Message-ID: <14126958.1075857196995.JavaMail.evans@thyme> Date: Thu, 22 Jun 2000 08:21:00 -0700 (PDT) From: thomas.suffield@enron.com To: clement.lau@enron.com, benjamin.rogers@enron.com, jinsung.myung@enron.com Subject: Re: LM6000 spending vs West LB budget Cc: billy.lemmons@enron.com, ben.jacoby@enron.com, mathew.gimble@enron.com, claire.harvey@enron.com Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit Bcc: billy.lemmons@enron.com, ben.jacoby@enron.com, mathew.gimble@enron.com, claire.harvey@enron.com X-From: Thomas M Suffield X-To: Clement Lau, Benjamin Rogers, Jinsung Myung X-cc: Billy Lemmons, Ben Jacoby, Mathew Gimble, Claire Harvey X-bcc: X-Folder: \Benjamin_Rogers_Dec2000_2\Notes Folders\Discussion threads X-Origin: Rogers-B X-FileName: brogers.nsf Clement: We have an add'l issue on the LM 6000's and that is on IDC. My understanding is when we originally structured the sharing of the West LB interim interest, we were assuming the turbines would move out of the facility to Project Facilities. Since we have turbines that do not have homes, but will continue to incur add'l IDC, we would like to agree on a new methodology for accruing IDC per turbine. We look forward to meeting with you soon to discuss this. Let me know when you are available. Thanks, Thomas. ---------------------- Forwarded by Thomas M Suffield/Corp/Enron on 06/22/2000 03:16 PM --------------------------- Thomas M Suffield 06/22/2000 01:33 PM To: Matthew Berry/HOU/ECT@ECT cc: Billy Lemmons/Corp/Enron@ENRON, Ben Jacoby/HOU/ECT@ECT, Chris Booth/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Kay Mann/Corp/Enron@Enron, Bruce Golden/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Humberto Cubillos-Uejbe/HOU/ECT@ECT, Roseann Engeldorf/Corp/Enron@ENRON, Lisa Bills/Corp/Enron@ENRON, Mathew Gimble/HOU/ECT@ECT, Eric Booth/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Herman Manis/Corp/Enron@ENRON, Roger Ondreko/HOU/ECT@ECT, Stanley Farmer/Corp/Enron@ENRON Subject: Re: LM6000 spending vs West LB budget Matt: thanks for the memo. As per my discussions with Billy, there is no problem with Austin being on balance sheet because we are accounting for our interest as a % of the J.V. and will accrue income, not Fair Value it. As to the turbine/West L.B. structure moving forward, I have left a message with Bruce Golden recommending in our next meeting we include the Procurement/Purchasing agent from NEPCO who would be involved in any ancillary purchases. Additionally, accounting should be represented. Let us know when next week will work for you. Thanks, Thomas. Matthew Berry@ECT 06/22/2000 12:09 PM To: Ben Jacoby/HOU/ECT@ECT cc: Billy Lemmons/Corp/Enron@ENRON, Thomas M Suffield/Corp/Enron@ENRON, Chris Booth/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Kay Mann/Corp/Enron@Enron, Bruce Golden/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Humberto Cubillos-Uejbe/HOU/ECT@ECT, Roseann Engeldorf/Corp/Enron@ENRON, Lisa Bills/Corp/Enron@ENRON, Mathew Gimble/HOU/ECT@ECT, Eric Booth/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Herman Manis/Corp/Enron@ENRON, Roger Ondreko/HOU/ECT@ECT Subject: LM6000 spending vs West LB budget Ben, I want to further discuss a few issues that arose from yesterday's LM6000 budget meeting. When structuring the Acquisition and Development Agreement (ADA) for the LM6000s with West LB, a spending budget for major equipment purchases was put together and signed off by Mike Miller and Chris Booth which included ancillary equipment items, such as transformers but also chillers, stacks and compressors, etc, through November 12, 2000. What I heard in yesterday's meeting is that related to the LM6000's, NEPCO plans to order not just major equipment but smaller items too. We need to ensure that (1) the ADA as currently drafted allows for non-major items and (2) those items have been budgeted. We will get back to you related to (1). More generally, accounting has told us that NEPCO cannot pay directly for ANY (big or small) hard costs for which it is not reimbursed (this includes items for City of Austin until their units and associated ancillary equipment are removed from the West LB structure). Specifically, that means NEPCO must (1) have a contract for all of the items (big or small) it plans to purchase on behalf of West LB as its acquisition agent (Kay please provide such language to Bruce Golden - he has informed me about an SCR LOI out there) and (2) have it in the West LB budget. It would be helpful if CTG could coordinate with NEPCO so that all binding LOIs or contracts be reviewed ahead of time by accounting and finance to ensure off-balance sheet treatment. I will ask my assistant to put together another meeting to further discuss the purchase process and that the current West LB budget truly reflects what NEPCO plans to purchase on behalf of West LB. Thanks, Matt