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Just wanted to check in on you.
We should get together soon.
I will try and swing by some time after work this week- are you still working late?
I have some leads on camping if you still think that is a good idea.
Debbie sent me the following information.
There are websites for them also, but I have not checked.
I don't know much about Cleveland, Texas although the fact that is close must mean it can't be that pretty (close is likely better, however, given that we will only have the weekend).
The last time we went camping we stayed at Chain O'Lakes in Cleveland.
They have all different kinds of cabins (very fancy to very rustic), horses, hayrides and only an hour away.
The number is 281-592-2150.
We also stay at Neal's Lodges in Concan which is about 4 hours away.
The cabins are not as fancy -- horses, hayrides, pool, cheap.
The
| Camping/Stuff |
I'm in the Enron Basics of Risk Management seminar Thurs (til 5) and Fri am.
I would like to take next Wednesday as a day of vacation.
Thanks,
| schedule stuff |
Hello, I would like to invite you to come by and check out the new Ready2Go Testing location!
The Ready2Go Program is still going strong, thanks to your participation and helping me spread the word.
Come by any time between 11:00 AM and 2:00 PM and bring a friend!
Sincerely,
| Ready2Go Open House |
Carol, Hope things have calmed down for you this week.
We are looking at Enron's proposed master netting agreement that Sara Shackleton sent to Beth Ng last week.
We should be able to send her comments on that shortly.
Also, we would like to get your comments on our form cover sheet to the EEI master, which McDermott, Will & Emery has sent to you on our behalf.
Meanwhile, we would like to explore additional means to manage our credit risk to each other, particularly in light of the multiple affiliated parties in which we each trade.
As we discussed last week, one way to do so is to do a series of trades that would result in the close-out of existing positions, corresponding settlement payments, and the reestablishment of the positions through new trades at market.
A startegy such as the following would probably require implementation by means of numerous trades.
Although the proposed strategy will result in cash payments, one goal of the proposed strategy is for the two group of companies to remain cash neutral.
Here is an example of how the strategy would work: Assume (These exposures are purely hypothetical and are not intended to represent the values of transactions between Morgan Stanley and Enron entities): 1)A) Based on Swaps and cash settled Options, MSCGI has exposure (before collateral) to ENAC in the amount of $40 MM, ENAC's threshold is $5 MM and MSCGI is holding collateral in the amount of $35 MM, for an exposure net of Collateral of $5 MM.
B) Based on UK Gas, UK Electricity, German Electricity trades, ECTRL in London has exposure to MSCGI in the amount of $10 MM.
2) ENAC and MSCGI agree to: (i) book out certain Swaps and Options resulting in ENAC paying $10 MM to MSCGI; (ii) reestablish those positions through new trades at market; and (iii) amend the ENAC/MSCGI CSA to provide that notwithstanding the mark-to-market Exposure of all outstanding Swaps and Options, MSCGI is entitled to hold $10 MM of the existing Collateral as a separate Independent Amount.
3) MSCGI and ECTRL book-out all of the existing UK Gas, UK Electricity, German Electricity trades, resulting in MSCGI paying $10 MM to ECTRL.
MSCGI and ECTRL reestablish the UK Gas, UK Electricity, German Electricity positions through new trades at market.
After all of these trades and amendments are completed, the status of the parties are as follows: A) MSCGI has exposure (before collateral) to ENAC in the amount of $40 MM - $10 MM = $30 MM.
ENAC's threshold is still $5 MM.
MSCGI continues to hold collateral in the amount of $35 MM (the new Independent Amount of $10 MM + the collateral of $25 MM for the new required Exposure, i.e., $25 MM = $30 MM - $5 MM).
MSCGI's exposure to ENAC net of Collateral = of $5 MMNAC owes MSCGI $145.0 MM (before $140 MM of cash collateral) on Electricity Forwards, Options and settled trades (for an exposure net of collateral equal to $5.0 MM); and B) MSCGI owes ECTRL $0 MM on UK Gas, UK Electricity, German Electricity and settled trades.
The amendment to the CSA described in (2)(iii) above is required.
Otherwise, the new exposure before collateral would be $40 MM - $10 MM = $30 MM.
With collateral previously posted equal to $35 MM, ENAC might request that MSCGI return collateral equal to $10 MM.
Without the Independent Amount of $10 MM, ENAC's Required Collateral would equal $30 MM - $5 MM = $25 MM.
If MSCGI were required to return the $10 MM as a result of these trades, it would defeat the purpose of the proposed strategy being cash neutral.
Thus, to stay cash neutral, this proposal only works to the extent that it is possible to amend the ENAC/MSCGI CSA to create this right of MSCGI to hold collateral as an Independent Amount at least equal to the amount that MSCGI must pay ECTRL under the booked-out UK Gas, UK Electricity and German Electricity trades.
Alternatively, it would work in any cases where the trading relationships between MS and Enron entities do not currently have either party posting collateral to the other, since we can take a similar approach to take advantage of potentially opposite exposures involving other MS and Enron commodities trading relationships.
Please call me after you review this to discuss further.
Regards, Bill
| Proposed Approach to Book-out and Reestablish |
When: Tuesday, November 20, 2001 11:00 AM-2:00 PM (GMT-06:00) Central Time (US & Canada).
Where: EB4335 *~*~*~*~*~*~*~*~*~* Hello, I would like to invite you to come by and check out the new Ready2Go Testing location!
The Ready2Go Program is still going strong, thanks to your participation and helping me spread the word.
Come by any time between 11:00 AM and 2:00 PM and bring a friend!
Sincerely,
| Updated: Ready2Go Open House |
Dede indicates she can't get in until late Thursday morning.
Do others have this problem?
Please email your travel plans to my assistant Cynthia Trueheart at ctrueheart@eei.org so we can finalize plans.
Thanks.
| Executive Meeting in Columbus |
Everyone, Due to people's vacation plans during this holiday, we are going to have a cake for Alice instead of trying to coordinate a luncheon.
It will be a "special" cake served next Wednesday morning at 10:00 am in Alice's area.
Please join us to wish Alice well.
Thanks,
| Alice's Going Away |
We received from NBC a notice of default dated Thursday Nov. 22.
The letter makes reference to our failure to deliver margin, and states that in accordance with the ISDA, our Threshold is now zero due to the potential event of default.
I believe our two day cure period will be over today (Friday and today serving as the two day cure period).
Do we need to reply to this letter or just sit tight and wait for the Termination Letter?
I think this will actually be the first contract that will be terminated as the ability to post an LC, and therby cure the default, is not available.
I am willing to try to have one more conversation with their credit manager Bill Bonnell although it is doubtful that it will help.
Please advise.
Thanks,
| National Bank of Canada |
Jeffrey Gollomp, Assistant GC of Cinergy is interested in developing a MISO product.
With Mitch's concurrence, I invited him to our meeting and this call.
He can be reached at:jgollomp@cinergy.com
| Invitation: Conference Call re: Transition of Into Product to MISO (Nov 2910:00 AM EST) |
The reason NBC will not take cash is the preference thing.
I think it may be helpful if an attorney were to call Bill Bonnell (and he can get his attorney) on why they should accept cash as margin or a prepay of the Jan invoice and it will not be a preference issue.
It may not work, but we should try.
His number is 514-394-7564.
This needs to be done asap.
They are one hour ahead of us and they will likely draw on the LC first thing tomorrow morning as the cure period is up today.
Please advise.
Tanya
| NBC |
Elizabeth - Can you please have one of your attys forward a draft of the power netting agmt to South Carolina E&G.
It is my understanding that trading will be curtailed (if not already shut down) until this agmt is in place.
Luara will provide your atty a contact to forward the document to.
Thanks.
| South Carolina Electric & Gas Company - Power Netting Agmt request |
In the interest of moving things forward, it would help if you could provide the following info: 1.
Hand-marked copy of the portions of the current contract which need to be changed.
2.
A brief description of the new deal, especially the index language.
I know VEPCO may be preparing a first draft, but I think it would be good to get some focus ahead of time.
