Re: Direct Access

Here are my first thoughts on this:

If we are to agree to exit fees, which I think we obviously have to to be
credible. The definition of, "...costs imposed on the portfolio that are
directly related to the load of the departing customer," should be the value
of portfolio costs (including generation at embedded costs, QFs at cost,
contracts, etc.) compared to market. The LD cannot be just based on the
liquidation of contract costs, or we don't get the benefit of embedded
generation value (which today would liquidate as a credit). This may bite us
if market costs drop below embedded generation, but we are out of business
now if we don't get it. Also, if we don't get the market liquidation value
of embedded generation then the portfolio gets, all else equal, a lower cost
resulting from the departing load - not fair or equitable.

Enron Energy Services

From: Mike D Smith 02/02/2001 12:39 PM

To: Scott Govenar <sgovenar@govadv.com<@ENRON
cc: "Harry.Kingerski@enron.com" <Harry.Kingerski@enron.com<@ENRON, Jim
Steffes <james.d.steffes@enron.com<@ENRON, Jeff Dasovich
<jdasovic@enron.com<@ENRON, Mike Day <MDay@GMSSR.com<@ENRON, Paul Kaufman
<paul.kaufman@enron.com<@ENRON, Rick Shapiro <rshapiro@enron.com<@ENRON,
Sandra McCubbin <Sandra.McCubbin@enron.com<@ENRON, Susan J Mara
<smara@enron.com<@ENRON, Vicki Sharp/HOU/EES@EES, James E Keller/HOU/EES@EES,
Scott Stoness/HOU/EES@EES, Scott Gahn/HOU/EES@EES
Subject: Re: Direct Access

Harry raises some good points.

I am attaching another copy of my comments from this morning--It looks like
this draft came out before you got these comments.

I will be traveling without access to my e-mail from 11-4 PST. Please call
on my cell phone 713 302 9089 if you have questions. MDS

From: Harry Kingerski@ENRON on 02/02/2001 12:31 PM
To: Scott Govenar <sgovenar@govadv.com<
cc: "Harry.Kingerski@enron.com" <Harry.Kingerski@enron.com<, Jim Steffes
<james.d.steffes@enron.com<, Jeff Dasovich <jdasovic@enron.com<, Mike Day
<MDay@GMSSR.com<, Mike D Smith <msmith1@enron.com<, Paul Kaufman
<paul.kaufman@enron.com<, Rick Shapiro <rshapiro@enron.com<, Sandra McCubbin
<Sandra.McCubbin@enron.com<, Susan J Mara <smara@enron.com<
Subject: Re: Direct Access

Initial comments for discussion:

Fees (exit, entry): should be transparent - in absolute terms and formula
that will be used. Can notional numbers be posted daily?

One-way tolling: eliminate re-entry fees. Puts new and returning customers
on equal footing and eliminates additional admin burdens.

DWR stranded costs for exit fee: should be an affirmative obligation on
their part to mitigate any incremental costs (reselling, etc.)

KW threshold: we're ok with 100 kw (or lower).

Limit on switching: once a year is reasonable.

Areas to clarify:
DWR carve-out: if load departs (re-enters) DWR, does it simultaneously
depart (re-enter) the utility? Assuming a clean break from bundled service,
is there an exit fee from the utility portion of the bundle?

Closure: need to specify when exit/re-entry fees no longer apply.

Open Subscription Period: if DWR does only 5+ year contracts, does this mean
there will be no open periods for a long time?

Scott Govenar <sgovenar@govadv.com<
02/02/2001 07:58 AM

To: Jim Steffes <james.d.steffes@enron.com<, Rick Shapiro
<rshapiro@enron.com<, Jeff Dasovich <jdasovic@enron.com<, Sandra McCubbin
<Sandra.McCubbin@enron.com<, "Harry.Kingerski@enron.com"
<Harry.Kingerski@enron.com<, Susan J Mara <smara@enron.com<, Paul Kaufman
<paul.kaufman@enron.com<, Mike D Smith <msmith1@enron.com<
cc: Mike Day <MDay@GMSSR.com<
Subject: Direct Access

Attached, please find the latest direct access legislative proposal for
your review and comment. This incorporates the amendments referenced in
Mike Day's e-mail yesterday. We need comments by 11:00 a.m. if possible
as the final draft language must be delivered to Senator Bowen today.

- subscription.protocols revised