Message-ID: <25892056.1075858502646.JavaMail.evans@thyme>
Date: Sun, 23 Sep 2001 10:44:00 -0700 (PDT)
From: chris.stokley@enron.com
To: jrichter@nwlink.com
Subject: SELF PROVISION FOR A/S
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Jeff,
	Here is a first cut of some of the questions that  need to be answered by the generator that is offering this service. I will have more as I dig into the detail this    	week.

			1) Non performance by counterparty (don't deliver energy when called) :
                                                       - Who is going to be held financially responsible if the generator is unable to meet the ISO instructions to Inc or Dec gen? 
			2)  Is the generator located in the grid or out of the grid?
			        - This is important to know so that we can evaluate our control area risk.
                                                3)   Has the generator registered and been certified by the ISO to deliver all of the A/s Products(Regulation,Spin, Non-Spin and Replacement)
			        - Need to know the specific unit ID's of the performing units so that we can verify w/ the ISO.
                                                4)   Are we paying the Generator based on what we bid in to the ISO or on what the ISO actually grants to EPMI. 
			5)   Are we paying the Generator a fixed price on Capacity and Energy or just passing through what the ISO pays EPMI minus losses for energy.
			   




		Other risks that we need to take look at as EPMI
			1)   Will the revenue stream coming in from the A/S payments put EPMI at risk of becoming a Creditor to the ISO instead of a Debtor.
			2)   EPMI reputation w/ the ISO if the Generator has perpetual non-performance issues. This could impact all of our A/S business if the ISO feels 
			       that EPMI is not able to meet its A/S obligation to the ISO on a consistent basis.
			3)   Need to make sure that they have language in the contract that covers EPMI and EES if we loss a dispute to the ISO. 
                                                4)   Risk to EPMI if the generator fails to deliver energy and the ISO takes back all capacity payment back to the last time in which EPMI
			       performed on an energy call. I think this is based on the entire EPMI portfolio not just for a specific unit. I will need to check on this item
			        Monday.
		



		Chris