Kay
| VEPCO |
I have enjoyed my years working with all of you.
Hopefully, our paths will continue to cross in the future.
Since our days may be numbered, below is my personal contact info.
Best of luck in the future.
| Contact Info |
Elizabeth, Here is a quick draft at a script to get some broker quotes.
Unfortunately, we will not be able to get firm quotes because our counterparties will not give them to us.
As a consequence, we will only be able to get indicative quotes from brokers.
I am assuming that you are preoccupied with other pressing matters; If I don't hear from you by tomorrow on this, I will distribute this to the term traders, and then we can improve the script later.---sch
| Draft script for getting broker quotes |
Elizabeth and Lisa, Please review the following draft e-mail that I would like to send to the CAISO.
As Elizabeth is aware, the CAISO wants some assurance from us or it will stop accepting our schedules.
Keoni, This e-mail confirms our conversation of a few minutes ago.
You, Phil Lieber, and I discussed how EPMI will continue to meet its SC obligations during the coming weeks.
1.
EPMI will notify the CAISO of any anticipated material negative deviations, e.g., if our counterparties are suspending power deliveries to us.
2.
EPMI is currently owed money by the CAISO, which is sufficient to cover any anticipated imbalance charges, GMCs, etc.
3.
In the event that Enron Corp. files for bankruptcy, EPMI will seek bankruptcy court approval to pay the CAISO any amounts required under the CAISO Tariff to establish creditworthiness in order to maintain EPMI's SC status.
EPMI will seek this approval as soon as possible; however, the CAISO understands that this process will not be immediate.
4.
The CAISO is working to set up a new SC identification code to identify EPMI as a post-petition SC.
5.
I will continue to be a single point of contact for the CAISO and will assume
| PLEASE REVIEW ASAP SO THAT I CAN SEND THIS TO THE CAISO |
Deed Restrictions are the best tool that the property owners in the Houston Heights have to curb over-development and the encroachment of commercial businesses.
A signed deed restriction document protects the investment you have made in your property by restricting undesirable development.
These restrictions do not restrict you from painting your house any color you like, putting up fences, adding garage apartments, or remodeling your property in any way.
Once signed, a deed restriction applies only to the specified property to which it applies and is an effective tool ensuring future protection, despite changes in future ownership.
More important, even if your entire block is not deed restricted, the existence of deed restricted properties within a block can often benefit the entire neighborhood by limiting developers' choices in future construction on not only that specific lot, but also adjacent properties.
The Houston Heights Association ("HHA") is not a homeowners association.
The HHA is prohibited from assessing maintenance fees and cannot put a lien against your home.
Why?
As a volunteer-based 501(c)(3) charitable organization, the HHA is dependent upon volunteers to donate time and effort to maintain community assets and services that improve our quality of life; these include Donovan Park, Marmion Park, the Fire Station at 12th and Yale and the esplanade of Heights Boulevard.
Volunteers coordinate all the fundraisers for these properties and the projects that the HHA supports.
HHA's four biggest fundraisers are the Spring Home Tour, the Fun Run, the Heights Festival and the Holiday Home Tour.
Monies raised by these fundraisers go right back into your Houston Heights Neighborhood.
The Deed Restriction effort initially started when concerned residents saw their property values plummet in the late 1970's.
Volunteers crafted a document that would enable our neighborhood to slow down and/or prevent commercial development.
Large businesses were moving in and depleting the historical housing stock by destroying the houses or turning the houses into businesses that were not desirable for the neighborhood.
With Houston's absence of zoning, deed restrictions in the Houston Heights were their only method of preventing commercial encroachment.
While the restrictions spurned businesses that invited 18-wheel truck traffic, unsightly dumpsters that were emptied at early morning hours, and the use of paved front yards as parking lots, the restrictions did allow small businesses and arts and crafts enthusiasts to co-exist with the neighborhood.
Currently there are approximately 1,034 Heights properties protected by deed restrictions and HHA volunteers make themselves available to answer questions and attend deed restriction signups and other Civic Association meetings to talk about the positive results of deed restricting a neighborhood.
The HHA recently revised the restrictions to protect the neighborhood from dense townhouse construction and encourage preservation of some of the few remaining larger lots in the Houston Heights.
By early 2002 the revised restrictions will be voted on by those properties that are currently restricted.
Their passage is vitally important to encourage development that suits the character of the Houston Heights.
Their need is immediate and severe.
In the fall of 2001, Perry Homes purchased large tracts of land on the West Side of Heights Boulevard.
Its plan is to build townhouses rather than single-family homes.
Representatives from the HHA have thus far unsuccessfully met with Perry Homes to encourage them to build period-style single-wall constructed homes.
The passage of amended deed restrictions and their ongoing wide spread adoption is the most significant tool our neighborhood has to stop over development and the mass construction of townhouses.
For more information please phone 713-861-4002, mailbox 1 or visit the website at www.houstonheights.org.
| Protect Your Most Important Investment with Deed Restrictions |
To those still on the list serv for the Houston Heights Association - my apologies for the barrage of emails that you have received over the deed restriction note from Monday night.
The list serv was set-up so that you could receive messages about community news and events.
It was not intended to be used as a chat line.
All postings to the list serv email address - announcements@houstonheights.org - have been closed, accept for message from me, the webmaster (assuming I have reconfigured it correctly).
Any future announcements will go back to it;s original intended use.
Thank you for your patience and again, my apologies.
Debbie Markey, HHA webmaster
| Apology from the HHA webmaster |
Lots of fun stuff coming up in the Heights: 1.
19th Street Holiday Open House is this Friday December 7th from 6-10.
The Merchants invite you to come and have a bit of "its a wonderful life/meets the Hood".
Carriage rides , entertainment, live music, giant puppets , Santa and tons of the city's finest and wildest gifts and decorations for your perusal.
2.
Lights in the Heights is this Saturday - December 8th 6-9 p.m LOCATION: Bayland and Omar Streets NEW THIS YEAR: The streets will be blocked by barricades and police.
Lights in the Heights is scheduled for December 8, 2001.
This year the streets are Bayland and Omar and for the first time ever, will be closed to motorized vehicles (with the exception of Santa Claus, hayrides and carriage rides).
Since the streets will be blocked beginning at 6 p.m., please make sure that your guests are aware of this.
Alternate parking is available at Hogg Middle School, Travis Elementary and various churches in the neighborhood.
Additionally, be mindful of not parking in front of fire hydrants or blocking driveways, when securing a parking spot.
Have a good weekend!
| busy weekend in the Heights! |
What's happening on Monday, December 10th?
Alot.
For starters, the Olympic Torch is coming right down Heights Boulevard.
That right!
If you can come out about 1:00 p.m. to show our support that'd be great.
The Torch is scheduled to arrive in Houston by Amtrak at 1:00 p.m.
It will come Washington Ave and turn right on Heights Blvd.
between 1:15 and 1:30 up to 11th and back down.
Please join us to cheer the Flame Relay and show Houston and the world that we are truly the Heartbeat of America.
Wear or bring something patriotic.
The Olympic Flame Relay won't be back in the U.S. for at least another decade.
Please join us to welcome the Olympic Flame to Houston.
Don't miss the HHA General Meeting this Monday, December 10, 7:00 P.M. at the Fire Station.
Congresswoman Sheila Jackson Lee will be attending to make a very exciting presentation on behalf of the Heights Boulevard Reforestation & Beautification Project.
It will be followed with a brief update on project funding and construction timeline.
Councilman Gabriel Vasquez will then provide us with a comprehensive update on what's happening in the neighborhood i.e.
street paving, townhouse development and more.
The homeowners from the Holiday Home Tour will be recognized followed by festivities and a delicious cookie swap... What: Holiday Cookie Swap When: Monday, December 10th Time: Approximately 8:15 (After the HHA's General Meeting) Where: HHA's firestation, bottom floor Please bring your favorite homemade holiday cookies, at least 5 dozen, to swap out in person with other Betty Crockers.
(The more dozen you bring, the more you can swap.)
Please have each dozen in a zip-lock type bag.
If you would like, enclose a copy of the recipe in each bag.
