Notice of Potential $86 million 3 Week Credit Exposure

Enron may have to pay the CAISO $86 million in erroneous imbalance energy charges due to an EES data submission error. The CAISO would then pay us the money back on June 19th. I have already discussed this with a few people and am documenting a basic summary for those people who will have to get involved over the next few days if the CAISO board determines that we have to pay the money.

Here is the summary:

EES submitted meter data to EPMI in kWh rather than MWh for one or more accounts for March CAISO activity.
This made EES appear to have underscheduled their load in March by a large amount. The charges associated with this underscheduling total approximately $86 million.
EES has subsequently submitted the proper data which has been forwarded to the CAISO.
CAISO staff is fully aware of the error and understands that we don't owe them $86 million. However, the tariff states that we should do a preliminary settlement on the data that was submitted and then a final settlement using the accurate data.
Per the tariff, we would owe them $86 million on Thursday May 31st at 10:00 AM PPT. They would then refund the money to us on June 19th when Final Settlement payments go out.
The CAISO staff is taking two proposals to the CAISO Board today. The Board could elect to do either of these, or strictly adhere to the tariff. The first option is to allow us to re-submit our preliminary meter data with the right data. The second option would be to pay them the $86 million but to keep it in some sort of escrow account until June 19th when they would pay it back.

Let's hope for the best with the CAISO board meeting today. I'll will let everyone know what the outcome is and then we can formulate a plan.