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Enron Mail |
Kevin:
My lack of response this week has not been because I have not been thinking about a possible structure. It is because the new FERC cap is making it difficult to figure out how a project like this is going to operate. A few thoughts: I. CDWR Dispatch Issues: It remains unclear to me how the communication with GWF/CDWR will work each day. What time will we get an indication of the volume they want? If the communication occurs late, it will be difficult to obtain much value from the capacity they do not need. Even if the communication occurs late, with the current cap there is little value in the "extra" MWs at your heat rate, given the current FERC cap and gas prices. Given that there could be very little value on the "extra" MWs, we would ask for a monthly fee in the neighborhood of $10,000 to schedule the CDWR volumes. To fine tune this number we need to clarify a few things. Will we be invoicing CDWR? What is the scheduling timing? What is the Enron liability for failure to submit the schedule? Do you want us to submit supplemental bids for your "extra" capacity on your behalf to abide by the FERC order? What happens if you are dispatched at a loss when we forget to put in Supplemental Energy Bids. 2. Gas Pricing: Here is a summary of possible gas pricing for you. 1. GWF pays demand charge equal to Maximum Daily Quantity (MDQ) times $.05/MMBtu. 2. GWF schedules gas each day with the Enron up to the MDQ. The Daily Contract Quantity (DCQ) is the amount GWF schedules each day. 3. Quantities above the DCQ can be made available on a mutually acceptable basis. 4. GWF pays variable charge equal to DCQ times Gas Daily Mid-Point for PG&E City gate, plus $.05/MMBtu. 5. GWF can substititue for the Gas Daily price with a NGI PG&E City Gate Price or a Fixed Price upon mutual agreement.. 6. GWF responsible for any imbalance charges resulting from using a volume different than the DCQ. 7. Enron responsible for imbalance charges when they deliver a quantity other than the DCQ. 8. The Monthly Consumption Quantity (MCQ) is the sum of daily usage. 9. If GWF does not want to be in the Enron Enron Contracted marketer Pool, GWF will be responsible for managing imbalances between the DCQ and actual usage. 10. If GWF wants to be in the Enron Enron Contracted marketer Pool, differences between the MCQ and the sum of the DCQs shall be cashed out as follows provided Imbalance Charges are not incurred. EPMI will purchase the volume by which the sum of the DCQs exceeds the MCQ at the average of the 5 highest days Gas Daily Mid-Point and sell the volume by which the sum of the DCQs is less than the MCQ at the average of the 5 lowest days Gas Daily Mid- Point. If Imbalance Charges are incurred then either 6 or 7 would apply. In conclusion, I recognize that you might think $10k/Month is steep. However, Scheduling Coordination is labor intensive and risky, particularly with the FERC cap and the political quagmire. That said, I definitely think we can help you guys optimize your generation, but . At a minimum we can buy your energy from time to time. We can also set you up with Enron Online for no cost, providing the most transparent price information available in the industry today. For these reasons, I want to get Master Agreements in place. The first step in this process is for you to provide financial statements. Can you send those to me? Something that might work for you guys is to use the APX to be your SC. This will require more work on your part, but it is a low cost option. Another thing is to watch out for firms offering low prices for SC services without giving you a clear indication of what they will pay you for your "extra" MWs. They will make their $ somewhere.Do not limit yourself to one counterparty. IN this age you need multiple trading partners to optimize your generation. I will call to discuss. Thanks Chris - -----Original Message----- From: "Kolnowski, Kevin" <kkolnowski@gwfpower.com<@ENRON [mailto:IMCEANOTES-+22Kolnowski+2C+20Kevin+22+20+3Ckkolnowski+40gwfpower+2Ecom+3E+40ENRON@ENRON.com] Sent: Thursday, July 05, 2001 11:40 AM To: Foster, Chris H. Subject: RE: talking points Chris, I believe that after your phone meeting on 6/15 you were going to prepare a proposal for us. How are you coming with that? Thank you, Kevin Kolnowski -----Original Message----- From: Chris.H.Foster@enron.com [mailto:Chris.H.Foster@enron.com] Sent: Thursday, June 14, 2001 5:41 AM To: kkolnowski@gwfpower.com Subject: RE: talking points This is a draft contract. This is negotiable. C -----Original Message----- From: "Kolnowski, Kevin" <kkolnowski@gwfpower.com<@ENRON [mailto:IMCEANOTES-+22Kolnowski+2C+20Kevin+22+20+3Ckkolnowski+40gwfpower+2Ec om+3E+40ENRON@ENRON.com] Sent: Wednesday, June 13, 2001 11:00 PM To: Foster, Chris H. Cc: Nelsen, Duane; Stanton, Robert; Edwards, Casey Subject: RE: talking points Chris, by giving this a quick look, it appears your fees of 5$/mw-hr would add up to be quite a large number for a 100 MW block of power for say 8000 hours a year. Are we reading this correctly? Please copy your response to Duane, Rob, Casey and myself. Thank You, Kevin -----Original Message----- From: Chris.H.Foster@enron.com To: kkolnowski@gwfpower.com Sent: 6/13/01 4:36 PM Subject: RE: talking points (See attached file: contract.doc) -----Original Message----- From: "Kolnowski, Kevin" <kkolnowski@gwfpower.com<@ENRON [mailto:IMCEANOTES-+22Kolnowski+2C+20Kevin+22+20+3Ckkolnowski+40gwfpower +2Ecom+3E+40ENRON@ENRON.com] Sent: Wednesday, June 13, 2001 11:35 AM To: Chris Foster (E-mail) Cc: Edwards, Casey; Stanton, Robert; Hosfelt, Jeff Subject: FW: talking points Chris; Attached are the talking points we have prepared for what we are looking for with an SC/Gas Supplier/Energy Marketer. We are in the process of establishing a confidentiality release with California Department Of Water Resources (CDWR) so we can share aspects of our contracts with Enron. Until then, I can only be vague. But in a nut shell we are in the process of installing 2-LM 6000 in the Hanford California area that will be operational 9/01 (Phase I). Phase II is also in the Hanford area, again 2-LM 6000's. Phase III is located near Tracy California and this will consist of 2 GE 7EA's. Initially all of these units are simple cycle. There is an option for Phase III to be converted to a combined cycle unit. The combined MW capacity of the simple cycle is 340MW. If we close the loop at Tracy, this will increase by approximately 90 MWs. CDWR has dispatch rights of so many hours per year, and they have first pick. In a rough cut, assume we will have about 1/2 a year in hours for the first three phases that could be in the market. The option we are exploring is can we establish a win-win relation ship with a company like Enron that would supply our gas needs, be able to schedule our power (both for CDWR and our own account), and be able to market our power (outside of CDWR's requirements). Potentially a incentive fee/tiered structure would be workable. We are open to ideas. Based on our initial conversation, it sounded like you may be interested. We would like to get together to discuss our options with you. As I said in my voice mail, I will be out of the office until next Thursday (6/21). Thursday afternoon or Friday (6/21 or 22) would work for us to have this first meeting. I will have to check the following week availability. I will be in the office the rest of today and will be periodically checking both e-mail and voice mail while I am out. If you have questions about the gas side our this transaction, please contact Jeff Hosfelt at (925) 431-1422. Thank you for your consideration, Kevin Kolnowski GWF Power Systems (925) 431-1431 (925) 766-7485 (portable) < <<GWF Requirements for Energy Marketer & SC-Coral.doc<< < - GWF Requirements for Energy Marketer & SC-Coral.doc << File: GWF Requirements for Energy Marketer & SC-Coral.doc << <<contract.doc<<
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