FW: Services Contracts

Elizabeth: How do you want to handle? Sara

-----Original Message-----
From: May, Tom
Sent: Wednesday, November 28, 2001 5:55 PM
To: Nettleton, David; Shackleton, Sara
Cc: Baughman, Edward D.; Bolt, Laurel; Clynes, Terri; Comeaux, Keith; Coulter, Kayne; Day, Smith L.; Gilbert, Gerald; Gulmeden, Utku; Kelly, Mike E.; Kinser, John; Miller, Jeffrey; Will, Lloyd
Subject: Services Contracts

Sara,

As we discussed, we would like to notify our customers of our current status and our ability to look after them. Here is a brief summary of the services contracts and obligations that we currently have along with the notification letter we would like to send them. Please let us know if we are ok to send these out.

Thanks,

Tom.

MDEA
purchase power for the cities
purchase and schedule gas as agent to supply the cities generating units
real-time operational coordination via our control room to balance the cities load and resources

MDEA relies entirely on EPMI for this as they have no other enabling agreements or marketing/scheduling capability. We are no longer able to purchase power for them but are able to schedule gas as their agent. The sities could incur signifigant imbalance charges as a result of our inability to perform.

QSE Customers

Green Mountain Power (BP Energy), New Power Company, XERS (starts Jan 1)

We schedule all power contracts with ERCOT
We settle all charges and payments with ERCOT (ERCOT settles with EPMI and EPMI settles with customer)

Frontera

We market the output of the Frontera plant (450 MW)
We buy to suppy Frontera's obligations (call options to EPMI and Mirant) when the market is below Frontera's cost.
We schedule all transactions as QSE

Frontera has no other enabling agreements and relies on EPMI for all trading activities.