Once considered the most complex solution, we are now driven by technology to the most simple. We are implementing an effective enterprise solution in six months that provides customers real value that can be utilized by the new breed of energy professionals. Our target customers are the mid-market companies and executives who are involved in the design and construction processes, but we have taken great pains to ensure that our technology and product is simple to deploy. A customer need only worry about
&how to get started
8 and not
&how to get there.
8 Our real product is extremely simple. It enables a customer to purchase our capacity with a single phone call. Our customers then call a credit contact who immediately provision the required capacity into the customer
,s account with a single phone call. Our customers can then call us and immediately have that same capacity withdrawn from the market and shipped to their bidding specification. Even for those unskilled in the technicalities of energy, it is clear that we offer enormous benefits. The FERC hearing has been an important ingredient of our success to this point. Their curiosity about the innovative tools and technologies has enabled the market to respond with incredible alacrity. The communication/public relations strategy has been a clear success to this point. The recent news coverage has focused on FERC
,s intent to lower the existing capacities in the market to 1,000. This is a good first step, but we believe the final determination by the Commission must allow for an opportunity for all of the existing generators to provide testimony as to why the CAPACITY should not be lowered. The alternative is to use the least efficient generators as the basis for the determination. The least efficient generators may not be the proper standard as applied to these types of contracts. In addition, the market today has no precedent for how prices will be set for these contracts. The Commission should consider the testimony of market participants prior to lowering the maximum capacity. Solving this problem will require a steady and incremental pace by all concerned. If market participants have a clear understanding of the proposal, then our job is made much easier. We are now engaging in a concerted effort to communicate our story to all of the major market participants. Our success will be greatly enhanced if the key industry leaders become involved. Meetings with Calpine, Strategic Energy, CMS Energy and Williams have been productive and we look forward to continuing to communicate the benefits of the program. We are encouraged that SCE and PG&E have agreed to work with us as a long-term solution. We have engaged with NRG, Duke, Constellation, Southern, Reliant, and El Paso. There is a common theme being expressed. Please continue to use the energy and enthusiasm that you have expressed in these meetings to further communicate the benefits that this offering will bring to the marketplace. The Commission has emphasized the fact that these rates are only for a six month period. To ensure that this critical path is protected, our first priority will be to identify a date certain by which we need all contracts in place. We are working to create as favorable an environment as possible to effectively implement this transaction. If we do not receive the necessary contracts from the market, we will have to decline to offer this program going forward. We will have very little time to wait to offer this program once the FERC order is issued, so it is essential that we have positive contracts in place prior to the issuance of the order. We need the contracts
*and the industry needs the prices. We have already made significant progress and are now in the final phase of contract negotiations. It is our goal to sign a contract by July 20. Because the supply is limited and the program is extremely popular, the request for voluntary contracts exceeds the supply. We are concerned that if the program is canceled, then supply will quickly be returned to the pre-program levels. With this in mind, we must ask you to help communicate the benefits of the program. We must also ask you to return this favor once the contracts are negotiated. Since the demand is increasing rapidly, it is possible that more customers will want to offer short-term contracts once the program is launched. If demand does increase significantly, then the Commission may have no choice but to extend the $150 offers indefinitely until the market can be satisfied. This will be important to the future success of our efforts and this program. Ensuring that the market can effectively provide this critical capacity in a timely fashion is essential to our success. Let
,s work together to help ensure that the Commission
,s decision to suspend the rate methodology for the new supplies goes smoothly. We must not forget that the goal of the transmission providers is to make money. The transmission providers will be pleased with our participation. Thank you for your support and effort to bring the most efficient and effective supply response program to the market. Together, we will continue to work to make this market work and continue to support the goals of FERC. Sincerely, Julie Gomez Program Director Electric Power Group Associate Member IIDB