A cookie swap is a great way to have a wide assortment of wonderful holiday cookies to be used for for guests, place in a goodie bag for the mailman, 'Santa's snack', etc.
That's all the announcements from us (the HHA) for awhile!
Thanks.
Debbie the webmaster
| after the busy weekend is Monday... |
The following reports have been waiting for your approval for more than 4 days.
Please review.
Owner: Stephen C Hall Report Name: Steve C. Hall Days In Mgr.
Queue: 5
| Expense Reports Awaiting Your Approval |
I got a letter from Lou Alexander asking me to sign something regarding distribution of Mon's IRA.
Do you know anything about that?
I thought Liz moved everything to Legg Mason.
| Mom's IRA |
The following reports have been waiting for your approval for more than 4 days.
Please review.
Owner: Stephen C Hall Report Name: Steve C. Hall Days In Mgr.
Queue: 7
| Expense Reports Awaiting Your Approval |
Brent and Sara: Here is where we ended up yesterday after discussing the LC situation with Debbie: 1.
Debbie and her group will initially review each LC that has been posted to Enron to determine if it is "transaction specific" or if it covers all trades with the counterparty.
If it is transaction specific and the counterparty has performed, then no further action is required.
If the counterparty has not performed then Debbie will work with us to see if a draw can be made.
2.
If the LC covers all trades, Debbie will send copies of the LC and the transactions docs to me and we will determine what rights, if any, we have to draw.
Each month, we will focus on those LC's that are due to expire that month.
Call me if you have any questions.
We will distribute the work to the trading lawyers as the need arises.
| Collateral and LC Issues |
Debbie and Tanya: At our group meeting this morning, the general consensus was that we should continue to send margin letters to those counterparties that have not yet terminated.
Can Harlan and I meet with you sometime this afternoon to talk about this so that we can keep track of what is being done?
Anytime after 1 works for me.
| Margin Letters |
The dealers and some of the customers are ok with an EEI but some important counterparties are anti-EEI.
BPA comes to mind.
Digging in our heels on an EEI-only position might make it difficult to get up and running.
Do you have a view of this?
| WSPP vs EEI |
I spoke to Elizabeth Sager today and she is on-board for everyone visiting with the relevant attorney to walk through the details of each contract and fill out the power contract grid and one-page summary.
Please make every effort to knock these out by Friday such that we can quickly begin prioritizing and move to the next stage.
The attorneys should have the grid and one page summary sheet.
Thanks,
| Power Contracts |
When: Thursday, December 20, 2001 2:00 PM-4:30 PM (GMT-06:00) Central Time (US & Canada).
Where: Reliant Energy, Houston, TX (Library - Rm 4319) *~*~*~*~*~*~*~*~*~* Meeting re: Into Cinergy Strawman Proposal.
The telephone numbers to dial in for this meeting are: Local: (713) 207-5103; Toll Free: (800) 344-8085 and the Access Code is 278800.
| Into Cinergy Strawman Proposal |
With the cancellation of a number of Surety Bonds by our providers, we are faced with a potential credit crunch in NEPOOL.
Also, it is my understanding (although I haven't seen anything) that our Nov 2001 bills are due in all of the markets on Dec 20, 2001.
Christi and I are trying to work out our payment plans (if any) and other requirements to keep our books afloat.
We need to have support on understanding any payment obligations (and bills if we have them) and issues (e.g., Annual Fees).
Who can we talk with for each market?
Thanks,
| PJM/NEPOOL/NYISO |
The following is an update of the in-the-money December deals.
It is also located in the dropbox under West Power/Dec Deal Funding If we can wire on Thursday, we would need approximately $4.2 MM and net a $8.9 MM gain.
Delivery requirements are included in the new schedule.
| December Deals |
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Elizabeth, I assume that there must be some publically available documents which describe the auction process and the structure of compliant bids.
I would like to obtain a copy of such documents, as they may provide some insight into what the deal structure might look like and help us to prepare NETCoOnline for as quick a relaunch as possible.
Do you know where I might obtain copies of such documents?
Dave
| Auctions Process |
Status of Grant PUD Termination EPMI has a WSPP Master Agreement with the Grant Public Utility District ("Grant "PUD").
Grant PUD terminated this agreement with EPMI on December 13, 2001.
All transactions were for physical power, and were documented and confirmed under the WSPP agreement.
Pursuant to a pre-petition agreement, at least two of the deals were converted to a cash payment and the physical delivery obligation was cancelled.
Grant calculated the termination payment as being $16,454,632.
On December 18, 2001, Grant paid this amount to Enron Account No.
40781075.
Our forward curves show that Grant still owes us approximately $450,000.
We are working with Grant PUD to "true up" the termination payment, and we expect to reach an agreement soon on the true-up payment.
We have not agreed to a release of claims, and are awaiting guidance from Houston before we proceed with a release or similar action.
| Grant PUD Status Report |
Tom: EGLI is holding a $420,000 LC that expires 12/21/01 covering a deal with Energy Service Providers LLC.
According to our records, this deal has terminated.
Have we been paid?
Are we owed anything?
Would we have any grounds for drawing prior to the expiry date?
| LC's |
Tom: Tanya told me that you were researching these counterpaerties with respect to the LC's that we are holding that expire 12/31/01.
Is that true?
Do we have any right to draw?
| Vitol and Ballpur Industries |
About Members Events Ne= ws Contact Jobs = December 19, 2001 APLF.org = Festo - Virtual Roundtable = On January 8th Oral arguments will be made before the Suprem= e Court on the Festo appeal.
A number of our members will be in attendanc= e, and on January 10 we will hold a panel discussion to report back and di= scuss the issues and provide some insight.
Time: 1.00pm Eastern Duratio= n: 1 hour Call in telephone number: If you wish to join us, please RSVP f= or the dial in toll free number to info@aplf.org .
The format will provi= de an opportunity to pose questions to the panel and to other experienced = patent law attorneys.
For a full briefing on the Festo case, please see t= he presentation on www.aplf.org/events/festo .
About = Members Events News Contact Jobs =09 To Unsubscribe from this newsletter, please reply to this email with UNSUBSCRIBE in the subject line.
| European "Community Patent" Proposal Derailed Again - APLF |
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| WARNING: Your mailbox is approaching the size limit |
tanya: Just a quick update on the LC situation.
We sent a renewal request to Enserco yesterday and they said they would get back to us tomorrow.
If they don't renew by tomorrow I think that we should send them a notice of Event of Default letter which would give them until Wednesday to cure.
If not cured by Wednesday, we could terminate and be in a position to draw on Thursday/Friday.
Who can I coordinate with next week on this?
Leslie Reeves is checking on a few of them that owe payments this week to see if they have paid.
On Vitol, Tom is obtaining a copy of the LC and seeing if they have paid.
He is also checking into Ballarpur.
Greg Johnston e-mailed me to say that they were handling EPCORE and Engage.
We have concluded that nothing can be done on Energy Service Providers, Trafigura and Glencore.
| LC's |
Lisa and Liz: Each of Great Bay, El Paso Electric and LG&E Power have issued LC's to us that have has a drawing condition the fact that they have failed to provide alternate security and less than 20 days are left before expiration.
Another drawing condition is that a "default" has occurred under the EEI.
The LG&E and the Great Bay EEI master have a default that occurs if a party fails to establish, maintain, extend or increase Performance Assurance when required pursuant to the Agreement.
The definition of Letter of Credit in each Master does NOT have language to the effect that it has to be acceptable to us.
In the El Paso Master the default is based on a party's failure to meet the collateral requirements in Article 8.
In that Master, the LC must be acceptable to us.
Do you think that we can argue that the failure to renew the LC is a "default" that would permit us to terminate and draw?
| EEI Qusetion |
Attached please find a spreadsheet that describes the prepays we completed this week.
In summary, we bought power supplies through December 31 from Allegheny, AEP, Avista, Idacorp, and PNM and delivered to over 15 in the money contracts.
The power cost approximately $3.3MM and will generate a post-petition receivable in excess of $12MM.
