FYI
----- Forwarded by Aleck Dadson/TOR/ECT on 06/12/2001 03:39 PM -----
Aleck Dadson
06/12/2001 03:29 PM
To: Rob Milnthorp/ENRON@enronXgate@ENRON
cc: Paul Devries/TOR/ECT@ECT@ENRON
Subject: RE: IMO Meeting Highlights
Rob, further to your two e-mails regarding the discouraging sentiments
expressed at the IMO Board meeting, Garrett and I had a very productive
meeting with Tony Dean, the Assistant Deputy Minister and Assistant Secretary
of Cabinetand his colleague, Frank Denton, Director, Economic Policy in the
Cabinet Office. Dean was identified by Bill Hawkins as a key voice on the
electricity file. He is someone I have been trying to see for two months.
He was very impressed by Garrett's presentation. His comments were as
follows: a) the mood in gov't is changing; b) the political environment
several months ago (California, high gas prices, and complaining industrials)
made it very difficult for the gov't to be making a decision at that time to
move forward with market opening; c) Enron's message has been getting
through" very effectively" (his words) ; and d) the political environment has
moderated considerably: the differences from California are understood, gas
prices have come off, and Pickering is evidently on track. He emphasized
that the gov't's announcement on April 23 was "by" May 2002.
Rob Milnthorp/ENRON@enronXgate
06/11/2001 12:43 PM
To: Aleck Dadson/TOR/ECT@ECT
cc: Paul Devries/TOR/ECT@ECT
Subject: RE: IMO Meeting Highlights
Aleck, re OPG and Pickering - too complicated of a message re Harris meeting.
As per Lavo, he wants 5 simple/straightforward and concise messages that we
can get accross to Harris. It needs to be short, to the point, concise, and
simple. By cc to Paul, Lavo is looking for our first draft TODAY (you and
Aleck need to agree on the speaking points - I provided you with my comments
already).
One further Item re the IMO Meeting that I didnt have time to communcicate to
you - At one point in the meeting Guolding stated that if one industrial or
one muni is not ready - the market will not open. I lost my mind, and told
him that if that is the case, I need to resign as this is a complete waste of
time and the market will never open if our CEO is telling the marketplace
that one rinky-dink muni can hold the entire market opening hostage. Without
doubt, it was the most frustrating/disappointing statement I've seen
Guolding/Baillie make - I'm sure Houghton was basking in all his glory after
that. I almost want to write a letter specific to guoulding and cc'd to
Baillie underlining who ridiculous a position this is for the CEO of the IMO
to be taking.
-----Original Message-----
From: Dadson, Aleck
Sent: Friday, June 08, 2001 11:32 AM
To: Milnthorp, Rob
Cc: Devries, Paul; Hemstock, Robert
Subject: Re: IMO Meeting Highlights
This message came back to me (too big) - I am resending and will send
garrett's paper separately.
__________________
Rob, thanks for the comments from the IMO Board meeting. Three
points: a) I am not sure what paper the IMO
Board members may be referring to. It could be the briefing note re Moving
Forward to Market Opening, the briefing note Satisfying the Government's Four
Guiding Principles, or the piece on resource adequacy and pricing that
Garrett Tripp prepared and that he and I have been delivering to senior
people in the government and elsewhere. I attach those three papers in
electronic format. b) The briefing notes above (and
the material we are preparing for Ken Lay and John Lavorato) address the
Pickering A point. The suggestion that market opening is tied to Pickering
A doesn't surprise me but is at odds with what Judy Hubert has been telling
stakeholders recently. In any event, it is commonly thought that the
government may think that Pickering A will improve reliability and stabilize
prices. There may, in fact, be another reason. One of our contacts in the
Premier's Office has indicated that Farlinger had told Harris that waiting
until the return of Pickering was important from the perspective of OPG's
financial position. On reflection, Garrett Tripp and I think that the
concern likely relates to OPG's obligations under the MPMA - the concern may
be a) that OPG may not be able to claim "force majeure" in respect of the
Pickering A delay in order to reduce their rebate obligations ( definition
of "force majeure" in sec. 2© may not be broad enough) or b) that, even if
OPG can claim "force majeure", the predetermined "force majeure replacement
cost" fixed at the time the MPMA was completed in 1999 may be too low to
offset the cost to OPG of securing replacement power in 2001-2002. In other
words, OPG is asking the government to intervene in market
development/market opening to protect OPG from the terms of the deal (maybe,
from OPG's perspective, now a "bad deal") that OPG made in 1999. We should
discuss whether Lay and Lavorato can make this point to Harris (without
compromising our source). c) With respect to Foward
Markets , I think we have to distinguish between a binding hour ahead and
day ahead market which we may want to have the IMO run (assuming that this
will facilitate and standardize trading among the Northeast ISOs - which is
a key objective in the East), but anything beyond that they should stay away
from. I will speak to Rob Hemstock and to the folks in Houston who have been
working so hard on the RTO development in the Northeast. Did any material
get circulated as to what they want to do re forward markets? In any event,
I think we should have a demo of Enron Online in Toronto for the IMO Board
and OEB. ` << File: Market Opening Doc. feb 26 .doc << <<
File: Satisfying the Government's Four Guiding Principles.doc
<<
Rob Milnthorp/ENRON@enronXgate 06/08/2001 12:11 PM To: Aleck
Dadson/TOR/ECT@ECT, Paul Devries/TOR/ECT@ECT cc: Robert
Hemstock/ENRON@enronXgate Subject: IMO Meeting Highlights
Some Brief Highlights from the 06/07/01 IMO Meeting:
- Market opening, without question, is now tied to the bringing back of the
1st pickering unit. Govt is clearly not thinking november but the good news
is that they have made some statements locking them into may/02. We should
have our own intelligence re Pickering return but Boland told me that March
was highly probable.
- A number of positive comments re Aleck's paper from board members - Aleck
I'm not sure which paper they are referring to - can i get a copy.
- Forward Market development - IMO "wants to make this happen". Assessing
two candidates. I told the IMO that this is not their mandate and that a
conditional forward market exists currently and an unconditional forward
market will exist when we have a unconditional market opening date. I talked
re Alberta and indicated that the Alberta sponsored forward market was a joke
(WattEx) and that Enron and others had done 100's of forward market
transactions and the Enron has a visible forward market 24/7. ACTION - We
need to develop a position paper on why this should be left to the market
place and not some regulated central agency. The IMO should be concerned with
creating the right environment to promote an efficient forward market (ie
information disclosure, etc). OPG would support this position - we may want
to co-author the paper. I believe Hemstock/Davies did some work on this
already re Alberta. Let's discuss further.
