Enron Canada

Kate, take a quick look at this would you?

Group,

Going forward we will be transacting with Enron Canada Corp on an over-the-=
counter basis. We will provide them with a bid and an offer suitable for b=
uying from or selling to them non-firm energy. Enron Canada will contact u=
s each morning to inquire about possiblities for export and import. We sho=
uld be familiar with the Alberta Power Pool forecast and be aware of the co=
nversion from CDD to USD. The lead or NW trader will provide Enron Canada =
with their estimate or feel of the market. Enron Canada will be trying nea=
rly every hour to obtain non-firm transmission. If this is an unwise pract=
ive from a risk-reward standpoint based on our understanding of the market,=
WE need to tell them, as they are losing $6.40 per mw CDD on unused tranny=
with zero chance for return. Further, Enron Canada wants the opportunity =
to transact with other counterparties at the BC Border. If we cannot use t=
heir energy they have asked to be able to contact WWP, IPC or TransAlta aft=
er giving us first look to attempt to recoup some of their loss. I do not =
see a need for this and think there is potential for embarrassment and dama=
ge to customer relations. If we are in contact with Enron Canada before ha=
nd (start of the day, top of the hour, etc.) we should be able to get them =
the best price for their energy. Be very clear in your dealings with the N=
W counterparty that the energy is non-firm. Determine a book-out price if =
necessary to solve problems with physical flow. We are basically buying a =
put or a call. Finally, I would like to see the communication with Enron C=
anada improve. Personal experience and observation has us not communicatin=
g with them as closely as possible and typically only speaking with their r=
eal-time group at the bottom. I feel we can do better. I want to prevent =
a repeat of this weekend (ECC selling/buying from a counterparty in the US =
without our knowledge) and do not want the NW being scoured by both Enron C=
anada and Enron North America. This is counterproductive for both of us fo=
r obvious reasons. Providing a bid/offer and being prepared to act on it i=
s a change in our relationship with Enron Canada. This should force a rene=
wed emphasis on communication and market fundamentals that should only be b=
eneficial. If you have questions or ideas regarding the relationship with =
Enron Canada please let me know.

To be sent to John Zufferli (equivalent of Tim B in Canada)
and Portland Shift