Next week we will identify the January schedule and recommended purchases/deliveries.
Apologies for any wiring firedrills.
Regards,
| West Power Prepays |
Based on the information given to Kevin, the following files represent all counterparties that are valued in excess of $500,000.
The first file contains all companies with the most exposure to Enron.
Regards,
| Counterparty Analysis - Non-terminated contracts |
Elizabeth: Now that the Federal Estate Tax Return has been filed, you should think about making a substantial distribution from the Trust to the individual trust accounts for you and your siblings.
Some funds should be held back in case of an audit of the Return.
I think $100,000 would be a safe number to keep in the account.
I called the Virginia attorney and left a message for him.
I hope he has gotten the Estate opened by now.
How have you progressed with getting the IRA distributed.
Please give me an update.
Ellen H. Arthur Hodes, Ulman, Pessin & Katz, PA 901 Dulaney Valley Road, Suite 400 Towson, MD 21204 (410)769-6146 NOTICE: The information contained in this electronic mail transmission is intended by Hodes, Ulman, Pessin & Katz, P.A.
for the use of the named individual or entity to which it is directed and may contain information that is privileged or otherwise confidential.
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It should not be copied or forwarded to any unauthorized persons.
If you have received this electronic mail transmission in error, please delete it from your system without copying or forwarding it, and notify the sender of the error by reply email or by calling Hodes, Ulman, Pessin & Katz, P.A.
at (410) 938-8800 or 1-800-276-0806 so that our address record can be corrected.
| Estate of Joan Sager |
Below is an updated list of recent contract terminations.
I believe we need to review our internal notification system to make sure this information gets distributed in a more timely fashion.
United Illuminating - effective January 1, 2002 HQ Energy Services - effective January 1, 2002 First Energy Solutions - effective January 2, 2002 Old Dominion - effective January 10, 2002 - we should schedule in PJM through the 10th of January (do we have any other positions with Old Dominion).
Ameren Energy GPU Energy - effective January 21, 2002 - we should schedule in PJM through the 21st of January (they may push back, but we should remind them that they will be subject to LDs).
Call David Portz at 3-9239 with questions.
| Recent Contract Terminations |
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| CORRECTION: Outlook Outage - Friday, December 28, 2001 |
We need to meet on Wednesday, the 2nd, at 2:00 pm (in the big conference on the sixth floor in ECS) to go back through the East Power contracts that we will continue to serve either through the pools or under bilateral deals.
Given the drill we went through today in preparing for the January schedules in PJM and NEPOOL, it became apparent we need to get all the team members on the same page and make sure we have a good system for notifying all relevant parties of terminations, changes, etc.
Bill/Ed - Can you please run the most recent DPR for non-terminated East Power contracts.
Casey and Stacey - will you please update the spreadsheet that you ran for Kevin last week.
Let's make sure we all agree on contracts that have been terminated.
As most of you probably have seen, a number of terminations have been received in the past several days (see below).
United Illuminating - effective January 1, 2002 HQ Energy Services - effective January 1, 2002 First Energy Solutions - effective January 2, 2002 Old Dominion - effective January 10, 2002 - we should schedule in PJM through the 10th of January (do we have any other positions with Old Dominion).
Ameren Energy GPU Energy - effective January 21, 2002 - we should schedule in PJM through the 21st of January (they may push back, but we should remind them that they will be subject to LDs).
Thanks,
| East Power Meeting |
Here is the final purposed clean assignments with Williams and Dynegy.
The NET result will be and elimination of $35.1 MM Williams risk, ONLY if Williams will accept 35.1 MM of Dynegy Risk.
- Susan & Tracy
| Final . . . Williams and Dynegy clean assignments |
Today's mail brought the following news: 1.
Metropolitan Water District: MWD has terminated Deal Nos.
790056.01 and 807275.01, effective December 12, 2001.
There are two other one-month deals, one beginning in February and one in March.
I am confirming with MWD that they intend to terminate those as well, as is required under the WSPP agreement.
2.
City of Vernon: City of Vernon has terminated all deals effective December 27, 2001.
3.
WAPA is retaining monies due Enron for post-November 30 deliveries while WAPA "assess[es its] set-off rights under the Bankruptcy Code and other applicable law."
4.
City of Luzenac has suspended deliveries until January 15, 2002.
5.
City of Burbank has terminated all transactions immediately.
| West Power Counterparty Update: 12/31/01 |
Attached is a clean CSA, only change is to date as of today.
Attached are a clean and relined MNA for final review.
Troy, I will call after 1 to get your final approval and coordinate execution of the documents.
| Enron Master Netting |
Dear Elizabeth, Per your request, please find attached the Contract Schedule Summary between Enron and PG&E.
Please let me know if you are unable to open this Excel document.
Christy
| EnronPG&E Contract Schedule (23rd).XLS |
I regret to inform you that Kay Mann's father passed away this morning.
I will get funeral arrangement details to you as soon as I receive them.
I will also send flowers on behalf of the company.
Please keep Kay's family in your thoughts and prayers today.
Thanks.
| Kay Mann's Father |
See the attached.
The parties need to identify all applicable guaranties.
Note that the representations have been revised on the basis of the revised UCC 9.
Please direct your comments to me.
| Master Netting Agreement Draft |
Here is an updated New Power Company exposure as of 10-24.
I have included Buy/Sell, Deal Type, and Capacity/Commodity.
Please let me know if there is any other detail you need.
Stacey
| New Power Company Exposure |
CONFIDENTIAL Liz/Lisa Attached is a resume for Emma Caplan, who is the wife of one of our Human Resources Directors.
Emma spent three months working with Michelle Cash and I have spoken with Michelle who speaks very highly of Emma.
In addition, with her contract management experience at Compaq I am sure she will be able to provide the coordination and contract support that we are looking for in the Legal Credit Team.
I have spoken with Emma today who is interested in the position.
By copy of this email to Linda and Alice I shall be grateful if they will arrange for a time, ideally early morning or late afternoon, for Liz/Lisa to interview Emma and tell me and Molly Magee (Human Resources) when that will be.
Please could you arrange it that Emma comes in for an hour and sees Liz and Lisa.
It is important that this happen within the next two weeks.
Marcus
| Sr Legal Specialist Position - Legal Credit Team - CONFIDENTIAL |
Hello everyone, Kay Mann's father is in the hospital in Fort Worth and scheduled to have triple bypass surgery tomorrow morning at 8:30 a.m..........Please keep Kay and her family in your thoughts and prayers.
Thanks.
Al
| Update on Kay's Father |
Elizabeth -- As discussed, attached is a draft 'generator' EMSA for your review, together with the draft Credit Support Annex forming its Exhibit B.
The pricing alternatives in the Exhibit A are not fully worked out yet.
I welcome any comments you may have.
For purposes of comparison, attached is the draft 'extreme short form EMSA' I circulated for comment several weeks ago.
David
| Draft of "generator' Energy Marketing Services Agreement |
At the request of Elizabeth Sager I am forwarding the attached draft Amendment for your review and comment.
At your earliest opportunity, please feel free to respond to Elizabeth (tel.
: 713-853-6349) or to me (tel.
: 713-853-9239).
-- David Portz
| Amendment re EPMI Collateral |
PRIVILEGED AND CONFIDENTIAL Julia The tax issue, as far as I see it does not do anything for us except put us in the position that we will have to make an application for a power marketing certificate using whatever vehicle provides the tax advisors with the solution they are seeking.
With Enron under the spotlight at the moment any filing at FERC would be picked up by the media and could be used to cause untold further damage to Enron's credibility and reputation.
We could not for example provide any credible reason for setting up such an entity without revealing our true intent.
In addition, the FERC Commissioners are going to be wary about expediting any application at the moment for an Enron entity which does not have an interest in a generating unit, for example.
As for Clinton Energy Services Management Inc, which has a power marketing certificate, we are getting an opinion from outside Counsel to confirm that if this entity was moved to become a subsidiary of Enron Corp. that because of the current ownership structure no filing will be necessary with FERC.
We at least retain this option and can thereby proceed fairly quickly if required.
