Subject: Enron Direct Canada Corp. - LC's Expiring 12/31/2001
From: [email-masked]
To: [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked]
Cc: [email-masked], [email-masked], [email-masked], [email-masked]
Date: Tue, 20 Nov 2001 15:50:08 -0800 (PST)

SENT ON BEHALF OF DEREK FLAMAN:

The following is a response to Bill's question: "When does the tariff require the LC to be renewed?  Do we have some time to wait until mid-December?"

Also attached to this email is Lori Poffenroth's November 9 memo which sets forth Lori's calculations based on WSP/PPA's formulas set forth in their tariffs for Initial Amounts, Revised Amounts, Recommended October 31 Amounts, and Estimated December 31 Amounts.

All of the WSP's and the PPA's Prudential Requirements allow the WSP's and the PPA to reevaluate EDCC's credit limit and/or request additional security from time to time.  While the following sets out in more detail the manner in which each WSP and the PPA can do this, all of the Prudential Requirements are the same in the following two respects: (1) if at any time EDCC's financial obligations to the WSP/PPA (the "Financial Obligations") exceed the existing credit limit (or a certain percentage thereof), the WSP/PPA has the right to request additional security (the "Additional Security"); and (2) if EDCC fails to post the Additional Security within the requisite time period, the WSP/PPA reserves the right to suspend service to EDCC.

Note that, as of today, no WSP/PPA has requested Additional Security.  

However, as soon as possible, the following needs to occur in those instances where the October 31 Amount exceeds the Existing Amount: (1) we should post the Additional Security now; or (2) we put ourselves in a position to be able to post the Additional Security within the requisite time period.  Consequently, we do have some time to wait until mid-December provided that (2) has occurred.

As at December 31, we must post the December 31 Amount.

ATCO

Existing Amount 	Recommended October 31 Amount	Estimated December 31 Amount	
$300,000	$300,000	$450,000	

As at October 31, the Financial Obligations have been calculated to be $300,000 and the posted security is $300,000; therefore, no Additional Security is currently required.  As at December 31, the Financial Obligations have been calculated to be $450,000 and the posted security will have expired; therefore $450,000 of Additional Security will be required at that time.  Such Additional Security will be due within 5 days of ATCO's request.

Enmax

Calgary	
Existing Amount 	Recommended October 31 Amount	Estimated December 31 Amount	
$475,000	$750,000	$1,850,000	

Red Deer	
Existing Amount 	Recommended October 31 Amount	Estimated December 31 Amount	
$30,000	$40,000	$75,000	

Lethbridge	
Existing Amount 	Recommended October 31 Amount	Estimated December 31 Amount	
$15,000	$35,000	$65,000	

As at October 31: for Calgary, the Financial Obligations have been calculated to be $750,000 and the posted security is $475,000 - therefore, the Additional Security which may be required is $275,000; for Red Deer, the Financial Obligations have been calculated to be $40,000 and the posted security is $30,000 - therefore, $10,000 of Additional Security may be required; for Lethbridge, the Financial Obligations have been calculated to be $35,000 and the posted security is $15,000 - therefore, $20,000 of Additional Security may be required.

As at December 31: for Calgary, the Financial Obligations have been calculated to be $1,850,000 and the posted security will have expired - therefore, $1,850,000 of Additional Security will be required at that time; for Red Deer, the Financial Obligations have been calculated to be $75,000 and the posted security will have expired - therefore, $75,000 of Additional Security will be required at that time; for Lethbridge, the Financial Obligations have been calculated to be $65,000 and the posted security will have expired - therefore, $65,000 of Additional Security will be required.  

All of the foregoing Additional Security is due within the number of days required by Enmax (i.e. at Enmax's discretion).

EPCOR

Existing Amount 	Recommended October 31 Amount	Estimated December 31 Amount	
$150,000	$150,000	$1,000,000	

Ponoka

Existing Amount 	Recommended October 31 Amount	Estimated December 31 Amount	
$5,000	$12,000	$12,000	

As at October 31: for EPCOR, the Financial Obligations have been calculated to be $150,000 and the posted security is $150,000 - therefore, no Additional Security is currently required; for Ponoka, the Financial Obligations have been calculated to be $12,000 and the posted security is $5,000 - therefore, $7,000 of Additional Security may be required.

As at December 31: for EPCOR, the Financial Obligations have been calculated to be $1,000,000 and the posted security will have expired - therefore, $1,000,000 of Additional Security will be required at that time; for Ponoka, the Financial Obligations have been calculated to be $12,000 and the posted security will have expired - therefore, $12,000 of Additional Security will be required at that time.

All of the aforementioned Additional Security is due within 10 business days of EPCOR's request.

Power Pool of Alberta "PPA"

Existing Amount 	Recommended October 31 Amount	Estimated December 31 Amount	
$4,800,000	$2,500,000	$6,000,000	

As at October 31, the Financial Obligations have been calculated to be $2,500,000 and the posted security is $4,800,000 - therefore, no Additional Security is currently required.

As at December 31, the Financial Obligations have been calculated to be $6,000,000 and the posted security will have expired - therefore, $6,000,000 of Additional Security will be required at that time.

All of the aforementioned Additional Security is due within the number of days set by the PPA (i.e. at the PPA's discretion)

UtiliCorp.

Existing Amount 	Recommended October 31 Amount	Estimated December 31 Amount	
$0	Barry/Lori to calculate	Barry/Lori to calculate	

UtiliCorp.'s Prudential Requirements, like the other WSP's and PPA's Prudential Requirements, allow UtiliCorp. to re-evaluate EDCC's credit limit and/or request Additional Security from time to time.  To date, UtiliCorp. has not exercised their right to request Additional Security from EDCC.  As such, Financial Obligations with respect to UtiliCorp. have not been calculated.  To be prudent, Barry/Lori will calculate a Recommended October 31 Amount and an Estimated December 31 Amount so that we are prepared in the event that UtiliCorp. does at some point exercise its right to require us to post Additional Security.

Regards,

Derek

Lori Poffenroth's November 9 Memo:

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Sarah Butt
Administrative Assistant
Enron Energy Services Canada Corp.
Enron Direct Canada Corp.
403-663-2828