Memorandum

To:	Standard Contract Working Group	

From:	
Drafting Committee	
Date:	
September 10, 1999	
Subject:	Proposed Master Agreement and Model Tariff	

Please find attached the draft Master Power Purchase and Sale Agreement and Model Tariff proposed for consideration by the Working Group at the September 24 meeting.  The Drafting Committee met in Baltimore on July 28 and 29 to Afine tune@ and complete the Master Agreement.  Two conference calls preceded and three conference calls followed these meetings.  The Committee has developed and will present to the Working Group a procedure for companies to integrate the Master Agreement with a short-form market-based FERC tariff.  The attached Model Tariff is intended to govern all transactions executed under the Master Agreement.  Except for the bolded and bracketed text, the Master Agreement  reflects numerous compromises among the members of the Drafting Committee and each member of the Drafting Committee agrees that the documents, while not Aperfect@ in anyone=s view, are workable. The bolded and bracketed text reflects areas where the Drafting Committee could not agree. A definition of the AInto@ product is still being developed and will be distributed at the meeting.

Our goal for the September 24 meeting is to reach closure on the Master Agreement and Model Tariff so that the lawyers can then get their companies= management and traders  to endorse the document.  The Drafting Committee will explain the changes made to the last draft the Working Group reviewed.  In addition, we hope to reach a consensus within the Working Group on the provisions that are not fully agreed to by the Drafting Committee.  Since the Drafting Committee represents a broad cross-section of the industry, it is our belief that the provisions endorsed by the Committee should be acceptable to the entire Working Group.  We urge anyone who has concerns about any provisions in the draft, to notify Patty Dondanville and David Perlman before the September 24 so that we can organize the discussion.  If consensus cannot be reached at the September 24 meeting, we will then decide on further procedures to reach closure on the Master Agreement.   We also will explain how the Master Agreement and Model Tariff are intended to work together and will suggest FERC filing procedures.     

Clean.mem.wpd