|
|
Enron Mail |
High-level meetings took place between officials of the Clinto
Administration, Governor Davis and other parties on Tuesday night (Ken Lay and Rick Shapiro attended for Enron). The parties agreed to continue the CA talks at Treasury and to suspend the FERC process. The FERC chief judge and FERC staff attended the meetings at Treasury on Wednesday. The Tuesday meeting is called the meeting of "principals." Apparent Process Tuesday meeting gave two assignments to us. (1) Develop framework for auction for long-term contracts and resolving QF issues (2) Develop framework for dealing with utility debt, including supplier "forbearance" Long-term contracts--Attended by Sue Mara -- After much debate, divided into three subgroups: (a) Timeline/Implementation (b) Utility Needs/Product definition/RFP development © Standard Contract Development -- Timeline -- I was the lead and we completed our assignment. We agreed on an aggressive schedule with power flowing by 2/1/01. The process is set up for DWR, working with a consultant. It's an RFP rather than an auction process. The idea of a mock auction was rejected. -- Product definition -- Much work needed here. Major issue set forth below. -- Contract -- Most parties (including Enron) want to use the EEI standard contract. Group working on additional provisions. Plan final contract by Friday. Utility Debt -- Attended by Sarah Novosel -- Report later Major Issues from Long-Term Contracts NEW MAJOR ISSUE: Utilities revealed late on Wednesday that they want the State to assume the role of their portfolio manager and claimed that this had been their idea all along. In their view, the utilities provide a forecast and the State takes on the entire risk of meeting the unmet load of the utilities. They were unwilling to commit to any time frame. Kind of Auction or RFP -- a.k.a What does the Governor really want? Many people in the room believe that the Governor was firm in his demand for 5.5 cent power for ALL the unmet load of the utilities. We spent four hours debating these issues. In the end, the parties felt that the best approach would be to have simulataneous auctions as follows: -- Separate bids for NP 15 and SP 15 -- RFP 1 -- Suppliers submit bids for more than one product with a blended price of 5.5 cents. -- RFP 2 -- (Considered closest to the Gov's proposal) State sets price of 5.5 cents and suppliers compete on term and volume. --RFP3 -- Suppliers provide bids for any of the utilities' product needs and are free to bid any price, volume or term. -- All RFPs would be conducted simultaneously. Parties agree that RFP3 is most likely to get the greatest number of bids. Next Steps Meetings continue on Thursday Plan is to have final documents ready for the next meeting of the principals Principals tentatively set to meet on Friday or Saturday.
|