SUMMARY OF INDEGO TASK FORCE RECOMMENDATIONS
January 7-8, 1997
Governance

1) Q. Should a major customer representative be allowed on the board of directors?

Recommendation: The bylaws should have a general prohibition against conflict of interest. The selection process may be adequate to determine how much conflict (e.g., size of customer) is allowable.

2) Q. Should a commissioner be allowed on the board of directors?

Recommendation: Under criterion number one (no conflict allowed), commissioners would generally not be allowed to be voting board members. The task force recommends that two ex officio commission class representatives be chosen for nonvoting board member status, one from east and one from west.

3) Q. Does the task force agree with the supermajority class nomination and selection process?

Recommendation: Yes, with commission class having the opportunity both to nominate and vote.

4) Q. Should there be a "consumer class" nomination and voting opportunity?

Recommendation: No strong feelings at this time. There are practical difficulties with this. If

• a) retail access becomes more prevalent and
• b) an acceptable way of identifying the consumer class represenatives can be found, this is a possibility for the future.

5) Q. What is the role of the technical advisory group?

The task force seeks additional information on the role of the technical advisory group. For example, what is the relationship between the technical advisory group and the board? What is the relationship between the technical advisory group and IndeGO staff? Can the group provide any direction or get assistance from the staff? Can advisory group members get reimbursed for travel costs? This might ensure greater participation.

Regulatory Issues

Questions: What regulatory approvals will be needed?

May vary by state

What type of proofs will have to be offered to justify approval?

Options (no consensus):

• Indego is "in public interest": of state citizens, of ratepayers and/or society
• Indego is "not harmful"
• Indego needs to accommodate restructuring; e.g., retail access, unbundling
• At a minimum, states may need to understand the components and implications of transmission rates. There is evidence that there are currently discrepancies between the transmission costs implied in retail rates and those embedded in wholesale rates.
• To the extent that regulators continue to have authority over retail rates, they will need to be comfortable with the costs that regulated utilities are paying to IndeGO, since they have to decide how those costs will be passed along to retail customers. For example, if IndeGO proposes a capacity-based access charge based on 12 CP, this may conflict with regulatory policy in some states to pass capacity costs to retail customers based partly on energy or 200 CP. Regulators will want to be comfortable that IndeGO will not produce undue cost shifts among retail classes. This is consistent with IndeGO policy on the wholesale level to minimize cost shifts among IndeGO participants, or that any cost shifts are explainable and tolerable.
• Despite these concerns, it is not the regulators? intent to place artificial barriers in front of IndeGO approval.
• If IndeGO can?t be justified on the basis of transmission savings but only on generation savings, it may be more difficult for regulators, since generation savings may be more speculative.
• Some task force members express concern that undue regulatory requirements may jeopardize the formation of IndeGO.