Message-ID: <30251403.1075854443665.JavaMail.evans@thyme> Date: Thu, 8 Jun 2000 01:55:00 -0700 (PDT) From: david.delainey@enron.com To: kevin.presto@enron.com Subject: Gleason Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: David W Delainey X-To: Kevin M Presto X-cc: X-bcc: X-Folder: \David_Delainey_Dec2000\Notes Folders\All documents X-Origin: Delainey-D X-FileName: ddelain.nsf ???? Delainey ---------------------- Forwarded by David W Delainey/HOU/ECT on 06/08/2000 08:51 AM --------------------------- Enron North America Corp. From: Scott Healy 06/07/2000 05:31 PM To: Don Miller/HOU/ECT@ECT, David W Delainey/HOU/ECT@ECT cc: W David Duran/HOU/ECT@ECT Subject: Gleason Bob Virgo has informed me that the desk wants to convert Gleason to combined cycle. Bob told me this in the context of asking me whether Calpine would sell us any additional combined cycle equipment (i.e., steam turbines). My guess is they won't. If 1) it was of interest to us and 2) we are really going to convert Gleason, I think I could get Calpine to execute a purchase/short term tolling transaction on Gleason on favorable terms. I say this for the following reasons: 1. Calpine is typically a strong bid for combined cycle installations. 2. Calpine has been trying unsuccessfully to get a combined cycle project in TVA (due to their rank in the cue) and thinks that it will take them a year to get through TVA. We actually think that their project is blocked. 3. Calpine would likely take the incremental construction cost risk on the transaction. 4. I believe that Calpine would undertake the permitting and interconnection work at their cost and risk, if needed. Given the cost of preparing a combined cycle permit along with the potential fight that ENA might face from TVA in such an effort, this risk sharing scenario could be attractive to ENA. 5. Calpine would likely accept a short term tolling arrangement. On their eastern assets, Calpine is generally executing 1-2 year deals. 6. Calpine particularly in the east has been aggressively purchasing projects. 7. If feasible, Calpine would probably be willing to further increase the size of Gleason. Calpine's current plants announcements are generally in the 700-1,000 MW range. I know that Dave Delainey has not previously supported selling Gleason individually. However, you may want to investigate if anything has changed in this circumstance, particularly since we are not generally a strong bid for combined cycle projects. Please let me know. FYI--Dave Duran and I are meeting with Bob Kelly of Calpine on next Tuesday to discuss the use of Enron NOLs in Calpine's PG&E contract buyouts.