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Stacey Bolton Environmental Strategies Enron Corp 713-853-9916 direct 713-303-2632 cell stacey.bolton@enron.com <mailto:stacey.bolton@enron.com< -----Original Message----- From: Bolton, Stacey Sent: Friday, October 05, 2001 4:00 PM To: Anne Marie McShea (E-mail); Ashley Houston; Brent Beerley (E-mail); Dale Bryk (E-mail); Favreau. Gilles (E-mail); Gary Zielanski; George Tung (E-mail); Hoatson, Tom; Ira Rubenstein (E-mail); Jane Hotchkiss Gordy (E-mail); Jason Gifford (E-mail); jean hopkins (E-mail); Jeff Schnur (E-mail); Jmartin (E-mail); Joe Roenbeck (E-mail); John Schneider (E-mail); judy sheldrew (E-mail); Leah Gibbons (E-mail); Liz Robinson (E-mail); Mel Jones (E-mail); Melissa Lavinson (E-mail); Meredith Wingate (E-mail); Michael Rucker (E-mail); nancy radar (E-mail); Nicole fabri (E-mail); Peter Meadows Adels (E-mail); Rich Sedano (E-mail); Rishe, Frank; Ryan Park (E-mail); Sally Mattison (E-mail); Scott Kushnick (E-mail); Scotth (E-mail); Sonny Murphy (E-mail); Steve Haas (E-mail); Susan Covino (E-mail); Tom Rawls (E-mail) Cc: Bob Grace (E-mail) Subject: PJM Mtg Recap All - Wanted to briefly recap yesterday's meeting at PJM. Our stated coalition goal going in to the meeting was to ensure the recognition of certificates (or financial commodities representing the attributes of energy) and capability with system New England is developing. While phase I will not meet either goal, PJM readily admits that there are adaptations that need to be made to the system that meet our goals for Phase II of the program. To this end, a users' group was establish. I've listed highlights of the meeting and next steps below. The formation of this group is a VERY positive step in moving toward a system that will most effectively meet our goals. Finally, I'm attaching a list of the meeting attendees. Let me know if you have any questions. I'm encouraged by these developments, and once again would like to thank all of you for your support and teamwork on this crucial issue to all of our companies/organizations. Highlights of Meeting: Regulatory update: Regulators all expressed interest in hearing from stakeholders on Phase II of PJM GATS system. In particular, Linda Nowiki from NJ BPU noted that because of the considerable change of the Board composition since the adoption of the disclosure rules, the upcoming expansion to 5 Commissioners and a likely new Board President, and the RTO proceedings that they were particularly interested in stakeholder feedback for the GATS system. Phase I: operational by end of year and will produce company labels comprised of an aggregation of the load purchased. Phase I is based on a mathematical formula, and will aggregate all fuel sources by company (not product). The limitations include: an inability to carve out dedicated resources (such as a specific hydro purchase from a company's system); the inability to get to the plant level detail (unit only); the inability to segment the company fuel and emissions label into products; the emissions data (taken from EGrid) being dated and not accommodating recent emissions reductions based on retrofits or installed control technologies; and the inability to distinguish whether the unit meets class I or class II RPS. PJM plans to distribute the first set of labels to LSEs and regulators, but realizes the data on the labels (due to the inabilities) will not be useful. Phase II: John Dadorian, project lead for GATS program, has toyed with several conceptual ideas for Phase II. The goal is to have the system operational by March '03 -- in time for the label distribution period for both NJ and MD. John wants Phase II to be web-based, with suppliers/generators/marketers having access to their data. John had one scenario that he presented whereby PJM would track, by contract path, the fuel and emissions mix of suppliers. After a specified time period, PJM would submit preliminary labels to suppliers. Suppliers would then have a choice of modifying their label based on trading attributes. PJM has not made any decisions about Phase II and is looking to members for comment. to this end, they suggested forming a user's group. Formation of a user's group to address Phase II Conceptual Design and Implementation: Enron, PG&E NEG, Hydro Quebec, PSEG and New Power made up the 5 needed members to start the group. The user's group is NOT limited to PJM members, and a sign up sheet was distributed. This user's group will be announced at the next PJM meeting on November 12th. The first meeting of our user's group will be held in Wilmington, DE on Thursday 11/15. Details will be circulated. Comment Period: Comments are due by October 19th to John Dadorian on Phase I. Since these labels are basically not going to have any "purpose" because the data will be useless, I don't know if it's worth the effort to submit comments. I think our focus should be on Phase II. Please let me know your thoughts. NEXT STEPS: While it is VERY positive that we have formed a user's group to vet these issues, it's clear that we still have considerable work to do. Denise Foster from PJM will be establishing a list serve for us to circulate ideas/issues/concerns prior to the meeting. The meeting participants briefly discussed items for our first meeting, including: Guidelines for scope of group Identifying Timeline and Milestones (target completion date is March '02) Matrix of State Requirements (to be done ahead of time) Identifying Design issues Capability with New England/New York Accommodating financial transactions or certificates Concerns Identifying "true fuel mix" v. residual average How many entities would participate in a certificate market Treatment of unsold certificates Whether to have the ability to trade financially through settlement and have it recognized by PJM's system Questions: Size of spot market Size of bilaterals Size of each state's load in PJM (i.e. 60% PA load) The additional uses for fuel and emissions mix information besides compliance with RPS/Disclosure Have a great weekend. Stacey Bolton Environmental Strategies Enron Corp 713-853-9916 direct 713-303-2632 cell stacey.bolton@enron.com <mailto:stacey.bolton@enron.com<
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