Message-ID: <27346448.1075848093380.JavaMail.evans@thyme> Date: Wed, 16 Aug 2000 10:35:00 -0700 (PDT) From: sarah.novosel@enron.com To: steven.kean@enron.com Subject: Commitments Needed to Expedite PGE/Sierra Merger Approval Cc: richard.shapiro@enron.com Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit Bcc: richard.shapiro@enron.com X-From: Sarah Novosel X-To: Steven J Kean X-cc: Richard Shapiro X-bcc: X-Folder: \Steven_Kean_June2001_4\Notes Folders\Discussion threads X-Origin: KEAN-S X-FileName: skean.nsf Steve: Dwight Larson asked Steve Angle and me to prepare a list of mitigation measures we believe would help get FERC and SEC approval so that the merger could close by year end. Attached is a list that Steve Angle and I put together. Dwight is preparing a summary of our comments (along with others') for your review prior to the meeting with Walt Higgins, but I thought you may want to see the list Steve and I put together. A couple of caveats to the list: First, for vertical market power, we propose that PGE release its firm transmission capacity into California when Sierra is using the Alturas line (i.e., at times when TANC and SMUD are prevented from importing up to 300 MW into California). However, the cost to PGE to release this capacity is apparently great and could have a material adverse effect on PGE. Therefore, we may need to consider other mitigation measures -- such as capping the price of power sold by PGE into California during these times. This mitigation is not as clean as a release of capacity -- it requires FERC to monitor PGE's sales and FERC could have some concern that PGE could game the rules. Nevertheless, it may be the only viable form of mitigation we have. We did not propose this alternative option in our list of mitigation measures. Second, we need assurance from PGE that the buyback contracts they are negotiating in the sale of their generators will not give Sierra market power (a concern raised by FERC in the July 26 order). Call me if you have any questions. Good luck with the meeting tomorrow. Sarah ---------------------- Forwarded by Sarah Novosel/Corp/Enron on 08/16/2000 05:44 PM --------------------------- "Angle, Stephen" on 08/16/2000 01:12:21 PM To: "'dwight.larson@enron.com'" cc: "'Sarah Novosel'" , "Fullenweider, Keith" , "Wenner, Adam" Subject: Commitments Needed to Expedite PGE/Sierra Merger Approval Here is the wish list prepared by Sarah and me that responds to your request for input for your meeting tomorrow. <<99522_1.doc>> - 99522_1.doc