Message-ID: <18128688.1075854853015.JavaMail.evans@thyme> Date: Wed, 13 Jun 2001 10:09:34 -0700 (PDT) From: m..presto@enron.com To: tim.belden@enron.com Subject: RE: FYI - Progress Report on testing an EES deal in Enpower Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: quoted-printable X-From: Presto, Kevin M. X-To: Belden, Tim X-cc: X-bcc: X-Folder: \Presto, Kevin M (Non-Privileged)\Presto, Kevin M.\Sent Items X-Origin: Presto-K X-FileName: Presto, Kevin M (Non-Privileged).pst You are 100% correct. That is my impression as well, and that is why I set= up the Monday meeting. Going forward, the format of those meetings should= be: =091) Richter presents his area of accountability (West wholesale prosition= , risk systems, deal capture system, status of =09projects, schedule, etc.) =092) Black presents his area of accountability (deal review, west tariff, = and gas) =093) Herndon presents his area of accountability (East wholesale & East ta= riffs) =094) Bernie presents his area of accountability (deal structuring, deal va= luation, new model construction) =095) Busby presents his area of accountability (risk systems and portfolio= valuation - works with Richter) =096) You and I find the holes and provide direction. Your thoughts? =09 -----Original Message----- From: =09Belden, Tim =20 Sent:=09Wednesday, June 13, 2001 10:44 AM To:=09Presto, Kevin M. Subject:=09RE: FYI - Progress Report on testing an EES deal in Enpower i think that we need to have an "org chart" meeting where we have don, roge= rs, and jeff present to us how everything is going to work. i am getting f= eedback from a bunch of people (donovan, swain, perry, richter) that people= in ees and on the ees transition team are feeling like they don't know wha= t's going on. we need this thing to be a lot tighter than it is now and we= need clear accountability that is visible not just to us, but to everyone.= we need to have this meeting asap. for example, sally beck is has put to= gether her proposed structure. who on our team will liais with her. how w= ill it work? as we discussed the other day, the deal review team is unders= taffed. rogers, don, or jeff needs to be wearing it. once we have the res= ponsibilities clearly layed out, then at a minimum you, don, rogers, jeff, = and i should meet once a week to get a high level update from each of them = on their areas of responsibility. if we don't do this we will quickly devo= lve into chaos. let me know your thoughts. -----Original Message----- From: =09Presto, Kevin M. =20 Sent:=09Wednesday, June 13, 2001 8:19 AM To:=09Belden, Tim Subject:=09RE: FYI - Progress Report on testing an EES deal in Enpower Didn't we already hang Richter with this at the Monday mtg. By the way, L= avo has indicated he will just attend our Monday meetings every couple of w= eeks instead of having a separate meeting. -----Original Message----- From: =09Belden, Tim =20 Sent:=09Wednesday, June 13, 2001 10:06 AM To:=09Presto, Kevin M.; Lavorato, John; Black, Don Cc:=09Herndon, Rogers; Richter, Jeff Subject:=09RE: FYI - Progress Report on testing an EES deal in Enpower at our meeting with the six of us we need to assign one of us to wear the o= versight of this project. -----Original Message----- From: =09Presto, Kevin M. =20 Sent:=09Tuesday, June 12, 2001 5:09 PM To:=09Cross, Edith; Lavorato, John; Belden, Tim Cc:=09Herndon, Rogers; Richter, Jeff Subject:=09RE: FYI - Progress Report on testing an EES deal in Enpower Looks like Enpower is "on the side of the road" with respect to capturing a= nd valuing retail deals. As we discussed in yesterday's meeting, Plan B i= s a more robust spreadsheet that unbundles the components and values them s= eparately and creates postions by risk component. I know this is easier said than done, but we need a tactical solution that = gives the group confidence that value and positions are correct, rather tha= n a bundled black box batch value with hard coded assumptions. -----Original Message----- From: =09Cross, Edith =20 Sent:=09Tuesday, June 12, 2001 5:47 PM To:=09Lavorato, John; Belden, Tim; Presto, Kevin M. Cc:=09Herndon, Rogers; Richter, Jeff Subject:=09FYI - Progress Report on testing an