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Enron Mail |
Megan,
I adjusted deal 529856 on the 2nd of Oct and Nov for the adjustments below. Can you make this work? D Enron North America Corp. From: Megan Parker @ ENRON 12/29/2000 12:08 PM To: Daren J Farmer/HOU/ECT@ECT cc: Subject: Tenaska IV Gas Are you going to make the price changes to the Tenaska IV sale 384258 for 10/00 and 11/00 that James details below? Right now, we are showing a short pay of $351,201.49 for those two months. Megan ---------------------- Forwarded by Megan Parker/Corp/Enron on 12/29/2000 11:46 AM --------------------------- James Armstrong@ECT 12/19/2000 10:31 AM To: Daren J Farmer/HOU/ECT@ECT cc: Megan Parker/Corp/Enron@ENRON, Jody Pierce/HOU/ECT@ECT, Mike Mazowita/Corp/Enron@Enron, Garrick Hill/HOU/ECT@ECT Subject: Tenaska IV Gas Daren, per review of the Gas agreements between Tenaska IV and Williams/Apache and our understanding of the Agency agreement, I had a few items I wanted to discuss with you (in lieu of our meeting today that was cancelled): 1. Looking at the October gas supply to the plant, I think Tenaska IV should have been charged at the contract prices with Williams & Apache (i.e. 2.285) and not at what the final price that was actualized per Megan's summary - 230,406 at $710,616.70, price of $3.084. If this volume was charged at 2.285 the total would have been $526,477.71, a difference of $184,138.99. 2. Looking at the November gas supply to the plant, Tenaska IV was charged $2.91 per MMbtu, instead of $2.285 for volumes of 267,300. At the $2.91 price, the total settlement price was $777,843 instead of $610,780.50 at 2.285, showing a difference of $167,062.50. I reviewed the gas supply agreements and the Williams gas price (pg. 19) for 2000 gas is 2.32, which can be adjusted by the Waha Transportation Adjustment if delivered at Waha. This adjustment started in 1997 at $.03 per MMbtu and increase by 5% per year. Thereby currently, the adjustment factor is at .0347, giving us a price of $2.2853 per MMbtu. In reviewing the Apache gas agreement (pg. 22), I noticed that the gas price is 2.285 at Waha & 2.315 at Katy/Carthage for 2000. Per review of the Apache invoices, it appears that we are not getting our gas at these points but at other places (i.e. Lomak-Sterling & Mendell CDP) at a price of $2.175. If Enron has a separate agreement at these delivery points and can capture a margin difference then that is upside to Enron. However, I think the plant should not be charged above the contract price of $2.285. Looking at the daily gas that was scheduled to the plant for November and October, I did not see that their use went over the contracted volumes from Williams and Apache of 45,000 MMbtu per day. Therefore I don't think spot prices are part of the equation here. Additionally, I recall from our meeting last month that all Enron makes on this deal is the Agency Fee of $.04 per MMbtu (excluding the margin difference that Enron has on Apache gas delivery points if my scenario above is correct). So based upon items 1 & 2 above, I am suggesting that Tenaska IV adjust their November invoice owed to Enron for gas used by the plant by the gas price differences showed above. Therefore, I am planning to wire a payment of $484,234.03 (see breakout below) on Friday, 12/22, to Enron on behalf of Tenaska IV Texas Partners, Ltd. for this activity. Month Plant Gas Price Amount November 267,300 2.91 $777,843 November adjustment $(167,062.50) October adjustment $(184,138.99) Nov. Agency Fee 1,350,000 .04 $54,000 Sept. Agency Fee 98,813 .04 $3,592.52 Total $484,234.03 I discussed these issues with Mike Mazowita, Rick Hill & Jody Pierce before reaching this conclusion. Should you have any different ideas or thoughts that I am not covering, please call me at 3-7280 and we can discuss. Thanks. James
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