Message-ID: <25279327.1075851033889.JavaMail.evans@thyme> Date: Thu, 27 Jul 2000 07:04:00 -0700 (PDT) From: philip.davies@enron.com To: steven.kean@enron.com Subject: URE Statement on Criteria for Lifting Tariff Approval Requirements Cc: mark.schroeder@enron.com Mime-Version: 1.0 Content-Type: text/plain; charset=ANSI_X3.4-1968 Content-Transfer-Encoding: quoted-printable Bcc: mark.schroeder@enron.com X-From: Philip Davies X-To: Steven J Kean X-cc: Mark Schroeder X-bcc: X-Folder: \Steven_Kean_Oct2001_2\Notes Folders\Attachments X-Origin: KEAN-S X-FileName: skean.nsf As requested by Mark. ---------------------- Forwarded by Philip Davies/LON/ECT on 27/07/2000 14:= 05=20 --------------------------- Philip Davies 25/07/2000 17:49 To: Poland cc: =20 Subject: URE Statement on Criteria for Lifting Tariff Approval Requirements The President of the Regulatory Authority has recently issued a 3-page=20 statement, outlining the criteria he will take into account in assessing=20 whether to release companies (ie, generators and trading companies) from th= e=20 tariff approval requirements in the Polish Energy Law. We may arrive at a= =20 situation later this year where we have signed the necessary transmission,= =20 balancing and settlement contract(s) with PSE so that we can do wholesale= =20 trades -but are still subject to the requirement to get our trades (sales,= =20 not purchases) "approved" by URE before we can conclude them. =20 The URE statement and recent press comments by the regulator do not give us= =20 any grounds to believe that traders such as Enron are going to be released= =20 soon from this requirement (in the press he has talked about possibly=20 releasing some generators from the requirement in early 2001). We may=20 therefore need to investigate getting an "approved tariff". However, unles= s=20 we can get a framework agreement in place (so we don't need to get each and= =20 every transaction separately approved), this does not appear to be a workab= le=20 solution. The attached statement is unhelpful in that it appears to be simply a list = of=20 every conceivable reason that URE could want to use at some point to justif= y=20 continuing with the current restrictions. While some (but far from all) of= =20 the issues raised are genuine concerns, it does not of course follow that= =20 requiring tariffs to be approved for all generators and traders is the righ= t=20 response. (In October 1999 we presented to URE the reasons why we believe= =20 that these requirements make no sense for a new entrant supplier such as=20 Enron.) =20 However, since this issue is unlikely to go away, Jarek D. and I plan to us= e=20 this statement to develop a dialogue with URE and see if we can find a=20 workable way forward. Regards, Philip URE definition of "competitive market" which must exist before he can=20 consider lifiting the requirements: "The Authority=01,s President defines the competitive market as a market wh= ere=20 the transaction price is determined as a result of free interplay between= =20 supply and demand, and the customer has the right to choose the supplier=20 without restraint, and to change it without excessive costs to himself, as= =20 well as being able to decide the quantity of purchases. Each of the subject= s=20 on the competitive market functions within similar external conditions. The= =20 transactions concluded on this market are subject to civil and legal=20 regulations, or customary ones, and the information regarding the prices of= =20 goods on offer are generally accessible. The President of the URE estimates= =20 that as far as electric power is concerned, a supplier=01,s market rather t= han a=20 competitive market is still in operation, because the customers are not abl= e=20 to exert economic pressure where their preferences are taken into account."