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Enron Mail |
Thanks. I'll call Tino back and tell him not to fret about what he heard
from Maddox --I know Tino and Dennis knew about the Cobisa project and I think he believed Maddox was working on yet another project. I can get Tino comfortable without breaching our confid. agreement with Maddox by just telling Tino that we understand there is just one project down South of our target location, not two. Also, I'll let Tino know that early April looks like the best time to get together to talk numbers and we'll call to set it up when we are ready. DF Lorraine Lindberg 03/16/2000 04:42 PM To: Drew Fossum/ET&S/Enron@ENRON cc: Steven Harris/ET&S/Enron@Enron, Kevin Hyatt/ET&S/Enron@Enron Subject: Re: Pueblo: CONFIDENTIAL Drew - Good timing. Here's what I know: 1) Jack Maddox and I have spoken sporadically in the past about very nebulous projects in areas near TW. (We even have a signed Confidentiality Agreement with him!) After I read your memo, I called him to see what's going on. He is working on a 220 MW gas-fired plant near Belen, NM. Houston-based Cobisa Corp. will ask the city of Belen to issue industrial revenue bonds to help it build this plant. Power generated by the plant will be sold to customers through service agreements with electricity moving along existing PNM lines. Plans call for construction to begin by Spring 2001 with operations to begin by 2003. Kevin and I have a meeting scheduled with him next Friday, March 31 in Albuquereque. We'll keep you posted. 2) I received the economic analysis today which factors in some of Dennis Langley's wish list. The "as good as it gets" rate, assuming the project is sized at 150,000 MMBtu and fully subscribed over the project life of 10 years, is $.1631. This does not include a) any ROW cost, b) a 50/50 split of any incremental revenue TW receives on its existing line as a result of additional capacity sold to serve new markets, or c) 25% of ownership in the assets and 25% of the cash flow stream after payout. I need to continue working the economics with James Centilli. In the meantime, our consultant, Mark Baldwin will hopefully provide us with critical market information near the end of March. This is also around the time when Tino should have his report on detailed the cost estimate of construction and environmental issues. Maybe we should rally first part of April to see where we are. Lorraine From: Drew Fossum 03/16/2000 01:55 PM To: Steven Harris/ET&S/Enron@Enron, Kevin Hyatt/ET&S/Enron@Enron, Lorraine Lindberg/ET&S/Enron@ENRON cc: Subject: Pueblo: CONFIDENTIAL Here's the latest Tino-gram: 1. Tino's environ. consultants have not discovered any stop signs. 2. The Isleta is interested in granting Dennis ROW/lease for the power plant as well as the pipeline. The power plant could be located on Isleta land adjacent to the South boundary of the Scandia reservation. Thus, the power plant could be connected to DOE's existing powerline infrastructure without ever leaving the Isleta and DOE land. PNM would not be necessary to move power to DOE. Unclear to me whether this approach would give the power plant optimal access to the power grid for sales of surplus power. (maybe this could be done through DOE to an interconnect with PNM on the Scandia reservation?) 3. Dennis is using Jim Slattery, an ex law partner of mine in DC (and ex Dem. U.S. Congressman from Kansas), as his primary contact with Bill Richardson at DOE. My recollection is that Jim does have a good relationship with Richardson, so this seems very likely to be effective. Tino reports that "DOE is OK with the deal" and the next step is negotiating the power contract itself. Tino said that DOE is aware that the capital for the project will not come from the tribe so the tribe's interest will be fairly thin. It is unclear exactly how much indian ownership Dennis and Slattery promised DOE. 4. Tino has run into a power plant consultant named Jack Maddox who says he's working on a 230MW plant to be located west of Belen. Tino thinks he's working for the Laguna tribe, but wanted us to find out who is planning a big power plant out there. Is this ours? PNM's? El Paso? Finally, the next key step is obviously the economics. Based on what Tino told me, I'm convinced that Dennis and Tino don't have a real good sense of how much $$$ might be in this deal. They are groping a bit and our initial analysis of the numbers will likely carry a lot of weight. How are those efforts coming? Thanks. DF 4.
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