Hi Jeff. I hope you are enjoying the challenge of running Enron in the
midst of all the excitement and change in the energy industry.
I want to bring to your attention an issue that affects me quite directly in
my new role as CEO of TransElect, an independent electric transmission
company. I think it also affects Enron in a very significant way. The
National Grid has applied to the FERC for a declaratory order that would
permit the Grid to operate the Alliance RTO (this is a Midwest RTO that
includes AEP, Exelon, DTE, CMS, First Energy and Dominion).
I believe quite strongly that FERC should deny this petition because the
Grid is a significant owner of both distribution and generation assets in
the Northeast (New England Electric and Niagara Mohawk). It is a very small
step from this decision to one that would allow Southern to operate
GridSouth, or one that would allow Entergy to operate the Florida RTO in
exchange for FP&L operating the Entergy RTO. As a matter of National
policy, transmission operators should be independent of either the wholesale
or retail electric markets. As a business issue, many transmission owners
are reluctant to divest of transmission because they retain hope that their
transmission can be used to protect above market native generation. How
would you like to try shipping power into the Northeast with the Grid, a
major retail supplier and a significant generator, controlling access to the
I think it is important that the FERC give the Grid a "no" on the request
for permission. It is even more important that the issue be decided by the
"new FERC". There is a disturbing indication that the outgoing chairman
might okay this request on his way out the door. I urge you to intervene as
a way to both slow down the freight train and as a way to get the right
answer out of FERC. If you or your General Counsel would like more
information, give me a call at 503 636-7134, or call my General Counsel, Al
Statman, at 202 393-1200.
Thanks for considering the issue, and best wishes for continued success.