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NGI's Daily Gas Price Index published : October 29, 2001 ALJ Clears Transwestern of Market Power Charges A FERC administrative law judge has found no improprieties, nor evidence of the exercise of market power in negotiated rate contracts between Transwestern Pipeline and two shippers on its system, which resulted in the shippers being charged as much as $27/MMBtu last February, far in excess of the pipeline's allowed transportation rate of 38 cents/MMBtu (RP97-288-009).
ALJ Jacob Leventhal had only one fault to find, and that was with Transwestern's method of posting capacity.
The judge said, and Transwestern agreed, to modify its tariff "so that all posting, bidding and award procedures are set forth in a separate provision with an appropriate caption" on its Internet bulletin board.
Shippers had said that reviewing capacity on the Transwestern web site was "a tortuous process."
Indicated Shippers claimed Transwestern's inadequate capacity posting and award procedures did not provide all interested parties with an opportunity to bid for the capacity that was available.
While "both Indicated Shippers and (FERC) Staff find it curious that SET (Sempra Energy Trading) and Richardson (Products Co.) were the sole bidders on the contracts awarded to each of them...curiosity does not translate into proof," the judge said.
Witnesses in the expedited hearing testified no bids were considered in advance of the capacity posting.
The judge subsequently found the capacity was awarded in a manner consistent with Transwestern's tariff.
Similarly, Levanthal could find no evidence that Transwestern exercised market power in negotiating the rates with shippers or withholding or threatening to withhold capacity.
The capacity was available at recourse rates, and the shippers knew those rates were available.
"Staff's arguments really are criticisms of the posting and award procedures, but do not demonstrate the exercise of market power."
The two shippers said they made a business decision to propose the "index-to-index" formula that produced the higher rates, rather than take the recourse rate "to minimize any risk on transportation options."
The index-to-index formula refers to taking the difference between the daily published commodity prices at two different points and subtracting to get the transportation rate between them.
In this case the two points were the San Juan Basin and the SoCal Needles delivery point.
The case was set for expedited hearing last summer by the commissioners acting on staff recommendations.
| NGI Article on TW Ruling |
Here is another matrix of TW "Current Shipper" rates & surcharges.
This one is not posted on the web.
I don't know whether anyone needs/uses it, anymore, but I have been keeping it up.
There is a new tab for each change in Current Shipper Rates.
The latest is "200111" Elizabeth - I forgot to send this to you this morning.
Jeanette - I don't recall whether I sent this along with the other TW files.
| FYI 11/2001 TW Rate Matrix - same rates, different format |
We'll do the regularly scheduled update next week 11/5 when we will hopefully have more market feedback.
Right now we are still working to secure market commitment and design rate structures that meet their needs and Enron's hurdle rates.
Please call me if you have questions.
kh
| postponed Sun Devil update for Monday 10/29 |
Jean - Thanks for the new computer.
They installed it the middle of last week.
Initially, it was great and a little faster but today is another day and the print function is incredibly slow.
Anything you can do?
Lorraine
| New Computer |
The Auto Exam link under the Auto Center Tab of our Web Portal, has been brought down due to a misdirected link displaying adult content.
Enron IT and Digital Insight are looking into the problem and will bring the link back up when it has been rerouted to the appropriate site.
Thanks,
| Web Portal Link Down |
Kim: I was hoping to catch up with you after Stan's meeting to discuss TW financing arrangements.
Their is still a very good possibility that TW could be added to the Cpt.
11 companies sometime in early Jan. (the Revolving Credit Agreement would be paid off as part of that process).
Two things to remember on new projects - (i) likelihood of TW cash for equity in deal is very low and (ii) If TW is put into Cpt.
11, the implications of its credit on the other counterparties.
If we can find other people's money and structure around the TW credit risk, we have a better chance (but still will be extremely tough).
As you heard this morning, cash is at a very high premium right now (especially with Red Rock expansion).
Thanks,
| Financing Arrangements |
Greg and I are available to meet between 2 and 3:30 today, does that work for you?
Because, after that we want to follow-up with SoCalGas to let them know our timing and where were at given our commitment at last week's meeting.
thanks, Maria
| SoCal billing issue/capacity |
Per our conference call today, here are some ideas to get TW Settlement Value.
1.
SoCal to commit to TW to let us schedule transport at the SoCal/Topock (South Needles) delivery point.
2.
