Message-ID: <6039220.1075843952589.JavaMail.evans@thyme> Date: Thu, 31 May 2001 12:43:00 -0700 (PDT) From: richard.shapiro@enron.com To: mike.mcconnell@enron.com, jeffrey.shankman@enron.com Subject: Wyoming Cc: paul.kaufman@enron.com, lisa.yoho@enron.com Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit Bcc: paul.kaufman@enron.com, lisa.yoho@enron.com X-From: Richard Shapiro X-To: Mike McConnell, Jeffrey A Shankman X-cc: Paul Kaufman, Lisa Yoho X-bcc: X-Folder: \Mark_McConnell_June2001\Notes Folders\Notes inbox X-Origin: MCCONNELL-M X-FileName: mmcconn.nsf Would a meeting between one or both of you with Gov. Geringer of Wyoming make any sense given attached memo? ---------------------- Forwarded by Richard Shapiro/NA/Enron on 05/31/2001 07:43 PM --------------------------- From: Paul Kaufman/ENRON@enronXgate on 05/31/2001 04:45 PM To: Richard Shapiro/NA/Enron@Enron, Lisa Yoho/NA/Enron@Enron cc: Subject: Wyoming Wyoming Governor Geringer has been a leader on energy issues in the West since (at least) the end of 2000 (when California's energy crisis pushed the Western Governor's Association to hold an emergency session in Denver). Based on discussions with his staff, it appears that the Governor likes our company and supports our efforts to open markets. His public comments, which are developed by the Governor's office with little outside influence, match both the direction and intent of many of our own policy objectives. You asked that I summarize my observations from yesterday's meeting of the Wyoming Energy Commission. I participated in the first session of the Wyoming Energy Commission at the Governor's invitation. (We were invited as the keynote speaker for the session). The Commission was created by the Wyoming legislature to look at Wyoming's energy future from the standpoint of both consumers and the producers. The Commission was given a $1 million budget and authority to take legislative and regulatory positions on behalf of the state. In conversations with the Governor's staff; it appears that they are familiar with commodity markets--particularly ag products. They understand the concept of basis and also understand that energy commodity markets work best when there is adequate transmission capacity, gas pipeline capacity and rail capacity. They also understand that their are some contraints on the transmission system (a complete constraint moving east, off-peak constraints moving north, south, and west), limited take away capacity on the one major pipeline serving the state (Kern--perhaps due to downstream constraints), and some problems with the cost of rail transportation (if not a constraint). While they have a working understanding of all these things, they haven't been able to put it all together in a cohesive way. They want our help in putting together the various pieces of the energy puzzle. I can't help but think that there is opportunity for Enron in Wyoming either as an advisor (for a fee) or as a business partner--e.g., there has to be some room for combining the energy markets--i.e., arbitraging the value of a coal-fired kWh and a gas-fired kWh or providing some incremental improvement to the market for their sale of commodity out of state. There also may be some opportunity to develop coal-fired or gas-fired plant. Indeed, Wyoming is a major producer of natural gas (including coal-bed methane) and coal. They want to produce more, but want to avoid the boom and bust cycle of a resource dependent state. (For example, the state moved from a $250 million deficit in FY 1999 to an approximately $750 million surplus in FY 2000). They also want to diversify the state's economy and bring economic development. For example, a major focus of the state's Business Council has been to recruit "server farms"--because of their load and high load factors. They talked about co-locating server farms and generation along the southern tier of the state (which has a large amount of fiber optic bandwidth available). While it is unclear, the bandwidth they are mentioning may be EBS fiber. Let me know how you want to proceed. It's rare when you get a Governor that has some understanding of commodity businesses and wants to provide leadership on energy issues.