EES deal in Enpower To all, The following is documentation of a sample EES deal which was tested in the= Enpower system. This is for informational purposes only. Please let me k= now if you have any questions, or need clarification on any points. =20 Over the last few weeks, a few of us have been working to test an EES deal = in Enpower (St. Luke's - Roosevelt, part of the Beth Israel deal). The dea= l is a fixed price sale in New York City (Zone J) of Energy, Line Losses, A= ncillary's, and ICAP. The T&D is a pass through. We only tested one site = out of the ten. Needless to say, this is probably one of the simplest stru= ctures available. Obviously, we have worked on a few other things at the s= ame time, so it has taken longer than we expected, but I hope this will hel= p highlight how difficult it is to book EES deals in Enpower in it's curren= t state. Quick statistics for ONE site: Each month of hourly data, takes 5-6 minutes to save. We booked 100 months= (approx 8.3 years), therefore each deal type (energy, ancillary, etc.) too= k 8-9 hours to book. Since each deal type takes 8-9 hours to book, it takes a total of 25-26 hou= rs to book energy, ancillary's (only 1), line losses, and ICAP (this is not= booked hourly, therefore, it only takes 1 hour to book). Although we booked only one ancillary position, most markets have at least = four, therefore the total booking time should be closer to 50 hours. Once we got a book to run, it took 25 minutes to calculate the value. All of the above statistics assume there are no errors in entering the deal= s. Recommendations: Work with Anthony Dayao to set up a system that can handle these trades for= position management, valuation, reporting, scheduling, settlements, accoun= ting, etc. In the interim: Enhance RPS to make the valuation consistent with the batch valuation proce= ss. This includes strengthening information for position and DPR reporting= . As well, create tools to help identify change in valuation due to curve = shift, reg switch options, and new deals. Enhance Intramonth valuation and reporting (East desk does not currently ha= ve an intramonth book). Integrate the Tariff Valuation and Reporting. Currently, this is done in a= stand-alone spreadsheet application. Support the Curve Database project which will allow the breakdown of curves= into its components (as opposed to current bundled curves). Move all the EPMI hedges to Enpower. All hedges will become desk to desk i= nstead of being entered in both RPS and Enpower. Position and P&L reports = will have be integrated between Enpower and RPS. =09 Here is a breakdown of what it took to 'rebook' this trade: Week 1 (May 14-18) Read Contract. Get Batch model, as well as a breakdown of value between Energy, Ancillary'= s, etc. Sit with Underwriting to answer questions about Load growth and contractual= questions. Work on Wholesale Full Requirements model (in Excel) to check valuation. Week 2 (May 21-25) Continue working on Full Requirements model. Work with Risk Management (Stacey White's group) to set up delivery points = and curves in Enpower.=09 Begin to book deal in Enpower - Getting access to Enpower took some time. Discovered that our assumption on hours for the 12x12 was incorrect. We h= ad gotten about 1/3 of the deal booked by the time we realized this. At times, the database tables would run out of space, because we have never= entered a deal of this size in the test database. This would keep us from= entering any new data. Week 3 (May 29-June 1) Finished Excel Full Requirements model. The EES Batch and the Wholesale mo= del tie out except for some minor differences on discounting and ICAP. The= current ICAP curves are $/MW-day, and they are not calculated u= sing the correct numbers of days (i.e. June and July have the same MW/day p= rice, even though there are 30 and 31 days, respectively, in each month). = This can be fixed in the curve files. In the future we should mark the cur= ves as $/Kw-month. Again, we ran into problems with the test database. Completed booking in Enpower. Week 4 (June 4-5) Took 2 days to get a MTM valuation (portcalc) to work. Discovered deal entry errors in booking. =09