As to trading without a power marketing certificate I could not support this course of action.
In addition, we would probably be in breach of any agreement we have with counterparties enabling them to terminate the agreements immediately.
If you need me I will be on 713 533 0313. and will be logged on.
Marcus
| PRIVILEGED AND CONFIDENTIAL |
I spoke with David Mitchell yesterday.
Apparently, they're running behind as a result of a flood of Enron work and will not be able to deliver their memo on the Forward Contract issues until Tuesday of next week.
Ed
| Cadwalder Legal Documentation Review |
We are considering including the attached provision (or something) similar in our Transaction Confirmations.
I would also like to propose it to EEI and WSPP for sample language that could be included on confirms.
Would any of you have a problem agreeing to this?
If so, what are your concerns?
I know you are all real busy right now and appreciate your consideration of this matter.
Thanks in advance.
| Attached |
There exists another receivable financing covering power receivables structured at the corporate level.
I am working with Trey Cash and Melinda Winn to extract the receivables to enable the master netting agreements to be executed.
For now, please touch base with me prior to initialing any master netting that includes power.
Please note we are still working on the extraction from the gas receivables as well.
| READ THIS NOW RE MASTER NETTING |
Listening in by phone is so much better than traveling to these meetings.
It greatly reduces one's exposure to the toxins of this process.
1.
A learned expert on Secured Transactions from Mike's firm gave an opening address on the principles of granting and receiving the grantation of security interests.
Almost completely irrelevant.
The guy up and suggested that for a given transaction, the parties might consider giving a security interest in an office building, ie.real estate, as collateral.
2.
A cannabalized EEI Credit Support Annex was tabled by Deedee Russo of Reliant and muddled through.
The format was typically: Mike: "Okay guys, why don't you explain to me what you want."
Member: "We think we need this...blah blah blah, " Mike: "Okay, we'll put that into our next draft and have a conference call in December and a meeting in January and remember, none of this is binding, its all optional."
3.
At the very end, a lawyer from PacifiCorp managed to raise the vital issue and Mike got his hackles up very quickly.
The PacifiCorp guy was basically saying that the WSPP was becoming more and more like the EEI and that this made it more and more difficult for parties to decide which agreement to use.
His implication was that the WSPP should try to remain different or throw in the towel and be just like the EEI.
Small reacted from a position of religion, dogmatically and loudly asserting that the two agreements were fundamentally different.
Here is where he left himself open to the shining light of rational analysis: if someone, had the time, and we thought it mattered enough, the approach to take would be this: Dispassionate Spokesperson: A question has been raised: is the WSPP agreement becoming more or less like the EEI?
To fairly answer this question one needs to look at all the changes that have been made by the WSPP in the last three years, comparing each change to the EEI agreement.
(prepare comparison document).
If we look at the evidence do we see convergence or divergence?
The answer will be overwhelmingly convergence.
If this objective study could be placed before the "Membership" it would speak for itself.
Nobody would have to utter a word.
The comparison document would do the job.
If we are going to bother playing with these guys, this is what we should do.
It would take some time, but if we circulated it to the membership and then merely raised the question of future direction, we might deal this tedious process a mortal blow.
Believe it or not, the solution to this process is to follow the same process that went on when the King James Bible was put together in 1611.
Various scholars took various views on how various Hebrew passages should be translated, and it took a committee of draftsmen, appointed and sent to Geneva by King James to pound out the form that has stood the test of time for centuries.
The Joint Drafting Committee's time on the historical stage is finally arriving.
I am going to talk to this Pacificorp fellow and Brenda Anderson at BPA and see what happens.
----cgy
| Summary of WSPP meeting |
As a point in clarification, in Section 2(a) of the Master Netting Agreement the parenthetical "(including automatic termination, if applicable)" should be deleted.
Here are the new forms with the deletion made in them.
Since the form is amending the underlyings to not include automatic termination, the parenthetical should no longer be included.
Further, see the attached once again revised process (hopefully this will be the last revision for a time!).
Changes are in bold and deal with the gas receivables financing and credit sign-off.
To the extent a counterparty will agree to a 25th of the month effective date, do so, as it fits our physical gas billing cycle and makes it easier to pull out the receivable from the gas receivable financing.
| Revision to Master Netting Forms |
In an effort to promote consistency of approach, the attached Adoption agreement contains a few modifications and drafting notes that should make your due diligence review task easier at least as regards affilitat matters.
I have reviewed the conceptual changes in this form with Travis and Marcus and are in agreement with the changes.
If you have been fortunate enough to complete any Adoption Agreements at this time, I am not asking you to go back and make revisions; however, any new documents should be drafted taking into account the information and changes contained in the attached.
Please call if you have any questions.
| Adoption Agreement Applicable to Power Masters |
Re power receivables facility: The following are the counterparties designated in the draft Master Netting Agreement under negotiation with AEP, which could be executed as soon as [late] this afternoon.
All other power trading affiliates of Enron and AEP, if any, are intended to be excluded from the agreement, though this is still under discussion.
Please contact Elizabeth Sager or me with any questions.
AEP ENERGY SERVICES, INC. AMERICAN ELECTRIC POWER SERVICE CORPORATION
| Power Receivables Financing: Master Netting with AEP |
Liz: Here is a summary of comments I have not yet incorporated: 1.
Fritz raised the point that if Fixed Independent Amount is selected then both parties could be posting collateral.
If this occurs, he thinks that only Sections 6, 7 and 9 should apply but that Sections 3 and 4 should not.
2.
In clause (b) of the definition of Exposure, should we add language at the end that says: "when such sum is a positive value, and when such sum is a negative value it represents, conversely, Exposure of Party Y to Party X.
3.
Fritz wanted to eliminate the "demand" requirement in Section 4 and make collateral posting automatic.
4.
Should we eliminate the consent requirement in the last sentence of Section 5(a) (reducing LC's)?
5.
Reliant wanted to delete the "mid point" language in the definition of Current mark to Market value.
6.
Reliant wants to add to Section 6(b)(iii) the phrase "Secured Party notifies the Pledging party as to the" after the 1 and 5 day triggers such that the delivery requirement begins after notice.
7.
Reliant wants to extend the time frames in Section 8.
8.
AEP wants to limit the definition of Credit Rating Event to a ratings drop only.
9.
AEP wants to add language to the definition of Letter of Credit that requires it to be acceptable to the Secured Party.
I will forward to you PacifiCorp's and Duke's comments as I found most of them to be problematic.
| EEI Comments |
Lech - A high priority Master Netting and Setoff Agreement (see attached) is in the late stages of negotiation with the below-referenced AEP affiliates.
The agreement is currently intended to be limited to masters/ transactions between ENA &/or EPMI and two major AEP trading affiliates, American Electric Power Service Corporation as Agent for the AEP Operating Companies ("AEP") and AEP Energy Services, Inc. ("AEPESI").
The Netting Agreement explicitly identifies enabling agreements between those entities relating to trading physical gas, physical power, and financial swaps.
Earlier today the Enron Credit group indicated that ENA trades (using GTCs) physical coal and physical synfuel with American Electric Power Service Corporation.
Please contact me with any questions.
-- David
| AEP Master Netting Agr |
1.
Be sure to verify that the underlying contracts do not allow cherry picking under any default scenario.
If it does, amend the express language.
2.
We have made 2 changes to the netting agreement forms on the basis of further review by Leslie Hansen of some provisions in our trading forms.
The first change is in paragraph 2(a) to clarify the definition of Default.
The second change is in paragraph 14(b) to delete the day limitation on claims of Force Majeure.
We feel this should not be included in any physical contract that will be included in a master netting agreement, especially because of the current international situation and security concerns.
See attached reline version to read the changes.
3.
No changes have been made to the Collateral Annex.
4.
Attached below are the new forms.
Rather than continue with forms with and without the user notes, I put the user notes in a separate document.
They are not at the back of the forms.
Simpler.
The attached forms are Master Netting & Security Agmnt 10 h a v1 (to use without collateral annex) and Master Netting & Security Agmnt 10 h v1 (to use with collateral annex).
| FORM CHANGES: READ |
See the new versions of the netting agreement forms below.
