Message-ID: <19788240.1075859515857.JavaMail.evans@thyme>
Date: Wed, 9 Feb 2000 07:58:00 -0800 (PST)
From: elizabeth.sager@enron.com
To: wanda.curry@enron.com
Subject: Possible Capacity and Energy sale to Duke - Preliminary, Outdated
 Term Sheet
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X-From: Elizabeth Sager
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As promised, here is rough idea of deal.  Terms have changed since this was 
prepared.   I will keep you informed as the deal progresses.
Thanks
Elizabeth
36349
---------------------- Forwarded by Elizabeth Sager/HOU/ECT on 02/09/2000 
03:54 PM ---------------------------


Mike Curry
02/08/2000 12:30 PM
To: David Portz/HOU/ECT@ECT, Elizabeth Sager/HOU/ECT@ECT
cc:  
Subject: Duke Info

David,  Sorry I had to jump off our conversation earlier, I had a guy on the 
other line that I having been trying to catch for a while.   I will meet you 
up at Elizabeth's office  at 3:30pm to talk.  Attached is the e-mail proposal 
I recently sent Duke.  Other verbal understandings that have been exchanged 
are:

1.  Duke would be allowed 50 starts per year (June through May each year).  
Each start after 50/yr will have a $1500 per start charge.
2.  Duke gets 1 start per day

Duke has asked for Force Majeure and Availability language, so I guess we 
need to write up a standard PPA contract with all the standard language to 
provide them.  Kevin Presto has provided me the following information on how 
we want to proceed with the Availability issue:

Monthly Availability Calc. = MWHs delivered by Seller(in Month) / MWHs 
Scheduled by Buyer (in Month)

Base Payment = 100% of Demand Payment (Availability = 93% to 95%)

Penalty Payment = 1% bonus for every 1% Availability above 95%
Bonus Payment = 1% penalty for every 1% Availability below 93%

Note: Force Majeure is excluded from Availability Calc. if < 90 days

Thanks for your assistance.  Give me a call if you have any questions, - Mike 
x3-4258

---------------------- Forwarded by Mike Curry/HOU/ECT on 02/08/2000 12:02 PM 
---------------------------


Mike Curry
02/02/2000 04:05 PM
To: dbjohnso@duke-energy.com
cc:  
Subject: Enron Capacity - 3 yr. proposal

Dave,  Here is an indicative three year proposal for your consideration:

Seller:   Enron Power Marketing Inc.

Buyer:   Duke Power

Commodity:  Capacity and Energy - Unit Contingent

Term:   Jun'00 through May'03 (three years)

Quantity:  120 MW (two New Albany units)

Capacity Source: ENNA - New Albany Plant (in TVA)

Delivery Point:  TVA / Duke Interface

Energy Price:  $/MWh = 12.8 * Gas Price($/MMBtu) + $2.00/MWh + 3% 
transmission losses through TVA
   Gas Price = Gas Daily, Lousianna Onshore South, Columbia, Midpoint 
           plus $0.08, plus 3% fuel
   
Demand Charge: $9.47 / KW-Month for each calendar month of term

Scheduling:  max. run 900 hrs/yr, min. take 4 hrs, 1 hr notification

Transmission:  Enron is responsible for any transmission charges (not 
including losses)

Conditions Precedent: Enron being able to acquire TVA-Duke PTP firm monthly 
transmission for term 

The prices in this proposal are subject to change until a final agreement is 
reached.  This proposal is for discussion purposes only to facilitate the 
negotiation, preparation, and execution of definitive agreements. This is not 
an offer or commitment of Seller or any of its affiliates to enter into any 
transaction. The transaction described herein is subject to further review 
and approval of the Board of Directors of Seller and Buyer, and execution of 
definitive agreements containing all appropriate provisions, including those 
related to credit and limitation of damages and remedies.