Minnesota/Price RIsk Management

Hi Rick. forgot to put you on the copy list for this one.
----- Forwarded by Susan M Landwehr/NA/Enron on 06/27/2001 08:31 AM -----

Susan M Landwehr
06/27/2001 08:20 AM

To: Laura Luce/Enron@EnronXGate, Russell E Murrell/Enron@EnronXGate,
Christi L Nicolay/HOU/ECT@ECT, Ed McMichael/Enron@EnronXGate, Terri
Clynes/Enron@EnronXGate
cc: Harry Kingerski/NA/Enron@Enron, Jennifer Thome/NA/Enron@Enron, Daniel
Allegretti/NA/Enron@Enron, James D Steffes/NA/Enron@Enron, Janine
Migden/NA/Enron@Enron, Lisa Yoho/NA/Enron@Enron, Roy Boston/HOU/EES@EES
Subject: Minnesota/Price RIsk Management

All--earlier this week the Minnesota PUC and the Department of Commerce
jointly hosted a workshop on on "LDC RIsk Management". There was a
presentation by Ken Costello from NRRI based on a paper that he has written;
a panel consisting of reps from Reliant Minnegasco, Xcel, UtiliCorp, Alliant
and MDU Resources (Great Plains); and a presentation from Blake Herndon of
Williams Energy. The discussion focused exclusively on natural gas--nothing
on power. Two of the five Commissioners sat in on parts of the presentation
along with a number of staffers.

There was (as always seems to be the case) no clear indication from the
workshop what actions would take place as a result of the discussion. My
sense would be that there may be an investigatory or study docket opened, but
not a formal proceeding that would lead to any meaningful policy
implementation requiring risk management to be utilitzed. I think that the
PUC is open to approving modest plans that the LDC might bring before them,
but they are not willing to be proactive.

Although it was not stated publically, in my private conversations with the
utilities I got a strong sense that Xcel would be coming with some type of
proposal--possibly a request for pass thru on limited premium costs. Alliant
and MDU will not, and I think Utilicorp will do something along the lines of
filing for a fixed price option that will be offered to their residential
customers. As I had indicated in a previous e mail, Reliant has already
gotten approval for pass thru of call option premiums and I think that they
are also petitioning for a fixed price option for residential customers.

Call if you have any questions--#612-339-4599-- or would like copies of any
materials.