|
|
Enron Mail |
New Power Company is current working on the acquisition of CES' mass market
customers. In light of the acquisition, there are issues that surround our relationship with ENA as we step into the supply management agreement. Below are the observations that I have. I would like to get you feedback on these. If necessary, let's get together to discuss the ramifications. 1) We are purchasing customers within only twelve markets. As such, we will only interpret the language of the agreement related to "existing markets" as applying to only those twelve markets. For other markets that we conduct business in, we would choose to make a decision on supplier and load management even if it is an LDC identified as an existing market under the agreement. In essence, we see the supply management agreement being bi-furcated since CES is selling C&I to another marketer. 2) My interpretation is that New Power Company will only be on the hook for capacity and storage charges as they apply to mass markets. This would include capacity and/or storage allocations received on CVA, CMD, AGL. In addition, it would include the FSS and SST purchased on COH. It would also include the following transportation agreements: 61822, 61825, 61838, 61990, 64939, 65418, 62164. There are some capacity agreements on TCO for CPA(65041, 65042) and BGE(65108) that were purchased by CES for both C&I and mass markets. It is our contention that we will only be on the hook for the demand charges related to the capacity covering mass market purchase commitments identified in the schedules of the purchase agreement . All un-utilized capacity would to stay with CES and/or buyer of the C&I agreements. 3) We need to discuss the application of the contract to additional capacity that New Power procures applicable to the periods prior to Apr. 1, 2001. I want to keep this capacity separate and under our control. I will need your viewpoint on this. If ENA feels strongly that we must place the capacity under the supply management agreement, then I would want to discuss our ability to market any excess capacity in open market. Bottom-line, I want to avoid gas costs being inflated due to my inability to receive value for un-utilized capacity. 4) I would like to get your viewpoint on the right of first refusal clause. My view would be that its applicable would be made to transactions of similar nature and service level. (supply management) To the degree that New Power chose after the primary term to manage its supply, all supply only transactions would not be subject to this clause. I know you will need to review the contract. We have some time to discuss these issues, but would like to have feedback from you no later than next Friday, if at all possible. I can be reached at ext 39475. Thanks for your help.
|