RE: Meeting

Agreed. Actually, I think you are being too aggressive.

-----Original Message-----
From: Herndon, Rogers
Sent: Monday, July 02, 2001 2:04 PM
To: Presto, Kevin M.
Subject: RE: Meeting

New business Ventures is Ader's group - outside of and separate from what is considered traditional EES. Included in New Business Ventures are: Reliable Power, Corporate Development, The New Power Company, and Acquiaition and Sourcing (or, "structured supply"). It has been represented throughout their org that this is a "new business opportunity"

Re: any further discussion of price curves we will use in these transactions, I am prepared to utilize Mid curves at best. Reasons are as follows:

I bear the cost of wholsale hedge unwinds (at the bid)
Resisdual Risk - These transactions do not completely absolve me of any and all risk
Slippage/Curve Shift - Unless they do back-to-back deals I will incur some curve shift - essentially a hedge unwind cost or "slippage"
Firm LD risk - curves reflect LD pricing vs. probable inferior products

In the event that we can take 100% of a porfolio risk segment off of our books, meaning sell a complete piece or area of our portfolio, I may be able to do better than Mid but will still have to recover the costs of wholesale hedge unwinds.

If anyone can bring me products that mitigate congestion and ancillaries, I will be glad to discuss pricing those components aggressively (again, factoring unwind costs).

The problem is that this function does not have the appropriate commercial supervision in its current spot. I received some outside feedback that when this group met with Reliant that their commercial leads were less than impressed by our lack of understanding of the commercial realities of the power markets. I witnessed this first hand at AEP when our supply rep asked AEP if they would be open to any tolling arrangements in their region just to have AEP respond, "I guess you aren't aware that we don't really have any gas fired generation around here."

It is unfortunate to have to sit back and watch this when we see opportunity (including the opportunity to confirm a potential value play by investigating with other suppliers).
Ultimately this just costs the rest of the EES organization.

-----Original Message-----
From: Presto, Kevin M.
Sent: Monday, July 02, 2001 1:18 PM
To: Herndon, Rogers
Subject: RE: Meeting

Who called it a new business?

-----Original Message-----
From: Herndon, Rogers
Sent: Monday, July 02, 2001 1:11 PM
To: Aucoin, Berney C.; Presto, Kevin M.
Subject: FW: Meeting

Berney -

I would have Jim Wood attend as well while we are at it. Bernstein's group needs to go through all of the channels a marketing deal goes through such as Product Development/Underwriting, etc.

I am still wondering though how supply purchases fits in with "New Businesses".

RH
-----Original Message-----
From: Bernstein, Mark
Sent: Monday, July 02, 2001 1:04 PM
To: Aucoin, Berney C.
Cc: Herndon, Rogers; Ader, Jeff
Subject: Re: Meeting

Berney,

Good idea. I suggest we also invite Sean Holmes as one of the things we should discuss is how we price the backlog of deals in the pipeline given everyone's limited resources.

thanks,

Mark
3-7516

p.s. Ader is out tomorrow

From: Berney C Aucoin/ENRON@enronXgate on 07/02/2001 12:07 PM
To: Mark Bernstein/HOU/EES@EES
cc:
Subject: Meeting

Mark

Rogers has asked me to coordinate a meeting for tomorrow (3:00 pm) with yourself, Jeff Ader, Rogers, Presto. Let me know your availability and we can firm up location.

Thx

Berney