Message-ID: <20793542.1075846132637.JavaMail.evans@thyme>
Date: Mon, 31 Jul 2000 10:59:00 -0700 (PDT)
From: kay.mann@enron.com
To: heather.kroll@enron.com, ozzie.pagan@enron.com, jeffrey.keenan@enron.com, 
	nwodka@bracepatt.com
Subject: VEPCO capacity contract issues
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I've made a list of issues Heather and I have discussed based on VEPCO's=20
suggested revisions.  Some of the issues are commercial, some legal, some=
=20
just reminders.  Comments are appreciated.

1. Term.  What will we accept?

2. Availability:  single computation despite source of power (market or=20
facility). Is forced outage the correct concept since we want to have some=
=20
discretion, and LD structure should apply even if power coming from the=20
market?  Note VEPCO=01,s insertion of a new event of default under 7.1 for=
=20
failure to deliver energy when the Facility is not in a forced outage. =20
Liquidated damages language still ok?  LD=01,s should apply regardless of=
=20
scheduled source of power =01) no cost of cover for market power.

3. Our position is that Contract Capacity set at contract signing, then=20
adjusted (if necessary) based on performance tests, not subject to adjustme=
nt=20
after that time: ditto for the demand charge.  What is the right number for=
=20
the Capacity?  Is there a benefit to Enron to have a correction curve exhib=
it?

4. Failure to complete facility suggested as a termination event.  Is=20
September long enough?

5. We need to be able to supply from either or both sources (market and=20
facility) during a day, but this doesn=01,t give us right to change during =
the=20
day after the schedule is set.

6. Note the Start Up definition (as suggested by VEPCO) and how it is=20
applied.  Reject 50% requirement at this point, subject to their explanatio=
n.

7. Note: construction of the facility now required (2.3).=20

8. Define commercial operation.

9. Confirm that Enron has sufficient protection from interconnection=20
failures/delays.

10. Day ahead scheduling (3.4)  Are we ready to commit?

11. Number of start ups. (2.3 e)

12. Force majeure =01) consistency with interconnection agreement, relief f=
or=20
certain equipment failures.  Is concept logically developed throughout the=
=20
document?  Note distinction between market and facility power in force=20
majeure language.

13. Dispute resolution:  arbitration vs. litigation/venue. Virginia law?

14. Change in law.  Counter with CIL as termination event?

15. Exhibit A =01) Heather is working on this.


Kay