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Enron Mail |
Joe
We have had several conference calls since last Saturday. Perhaps you should talk to Orlando and join us from now on. This subject is in state of flux. As you know, those measures triggered a hostile reaction from D/Cs and from Gs. Aneel (Jose Mario and Jose Alves) called me on Saturday asking for help. We discussed this subject internally over the weekend. On Monday, Joao defended ANEEL in the COEX meeting. However, we were the only ones. Other players were very angry. They perceived the action as pure intervention (despite necessary and timely for most). ANEEL was informed about the COEX reaction and thanked us for our position. We examined the Resolutions in great detail. Unfortunately, it seems that ANEEL went far beyond its institutional responsibilities. The substance is OK. The format is legally weak. Our strategy (we will try to sell to Abradee, CBIIE, COEX and ABRACEEL) is to remove the spotlight from the legal arguments and propose to our industry peers to focus on the design of a new Market agreement (to create a sense of buy-in). We know that the changes will be only cosmetic. The basic principles of the resolution should be maintained. As per Enron's suggestion, I spoke to ANEEL again (Jose Mario and Jose Alves) showing them how difficult the situation is. In our view, thard he only way to validate the measures is to write a new agreement (Fred and Debora are working on that). I was open in saying that the Resolution are weak from a legal standpoint. They agreed with us. Publicly they say otherwise. They said they are willing to negotiate. We also expressed our view to ANEEL that part of the reaction is parochial: some COEX members will lose their jobs. ANEEL agrees. That is why they are inviting all CEOs and Chairmen of the Board to a meeting tomorrow, where ANEEL will explain what is happening and ask for support from top management. Why has ANEEL approached us? Perhaps two reasons: 1) They know we defend markets 2) We wrote Informativo Regulat?rio # 3, attached (which basically purports the replacement of COEX by a professional Board - I discussed those issues with Rick Shapiro before the IR was issued to understand Enron's view on power pool governance) Your comments/involvement would be very important. It is a pretty delicate and messy situation. My personal view. 1) This was a necessary evil. MAE would not function otherwise. Our merchant plants would be in jeopardy. 2) I would dare to say that this is a "window of opportunity" to get MAE working (and therefore our long term strategy) 3) However, the way ANEEL did was disastrous. They should have acted long before. (imposing gradual penalties). Now they suddenly "fired" 26 CEOs of the largest utilities in Brazil 4) We should support ANEEL. However, it has to be in a very diplomatic way. Orlando will take care of Abradee. Joao - COEX. S,rgio CBIEE. We have to walk over a fine line. If we push to hard, they will reject Enron (together with ANEEL's Resolution) 5) We should be the champions in drafting a new Market Agreement LM Joe Kishkill 04/25/2001 01:07 PM To: Luiz Maurer/SA/Enron@Enron cc: Joao Carlos Albuquerque/SA/Enron@Enron, Orlando Gonzalez/SA/Enron@Enron, Sergio Assad/SA/Enron@Enron, Fred Sampaio/SA/Enron@Enron, Jose Bestard/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Brett R Wiggs/SA/Enron@Enron Subject: Re: MAE/COEX - ANEEL Resolutions when are we talking? Luiz Maurer 04/24/2001 09:42 AM To: Joao Carlos Albuquerque/SA/Enron@Enron cc: Orlando Gonzalez/SA/Enron@Enron, Joe Kishkill/SA/Enron@Enron, Sergio Assad/SA/Enron@Enron, Fred Sampaio/SA/Enron@Enron, Jose Bestard/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Brett R Wiggs/SA/Enron@Enron Subject: Re: MAE/COEX - ANEEL Resolutions Perfect LM Joao Carlos Albuquerque 04/24/2001 09:30 AM To: Orlando Gonzalez/SA/Enron@Enron, Joe Kishkill/SA/Enron@Enron, Sergio Assad/SA/Enron@Enron, Luiz Maurer/SA/Enron@Enron, Fred Sampaio/SA/Enron@Enron, Jose Bestard/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT cc: Brett R Wiggs/SA/Enron@Enron Subject: MAE/COEX - ANEEL Resolutions At the COEX meeting yesterday, it was clear from the lawyers presentation that there are grounds to legally challenge ANEEL's resolutions. Some romantic guys were kind of going in that direction. My position was to take the subject to a Market Assembly for the shareholders to deliberate. Also everybody knows, and some acknowledged, that MAE governance was not working. Our line of action at the Assembly would be to support the general direction of the measures, and at the same time, preserve MAE autonomy, opening a negotiable line with ANEEL. The main point of discussion will be if we should discuss without going to court or after challenging ANEEL in court. The Assembly was called for next Thursday, April 26th. Fred is going to talk to Luiz Maurer for us to have a deep exam of the resolutions and see what points we can propose to ANEEL to improve. Also, in that negotiable line, we should discuss/propose some names to the new COEX. We need to discuss this subject tomorrow. Jo?o Carlos
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