EXHIBIT 99.163
[CALIFORNIA ISO LOGO] California Independent System Operator
151 Blue Ravine Road
Folsom, CA 95630
November 19, 1997
Mr. Chuck Bell
Perot Systems
12377 Merit Drive, Ste. 1100
Dallas, Texas 75251
Dear Chuck:
Many thanks again for your quick and positive reaction in attending the
ISO/Alliance Executive Committee meeting on November 13. This letter will
confirm the main points we covered.
First, let me indicate how pleased we have been with the last several weeks'
progress. As I indicated, the consensus at our internal contingency planning
meeting on November 7th was that we should go for full system operation on
January 1, 1998. We believe if we can maintain the pace and accomplishment you
have shown in the three to four weeks prior to that date, we stand a reasonable
chance of being successful.
Secondly, as I also indicated, we briefed the Board in some detail at the
monthly meeting on November 12. While we have pulled no punches, indicating the
basis for our conclusions as well as the downside risks. The Board consensus was
that we should assure ourselves as we proceed that once up and running, the
operation thereafter should not have to go down.
The FERC CEO certification requirement in the October Order speaks for itself.
The CEOs of the principally-involved organizations are required to provide
certification based on system grid reliability as a predicate to the start-up of
the system. As I mentioned, this requirement may impose a requirement that the
readiness and viability of the system be visible at an earlier date than we
might have planned. Obviously this additional requirement does not change the
standards we must meet to put the system online, but will involve a wider
sharing of the startup standards and their fulfillment prior to operational
start-up.
Your responses to my concerns about resources were encouraging. I must reiterate
that we have been concerned for some time about the adequacy of Project
resources. We will watch closely for confirmation of your renewed commitment in
those regards. Particularly, the deadline for the software drop on November
21-23 must be reversed, since this deadline is directly on the critical path to
January 1, 1998 success. I believe this was clear in the staff meeting following
our telephone call on Thursday the 17th and in the memo that summarized the
conclusion of that meeting. As I indicated, if ISO has additional resources that
can be put to the team task, please advise. If we can shift personnel to the
most critical areas from areas where an available person can backfill without
slipping, we should move now. Obviously, if there are individuals not presently
on the team who
can or should be made available, time is the critical factor. I particularly
appreciate ABB's situation and hope the results of your internal meeting will
provide us with further assurances.
We spoke about the requirement of a Rapid Response Team to be available on and
after January 1, 1998 to assure reliable initial operation and to complete the
"settling in" of the system. We will be discussing this further in our up-coming
ISO/Alliance Executive Committee meeting which will take place here in Folsom on
November 2Oth. Also at that meeting we should proceed with the contingency
planning I outlined at the November l7th teleconference. Should we not meet the
deadline, we will need to assure that we have a very clear picture of our
situation as it then exists, so that we can accurately forecast when the start
can be made. Again, your immediate response was gratifying, but we will need to
particularize dates and resources at the Thursday meeting.
Again, I see us in the home sketch with gathering momentum. Thank you again for
that and for your attendance and inputs last Thursday. I look forward to our
next session this Thursday.
Sincerely,
/s/ TERRY M. WINTER
Terry M. Winter
Chief Operating Officer
California Independent Systems Operator
TW/co