Message-ID: <31651288.1075846132937.JavaMail.evans@thyme>
Date: Mon, 7 Aug 2000 12:20:00 -0700 (PDT)
From: ben.jacoby@enron.com
To: heather.kroll@enron.com, jeffrey.keenan@enron.com
Subject: VEPCO PPA
Cc: ozzie.pagan@enron.com, kay.mann@enron.com
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Heather / Jeff:

Thanks for a copy of the draft PPA. I've addressed this to both of you as 
some of my questions are based on the interaction of the PPA vs. development 
timeline and risk. Here are my thoughts / comments:

1. The PPA is really a free option through Nov. 30th, at which time we can 
choose to exercise our position and proceed. How does this fit with our 
expectations regarding PUC approval of our CPCN (which seems to be our 
highest risk development item)? Have we gone back and submitted a 
modification to our CPCN for the 2- LM6000, and 1- SW501D5A config? 

2. Do we need to define the Facility as "dual" fuel? It will not initially be 
dual fuelled as we intend to field engineer the dual fuel capability.

3. Section 3.1 (c). This provision should acknowledge our right to sell base 
Contract Capacity (as opposed to excess) to any Person to the extent that 
VEPCO has not exercised their option to purchase such Contract Capacity. In 
other words, this section should be consistent with sales allowances to other 
Persons in Section 3.4 (b) (although that section only references energy 
sales).

4. Section 3.4. Can we sell both day ahead energy and capacity to any Person 
to the extent VEPCO does not exercise their call by providing us the notice 
contemplated in Section 3.4 (b) (the section only references an allowance for 
energy sales)?

5. Section 3.4(c) Do the "additional costs" which this section requires Buyer 
to pay (to the extent Buyer provides an intra-day notice) include 
"lost-profit" costs arising from sales of energy and capacity by Seller to 
other Persons as permitted in Section 3.4 (b)? If so, I would suggest that 
this section make a specific reference, such as "including any and all of 
Seller's lost-profit and transaction costs associated with energy and 
capacity sales to other Persons".

6. Do we have a project LLC formed which can serve as the entity signing the 
PPA? Do we think VEPCO will ask for any corp. or ENA guarantees to the extent 
we use an LLC?

 7. Have we worked with the accountants to make sure we can use MTM 
accounting given the terms of this PPA?  

Jeff: Please provide a brief development summary to the group outlining (in 
order of highest risk to lowest) the various significant development items 
we'll need to deal with for this site (i.e. zoning, groundwater supply vs. 
municipal water supply, etc.). It would be helpful if you would use the 
project development control matrix.

Please let me know if you have any questions.

Regards,

Ben