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Enron Mail |
Below is a rough estimate of the book impact if ComEd succeeds in ending PPO
early. That is, if they terminate PPO starting Jan. 2005 it should cost us $1.2m, if they want to terminate Jan. 2004 it would be an impact of $3.1m ($1.2m for 2005 + $1.9m for 2004), etc. These costs can be reduced with a liquid market for wholesale power and ancillary services. Let's discuss our suggested changes. Marc Ulrich Janine Migden@ENRON 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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