Subject: ISU/IP Discussions
From: [email-masked]
To: [email-masked], [email-masked]
Cc: [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked]
Date: Mon, 9 Jul 2001 15:40:00 -0700 (PDT)

Eric and Tim -- I spoke with IP last week (Kathy Patton and Joe Lakshmanan)and their position is that the word "parallel" in the Terms and Conditions refers to load, not generation, thus if any load is capable of being served by either self-gen or utility resources, standby charges will be imposed -- retroactively, and for five years.  I left the discussion with a commitment that Enron would look into how the load was configured.  The attached draft letter solicits that, and other, info from ISU.  I think that we have to consider that ISU's ability to run its self-gen units without paying standby charges was a courtesy IP would only extend to the customer, not Enron.  It is not believebale that only now IP learned how the University uses its self-gen units -- this was probably a "wink-and-nod" arrangement between the two before Enron came into the picture.  
	This raises some possibilities: 1) ISU pays for any standby charges related to the units' use;  2) ISU reconfigures,at its cost, each unit so that each one is the sole source for the respective load being served; or, 3) there was a mutual mistake between Enron and ISU regarding the use of the units in question that is so fundamental to the deal that it needs to be unwound.  This is a dispute for which ISU was at risk regardless of which non-utility entity was providing commodity service.
	In any event, I have attached a draft letter to the University that, after necessary changes, I believe should go out over you signature TIm.  Please look it over at your earliest convenience and let me know what steps you would like me to take next.  Thanks.