All that has been done is to move the Force Majeure concept to paragraph 2(a) from 14(b).
This allows the daily limit concept to stand in the UMAs, but it won't elevate to a default under the master netting arrangements.
In certain instances if you want to "kill" the day limitation completely in the underlying agreement, you can always use the previous 14(b) language from the emailed docs earlier today.
The docs remain at v1 (version 1).
| FORM CHANGE AGAIN! |
Wendy -- As discussed.
MidAm is anxious to get this EEI in place, and you had indicated the open power trades are not a large exposure (SeeAtttachement A below).
Enron's triangular set-off is installed in 5.6, not the EEI's square set-off in the 5.6 B election.
Please help assure that execution of this fits into the larger credit picture as well.
--David
| MidAmerican draft finalized EEI docs |
Andy: I would like to participate by phone in Monday's meeting.
Could you please give me a number to call into and a time?
Thanks.
| Monday's Meeting |
My brother just called, and my dad has just been admitted to the hospital for a heart problem.
There is a good chance that they will operate tomorrow or the next day.
If they do, then I will need to go to Ft. Worth for a couple of days.
I'll keep you posted.
Kay
| Scheduling |
Elizabeth, Attached please find some contractual documents related to the Midwest ISO and our ability to take service under their OATT.
I need to have them reviewed as well as get some aid completing them.
I have attempted to complete as much of the documents as possible.
Can you please task someone to look at these as soon as possible?
The MISO is expected to start offering service on November 15.
Unfortunately, they have not given us a lot of lead time on this.
I have already been working with Ed Sacks and Leslie Reeves to deal with credit and billing issues, but now have collected much of the information and need to get the documents reviewed.
Thanks for your help.
One annoying problem with Sections 3-7 - they are in Adobe Acrobat, and can only be edited with Acrobat Writer.
I have tried getting the editable originals from MISO, but have not had a lot of luck.
I just placed another call to them to request them again.
Please call me if you have any questions.
| MISO Registration |
Whoever wrote question number four clearly has a sense of humor.
Will any Enron executives have a role in the combined company's senior management team?
Yes, Greg Whalley will serve as Executive Vice President and will join Dynegy's Office of the Chairman when the transaction closes.
What happens to Ken Lay?
Ken Lay will remain as Chairman and CEO of Enron until the transaction closes.
He will not join the Dynegy Office of the Chairman.
Will Enron complete its new building?
Yes.
Is Enron's vision still to be the world's leading company?
Enron's vision will be revisited once the companies are merged.
Will this affect Enron's innovation?
A key strength of Enron and Dynegy has been their employees' innovation and we expect this to continue.
| From the ENE/DYG Q&A on Enron's website |
Tracy: Could you please e-mail to the group the 11/8 letter that you sent to Mark Russell at SRP.
We received a letter on 11/9 stating that they disagreed with our assertion that SRTP's request for additional collateral is subject to the disputes resolution section of the Agreement.
Who is handling this on the legal side?
| SRP |
Hall Yoder Daily Assessment Index for Monday, November 12, 2001: +3 A number of relatively positive factors are offset by the single negative factor that the good old days are forever gone.
The free fall seems to have ended.
Lots of cash is coming in.
Portland office is apparently to be spared a misery that Houston will not be so fortunate as to escape, and is given a clear message to resume work as usual.
Street Oracle carping and whining at low level of hysteria.
Perhaps a key subliminal message can be divined from the fact that Tim went to Houston carrying full documentation and prepared to hand in all of his expense reports, but came back without having turned anything in at all, flying back home on the jetstream, much like the single crow that sailed by today, heading due north high above the center of the Willamette, as though it knew exactly where it was going.
| HYDA +3 |
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Members, Drafting Group: Following Monday's meeting, I would like to confirm the meeting dates that we discussed for 4 future Contract Group activities: December 6, 2001.
- Executive/Drafting Committee - Discuss RTO Products.WSPP, Canadian Update.
Mitch Dutton has confirmed that the Executive/Drafting Committee can meet in AEP's offices in Columbus, 28th floor Conference Room.
Let's start at 10:30 unless we find that your planes get in much earlier.
Mitch will provide address, transportation information from the airport and building access information (as well as Columbus' best lunchl).
Please RSVP to Cynthia Trueheart, Ed's assistant, (202) 508 5619 (or by replying to this message) and include your arrival and departure times so we can set precise meeting times.
February 5 or 7, 2002.- Working Group meeting to present the Collateral Annex, and other pending issues EEI's Offices have space for up to 100 people.
Do you have any preference for February 5 (Tuesday) or 7 (Thursday)?
Let Cynthia know.
May 2, 2002.
Training Seminar in conjunction with EEI Legal Conference.
Bishops' Lodge, Santa Fe.
NM.
The Legal Conference begins with a reception Wednesday evening, May 1 and continues through Saturday, May 4.
We would devote the first full day, May 2, to Contract issues, including a Trading Basics review and more in-depth discussion of the Collateral Annex, new RTO Products and a Canadian annex.
While rooms at Bishop's Lodge are limited, we are looking into nearby hotels for additional rooms.
June 3 or 4, 2002.
Executive/Drafting Committee meets during EEI Convention.
The EEI Convention takes place Sunday June 2 thru Tuesday June 4 at the Boston Marriorr Copley Place Hotel.
the Convention is open to the public, includes many interesting presentatons, a large trade show and a very nice party on the last night.
EEI also conducts members-only business meetings in between conventino events.
It attracts over 1000 people.
We can easily meet there.
I will most likely have the most free time on Tuesday, June 4, but will confirm that shortly.
Canadian Issues.
Hans Konow, President of the Canadian Electric Association, is very interested in participating in the development of a Canadian Annex to the EEI Contract.
CEA is usually ery easy to work with and would play the same role as EEI and NEMA did in the initial stages - bring together interested parties and serve as a neutral.
I expect to hear back from his staff soon.
Your TO DOs: Please RSVP for the Dec. 6 meeting in Columbus with arrival and departure times and indicate whether you prefer February 5 or 7 for a Working Group meeting.
| EEI Contract/Future Meetings |
Depending on who you ask, the EEI evangelism campaign to Seattle was eithe= r a failure or a success.
If you ask Stewart, he will say in his clipped, = highly focussed manner that it failed.
Seattle did not agree to convert to= the EEI and immediately sign a completed Cover Sheet right there on the sp= ot.
Far from it.
If you ask me, I think I pulled off a major political = coup and have a vote for consolidation in my firm grip.
I didn't even try = to convince Paula Green, a bureaucrat who has dealt with Seattle power poli= cy matters for over twenty years and who is very much "set" in her ways in= a subliminal manner that is perfectly consistent with her title: "Deputy = Superintendent," to come to the EEI Jesus.
Somewhere on the long dark dri= ve up the I-5 corridor, with rancid coffee sloshing around with a stale ma= ple bar from a seedy gas station store in my empty, weak belly, somewhere u= p there by the Centralia coal fired power plant that Transalta bought a cou= ple of years ago amidst all that due diligence frenzy that Greg Wolfe had s= tirred up within our shop, somewhere up there in the dark, miserable windy= rain I settled upon my strategy.
I would not even attempt a frontal attac= k. We have sent the equivalent of John Bell Hood and his corp of Texans di= rectly against the WSPP fortification (the Shari Stack gambit) and been bad= ly mauled and hurled back.
Secondly, Enron, or whatever is left of us, is = in no position to claim the high moral ground.
We have to get used to slin= king around sheepishly in front of there conservative folks who had suspect= ed our hubris all along.
It wasn't a good time to argue from the implicit = basis of superior intelligence.
=20 Therefore, I decided to test drive my consolidation theory, and, had a spec= tacular success.
I had this intransigent, stubborn old policy gal leaning = over the table, looking into my eyes and emphatically exclaiming: "I suppo= rt that.
Who could possibly be against that?"
