Message-ID: <26163567.1075858710999.JavaMail.evans@thyme> Date: Fri, 22 Jun 2001 19:18:00 -0700 (PDT) From: aleck.dadson@enron.com To: richard.shapiro@enron.com Subject: Re: Market Opening Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: quoted-printable X-From: Aleck Dadson X-To: Richard Shapiro X-cc: X-bcc: X-Folder: \RSHAPIRO (Non-Privileged)\Shapiro, Richard\canada X-Origin: Shapiro-R X-FileName: RSHAPIRO (Non-Privileged).pst FYI - Paul agreed with my suggestions.=20 ----- Forwarded by Aleck Dadson/TOR/ECT on 06/22/2001 05:27 PM ----- =09Aleck Dadson 06/22/2001 05:03 PM =09 To: Rob Milnthorp/ENRON@enronXgate= @ENRON cc: Garrett Tripp/TOR/ECT@ECT@ENRON, Paul Devries/TOR/ECT@ECT@ENRON= Subject: Re: Market Opening =09 =09 With respect to point 1 in your memo, my sense is that the counterparty wo= uld have to be either OPG or OEFC. In my view, the concept would not/could= not go forward and be implemented unless it had the support of OPG. The = question we should talk through is how do we best try to get that support = from OPG. =09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09= =09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09With respect to point= 2, I think we should be careful about being too encouraged by Wilson's /P= urchase's comments to Lay/Lavorato on June 19 that if positive reports are= delivered by the IMO and OEB in September, the gov't will be hard pressed= not to move forward. My concern is that Wilson and Purchase may feel comf= ortable saying this precisely because they are expecting a negative report = from the OEB (or at least one that they can interpret as being negative). I= agree with you that the likelihood of the IMO delivering a positive report= is very good. The likelihood of a positive report from the OEB is far less= certain. The key issues at the OEB/retail level are EBT, LDC access to th= e data they need from HydroOne, completion of LDC CIS systems, the gov't's= interest in an industry resolution of customer duplications prior to mark= et opening in order to avoid mass confusion in the initial period of the ma= rket, the state of customer education, and a contingency plan to accommoda= te those who are not ready. =09=09=09=09=09=09=09=09=09=09=09=09=09=09=09= =09=09=09=09=09=09=09=09=09=09=09=09=09=09=09- with respect to EBT, I think= the best we can do is get onside quickly with our EBT hub of choice and = work with them on perceived difficulties =09=09with LDCs, etc. Ellis, Marr= yott and I are going to make a recommendation to Paul next week on our pref= erred EBT hub. =09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09= =09=09=09=09=09-with respect to the info from HydroOne, I have already rai= sed this issue with the OEB and the IMO. The OEB and the IMO subsequently m= et with =09=09HydroOne and the MEA in an effort to resolve this issue. My = understanding, until yesterday's discussion with Conway, was that the issue= was resolved =09and the information was now flowing to the LDCs. Paul, Gar= rett and I are meeting senior HydroOne execs (including Rod Taylor) on Mon= day re =09=09resource adequacy issues and we can press this with them a= s well. =09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09= =09=09=09=09=09=09=09=09- with respect to the CIS issue, there is not much = we can do since most LDCs already have a CIS vendor; but my understanding = is that at least =09=09one CIS vendor has backed out of its commitments to = a number of LDCs recently (per David MacFadden) and perhaps we can get a ve= ndor =09=09to move in quickly to fill that gap. I will raise this with Marr= yott to see what may be feasible at this stage. =09=09=09=09=09=09=09=09=09= =09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09- with respect to the cu= stomer duplication issue, I have already met with the senior people at Dire= ct (last week) to discuss this issue with them and to =09propose a resolut= ion that would see the retailers involved retaining a third party (such as= E&Y) to assess the degree of overlap and whether =09=09there was an accep= table solution to any problem. Direct is convinced that the degree of dupli= cation is not high. Direct is talking to Onsource =09=09and Toronto about = this. =09I am checking with our staff in the UK about whether there was a s= imilar issue when the UK market opened and, if so, how it was =09resolved. = . =09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09= =09=09=09=09=09=09=09=09=09=09=09=09=09-with respect to customer education,= I and Dick Perdue (Direct's advisor) have contacted TransAlta, OPG, HydroO= ne, Onsource, Enersource, =09=09and Toronto about funding a Province- wide= consumer education initiative over the summer. We are meeting next week t= o discuss this idea =09=09 further. This could require a financial commitm= ent from Enron of up to $200,000. =09=09=09=09=09=09=09=09=09=09=09=09=09= =09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09- with respect to the conti= ngency plan to deal with those LDCs who are not ready, the OEB is already o= n side in recognizing the need for a contingency =09plan - it will likely b= e very simple: the IMO would send a bill to the LDC each month and the LDC= would bill customers at some fixed rate, with a deferral =09account). The = key issue will be how many LDCs (in terms of numbers and size) are not re= ady and what is the minimum number of LDCs that =09=09the OEB/gov't is look= ing for to be ready. This is an issue we will have to talk to the MEST abou= t as well as the OEB=09, since ultimately the =09=09=09decision of whether = enough LDCs are ready will be a political one.=09=09=09=09=09=09=09=09=09= =09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09These are the O= EB/retail focussed things we are doing. On the larger political front, I = have several ideas about some things I would like to do that I can discus= s with you and Paul. =09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09= =09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09=09= =09=09=09=09=09=09=09=09=09 =09Rob Milnthorp/ENRON@enronXgate 06/22/2001 11:13 AM =09 To: Paul Devrie= s/TOR/ECT@ECT, Garrett Tripp/TOR/ECT@ECT cc: Aleck Dadson/TOR/ECT@ECT Sub= ject: Market Opening=09 Garrett/Paul - Can you guys work with the North East desk to price out a 50= 0MW option at the New York/Ontario intertie as an insurance policy for the = Ontario government re market opening. You will recall that this was somethi= ng we had suggested a while back and didnt receive much support. However, f= ollowing Lavorato's meeting with Harris, Lavo is adamant that we send a ter= m sheet to Harris directly outlining both an call option structure and a sw= ap structure.=20 Second, it is quite apparant to me that everything hinges on the September = readiness report. If its favorable, I think there is a good chance of a fal= l market opening. With that said however, we are in the hands of the IMO an= d the OEB. I'm comfortable that we can continue to influence the IMO to pro= duce a favorable announcement but I dont know what we can do to ensure that= the OEB says its ready. Any suggestions, comments? I dont want to be in a = position that one LDC could halt market opening.=20 Regards Rob