will increase with open
access. They said that the 2-5 percent works in the east (AEP) but they
would like to be more conservative in the west (1-3 percent increase in
supply). This still results in an increase of supply on any given day of
1,350 - 4,050 of MW. I made this change to the "Examples" page but we'll
need to make a similar change to the Lay paper.

Call me this weekend if you need me (202) 466-9160.

Sarah

James D Steffes
04/13/2001 05:43 PM

To: Linda Robertson/NA/Enron@ENRON, Sarah Novosel/Corp/Enron@ENRON, Richard
Shapiro/NA/Enron@Enron
cc:
Subject: BENEFITS OF OPEN ACCESS - EXPANSION OF SUPPLY

HERE ARE SOME OTHER THOUGHTS TO MAYBE WORK IN OVER THE COMING DEBATES --

There are real supply benefits from open access.

First, reliability is increased. Historically, utilities shared reserves
only with adjoining systems. Open access allows sharing of reserves,
especially replacement reserves, over a broader market.

Second, open access increases the productivity of the current generation
portfolio. Barriers to moving power to where it is needed allows less costly
generation to sit idle. In addition, open access reduces the generation
capacity requirements of the overall system. Instead of local utilities
building for their needs, open access allows remote generation to reliably
serve local needs. The result is that lower capacity is required as more
energy is served out of the same quantity of capacity, resulting in long-term
efficiency.

Third, open access should improve the utilization of the current transmission
network. In the natural gas context, pipeline open access has allowed for
transported volumes nearly quadrupling since 1985.