IN: This is an email
The Commission discussed its market based rate policy at today's meeting. They did not vote out an order today, but expect to take up this issue again next meeting. The staff memo recommended the following: For an interim period, FERC will deal with pending requests for market based rates and with triennial reviews of those rate authorizations, using a new test called the "Supply Margin Assessment" (also called a jazzed up version of the hub and spoke test) where a seller's capacity will be reviewed against the generation reserve margin in a market. The test takes into account constraints based on TTC. If the capacity of a seller is not necessary to meet peak demand,the seller does not have market power. This test is applicable to all markets that are not part of an existing RTO or ISO. For those selling into an RTO/ISO, the FERC will continue to allow market based rates subject to the market monitor and mitigation. Staff also recommends that FERC initiate a Section 206 investigation to require each seller with market based rate authority to change its tariff by adding a provision stating that if the seller acts in an anticompetitive manner, the FERC can require refunds. Through questioning by Commissioner Massey, it was revealed that, even if a seller did not engage in bad behavior, but sold into a disfunctional market, refunds could be required. In the staff memo, apparently staff had left vague the definition of anticompetitive behavior in order to be able to interpret it most broadly. However, Commissioners asked staff to better define the anticompetitive actions that could trigger refunds. This policy will be brought up again at the next Commission meeting on October 11. It will be issued as a proposed action, giving parties an opportunity to comment within 15 days and then also file reply comments, Final action is expected within 60-90 days. Last, for the long-term, FERC will hold outreach meetings looking for answers as to how to detect market power and what to do when it is detected. Since the interim measure is only a "snapshot" approach according to Commissioner Massey, he is willing to support it only along with the above described tariff provision. Commissioner Breathitt is very uncomfortable with an open refund requirement, stating that it adds to regulatory uncertainty at a time when the Commission is most interested in giving certainty to the industry in order to assure reliability.

What is the subject?

OUT: FERC Meeting: Market Based Rate Review

IN: This is an email
Below is a summary of the surety bond issues that I believe we need to resolve in order to feel comfortable accepting it as a form of collateral to secure a counterparty's obligations with respect to physical power purchase and sale transactions: 1. Determine whether an issuer can refuse to honor a draw made under a surety bond if after issuance, it determines that the bond was issued in violation of the appleton statute. What type of legal comfort should we receive from the issuer at the outset to get comfortable that the bond was validly issued and is enforceable against such issuer? 2. Determine the proper minimum credit rating(s) that should apply to the issuer. 3. In the form of bond that we were given, the "Now Therefore" language in the third paragraph is not acceptable. Determine what can be said in its place to establish the necessary linkage back to the transaction covered by the Confirmation. 4. Make sure that the bond can be drawn down no matter what type of Event of Default occurs, even if such event is not related to the transaction that the bond references. The Notice of Claim language needs to be written more generically to accommodate this. 5. Does credit need a "pre-bankruptcy" trigger that would require Reliant to convert all outstanding bonds into LC's or cash collateral? If so, what would this trigger be? Let me know if you have any additional issues. I will be discussing some of these with our outside counsel shortly.

What is the subject?

OUT: Surety Bond Issues

IN: This is an email
Hello, I am an attorney at Enron North America Corp. I have recently been asked to coordinate our hiring of summer clerks. Monica Jordan previously had handled these duties and informed me that she had used the HBA Minority Committee through which to do some of our hiring of clerks. I am looking for information concerning this program; such as how it operates, when it meets. etc. Any information you could supply would be greatly appreciated. Thanks,

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OUT:
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