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Let's discuss this in our Monday meeting. In general, though, your approa=
ch seems reasonable to me. -----Original Message----- From: =09Herndon, Rogers =20 Sent:=09Friday, July 13, 2001 11:55 AM To:=09Presto, Kevin M.; Will, Lloyd Cc:=09Misra, Narsimha Subject:=09Outsourcing of ERCOT Physical Delivery Services Kevin - Lloyd and I spoke yesterday about the idea of outsourcing all of EES' next = 30-day physical obligations in ERCOT to the Wholesale Services Desk (Servic= es Desk). Essentially, we would provide Services Desk with a list of cust= omers, meters, forecasts, and a net open position (load obligation - hedges= ). Services Desk would fill any net open positions at some hourly index + = service fee. EWS-Retail would still hedge all forward risks. How we handl= e load forecasting as it relates to changes in our position needs to be iro= ned out as far as whose forecasts we use - do we consolidate this function?= . My view is that 1) Wholesale Services Desk could benefit by getting an = opportunity to serve retail load and learn in a low risk position and 2) Se= rvices Desk will ultimately perform a better service than I could begin to = recreate. I want this to be the model that I can build a case on to outsou= rce all of our next 30 day physical delivery portfolio across the Eastern G= rid. Also, Lloyd will be able to best determine what metering capabilities= we really need to most accurately deliver and work these requirements thro= ough the Ozzie/PMC model we have been working on. Doug is also interested = and on board with this concept. Kevin, you and I can negotiate an overall macro service fee for this stuff= once we get it ironed out. What do you think? Rogers
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