Enron Mail

From:m..forney@enron.com
To:e-mail <.kenneth@enron.com<, tom.may@enron.com
Subject:Frontera Proposal for tomorrow
Cc:doug.gilbert-smith@enron.com
Bcc:doug.gilbert-smith@enron.com
Date:Thu, 27 Sep 2001 12:45:11 -0700 (PDT)



Ken,
As discussed earlier, I am proposing ramping up late for the onpeak sale that Frontera made for tomorrow. If we must sell the offpeak hours required to affect a 340 mw onpeak schedule, I show that we would almost negate all profit from the sale.

I am suggesting starting your ramp beginning hour ending 7 and purchasing a fixed price swap from Enron for the short generation. Basically, you sold the preschedule for $21 and we would fix your price for hours ending 7-11 at $20.

The benefit in this swap would be:
hedge against floating price
lock in $1 profit on sale for short portion of the schedule, increasing revenues
avoid losing approximately $10k on selling ramping schedule - $4 is an optimistic real time sales price at this point, however, I used this in the analysis.



Please let me know what you think. Enron will be offically rolling this swap product out to all of our service customers.
I think this would be a good fit your company and I would like to try this for Friday's run.

Additionally, I think that there may be a good down balancing or OOM down opportunity for tomorrow because of this preschedule.


Let me know what you think,

JForney
713-853-7160