NYPSC Adopts Enron Online as Index

Mark -- let's talk about this when you return to the office. thx. Lisa
----- Forwarded by Lisa Yoho/NA/Enron on 04/05/2001 08:51 AM -----

James D Steffes
04/04/2001 06:51 PM

To: Louise Kitchen/HOU/ECT@ECT, Lisa Yoho/NA/Enron@Enron, John J
Lavorato/Enron@EnronXGate
cc:
Subject: NYPSC Adopts Enron Online as Index

Not sure if you had seen this language from the NY PSC. While great, this
clearly means that NY PSC commissioners will begin to think alot about how
EOL and its relationships with other Enron companies.

Jim

---------------------- Forwarded by James D Steffes/NA/Enron on 04/04/2001
06:49 PM ---------------------------
From: Howard Fromer on 04/02/2001 04:38 PM
To: Jeffery Ader/HOU/ECT@ECT, Michael Brown/Enron@EnronXGate, Mark Dana
Davis/HOU/ECT@ECT, Tom Dutta/HOU/ECT@ECT, John D Suarez/HOU/ECT@ECT, Doug
Sewell/HOU/ECT@ECT, Richard Ring/HOU/EES@EES, Charles Decker/HOU/EES@EES,
Gary Keevill/ECP/Enron@Enron, John Llodra/Corp/Enron@ENRON, Tom
May/Corp/Enron@Enron, Pearce W Hammond/Enron@EnronXGate, Christi L
Nicolay/HOU/ECT@ECT, Sarah Novosel/Corp/Enron@ENRON, Dan Staines/HOU/ECT@ECT,
W David Duran/HOU/ECT@ECT, Richard Lydecker/Corp/Enron@Enron, Steve
Montovano/NA/Enron@Enron, James D Steffes/NA/Enron@Enron, Janelle
Scheuer/Enron@EnronXGate, Rick Bachmeier/HOU/EES@EES, Lance
Hinrichs/HOU/EES@EES, Jim Meyn/NA/Enron@Enron, Berney C Aucoin/HOU/ECT@ECT,
Richard Shapiro/NA/Enron@Enron, Patricia Collins/HOU/EES@EES, Fatimata
Liamidi/HOU/EES@EES, Dag Joraholmen/HOU/EES@EES, Dwight Fruge/HOU/EES@EES,
John Campbell/HOU/EES@EES
cc:

Subject: NYPSC approves market-based backout credit for RG&E; Adopts Enron
Online as Index

Another big victory for Enron in New York! In an Order issued by the NYPSC on
March 29, the NYPSC has approved a proposal to modify the existing fixed
backout credit of 2.8 cents per kwh for energy and capacity and replace it
with a market-based backout credit. The additional retail adder of 0.4 cents
per kwh would remain. Load-serving entities (LSEs) will have the option of
continuing to buy their energy and capacity from RG&E at the market based
backout credit which will be determined 15 days prior to the beginning of
each of the two six-month capability periods, and will be based on "a
forecast of energy prices derived from Enron Corporation's (Enron)
EnronOnline trading platform." To my knowledge, this is the first occasion
that a regulatory body has agreed to use Enron Online as an index! LSEs can
elect instead to procure their own commodity and get a market-based backout
credit (MBBC). Under this option, the LSEs will get a market based backout
credit. However, the Enron online prices for the six months determined as
above will be reconciled on a lag basis against actual market prices. The
PSC has capped the amount of the reconciliation for any LSE to the product of
the LSE's total load for the calendar year and $0.065 per kwh (PSC staff's
estimate of RG&E's embedded power supply cost). (The PSC Order actually says
$0.015 but this appears to be a mistake since the attached settlement states
$0.065.) A copy of the PSC's Order is available on its website:
www.dps.state.ny.us