SoCal to turnback 20,000 to 25,000/d of receipt capacity from the WTX Pool, at no cost to TW (SoCal continues to pay for it).
3.
TW has been scheduling PG&E's payback to SoCal at SoCal/Topock to help PG&E and SoCal.
SoCal to schedule this as transport from PG&E/Topock (as a RP) to SoCal/Topock (DP) and pay TW transport fee.
4.
SoCal to agree (in writing) to dedicate to TW the incremental 50,000/d at Needles becoming available Jan, 2002 until Red Rock Expansion in-service.
5.
SoCal to amend their OBA to dollar-valued (from volumetric) and cash-out their existing OBA with TW (at TW's index value).
6.
SoCal to sell storage to TW.
7.
SoCal to purchase incremental Thoreau to West of Thoreau capacity from TW.
8.
Extension of SoCal's mainline &/or San Juan lateral contracts.
Or early notice of termination or early notice of ROFR trigger (so that we would have the opportunity to remarket it).
| SoCal Ideas for Settlement Value |
When: Monday, August 06, 2001 9:00 AM-9:30 AM (GMT-06:00) Central Time (US & Canada).
Where: EB 3671 *~*~*~*~*~*~*~*~*~* Konstantin G. Aslanidi is confirmed for an in person Interview on Friday August 10,2001.
Konstantin is coming in to interview for job #107855 SPEC SR HR.
Attached below you will find his resume attached for your review.
Thank you,
| In person Interview - Konstantin G. Aslanidi - Friday August 10,2001 |
Per our conversation yesterday on TW fuel sales, below are the general criteria I use in formulating my market view.
Please note that these are listed in order of importance.
1.
Continuation Charts: Looks like the recent move to 2.450 completed the -B- Wave down and we are currently in the -C- wave up of this larger -A- up; -B- down; and -C- up move.
Specifically, within this -C- wave up:
| Technical Market View |
Hi, I know everyone is doing their best, and it is appreciated, but: How can The Association continue to justify asking residents to pay the same fees month after month after month while simultaneously failing month after month after month to provide all the services we pay for?
I'm curious: has the board has addressed the possibility of reducing fees commensurate with services provided?
If they did and (obviously) decided to keep things the same, I'd appreciate a glimpse into the "why" of that decision.
Just wondering aloud after another one-elevator-day.
I would greatly appreciate an official response from the board by email.
Thank you very much for time, Mike Mancini 1103 (of course, I am well aware we received a month free, which works pretty well considering the building was unlivable most of that month.
I am aware, too, of water damage checks for, yes, damage.
I'm not aware of anything in the works, however, to reasonably address the last many months of poor service, nor the predicted next 6-12 months of the same...
I most certainly welcome enlightenment if I am missing something simple---really!)
| You know, I've been wondering.... |
FYI, Here is the 2002 schedule for the Outage Commercial Review Meeting.
Note the new locations and the new conference code number.
These dates have been set, but are subject to change.
If you have any questions please give me a call.
| Outage Commercial Review Schedule (2002) |
When: Friday, August 10, 2001 9:00 AM-9:30 AM (GMT-06:00) Central Time (US & Canada).
Where: EB 3671 *~*~*~*~*~*~*~*~*~* Konstantin G. Aslanidi is confirmed for an in person Interview on Friday August 10,2001.
Konstantin is coming in to interview for job #107855 SPEC SR HR.
Attached below you will find his resume attached for your review.
Thank you,
| Updated: In person Interview - Konstantin G. Aslanidi - Friday August 10,2001 |
This is just a Reminder!!!!
August 8th - Four Seasons Hotel Downtown 1300 Lamar Street (we will be located in the Conroe Room) Breakfast will be served at 7:15 AM and we will begin promptly at 8:00AM.
Once again we encourage you to dress casually, but keep in mind the Hotel Room may be Cold!!!
Maps to the Secret Social will be handed out following the afternoon brainstorming event!!!
We look forward to seeing YOU there!!
!
| TEAM BUILDER |
The following volumes are capacities west of Station 1 that will result fro= m tie-in construction work slated for the Red Rock expansion.
Tie-in assem= blies will be required on both the Mainline and Loopline at stations 1, 2, = and 3.
New block and side valve assemblies for new compressor and scrubber= s will be installed on the suction side main and loop lines at each station= .
