Message-ID: <26724737.1075842429354.JavaMail.evans@thyme> Date: Thu, 18 May 2000 04:32:00 -0700 (PDT) From: drew.fossum@enron.com To: bill.cordes@enron.com, steven.harris@enron.com Subject: Pueblo Cc: kevin.hyatt@enron.com Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit Bcc: kevin.hyatt@enron.com X-From: Drew Fossum X-To: Bill Cordes, Steven Harris X-cc: Kevin Hyatt X-bcc: X-Folder: \Drew_Fossum_Dec2000_June2001_1\Notes Folders\All documents X-Origin: FOSSUM-D X-FileName: dfossum.nsf I got a call from Tino Monaldo today passing on the results of Dennis Langley's meeting with DOE in Albuquerque. DOE indicated that their current PNM rate is "5.3 cents, exclusive of the demand charge." Tino's consultant claims that factoring in the demand charge yields an effective rate of approximately 7 cents/KWh. Assuming we need to come in at 10% less than the current rate, our bogey is 6.3 cents/KWh. This is at the high end of the range we hoped they'd be in. Additionally, DOE indicated that they need "redundancy" and don't want to rely on PNM for back up power. They want a multiple turbine facility--i.e., more smaller turbines instead of fewer large turbines. The new pipeline will need to be split connected to El Paso and TW in order to access diverse supplies and guard against supply failure. They have not asked for fuel oil backup. I know this is starting to look like the project that won't go away, but the power price number looks very promising to me. I think its worth scrubbing down the model we've used to replace the generic capital cost and O&M assumptions with more specific assumptions related to the specific turbine configuration we'd be using. If this price is really as favorable as I think, can we make another run at the ENA people and Federal Solutions guys to see if they have any interest? DF