This after I basically said= that lawyers could tie us all up for years arguing about an ever narrowing= set of distinctions and that it was time to stop bashing either agreement = and set up a Joint Drafting Committee and "harmonize" them.
Excuse me for = using this nauseating word "harmonize."
It's right up there with "facilita= te" or the dreaded "incentivize" as disguting words, but I swallowed my pr= ide and used it with gusto.
I laid it on real thick, claiming that the WSP= P had done a great job in the west while the same thing was going on in the= east and now it was time to harmonize the documents and get on with more i= mportant matters, that it was stupid to tie up our valuable resources and t= ime comparing these agreements and trashing them.
I claimed that each agre= ement referred to exactly the same concepts, only using different words, an= d that these differences could be quickly resolved by competent energy atto= rneys.
=20 My test drive of this theory with a live candidate, an entrenched WSPP supp= orter who aint gonna change was interesting.
I got her to agree to a joint= committee concept and state emphatically in front of all that she would en= thusiastically endorse this idea.
This is the first of several of these ty= pes of conversations we need to have with various parties.
I am going to h= ead over to BPA and "convert" the infamous Brenda whoever to this new doctr= ine.
If we line up big guys like Seattle, BPA and others, critical big Mo = may be generated and, in the ultimate scene, we send Elizabeth into the cav= es (drafting conference room) against Mike bin Small and, hey, I'm willing = to bet on the outcome of that encounter.
I think we all know what would ha= ppen then.
Think about it.
It is a marginal little drama that I have kind= led up out of the depths of my despair and boredom, but, it might just pick= up steam if it is nursed along.
PacifiCorp's Jeremy Weinstein is taking a= more strident, judicial review of due process approach to the WSPP, and wi= th him leading a formal charge, this little argument I am trying to plant c= ould be the compromise for peace.
----cgy
| Report from the field |
Effective Monday, November 19, Mark Haedicke will office in the new building.
His location will be: ECS 06788 (sixth floor, office number 788).
My new location will be ECS 06785 (just outside Mark's office).
Our telephone numbers and fax number will remain the same.
| Move to Enron Center South |
Elizabeth, As a follow-up to our discusion on Monday and my voice-mail this morning, and the two voice-mails I have left for Marcus today, I thought I would try this method of communication as well.
I'd like to wrap up the EEI Agreement between us as soon as possible, and would be grateful if either you or Marcus would give me a call.
I understand that you must still be very busy, but I hope that either you or Marcus will find the time to give me a call.
Thanks,
| EEI Agreement |
Attached is an amendment to the ENA/ Dynegy agreement regarding the Sithe deal.
It may require some clean-up but if you would please consider whether this meets the objectives of cross defaulting ENA's payment obligations under the Letter Agreement and netting and setoff with the Master Netting Agreement.
Please call me with your comments as soon as possible.
Thanks!
| Dynegy |
The Hall-Yoder Daily Assessment Index for Tuesday, November 13 and Wednesday, November 14, 2001: +1 We are finding new footing after a time of floundering in quicksand.
The solidification of the sense that there is not going to be a quick recovery, high level remarks about keeping Enron's trading talent intact, and encounters with counterparties like Seattle and Snohomish who seem to take a kind of nonplussed (clueless?)
view of the whole situation, all suggest that the storm may be over and we are going to be able to gird up for a long steady march to a different promised land, Houston toxins notwithstanding.
In the morning, the crow community seemed harassed by the strong winds and were seen heading up river in a southerly direction, while the afternoon provided a view of a large raptor, some kind of hawk, or perhaps an osprey, circling high above the city's downtown core.
| HYDA +1 |
As I mentioned in my previous e-mail, on October 17 Dynegy filed a complaint against ComEd.
This proceeding may be of particular interest to Enron given EES's plans to offer physical delivery in Illinois in early 2002.
I've outlined Dynegy's principal arguments below.
Dynegy requested fast-track processing, so any intervention and comments we file are due Friday, Oct. 26.
In order to file a timely intervention (and meaningful comments, if we decide to comment), I need to know your thoughts on this as soon as possible.
Elizabeth and Harlan, I'm copying you because I would especially like to know what you think of Dynegy's characterization of the Firm LD product.
Main argument: Dynegy challenges ComEd's published Business Practice that allows "marketer firm" (Firm LD) contracts to be designated as Network Resources.
Dynegy argues that this practice conflicts with the OATT provisions that 1) Network Resources are generation "owned, purchased or leased by the Network Customer designated to serve Network Load," and 2) a Network Customer "must demonstrate that it owns or has committed to purchase generation pursuant to an executed contract" in order to designate a Network Resource.
Dynegy's theory on why Firm LD should not be a Network Resource: - permits designation of network resources that are committed for sale to others, creating reliability problems - Firm LD under the EEI contract is not capacity-backed, nor is it a commitment to purchase generation - allows transmission customers to get the advantage of generation capacity without actually paying the cost of that capacity - since retail providers are allowed to rely on "over-the-counter" firm instead of securing long-term contracts, adequate reserves are not being carried to serve retail load Dynegy claims that ComEd's practice has deprived DMG of payments for capacity and the ability to earn revenues for capacity properly designated as network resources.
It cites specific instances in which ComEd has accepted transmission reservation requests from New Energy and Cilco in which these parties designated Illinois Power as a network resource, when only a Firm LD contracts were in place with IP.
| Dynegy vs. ComEd (EL02-6) -- further info |
Elizabeth, Background: On Wednesday, October 10, the NPUC voted to authorize its General Counsel to seek to void or renegotiate certain SPP/NP long-term power contracts by either going to court or filing a complaint at FERC.
According to the utilities, the contracts are out-of-the-money by approximately $800 million.
Enclosed, you'll find.
.
.
.
: Attached is a spreadsheet showing all of the physical Enron-SPP/NP deals that are (1) currently flowing or (2) scheduled for future delivery.
I have left off transactions that have been completed because the tenor of SPP/NP's statements indicates that they are seeking prospective relief, not refunds.
I am also going to fax to you two pages showing our credit exposure to SPP and NP.
Worst case, back of the envelope, we are looking at approximately $400 million in MTM exposure for all deals.
However, the prices under these deals range from $27.50/MWh to $311/MWh (the $3.60 deal is for transmission).
It's extremely unlikely that FERC would (1) void every transaction or (2) reduce the price for every deal to $0.
Therefore, the true amount at risk is less than $400 million.
Bottom line: All in all, I think the risk of FERC undoing these transactions is unlikely for the following reasons: 1.
The ALJ in the Pacific Northwest refund case rejected claims for refunds of bilateral transactions because (1) the non-California long-term market was competitive, and (2) because of the concern about "ripple" claims.
Although the Commission has not yet adopted the ALJ's recommendation, I expect they will because it's the path of least resistance and has popular support.
2.
SPP/NP is the only party arguing that the Southwest market is uncompetitive.
This aspect was fatal to the Pacific Northwest claims because the majority of the market did not want refunds.
3.
SPP/NP was not required to buy power under these contracts----unlike the California utilities, which were required to buy from the PX.
Presumably, these were the lowest prices available at the time.
| Sierra Pacific Power/Nevada Power |
Pursuant to our discussion yesterday regarding the above, please find below for your consideration a suggested revision to MAC/Credit Rating trigger definition to used in all future master trading agreements or confirmations in which Enron Corp's credit rating is part of a MAC/Credit Rating trigger.
"Material Adverse Change" means (i) with respect to [Enron Trading Entity], Enron Corp. (or its successor or its successor's parent company) shall have long-term, senior, unsecured debt not supported by third party credit enhancement that is rated by S&P below "BBB-" [also insert Moody's as appropriate]; I understood yesterday that we may also need to consider changing the definition of Credit Support Provider in the ISDA's.
I suspect that if "Credit Support Provider" is defined as Enron Corp. in the relevant Master, then the corresponding changes noted above would also need to be made.
Your further thoughts regarding this issue are welcomed.
Please provide me your comments to the above language by tomorrow so we can start implementing a revised definition in our agreement templates.
