Message-ID: <353528.1075851982970.JavaMail.evans@thyme>
Date: Fri, 15 Jun 2001 08:05:00 -0700 (PDT)
From: aleck.dadson@enron.com
To: richard.shapiro@enron.com
Subject: RE: Lay/Harris Meeting
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FYI
----- Forwarded by Aleck Dadson/TOR/ECT on 06/15/2001 03:15 PM -----

	Aleck Dadson
	06/15/2001 03:05 PM
		
		 To: Rob Milnthorp/ENRON@enronXgate@ENRON
		 cc: Paul Devries/TOR/ECT@ECT
		 Subject: RE: Lay/Harris Meeting

Rob, just to reiterate one point Paul and I were  trying to make on   our 
conference call  - We both  think it would be a  mistake to delete from the 
discussion with Harris et al  our views regarding prices and resource 
adequacy.  The biggest political  fear of the gov't going forward is that 
consumers will see a big jump in prices once the market opens.  For 
instance,  that fear underlies  the suggestion that  market opening should 
await the return to service of the first Pickering A unit.  - the idea (right 
or wrong)  is that Pickering will provide  greater reliability and price 
stability. The biggest fear  of the  government - based on our discussions 
with the politicians and their advisors  - is  the prospect of headlines in 
the Toronto Star et al about high prices in the IMO markets, whether or not a 
rebate is ultimately payable down the road. They saw the problems that  high 
prices posed for Klein earlier this year and are fearful of being caught in 
the same position. The Harris gov't is far more vulnerable than Klein  ever 
was.   We are concerned that it  is not an adequate answer to the gov't's 
political concerns  to say that high prices will simply increase the cashflow 
to the government's own coffers (via OPG) to be redistributed at some later 
date to  Ontario electricity consumers.  Remember that, in any event,  the 
MPMA rebate is calculated on the basis of annual revenues and that estimates 
are that consumers may not see an MPMA  payout until six months after the end 
of the year.  Our own extensive analysis and our own forward curves for 
Ontario indicate that significant price increases  (compared to the new OPG 
bulk power rate of $48 MWh ) are unlikely.  This is a reassuring assessment 
and we think it is important to share that view with gov't.   We can't rely 
entirely on the existence of the mitigants; we have to address the underlying 
concern about price spikes and high prices.  We think we have a good story to 
tell in that regard.  Pleased to talk about this further.  Aleck



	Rob Milnthorp/ENRON@enronXgate
	06/15/2001 10:16 AM
		 
		 To: Aleck Dadson/TOR/ECT@ECT
		 cc: Paul Devries/TOR/ECT@ECT
		 Subject: RE: Lay/Harris Meeting


Aleck/Paul - the attached looks good - much tighter message.
 -----Original Message-----
From:  Dadson, Aleck  
Sent: Friday, June 15, 2001 7:39 AM
To: Milnthorp, Rob
Cc: Devries, Paul
Subject: Lay/Harris Meeting

Made your changes to the draft .   The EOL figures had come from EOL in 
Houston.   Will have the Texas generation additions in MWs later today. 
Lindsey has sent the revised speaking points and agenda to John 
Lavorato/Kimberley Hillis. << File: Lay-Harris Agenda.doc >>  << File: 
Outline of speaking point clean - r.doc >>