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Enron Mail |
Jeff,
I had a good discussion with Milton Schultz, GM of Burney Forest Products. Milton indicated they have 19 years left on a PPA (SO4) with PG&E. Their plant provides 31 MW of peak generation (with firm capacity on 24 MWs and as available on volumes above 24MW) which Milton indicated has the flexibility to be turned down on off peak hours. In addition, their fuel costs are a function of demand and if they were able to fill the energy from the market it would likely lower the overall cost of fuel (wood chips). The economics of the deal for ENA appear to be good enough for ENA to be able to pay a decent option premium up front which could be structured as partial relief of the PG&E receivable ( Milton indicated that the PG&E receivable is approx $10 ). Below is the email I sent Milton and an attached outline sheet. Milton indicated the he would discuss the idea with Rich Purcell, apparently a main partner in the project. He seemed to be genuinely interested and felt it was something Rich would also like. The question is, "Can we facilitate, through the QFs, a contract restructuring with PG&E and if so what steps would we propose at this point ?"(assuming I get interest back from Burney Forest Products.) I would propose that ENA work with the QF to structure the terms of the "restructed" PPA between the QF and PG&E and that simultaneous with that agreement, ENA enter into a long term services deal to supply the market based energy as well as provide for an up-fron option premium for the right to "put" market based power to the QF/utility. Let me know your thoughts. Mike ---------------------- Forwarded by Michael Etringer/HOU/ECT on 05/03/2001 01:38 PM --------------------------- Michael Etringer 05/03/2001 12:57 PM To: bfpjv@c-zone.net cc: Chris H Foster/Enron@EnronXGate Subject: Proposal for QF Contract Restructure Milton, I very much enjoyed talking with you today. As we discussed, please find attached a general discussion outline for the QF restructuring proposal. I hope this gives a fair assessment of the proposal but as usual words are always subject to interpretation so I would look forward to discussing these ideas in greater detail. Although the landscape is currently a "mess" at best, I do believe it provides some unique opportunities to explore alternative solutions to the current energy crisis. As I indicated, Enron would be very interested in working with a QF or group of QFs to explore and develop an approach which the QFs can take to the utilities and potentially the PUC and bankruptcy courts. Look forward to talking with you and Rich after you've had a chance to further consider the proposal. Thanks again for your time. Sincerely, Mike Etringer West Power Origination 503-464-3836
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