Message-ID: <29578470.1075840063649.JavaMail.evans@thyme> Date: Tue, 2 Oct 2001 19:29:24 -0700 (PDT) From: sean.crandall@enron.com To: kevin.meredith@enron.com Subject: RE: Day Ahead "Financial" Parking/Lending product Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: quoted-printable X-From: Crandall, Sean X-To: Meredith, Kevin X-cc: X-bcc: X-Folder: \ExMerge - Crandall, Sean\Sent Items X-Origin: CRANDELL-S X-FileName: Kevin, My apologies for not getting back sooner, but I sort of wanted to see how t= he Enron real-time products did before proceeding with this. It seems like= real-time is a success, so let's get going with this. =20 I call this product DART (Day-Ahead/Real-Time). It's basically a physical = product that is transacted on a day-ahead cash basis, but is delivered on r= eal-time. For example, on the day-ahead, lets say I post a "US Pwr Phy Fir= m Mid-C Peak Oct04 to Oct05 DART" $27 at $28. If I get hit, then the par= ty selling to me is obligated to deliver on Oct 5th, real-time 25 MW each h= our. I would be long real-time at $27. If a party lifts my $28, then I wo= uld be obligated to deliver to them on Oct 5, real-time, 25 MW each hour. = I would be short at $28. The mechanics of this deal are much like a regular day-ahead cash transacti= on. The primary difference is we would have to flag these deals somehow su= ch that they would not get mixed with our regular day-ahead transactions th= at needed to be prescheduled. As far as the product language goes, I think if you add the following langu= age to what you provided below, we should be OK (obviously subject to legal= review). "This product is intended to be transacted on a Day-Ahead basis, for delive= ry on a Real-Time basis. Day Ahead means the trading day prior to the day = of delivery, consistent with WSCC scheduling and trading practices. Real-t= ime means the actual Delivery Day. Real-time deliveries shall be consisten= t with generally accepted WSCC scheduling timelines and practices." Take a look, give me a call. Thanks. -----Original Message----- From: =09Meredith, Kevin =20 Sent:=09Monday, September 10, 2001 10:12 AM To:=09Crandall, Sean Subject:=09RE: Day Ahead "Financial" Parking/Lending product Sean, The language is below. Also, Savita wanted to conference call you this aft= ernoon to discuss this product. What time is good for you? Kevin A US Power Transaction with Enron Power Marketing, Inc. under which the Sel= ler shall sell and the Buyer shall purchase a quantity of firm energy equal= to the Hourly Quantity at the Contract Price. The Contract Price shall be = as submitted by the Counterparty via the Web Site. "Firm energy" is power = that is or will be scheduled as firm energy consistent with the most recent= rules adopted by the Western Systems Coordinating Council for which the on= ly excuses for failure to deliver or receive are if an interruption is (i) = due to an Uncontrollable Force as provided in Section 10 of the WSPP Agreem= ent; or (ii) where applicable, to meet Seller's public utility or statutory= obligations to its customers. Notwithstanding any other provision in the = underlying agreement between the Seller and the Buyer that governs this tra= nsaction (the "Agreement"), if Seller exercises its right to interrupt to m= eet its public utility or statutory obligations, Seller shall be responsibl= e for payment of damages for failure to deliver firm energy as provided in = the applicable cover remedy section(s) of the Agreement. "WSPP Agreement" = means the Western System Power Pool Agreement as amended from time to time. The term of the Transaction shall correspond to the date(s) set forth in th= e Product description on the Website. The transaction is for delivery or receipt of power at Mid Columbia. The price is quoted in US Dollars per unit of volume, which will be the Con= tractual Currency. The unit of measure against which the price is quoted shall be megawatt-hou= rs (MWh) and the quantity shown shall be in MW's delivered in each applicab= le hour for the duration of the Transaction (the "Hourly Quantity'). The transaction is for on-peak ("Peak") hours on each Delivery Day beginnin= g with the hour ending 0700 (6:00 am) and concluding with the hour ending 2= 200 (10:00 pm) Pacific Prevailing Time. "Delivery Day" means a day during = the term of the transaction that is a Monday, Tuesday, Wednesday, Thursday,= Friday or Saturday, excluding any day that is a NERC holiday. -----Original Message----- From: =09Crandall, Sean =20 Sent:=09Monday, September 10, 2001 12:07 PM To:=09Meredith, Kevin Subject:=09RE: Day Ahead "Financial" Parking/Lending product Kevin, Could you e-mail me the contract language we currently have for the Mid-C p= hysical product so I can work with it? (I don't have an electronic copy). Thanks -----Original Message----- From: =09Meredith, Kevin =20 Sent:=09Thursday, September 06, 2001 7:33 AM To:=09Crandall, Sean Subject:=09RE: Day Ahead "Financial" Parking/Lending product I am the one to talk with about this new product. I will call you today to= discuss. Kevin -----Original Message----- From: =09Crandall, Sean =20 Sent:=09Wednesday, September 05, 2001 6:43 PM To:=09Meredith, Kevin Cc:=09Belden, Tim; Scholtes, Diana; Alonso, Tom Subject:=09Day Ahead "Financial" Parking/Lending product I've had an idea for a new EOL product that I would like to start our EOL l= egal and contracts people thinking about. It's kind of a weird product, bu= t I think it would trade quite a bit once people figured out what it was. It's called the Day Ahead/Real-Time Park/Lend product. Essentially it's a = financial trade on a day ahead basis that is settled real time. For exampl= e, let's say Morgan Stanley agrees to sell us 25 MW onpeak for $25, but tha= t it is not prescheduled--it is to be settled real time. If we fast forwar= d to real-time, Morgan Stanley has two options. They can buy from us on EO= L, whereby this transaction books out, or they can deliver us physical powe= r, whereby we have to sell the power to a third party real time. The nice = thing about this product is it provides any party the ability to take a pos= ition to real time, even if they are not a control area. In addition, it w= ould provide utilities and generators the ability to hedge a day-ahead posi= tion. Kevin, I'm not sure if it's you I need to talk to about this, but I would a= ppreciate some direction if it's somebody else. Once we identify who we ne= ed to look at this, I'd like to set up a conference call to discuss contrac= t language and EOL mechanics. Thanks.