VEPCO capacity contract issues

I've made a list of issues Heather and I have discussed based on VEPCO's=20
suggested revisions. Some of the issues are commercial, some legal, some=
=20
just reminders. Comments are appreciated.

1. Term. What will we accept?

2. Availability: single computation despite source of power (market or=20
facility). Is forced outage the correct concept since we want to have some=
=20
discretion, and LD structure should apply even if power coming from the=20
market? Note VEPCO=01,s insertion of a new event of default under 7.1 for=
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failure to deliver energy when the Facility is not in a forced outage. =20
Liquidated damages language still ok? LD=01,s should apply regardless of=
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scheduled source of power =01) no cost of cover for market power.

3. Our position is that Contract Capacity set at contract signing, then=20
adjusted (if necessary) based on performance tests, not subject to adjustme=
nt=20
after that time: ditto for the demand charge. What is the right number for=
=20
the Capacity? Is there a benefit to Enron to have a correction curve exhib=
it?

4. Failure to complete facility suggested as a termination event. Is=20
September long enough?

5. We need to be able to supply from either or both sources (market and=20
facility) during a day, but this doesn=01,t give us right to change during =
the=20
day after the schedule is set.

6. Note the Start Up definition (as suggested by VEPCO) and how it is=20
applied. Reject 50% requirement at this point, subject to their explanatio=
n.

7. Note: construction of the facility now required (2.3).=20

8. Define commercial operation.

9. Confirm that Enron has sufficient protection from interconnection=20
failures/delays.

10. Day ahead scheduling (3.4) Are we ready to commit?

11. Number of start ups. (2.3 e)

12. Force majeure =01) consistency with interconnection agreement, relief f=
or=20
certain equipment failures. Is concept logically developed throughout the=
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document? Note distinction between market and facility power in force=20
majeure language.

13. Dispute resolution: arbitration vs. litigation/venue. Virginia law?

14. Change in law. Counter with CIL as termination event?

15. Exhibit A =01) Heather is working on this.

Kay