Message-ID: <21341025.1075848081176.JavaMail.evans@thyme> Date: Tue, 18 Apr 2000 10:17:00 -0700 (PDT) From: steven.kean@enron.com To: scott.gahn@enron.com Subject: Re: EES - RAC Deal Approval Meeting Cc: james.steffes@enron.com, david.gorte@enron.com, vladimir.gorny@enron.com, rick.buy@enron.com, harry.kingerski@enron.com, john.neslage@enron.com, karen.barbour@enron.com, scott.stoness@enron.com Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit Bcc: james.steffes@enron.com, david.gorte@enron.com, vladimir.gorny@enron.com, rick.buy@enron.com, harry.kingerski@enron.com, john.neslage@enron.com, karen.barbour@enron.com, scott.stoness@enron.com X-From: Steven J Kean X-To: Scott Gahn X-cc: James D Steffes, David Gorte, Vladimir Gorny, Rick Buy, Harry Kingerski, John Neslage, Karen L Barbour, Scott Stoness X-bcc: X-Folder: \Steven_Kean_June2001_4\Notes Folders\Discussion threads X-Origin: KEAN-S X-FileName: skean.nsf I understood the "validation" process to be a fairly flexible name applied to a wide variety of approaches. What we specifically discussed, and what scott s. left prepared and committed to do, involved looking at individual curves, the assumptions underlying them and some process (yet to be specifically determined) for addressing updates. We agreed to start with the top 20 curves and especially those which are involved in the upcoming deals. I think the confusion is in what the term validation means. In the ENA context it means one thing; in this context it means what we discussed (which was in Jim's memo and, as you'll recall, we went through point-by-point). Let's just get this done. ---------------------- Forwarded by Steven J Kean/HOU/EES on 04/18/2000 05:10 PM --------------------------- James D Steffes 04/18/2000 03:46 PM To: Scott Gahn/HOU/EES@EES cc: john Neslage/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, David Gorte@ECT, Rick Buy@ECT, Scott Gahn@EES, Jeremy Blachman@EES, Scott Stoness@EES, Karen L Barbour@ECT, Steven J Kean@EES, Harry Kingerski@EES, Gia Maisashvili/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Vladimir Gorny/HOU/ECT@ECT Subject: Re: EES - RAC Deal Approval Meeting Scott -- We should talk about what was agreed to at the meeting. My discussions with others indicated that both (a) a curve validation process and (b) a deal-by-deal review would be undertaken. The deal-by-deal review is especially critical during the implementation of a structured curve validation process. In addition, even when the curve validation process is fully up and running, we should continue looking at major position impacts in new transactions. There are many curves to review. It seems reasonable to look at the critical rate curves as appropriate. Let me know. Jim Steffes Scott Gahn 04/15/2000 07:25 AM To: John Neslage/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT cc: David Gorte@ECT, Rick Buy@ECT, Scott Gahn@EES, Jeremy Blachman@EES, Scott Stoness@EES, Karen L Barbour@ECT, Steven J Kean@EES, James D Steffes@EES, Harry Kingerski@EES, Gia Maisashvili/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT Subject: Re: EES - RAC Deal Approval Meeting In the interest of clarity: It was agreed that ongoing curve validation consistent with that followed on wholesale curves would be instituted. It was further agreed that certain information would be provided by Scott Stoness to get this process going. Such ongoing validation should make the impractical deal-by-deal review described below both redundant and unnecessary. I assume the list below did not contemplate the type of curve validation process we discussed and agreed to at the meeting. To: David Gorte@ECT, Rick Buy@ECT, Scott Gahn@EES, Jeremy Blachman@EES, Scott Stoness@EES, Karen L Barbour@ECT cc: Steven J Kean@EES, James D Steffes@EES, Harry Kingerski@EES, Gia Maisashvili/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT Subject: EES - RAC Deal Approval Meeting As mentioned in yesterday's meeting, below are Jim Steffes' comments relative to what information should be presented to Government Affairs when EES brings a deal to RAC. ---------------------- Forwarded by John Neslage/ENRON_DEVELOPMENT on 04/14/2000 02:53 PM --------------------------- James D Steffes@EES 04/09/2000 12:11 PM To: Steven J Kean/HOU/EES@EES, Harry Kingerski/HOU/EES@EES, John Neslage cc: Marcia A Linton/HOU/EES@EES Subject: EES - RAC Deal Approval Meeting I received word late last week that Dave Gorte (works for Rick Buy) is setting up a meeting to discuss the process under which EES will have its deals considered by RAC. I think that we should argue that the following package of information be pre-assembled and provided to Govt Affairs when EES brings a deal to RAC: 1. List of each position by utility and by rate class within the deal 2. Regulated Rate forecasts by utility and by rate class for each position in the deal. Not just the "scalars" but also the absolute $/Mwh. 3. For each impacted position, the key assumptions contained within the curves - a. deregulation date (if any) b. stranded cost roll-off date (if any) c. standard offer end date (if any) d. other rate reduction dates and amounts (if any) 4. Revenue side or Cost side contract terms that impact the deal (for example, movement in pricing terms given some event) I also think that we should have at least 3 working days to review this package. If anyone can think of anything else that would ease our analysis, I would be game. Thanks. JDS