Message-ID: <31157084.1075851967611.JavaMail.evans@thyme> Date: Tue, 12 Jun 2001 08:30:00 -0700 (PDT) From: aleck.dadson@enron.com To: richard.shapiro@enron.com Subject: RE: IMO Meeting Highlights Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Aleck Dadson X-To: Richard Shapiro X-cc: X-bcc: X-Folder: \Richard_Shapiro_Nov2001\Notes Folders\All documents X-Origin: SHAPIRO-R X-FileName: rshapiro.nsf FYI ----- Forwarded by Aleck Dadson/TOR/ECT on 06/12/2001 03:39 PM ----- Aleck Dadson 06/12/2001 03:29 PM To: Rob Milnthorp/ENRON@enronXgate@ENRON cc: Paul Devries/TOR/ECT@ECT@ENRON Subject: RE: IMO Meeting Highlights Rob, further to your two e-mails regarding the discouraging sentiments expressed at the IMO Board meeting, Garrett and I had a very productive meeting with Tony Dean, the Assistant Deputy Minister and Assistant Secretary of Cabinetand his colleague, Frank Denton, Director, Economic Policy in the Cabinet Office. Dean was identified by Bill Hawkins as a key voice on the electricity file. He is someone I have been trying to see for two months. He was very impressed by Garrett's presentation. His comments were as follows: a) the mood in gov't is changing; b) the political environment several months ago (California, high gas prices, and complaining industrials) made it very difficult for the gov't to be making a decision at that time to move forward with market opening; c) Enron's message has been getting through" very effectively" (his words) ; and d) the political environment has moderated considerably: the differences from California are understood, gas prices have come off, and Pickering is evidently on track. He emphasized that the gov't's announcement on April 23 was "by" May 2002. Rob Milnthorp/ENRON@enronXgate 06/11/2001 12:43 PM To: Aleck Dadson/TOR/ECT@ECT cc: Paul Devries/TOR/ECT@ECT Subject: RE: IMO Meeting Highlights Aleck, re OPG and Pickering - too complicated of a message re Harris meeting. As per Lavo, he wants 5 simple/straightforward and concise messages that we can get accross to Harris. It needs to be short, to the point, concise, and simple. By cc to Paul, Lavo is looking for our first draft TODAY (you and Aleck need to agree on the speaking points - I provided you with my comments already). One further Item re the IMO Meeting that I didnt have time to communcicate to you - At one point in the meeting Guolding stated that if one industrial or one muni is not ready - the market will not open. I lost my mind, and told him that if that is the case, I need to resign as this is a complete waste of time and the market will never open if our CEO is telling the marketplace that one rinky-dink muni can hold the entire market opening hostage. Without doubt, it was the most frustrating/disappointing statement I've seen Guolding/Baillie make - I'm sure Houghton was basking in all his glory after that. I almost want to write a letter specific to guoulding and cc'd to Baillie underlining who ridiculous a position this is for the CEO of the IMO to be taking. -----Original Message----- From: Dadson, Aleck Sent: Friday, June 08, 2001 11:32 AM To: Milnthorp, Rob Cc: Devries, Paul; Hemstock, Robert Subject: Re: IMO Meeting Highlights This message came back to me (too big) - I am resending and will send garrett's paper separately. __________________ Rob, thanks for the comments from the IMO Board meeting. Three points: a) I am not sure what paper the IMO Board members may be referring to. It could be the briefing note re Moving Forward to Market Opening, the briefing note Satisfying the Government's Four Guiding Principles, or the piece on resource adequacy and pricing that Garrett Tripp prepared and that he and I have been delivering to senior people in the government and elsewhere. I attach those three papers in electronic format. b) The briefing notes above (and the material we are preparing for Ken Lay and John Lavorato) address the Pickering A point. The suggestion that market opening is tied to Pickering A doesn't surprise me but is at odds with what Judy Hubert has been telling stakeholders recently. In any event, it is commonly thought that the government may think that Pickering A will improve reliability and stabilize prices. There may, in fact, be another reason. One of our contacts in the Premier's Office has indicated that Farlinger had told Harris that waiting until the return of Pickering was important from the perspective of OPG's financial position. On reflection, Garrett Tripp and I think that the concern likely relates to OPG's obligations under the MPMA - the concern may be a) that OPG may not be able to claim "force majeure" in respect of the Pickering A delay in order to reduce their rebate obligations ( definition of "force majeure" in sec. 2(c) may not be broad enough) or b) that, even if OPG can claim "force majeure", the predetermined "force majeure replacement cost" fixed at the time the MPMA was completed in 1999 may be too low to offset the cost to OPG of securing replacement power in 2001-2002. In other words, OPG is asking the government to intervene in market development/market opening to protect OPG from the terms of the deal (maybe, from OPG's perspective, now a "bad deal") that OPG made in 1999. We should discuss whether Lay and Lavorato can make this point to Harris (without compromising our source). c) With respect to Foward Markets , I think we have to distinguish between a binding hour ahead and day ahead market which we may want to have the IMO run (assuming that this will facilitate and standardize trading among the Northeast ISOs - which is a key objective in the East), but anything beyond that they should stay away from. I will speak to Rob Hemstock and to the folks in Houston who have been working so hard on the RTO development in the Northeast. Did any material get circulated as to what they want to do re forward markets? In any event, I think we should have a demo of Enron Online in Toronto for the IMO Board and OEB. ` << File: Market Opening Doc. feb 26 .doc >> << File: Satisfying the Government's Four Guiding Principles.doc >> Rob Milnthorp/ENRON@enronXgate 06/08/2001 12:11 PM To: Aleck Dadson/TOR/ECT@ECT, Paul Devries/TOR/ECT@ECT cc: Robert Hemstock/ENRON@enronXgate Subject: IMO Meeting Highlights Some Brief Highlights from the 06/07/01 IMO Meeting: - Market opening, without question, is now tied to the bringing back of the 1st pickering unit. Govt is clearly not thinking november but the good news is that they have made some statements locking them into may/02. We should have our own intelligence re Pickering return but Boland told me that March was highly probable. - A number of positive comments re Aleck's paper from board members - Aleck I'm not sure which paper they are referring to - can i get a copy. - Forward Market development - IMO "wants to make this happen". Assessing two candidates. I told the IMO that this is not their mandate and that a conditional forward market exists currently and an unconditional forward market will exist when we have a unconditional market opening date. I talked re Alberta and indicated that the Alberta sponsored forward market was a joke (WattEx) and that Enron and others had done 100's of forward market transactions and the Enron has a visible forward market 24/7. ACTION - We need to develop a position paper on why this should be left to the market place and not some regulated central agency. The IMO should be concerned with creating the right environment to promote an efficient forward market (ie information disclosure, etc). OPG would support this position - we may want to co-author the paper. I believe Hemstock/Davies did some work on this already re Alberta. Let's discuss further.