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Enron Mail |
To synthesize what I'm hearing from you and MKM (and Mr. Ni), our story is
that we will post for sale an option with a specific MDQ, type (i.e., European option or American or whatever), flow period, and points. For example, we'd post a European call on 10,000/d of Nov. 01--March 02 Permian to Topock firm capacity with an exercise date of Jan 1, 2001. the customer would bid an option price and a transport rate. We'd look at both components under a publicly posted evaluation method to decide who wins. I.e., we may post a method saying the winner is the one who pays the highest option fee so long as the transport rate bid is above "x". Seems pretty straightforward, and we ought to be able to clarify this adequately in our answer to protests. DF Shelley Corman 10/31/2000 08:31 AM To: Mary Kay Miller/ET&S/Enron@ENRON cc: Susan Scott/ET&S/Enron@ENRON, Drew Fossum/ET&S/Enron@ENRON, Jeffery Fawcett/ET&S/Enron@ENRON, Glen Hass/ET&S/Enron@ENRON, Mary Darveaux/ET&S/Enron@ENRON Subject: Re: TW Options filing In our pre-filing discussion, we explained the awarding of call options as follows: Because call options are only sold after we have tried to sell the underlying capacity and there were no takers at max. rate or an acceptable price, there is really only 1 variable -- the total rate (consisting of the option component and the strike price). The call option is posted for a specific quantity, start date, etc. There are no other variables. It's just price. From our discussions with Mike Coleman and crew on this topic -- I think is it absolutely key that we keep the award variables to a minimum. My take is that the transmittal letter referring to highest price is the right way to go. The concept in the tariff about posting the evaluation criteria (implying that there are more variables) could kill the deal.
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