Message-ID: <2280388.1075851622573.JavaMail.evans@thyme> Date: Tue, 9 Oct 2001 08:53:11 -0700 (PDT) From: jeff.dasovich@enron.com To: richard.shapiro@enron.com, d..steffes@enron.com, susan.mara@enron.com Subject: Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Dasovich, Jeff X-To: Shapiro, Richard , Steffes, James D. , Mara, Susan X-cc: X-bcc: X-Folder: \Dasovich, Jeff (Non-Privileged)\Dasovich, Jeff\Sent Items X-Origin: DASOVICH-J X-FileName: Dasovich, Jeff (Non-Privileged).pst Rick: Based on your voicemail, here's a quick-and-dirty synopsis of a proposal that I've been quietly discussing with a select few out here in California (e.g., John White, large customers). It could include more bells and whistles, but the intent of this proposal is to get DA back as soon as possible. ************************************************************************** Reduce DWR L-T contract volumes by at least 33-50% To "back fill" increase in net-short created by contract reformation, permit noncore customers (20 KW and above) to elect to go DA to fill the position DA provides a significantly more efficient hedge against price volatility than DWR contracts Election is first-come, first-serve, capped at the aggregate net short position Customers decision to go DA will constitute a 3-year commitment to stay DA (i.e., can't go back to IOU for 3 yrs; must stay in the market) If a net short position remains after noncore customers have elected DA (i.e., not enough elect to fill the net short), then the IOUs will hold an auction to fill the net short The auction would seek a portfolio of 3 month, 6 month, 1 year and 3 year deals (both peak and off-peak) to fill the net short. Noncore customers choosing DA would not escape costs of DWR power consumed when the customer was receiving utility service (i.e., prior to electing DA) Likewise, if the noncore customers choosing DA was a utility customer during the period when the utility accured its "undercollection," (i.e., when wholesale prices exceeded the retail cap), the customer would not escape those costs by virtue of electing DA status Noncore customers would not bear responsibility for recovery of DWR L-T contracts. Potential add-on to deal: Core customers (less than 20 KW) could choose "green only" DA, but, like, noncore customers could not escape costs for which they are responsible.