The tie-in will entail blocking (isolating) a line segment within the st= ation yard on the suction side (each line done separately) thus creating a = dead leg back to the next upstream block valve crossover(s).
Hence, all of= the flow will be forced into a single line when making tie-in on the adjac= ent pipeline line.
The result of forcing all volumes into a single line wi= ll produce greater pressure losses in the operating segment to the existing= compression and reduce throughput due to lower suction pressure and respec= tive horsepower limitations.
Discharge piping at the station having tie-in= work will be unchanged regarding valving configurations.
Tie-in=09Schedule/Duration=09Capacity=09X-over Status CS 2 ML=09Oct '01 / 4 days=09960 MMcfd=09MLV 3010-open us/ds x-over; open u= s 30" x-over CS 2 LL =09Oct '01 / 2 days=09960 MMcfd=09MLV 3010-open us/ds x-over, open = us 30" x-over CS 1 ML=09Mar '02=09/ 4 days=09990 MMcfd=09MLV 2012 & 2011-open us/ds x-ove= r; open us 30" x-over CS 1 LL=09Mar '02=09/ 2 days=09990 MMcfd=09MLV 2012 & 2011-open us/ds x-ove= r; open us 30" x-over CS 3 ML=09Apr '02=09/ 4 days=091010 MMcfd=09MLV 4012 & 4011-open us/ds x-ov= er; open us 30" x-over CS 3 LL=09Apr '02=09/ 2 days=091010 MMcfd=09MLV 4012 & 4011-open us/ds x-ov= er; open us 30"x-over Notes: 1.=09Specific schedule dates are forthcoming 2.=09Schedules could be impacted by material deliveries and is based upon r= eceipt of construction permits 3.=09Durations consider working around the clock until completed
| TW Capacity Affected for Red Rock Tie-ins |
I have placed the contracted information we discussed in a file called "TW Firm October 1996.XLS" on "S:\MARKETING\TW_FLOW\".
This file has all of the firm contracts, including capacity release contracts, contracted on or after October 1, 1996.
It includes the contracted points and the contracted volume at each point.
I decided to include the capacity release contracts thinking that their rates might show us the market value of the capacity over time.
I can easily remove this data if you don't think it will be helpful.
My next steps, as I understand it, are to 1) extract commodity volume, revenue and rate information from the invoiced data for these contracts; and 2) extract a sample of daily flow information from the scheduling system for these contracts for Sean to review.
Please take a look at this data and let me know if it meets your needs, or if you need additional information.
I'll keep working!
| Status - Firm Contract Data Request |
Steve - In response to your previous questions regarding customers behind SWG.
SWG's largest customers are power plants.
Nevada Power (still owns generation) El Dorado (Reliant and Sempra) Nevada Cogen Assoc.
(NCA1 & 2) (partially owned by Texaco) Saguro Power Plant (NRG partially owns) Las Vegas Cogen (Enron involved?)
Parties who are either planning to build new power plants or are already building power plants in the Southern Nevada area include Mirant Reliant Calpine PG&E APS/Pinnacle West was among the buyers of one of Nevada Power's plants before dereg in NV was postponed.
Please let me know if you need other info.
Lorraine
| Southwest Gas |
PRIVILEGED & CONFIDENTIAL - ATTORNEY/CLIENT COMMUNICATION FROM GREG PORTER We have agreed with SoCalGas and FERC's ADR group lead by Rick Miles, to meet in Chicago on December 4, 2001 to begin mediation.
In anticipation of mediation, over the next month we will be meeting to prepare our mediation presentation and discuss potential settlement scenarios and strategies.
We will have a better sense after the mediation session on December 4th whether SoCalGas is serious about its desire to resolve this proceeding amicably.
SoCalGas' lawyer has represented to me that they are interested in settlement and "prepared at some level" to compromise.
Should you have any questions regarding this matter, please do not hesitate to contact me.
| Message from Greg Porter re: Update on Transwestern Pipeline Company vs SoCalGas FERC Proceeding |
Kim & Frank, I received a call last week from a Brian Laurie with PG&E.
Brian indicated that PG&E was splitting their Pipeline and LDC businesses into two separate units/companies.
Brian was asking about what kind of agreements that NNG has in place dealing with our LDC business.
I'm not sure how much or what kind of information that we feel comfortable in sharing with PG&E on this issue.
