Message-ID: <30030595.1075859577976.JavaMail.evans@thyme> Date: Thu, 28 Dec 2000 06:56:00 -0800 (PST) From: elizabeth.sager@enron.com To: christian.yoder@enron.com, tim.belden@enron.com Subject: Re:EPMI/EES letter EES's comments Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Elizabeth Sager X-To: Christian Yoder, Tim Belden X-cc: X-bcc: X-Folder: \Elizabeth_Sager_Jun2001\Notes Folders\All documents X-Origin: Sager-E X-FileName: esager.nsf CY please work through w Tim thanks ----- Forwarded by Elizabeth Sager/HOU/ECT on 12/28/2000 02:54 PM ----- Vicki Sharp@EES 12/28/2000 02:48 PM To: "JOHN G KLAUBERG" <JKLAUBER@LLGM.COM> @ ENRON, Wanda Curry/HOU/EES@EES, Don Black/HOU/EES@EES, Marty Sunde/HOU/EES@EES, Kevin Hughes/HOU/EES@EES cc: <Elizabeth.Sager@enron.com>@ENRON, <Mike_D_Smith@enron.com>@ENRON, <vsharp@enron.com>@ENRON, "MICHAEL W E DIDRIKSEN" <MDIDRIKSEN@LLGM.COM>@ENRON Subject: Re: Draft Letter In the interest of time, I am forwarding the attached contract to Kevin Hughes, Wanda Curry, Don Black, Ron Adzegary, and Marty Sunde. Please read the attached and confirm that this is your understanding of the PGET/EPMI/ EEMC assignment. I am also at this time forwarding to the working group my four main points, which I think reflect my main areas of concern under the drafts: 1. I would like to say that the price is the same under the transactions. Transaction costs should be dealt with separately. 2. While we have agreed to take a pass through of the bankruptcy risk, this draft provides that we take on all contract dispute risk. As I understand it, EPMI intends to pass through all risk, such as change in delivery point risk, under the contract. Since EPMI is our sole provider of power to EES (other than the PGET contract), EPMI is in the best position to manage general contract risk with its counterparties, as it does today with all our physical electricity purchases. EPMI may have disputes under contracts for many reasons that EEMC is not aware of and will not be in a position to influence once the contracts are assigned to Avista. 3. I assume if EPMI trades out of these positions as it manages its own portfolio, the credit risk would not follow to subsequent counterparties and the EPMI/EES confirm terms would revert to typical confirm language. 4. I was operating under the assumption that the tax issue would be resolved with Steve Douglass prior to signing the main documents. I am not sure whether this issue can be quantified by EES tax today. Any suggestions or ability to resolve/quantify today? Same concern for the accounting issues. My concern here is that if the transaction leaves us in a worse economic position as a result of making EPMI whole, this would need to be addressed with our business people. Elizabeth and JOhn, what are the next steps. "JOHN G KLAUBERG" <JKLAUBER@LLGM.COM> on 12/28/2000 12:08:34 PM To: <Elizabeth.Sager@enron.com>, <Mike_D_Smith@enron.com>, <vsharp@enron.com> cc: "MICHAEL W E DIDRIKSEN" <MDIDRIKSEN@LLGM.COM> Subject: Draft Letter PRIVILEGED AND CONFIDENTIAL:ATTORNEY WORK PRODUCT As requested, attached is a draft of an internal letter between EEMC and EPMI relating to the PG&E transaction. I will touch base to review the issues associated with it. John "This e-mail, including attachments, contains information that is confidential and it may be protected by the attorney/client or other privileges. This e-mail, including attachments, constitutes non-public information intended to be conveyed only to the designated recipient(s). If you are not an intended recipient, please delete this e-mail, including attachments and notify me by return mail, e-mail or by phone at 212 424-8125. The unauthorized use, dissemination, distribution or reproduction of the e-mail, including attachments, is prohibited and may be unlawful. John Klauberg LeBoeuf, Lamb, Greene & MacRae, L.L.P. 212 424-8125 jklauber@llgm.com - EEMC-EPMI.doc