RE: Follow-up Materials

Michael - the above Q&A document for the EPA discusses the compliance supplement pool questions you raise. The document is dated - so the dates are no longer accurate given the court delays of the SIP Call implementation. But basically, it is up to each state to develop a methodology for allocating their compliance supplement pool. The CSP is meant to give credits to units that make early reductions. The compliance supplement pool (roughly 200,000 allowances for the NOx SIP Call) is only good for the first two years of a state's launch of its NOx SIP Call. Those allowances that aren't allocated during these first two years are retired.

Mary Schoen
Environmental Strategies
Enron Corp
415.782.7803 (phone)
415.782.7854 (fax)

-----Original Message-----
From: Taylor, Michael E
Sent: Wednesday, November 14, 2001 10:19 AM
To: Schoen, Mary
Subject: RE: Follow-up Materials

Ok. The file you sent me contains the total trading budget and CSP. The states total allowances equal the total trading budget and the CSP? Is the CSP a one time allocation in SIP CALL while total trading budget is annually? If CSP is only a one time allocation, have the states determined how many allowances from the CSP will be used in 04? 05? etc. Or is there some other method that I am missing?

-----Original Message-----
From: Schoen, Mary
Sent: Wednesday, November 14, 2001 12:13 PM
To: Taylor, Michael E
Subject: RE: Follow-up Materials

These are the compliance supplement numbers for the NOx SIP Call not the OTR compliance supplement numbers which are roughly 25,000 tons.

Mary Schoen
Environmental Strategies
Enron Corp
415.782.7803 (phone)
415.782.7854 (fax)

-----Original Message-----
From: Taylor, Michael E
Sent: Tuesday, November 13, 2001 3:00 PM
To: Schoen, Mary
Subject: RE: Follow-up Materials

On the state file. The CSP of each state added together is way above 25,000. Why is this? How should I look at this CSP? Is there a discount factor that will be applied to get down to the 25,000 at the end of 2002. If so, what is it?

Should I add them all together and get a percent per state? And then multiply the percent by 25,000 to determine the state's CSP at the end of 2002? Please advise.
-----Original Message-----
From: Schoen, Mary
Sent: Tuesday, November 13, 2001 2:46 PM
To: Taylor, Michael E
Cc: Jacobson, Lisa
Subject: Follow-up Materials

Michael - I haven't heard back from Joel yet on a call date & time, but here is some of the info I promised. Attached is the latest information I have on the state allocations, including their total trading budgets:

<< File: State.htm <<

Also attached, is the Section 126 Non-EGU allocations:

<< File: Sec. 126 NonEGU affected units.pdf <<

I am pretty sure this is all the non-EGUs that will affected in those states under the SIP Call, but am double checking just to be completely sure.

I am still working on a date that the allowances have to be parked in the compliance supplement pool in 2002 to be valid in 2003.

I'll let you know as soon as I have some more answers.

Mary Schoen
Environmental Strategies
Enron Corp
415.782.7803 (phone)
415.782.7854 (fax)