California ISO Credit

ok swammies -

I told Neil I'd gather some input - my assessment is 25% probability that
payment is not received within one year; probability is nil that it won't be
received at all. Your thoughts?
----- Forwarded by Harry Kingerski/NA/Enron on 02/25/2001 08:52 PM -----

Neil Bresnan@EES
02/23/2001 05:45 PM

To: Harry Kingerski/NA/Enron@Enron, Michael Tribolet/ENRON@enronXgate
cc: Don Black/HOU/EES@EES, Dennis Benevides/HOU/EES@EES, Jubran
Whalan/HOU/EES@EES
Subject: California ISO Credit

Michael,

With the dissolution of the PX we are exploring various markets in an attempt
to shape our load and minimise our credit exposure to counterparts such as
the ISO. We are continuing to work with EPMI to manage the risk associated
with selling any volume into the Cal ISO. Currently we are purchasing power
on a daily basis from the market to meet the highest common on and off peak
hour. This strategy leaves us long for all the other hours but reduces our
exposure to ISO penalties for under scheduling . Our most promising options
are to sell the excess shoulder power into the PX imbalance market or OTC
hour ahead. We are concerned about any receivable from the ISO and would like
to know what you think the probability is of non-payment. If we do receive
payment over what time period can we expect to receive it.

NFB