UNITED STATES OF AMERICA
BEFORE THE
FEDERAL ENERGY REGULATORY COMMISSION

						)
	California Independent System	)	Docket No. ER98-1057-001
	  Operator Corporation		)
						)

ANSWER OF THE 
CALIFORNIA INDEPENDENT SYSTEM OPERATOR CORPORATION
TO MOTIONS TO INTERVENE AND PROTEST

	Pursuant to Rule 213 of the Commission’s Rules of Practice and Procedure, 18 C.F.R. § 385.213 (1997), the California Independent System Operator Corporation (“ISO”) submits this answer to the motions to intervene submitted in this docket.  As stated herein, the ISO does not oppose any of the interventions.  In addition, the ISO has proposed to modify both Reponsible Participating Transmission Owner Agreements (“RPTO Agreements”) to address the concern raised in the protests by the Western Area Power Administration (“WAPA”) and the Northern California Power Agency (“NCPA”).  

I.  BACKGROUND
	On June 1, 1998, the ISO submitted a compliance filing amending the ISO Tariff (including the ISO Protocols), the ISO Code of Conduct, the Transmission Control Agreement, certain of the ISO’s pro forma operating agreements, and certain of the ISO’s bilateral operating agreements.  Included in the June 1, 1998, compliance filing were amendments to the bilateral RPTO Agreements between the ISO and Pacific Gas and Electric Company (“PG&E”) and Southern California Edison Company (“Edison”).
	The Commission noticed the ISO’s filing on June 9, 1998, with interventions and protests due by August 5, 1998.  The Commission specified that comments related to the bilateral RPTO Agreements were to be submitted in Docket No. ER98-1057-001. 
	Interventions were filed by six parties:  the California Electricity Oversight Board, WAPA, the California Department of Water Resources, Enron Power Marketing, Inc., CalEnergy Company, Inc., and NCPA.  Only WAPA and NCPA raised a substantive issue concerning the RPTO Agreement.  The ISO will discuss this concern below.  By order dated August 14, 1998, the Commission granted the ISO’s motion for an extension of time to respond to all of the interventions in the various compliance dockets, including this matter.
II.  DISCUSSION
	The ISO does not oppose the intervention of any of the parties that have moved to intervene in this proceeding.  WAPA and NCPA both challenge the limitation in Section 4.4 of the RPTO Agreement that restricts the Responsible Participating Transmission Owner from selling into the ISO Ancillary Services auction or bidding into the ISO Ancillary Services auction on behalf of an Existing Rightholder.  WAPA Protest at 13; NCPA Protest at 3-4.  WAPA is concerned that the limitation in Section 4.4 may prohibit potential sources of generation from accessing the ISO’s Ancillary Services market and could prevent the development of a robust Ancillary Services market.  NCPA characterizes the provision as an “anticompetitive and pointless restriction.”  However, this issue is not a compliance issue ordered by the Commission and should instead be addressed in the ongoing RPTO Agreement proceeding, not in the compliance filing. 
	In its Direct Testimony recently filed in Docket Nos. ER98-1057-000, ER98-1058-000, and ER98-2199, the ISO indicated its willingness to remove the limitation in Section 4.4.  The ISO proposed that the provision be modified in the following manner:
The Responsible PTO will be able as a S[cheduling] C[oordinator] to procure Ancillary Services.  The Responsible PTO cannot sell is not obligated by this Agreement to bid into the ISO Ancillary Services auction and will not or bid into from the ISO Ancillary Services auction on behalf of an Existing Rightholder unless required by the Existing Contract or as the parties to the Existing Contract may otherwise agree.
The ISO notes, however, that it is not permitted under the RPTO to file unilateral amendments.  Consequently, the ISO’s ability to implement this change is contingent upon acceptance by PG&E and Edison or by order of the Commission.  
III.  CONCLUSION    
	Wherefore, for the reasons stated herein, the ISO respectfully requests that the motions to intervene be granted and that the Commission accept, without modification, the ISO’s compliance filings of the pro forma and bilateral RPTO Agreements.  The ISO has also expressed its willingness to remove the limitation in Section 4.4 of the RPTO Agreement protested by WAPA and NCPA in the RPTO Agreement proceeding.  The ISO believes that this issue is appropriately addressed in that proceeding.  The ISO notes that both NCPA and WAPA are parties to the RPTO Agreement proceeding.   

				Respectfully submitted,

_______________________		________________________
N. Beth Emery				Edward Berlin
Vice President and General Counsel	Kenneth G. Jaffe
Roger E. Smith				David B. Rubin
Regulatory Counsel			Swidler Berlin Shereff Friedman, LLP
The California Independent		3000 K Street, N.W.
System Operator Corporation		Washington, D.C.  20007-3851
151 Blue Ravine Road			(202) 424-7500
Folsom, CA 95630
(916) 351-4400

Dated:  September 3, 1998

	CERTIFICATE OF SERVICE
	I hereby certify I have this day served this document upon each person designated on the official service list compiled by the Secretary in this docket in accordance with the requirements of Rule 2010 of the Commission’s Rules of Practice and Procedure (18 C.F.R. ¶ 385.2010).

	Dated at Washington, D.C. on this 3rd day of September, 1998.

						David B. Rubin

September 3, 1998

The Honorable David P. Boergers
Secretary
Federal Energy Regulatory Commission
888 First Street, N.E.
Washington, D.C.  20426

Re:	California Independent System Operator Corporation
	Docket No. ER98-1057-001 

Dear Secretary Boergers:

	Enclosed is an original and fourteen copies of the Answer of the California Independent System Operator Corporation To Motions To Intervene and Protest in the above-captioned docket.

	Also enclosed is an extra copy of the filing to be time/date stamped and returned to us by the messenger.  Thank you for your assistance.  

					Respectfully submitted,

					Kenneth G. Jaffe
					David B. Rubin
					Swidler Berlin Shereff Friedman, LLP
					3000 K Street, N.W.
					Washington D.C.  20007

					Counsel for the California
					Independent System Operator

Enclosures
cc:	Service List