Message-ID: <23443519.1075854470134.JavaMail.evans@thyme> Date: Wed, 30 Aug 2000 02:57:00 -0700 (PDT) From: david.delainey@enron.com To: charles.ward@enron.com Subject: Ada pump and QF concerns in general Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: David W Delainey X-To: Charles Ward X-cc: X-bcc: X-Folder: \David_Delainey_Dec2000\Notes Folders\Sent X-Origin: Delainey-D X-FileName: ddelain.nsf Chuck, I appreciate the note - I just like to ensure that everyone is aware of the various issues and that we are managing our risk appropriately. I have a great deal of confidence that you have this handled. Regards Delainey ---------------------- Forwarded by David W Delainey/HOU/ECT on 08/30/2000 09:55 AM --------------------------- Charles Ward@ENRON 08/30/2000 08:45 AM To: David W Delainey/HOU/ECT@ECT cc: W David Duran/HOU/ECT@ECT, Carl Tricoli/Corp/Enron@Enron, Jeff Donahue/HOU/ECT@ECT Subject: Ada pump and QF concerns in general I wasn't sure whether you were messing with me or serious during the QBR about the Ada boiler pump. It was a $10k issue which was fixed in the normal course of operations and NBD in the scope of things. The QF was never at risk as the pump is a standard part which is commonly available. The QF loss issue I typically worry about usually derive from an outage sourced at the counterparty level (cashflow problems, operational difficulties, etc.) I've seen this cause a few projects tense moments, although FERC has always allowed the projects to recover. Typically the utility will protest the loss of QF but since the QF's are self-certifying with FERC right to protest, the utility can typically only make noise and or cease paying. Recently, FPL attempted to not let the Indiantown QF IPP back on-line after a technical shutdown (and thereby bust their QF), but FPL lost their case in court (wrongful act) and has had to let the project return to on-line status (financing and QF remained intact over the +6 month ordeal). To me the general theme is that an executed and performing (energy is being delivered) PPA will survive incredible QF stress. The plant managers typically have the highest level of understanding of the intricacies of the PPA's vis-a-vis the relationship between plant, utility and QF host. Historically, FERC is not looking to kick out a project's contract based upon a QF technicality, although charged with enforcement of QF. If FERC was a tough enforcer, Cleburne and a few other similar QF projects would rate high on their hit list and the past speaks well to the future in this case. Chuck