FROM: Alex Brennan
DATE: December 14, 2001
SUBJECT: Action Plan from December 13-14 meeting
As a result of the Committee meeting in San Diego on December 13-14, the following outline for the white paper for the governors was agreed upon, draft assignments were made and a schedule developed. In addition, a brainstorming list of potential recommendations was developed. No attempt was made to debate the list.
Below are the report outline and assignments, schedule, and brainstorming recommendations.
Please call Jim Hicks (503/813-5432) if you have any questions. If anyone needs to speak to me between now and 9 January, you can get me on 011 44 141 568 2983 or cell phone 01144 7753521688.
I suggest that those drafting the various parts of the report should send their completed draft to all the committee members on the list serve. Jim and I will pull together the complete report from the inputs received. Thanks for your help and I hope you all have a great time over the holiday period.
Alex
Background
· What’s happening now
o Difference between wholesale and retail restructuring
o Transition period prior to RTOs
o Sidebar on CA ISO and AB TA system expansion system (Deborah Le Vine/ Fergal McNamara)
o Views of FERC – John Carr
o View of financial community -- Christine Uspenski
· What are the problems
o No consistent mechanism for evaluating and building large scale, multi-state transmission – Jim Charters
o Regulatory uncertainty – Christine Uspenski/ Phillip Muller
Two models (intro including timelines for implementation compared with RTO formation timelines – Wally Gibson/Steve Fauscett)
·
Merchant model – Wally
Gibson
o Description
o Issues/problems
o Possible solutions/actions
o Recommendations
·
System cost model – Ted Humann
o Description
o Issues/problems
o Possible solutions/actions
o Recommendations
· Challenge RTOs to kick start a proactive planning process.
· Education regarding the distinction between deregulation and restructuring
· Support seamless RTO formation.
· Advocate consistency among PUCs (PUCs work together on cost recovery for new transmission).
· Governors advocate the two models.
· Governors discuss issues of concerns with financial market.
· Governors advocate transmission sufficient to enable competition, reliability, fuel diversity, reduction of market power, reducing total costs to customers and fewer price spikes. Transmission is a small component of consumers’ bill. The risk of too little transmission is greater than the risk of too much transmission.
· Governors recognize that restructure of the wholesale market will not be effective in producing lower costs to customers without infrastructure investment.
· Governors support pass through of transmission costs without lag.
· Cost shifting argument is a red herring.
· Governors support faster depreciation for transmission investment.
· Advocate permanent fix on IRS treatment of private use restrictions on tax exempt financing for transmission projects (Marshall Empey will write).
· Support system improvement charge as a means of covering carrying charge for work in progress.
· Support the honoring of existing contract rights associated with rate recovery to reduce financial uncertainty.
· Support treating all load the same.
· Support state/interstate siting reforms.
First draft of elements due from authors on or before 1/9
First draft of complete report and full list of brainstorming recommendations emailed to Committee 1/15
Feedback on first draft report and priority of recommendations 9/18
Potential conference call 1/22
Second draft of report by 1/24
Comments from Committee on second draft report 1/28
Draft recommendations to governors by 1/30
Final report 2/14