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Enron Mail |
A conference call with Steffes, Kingerski, Boston, Roan, Lewis and me took
place to discuss Enron's position on Com Ed. Summary - We discussed a public position of "No PPO without an RTO" since without a functioning market, Enron is at risk with our current book of business. From a public policy standpoint, we would argue that without the protection of the PPO, customers need a functioning market in which to procure power. Privately, in exchange for supporting the Com Ed Proposal, we would negotiate for the following (in order of importance): 1. No losses on our existing book of business by negotiating a bulk power deal to cover our exposure. 2. Build a broad market by seeking changes to Com Ed FERC tariffs as it regards balancing and penalties, etc. As a separate matter or in conjunction with the above, do a default service or some other related deal. A meeting is scheduled for Friday with Chuck Decker to talk through the issues related to physical delivery into Com Ed. A more detailed memo will follow this weekend. Janine James D Steffes 04/30/2001 11:59 AM To: Janine Migden/NA/Enron@Enron cc: Jeff Ader/HOU/EES@EES, Mark Bernstein/HOU/EES@EES, Edward D Baughman/Enron@EnronXGate, Marc Ulrich/HOU/EES@EES, Harry Kingerski/NA/Enron@Enron, Roy Boston/HOU/EES@EES, Daniel Allegretti/NA/Enron@Enron, Eric Letke/HOU/EES@EES, Mike Roan/ENRON@enronXgate, Susan M Landwehr/NA/Enron@Enron, Richard Shapiro/NA/Enron@Enron, Ron McNamara/NA/Enron@Enron, Don Black/HOU/EES@EES, James W Lewis/HOU/EES@EES Subject: Re: Com Ed Janine -- The point about load balancing and following is critical. EES is struggling to compete with a physical product in ILL. I know that Don Black and Jay Lewis are trying to figure out what are the critical components of the real-time balancing rules. Maybe we should try and set up a phone call between Govt Affairs and EES Risk Mgmt to define the necessary rules and see how (a) a ComEd / ICC Settlement would work and (b) what are the implications of the Order 2000 RTO process in the Midwest (MISO and ARTO). Thanks, Jim Janine Migden 04/30/2001 10:09 AM To: Jeff Ader/HOU/EES@EES, Mark Bernstein/HOU/EES@EES, Edward D Baughman/Enron@EnronXGate, Marc Ulrich/HOU/EES@EES, Harry Kingerski/NA/Enron@Enron, James D Steffes/NA/Enron@Enron, Roy Boston/HOU/EES@EES, Daniel Allegretti/NA/Enron@Enron, Eric Letke/HOU/EES@EES, Mike Roan/ENRON@enronXgate cc: Susan M Landwehr/NA/Enron@Enron, Richard Shapiro/NA/Enron@Enron Subject: Com Ed Last week, Sue and I, along with Phil O'Connor of New Energy met with Frank Clark ( Senior V.P. Exelon - Government Affairs, etc) and Arlene Juracek (V.P. Rates and Tariffs). Sue and I also met with Commissioners Hurley and Harvill. Information Gleaned From the Meeting: 1. Com Ed does not think price volatility will be acceptable to the residential customers and wants to create a structured rate. They are not open to any alternative that causes them to lose money. 2. They will file a rate case in 2004 to be effective in 2005. They are not sure the statute requires them to file an MVI plus 10% at the end of the PPO period and need to study the statutory requirements. Their preference is to initiate performanced based ratemaking instead for bundled rates. 3. Com Ed's view is that the energy situation is a national problem. Com Ed wants to be protected through its commodity price. 4. Com Ed does not want the obligation to serve industrial customers and on a longer term basis, would like to shed its obligation to serve residential. 5. Com Ed has arbitrarily defined mass market as 400kw or less and has therefore lumped these commercial customers in with their residential, however, they are open to separating them out. 6. Com Ed does not want the legislation reopened which may provide us with some leverage. At the conclusion of the meeting it was decided to start an open forum process to get ideas on the table. Com Ed is shying away from any formal process. Their concern seems to be that they do not want to take the political heat for high prices and volatility and would rather give up its default customer service obligations. Possible Deal Opportunities: 1. Either through negotiations (preferred choice) or through competitive bidding, become the default service provider for some or all of Com Ed's industrial customers. This would allow us to upsell additional products to the industrial class. 2. Segregate the commercial customers (100 - 400 Kw) customers from the residential customers and negotiate to become the default service provider. 3. Joint venture between ENA and New Power to be the default service provider for portions of the residential class through an opt-out program like municipal aggregation or some other format. Next Steps: 1. Mark Ulrich is to complete an analysis of the Com Ed proposal in terms of its impact on our current book of business 2. Develop a position boiled down to just a few key points that we can push with regulators and Com Ed. In a conference call with Harry, Mark, Roy, Sue and me, we have tentatively distilled the list to the following: a. Default deal for industrial customers b. Negotiate for Com Ed to provide load following and balancing c. Default deal for commercial as opposed to PBR Janine
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