Regards, Alan
| Draft of revised definition of Material Adverse Change/Credit Rating Trigger |
harlan: for forwarding to dynegy the framework re the sithe letter: 1.added cross default to master netting agreement.
2.added acceleration of ena's payment obligations in the event of default by enron parties under the master and close-out by the dynegy parties.
3.added set off right to dynegy parties if they end up owing under the master to the remaining payment obligations of ena.
re the master netting agreement which you will send: 1. added cross default to ena's payment obligations under the sithe letter.
2. added set off right to dynegy parties like in 3. above.
| dynegy letter re sithe |
Margo, Elizabeth Sager has approved a total of 64 hours of vacation to carry-over to 2002 for Genia FitzGerald.
The breakdown is as follows.
40 hours - Supervisor approval not needed 24 hours - Approved by Elizabeth Sager (11/15/01) Please make sure Genia's file reflects this change.
Should you have any questions, please do not hesitate to contact me.
Thanks.
| Vacation Carryover |
Christmas is almost here.
Our class will give a gift to Miss.
Post and the enrichment teachers.
If you would like to donate $10 toward this we would gladly put $5 in the first grade pool, this goes toward gift certificates for the enrichment teachers and the coaches.
The other $5 goes toward a personalized platter or bowl that our class will create with Jean Heck.
Please send cash or a check to Jane Pefanis care of Nick Pefanis by December 1st.
Don't forget our Christmas party Dec. 19th at 2:15pm.
The Chair for the party is Morgan, the snacks are Sager and Cox, drinks are Schwartz, paper products are Morgan, the activity is Buckstaff, and our photographer is Harris.
Have a great Thanksgiving!
Jane
| AOS |
Attached please find a copy of the memo from F. Mitchell Dutton regarding Into Product Definition and Formation of Regional Transmission Organization for the 5:00 p.m. (EST) Conference call today.
Please contact Mitch Dutton at (614) 223-1605 or myself at (614) 324-6843 if you have any questions or comments.
(See attached file: 87712.DOC) Thank you,
| Conference Call re: Transition of Into Product to MISO |
Everyone, We are trying to plan a going away luncheon for Alice on Tuesday, November 27th and it would be helpful if each of you could tell me whether or not you would be able to attend.
As soon as I get a head count I will let you know the time and place.
Thanks,
| Alice's Going Away |
All, For the security model, this is a list of privileges that I've come up with.
1.
Financial Read/Write 2.
Financial Read only 3.
Power Read/Write 4.
Power Read only 5.
Gas Read/Write 6.
Gas Read only 7.
IM Read/Write 8.
IM Read only 9. Credit Comments Read/Write 10. Credit Comments Read only 11.
Legal Comments Read/Write 12.
Legal Comments Read only 13.
Confirmation Comments Read/Write 14.
Confirmation Comments Read only 15.
CP Read/Write 16.
Keyword Read/Write Please let me know if there are other privileges to be included.
| Security Model |
If you are planning to attend the December 6, 2001 Drafting Committee meeting here in Columbus, Ohio and have not already made your hotel reservations please do so as soon as possible in order to get the discount AEP rate.
Their discount rate for AEP is $92 per night plus tax.
Apparently, they only have so many rooms with the discount rate.
The hotel is Courtyard by Marriott - Downtown, 35 W. Spring St., Columbus, Ohio 43215, (614) 228-3200.
I will be checking other hotels in the area to find out about discount rates and forward to you the information.
Please forward any names of individuals that you know will be attending the meeting who are not listed.
Please contact me if you have any questions.
Thank you,
| Hotel Reservations |
Attached hereto is a memorandum outlining the requirements of Regulation M-A with respect to communications regarding the Enron/Dynegy merger.
In general, Regulation M-A requires that all written communications made by Enron that could be viewed as soliciting support for the merger and are sent to stockholders must be filed with the SEC on the date of first use and must contain the legend set out in the attached memo.
This memo was distributed today to the attendees at Steve Kean's daily 10:30 meeting.
If you have any questions concerning the attached, please contact me at ext.
33448 or Elizabeth Sager at ext.
36349.
Thanks, Anne.
| Regulation M-A |
Mark: I have drafted an ISDA Master Agreement for the above referenced Counterparty.
Steve Hall is an attorney in our Portland office and wishes to negotiate the ISDA with the Counterparty.
I have informed Steve that I must get approval from you before I can give him the OK. From my conversation with Steve, it seems that he is working on other issues with Elizabeth Sager and she is to speak with you about Steve working on the ISDA.
Please let me know how to handle this issue.
If you need to contact Steve his number is (503) 464-7795.
| Follow-up re: West Linn Paper Company |
Ladies and Gentlemen: With address information changing so rapidly, especially email addresses, we want to make sure we have the most current address and email information for you.
Please take a few moments to complete the attached form (word document) and email or fax back to my assistant Cynthia Trueheart.
Thanks in advance for your assistance and have a wonderful Thanksgiving.
| Updating Contract Group Information |
We need a brief description of EPMI's business as soon as possible; you were suggested.
Could you send me one by Monday morning?
Thanks, NJD
| EPMI Business |
At the request of Christi Nicolay, attached please find the definition of an "Into Product" that was prepared by a group of industry participants working with the Edison Electric Institute (EEI) (this definition is also available on the EEI web page).
The only other definition of an "Into" product of which I am aware is the information that is available on the Cinergy web page or the definition published by NYMEX for its "Into Entergy" product.
If you have any questions about the "Into" energy product that is so commonly traded in the over-the-counter market in the East (eg "Into Entergy", "Into TVA", "Into Cinergy", "Into ComEd"), please don't hesitate to call me.
| "Into Product" definition from EEI |
Attorney-Client Privileged Communication Not Discoverable Hi Tim Leslie Reeves recently spoke to me about an outstanding receivable we still have relating to PCA.
PCA went into bankruptcy in 1998.
At the time of PCA's bankruptcy, PCA owed a $5.3 million receivable to EPMI.
On EPMI's books, this uncollected receivable amount was offset by an out-of-the money forward position EPMI had with PCA which we were able to take to zero when PCA defaulted (contract provided for one way payments upon the occurrence of an event of default) and some funds from credit.
After netting all these amounts, there is still a $600,000 receivable showing up as owed from PCA to EPMI.
Based on the current bankruptcy proceedings, it is not likely that EPMI will receive any additional funds from PCA (we have taken a very low key approach in the bankruptcy due to the lack of PCA funds, the extensive amounts owed by PCA to other creditors, the assertions being made by PCA against some of the other creditors, and the legal effect of the one-way payment termination payment that provided us a significant offset to the receivable).
Accordingly, unless I hear otherwise from you, I will talk to Leslie and tell her to go ahead and clean up the $600,000 PCA receivable now, and in the unlikely event PCA makes payments to any creditors, we would then give such amounts received from PCA back to you.
Call me if you have any questions.
Thanks
| Receivable Write-off -- Power Company of America (PCA) |
Phone is busy so ..... Will have agreement shortly.
Please send fax numbers (no electronic copy) where you want it sent.
Hope all is well.
| BECO Sales |
Confidential; Attorney client work product; Not discoverable Here is a rough draft.
I will also start on TVA letter.
Per my earlier vm, I am struggling with the benefit of a 2 year proposal vs. 7.
I'm not sure if we get any "cap" benefit from making a seven year deal even if TVA doesn't accept our offers (benefit would assume that TVA has an obligation to cover entire position which is contrary to what our outside counsel has said in the past.
According to Bob, since TVA is asking for specific performance, it may not be reasonable for TVA to cover entire period.
I will try to talk to him tonight.).
If TVA accepts one of our proposals and then we lose the termination argument, what do we do?
Supply?
Terminate Again?
In either case our proposal for 7 years will likely not cap our damages.
Let me know what you think.
I'll be in early tomorrow.
Thanks
| Draft TVA memo to Delainey |
CONFIDENTIAL ATTORNEY WORK PRODUCT Please review attached memo and provide me comments early Thursday morning.
Kevin and Rodgers saw an earlier draft and I do not want to recirculate to them for their final review until we have all legal input.
Thanks
| Draft TVA memo |
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