Can you give me some insight into what information we may want to share or who may need to discuss this with PG&E.
| PG&E |
Pipe Expansions Planned for Rockies Region With several pipeline companies well into addressing the pipeline capacity shortages that persist as natural gas production grows throughout the Rocky Mountain region, Kinder Morgan Interstate Gas Transmission LLC (KMIGT) announced two major projects Wednesday, and several other companies detailed expansions planned or in the works during the closing session at the 13th Annual Rocky Mountain Natural Gas Strategy Conference.
Headlining the news was KMIGT's plans to use existing rights-of-way to build the Advantage Pipeline, which would fill the same needs as the Colorado Interstate Gas pipe, moving from the Cheyenne Hub to the Mid-Continent.
An open season is scheduled on the proposed pipe this fall.
Dave Scharf, business development director for KMIGT, said the 24-inch pipe, which would move gas primarily from the Powder River Basin, would have a capacity of 330 MMcf/d, delivering to interconnects on its way to the Kansas City markets.
"It would have a smaller size, with about 40% less content," Scharf said, but it would be expandable to 450 MMcf/d, with access to liquid Mid-Continent pipes, local distribution centers and end-use markets.
A smaller pipeline, NECO -- a 12-inch pipe, about 95 miles long -- would serve the northeastern Colorado market.
Although small, Scharf emphasized that it would reduce some of the bottlenecks now evident in moving gas in that part of the state, and would also allow backhauls to Cheyenne.
An open season on this line is also scheduled this fall, Scharf said.
| Kinder Morgan Makes Some Expansion Announcements for Rockies |
As many of you know, the Outlook mail retention rules have been turned on at the mail server, and all user mailboxes now follow these rules: Message Location Maximum Retention Inbox 30 days Sent Items Folder 30 days Trash Rollover from Inbox for one day Folders All eMail messages placed in folders will be destroyed after one calendar year But what if you regularly view your Sent Items folder to see your past communications?
Are you stuck to only 30 days now?
In the Sent Items folder, YES.
But, luckily, we are still allowed a full year on all other mail folders, so we can easily create a new folder to store our sent mail in which will allow us to keep it for a full year.
We then create a RULE to automatically move the sent mail to it.
Works great!
Note: This new folder will be included in your mailbox 100mb size limit!
CREATE NEW FOLDER Right-click on the top folder in your folder list and select New Folder Type the name you'd like to give this folder ("Save Sent" for example) Click OK CREATE NEW RULE Close any open messages, calendar items, etc, so just Outlook is open.
Click Tools, then Rules Wizard Click New, then select Check messages after sending Click Next Click Next When prompted ......Is this correct?, click Yes Put a check mark next to move a copy to the specified folder Click the word specified in the lower window Select the new folder you created earlier and click OK Click Finish When prompted, This rule is a client-only rule..... click OK Click OK Now, a copy of all messages you send will be in your new folder for reference for a full year.
Enjoy!
| IT Weekly Tip - Save Those Sent Messages |
When: Friday, November 09, 2001 1:30 PM-2:30 PM (GMT-06:00) Central Time (US & Canada).
Where: 4052 *~*~*~*~*~*~*~*~*~* Note: This presentation will be repeated on Monday 11/12/2001 from 10:30 - 11:30 am.
You will receive that appointment also.
Please accept the time that best fits your schedule.
If you have any questions or need to schedule another time please give me a call.
Bobby Mason
| Pipeline Profile, Dashboard Alerts Testing Presentation |
I will be travelling on 11/12 so here's the update: Sonoran Pipeline - Received offer price from Kinder Morgan to purchase capacity on their project.
Marketing - Panda Energy - Presented capacity offer to Panda on 11/6.
They liked the swing capability, but fuel is an issue.
They will present the offer to their partner TECO.
We expect their counter offer by week end 11/16.
AZ Public Service - Scheduled next meeting for 11/16 in Phoenix.
Working on finishing Pre-pay and SFV rate designs.
El Paso / FERC - No word yet on direction of Full Requirements settlement.
Copper Eagle Gas Storage - No word yet on our submitted bid.
Leave me a voicemail if you have questions.
thanks
| Sun Devil update meeting Monday 11/12 cancelled |
Attached below is a complete copy of the CPUC's Order on SoCal's RLS Tariff for peaking rates for bypass customers.
There are some differences in the final order as opposed to the proposed decision previously issued such as the addition of an interruptible rate.
In summary the Order contains the following provisions: 1.
Two rates were adopted.
A firm cost-based peaking rate and an interruptible peaking rate.
2.
The firm cost-based peaking rate will include the following components: a.
A monthly customer charge to collect the cost of customer-related facilities.
Actual rate will be dependent on type of customer ranging from $800 to $19,000.
b.
A volumetric Public Purpose Program surcharge based on Commission approved rates.
c. A monthly reservation rate calculated using the currently authorized end-use customer class rate times the MDQ.
3.
The interruptible peaking rate has been set at 150% of SoCalGas' default tariff rate at a 100% load factor.
4.
Firm and inter.
customers will pay a volumetric rate to collect the Interstate Transition Cost Surcharge, Sempra-wide rate charge and any other similar types of surcharges.
5.
Other provisions include: customers are subject to daily balancing, interruptible customers are not eligible for Service Interruption Credits and the tariff will apply on a facility-by-facility basis.
SoCal was ordered to submit modified cost-based tariff sheets within 10 days of the order (Due 8/12/01).
If you have any questions feel free to give me a call.
gh
| SoCal RLS Tariff/peaking rates |
FYI, The next Outage Coordination Commercial Review meeting is 11/14/01.
The purpose for the meeting is to discuss outages that have a flow impact for the month of December.
I will send out an outage report later today for your review.
If you have any questions, please give me a call.
| Outage Commericial Review Meeting (NNG,TW, & NBPL) |
A meeting has been scheduled for 3:30 p.m. on Wednesday, November 14 in ECN 1336.
The purpose of the meeting is to discuss ENA's desire to create a WAHA Header using facilities owned by Northern and/or Transwestern.
We will tie Jo in via conference call.
See you tomorrow.
Thanks,
| WAHA Hub Co. |
FYI, The next Outage Coordination Commercial Review meeting is 11/14/01.
The purpose for the meeting is to discuss outages that have a flow impact for the month of December.
Please review the attached outage report.
If you have any questions, please give me a call.
| Outage Commericial Review Meeting (NNG,TW, & NBPL) |
FOOD ASSIGNMENTS: Saturday Breakfast - Sam, Paula Saturday Dinner - Kim, Phyllis Snacks - Judy, Lee Sunday Breakfast - Lisa, Cynthia Paper Products - Amy DIRECTIONS FROM LISA: Hello Everyone- Here are detailed directions to the beach cabin for the Nov. 30 girl's weekend.
Directions to the Polk Beach Cabin: Go south on IH-45.
Take the Harborside Dr. exit when you get to Galveston and turn left under the highway (this is the first exit after crossing the causeway, so be watching for it).
Travel approx.
6 miles on Harborside Dr. to Ferry Rd.
Turn left on Ferry Rd., go to the end, and catch the ferry to Bolivar ( this is a free drive-on ferry operated by the Texas Hwy Dept.).
After exiting the ferry you will be on Bolivar Peninsula Hwy 87.
Travel approximately 11.5 miles to the Emerald II edition (the Crystal Beach water tower is a good land mark when you are getting close and the Emerald II edition is the first road after the post office).
| Food assignments and directions for Girls' Weekend |
Attached is an Excel spreadsheet of contract details of the TW deals we will be evaluating.
There are 430 deals we will evaluate.
The next step is to add price data with these details.
Please let me know if you have any questions.
Richard Riehm
| TW Contract Data |
Good Morning, I am preparing a presentation that includes information about our Board.
Please send me length of time you have served on the board by the end of day tomorrow.
Let me know if you have any questions.
Thanks,
| Personal Information |
USGT has a new rate for contract 27161 starting Novemer 1, 2001 and in effect until changed or March 31, 2003.
East to East gas Flow - $.025 - 1 part rate East to West gas Flow - Index to Index (with a floor of $.0246/MMBtu) - 1 part rate If you have any questions or need more details, please contact me.
Mark
| FYI reminder - new rate in effect for USGT |
The legal description for the proposed Southern Trails interconnect north of the Blanco Hub is Sec.
13, T29N, R11W, San Juan County, NM.
This is on the old NWPL receipt line coming off the 30" Ignacio - Blanco line into the Blanco Hub upstream of the El Paso Blanco measurement.
Bottom line is it's the same place we talked about earlier this week.
Ron Matthews
| Questar Southern Trails Interconnect - San Juan Co., NM |
I have found a ferry that appears to be the shortest/cheapest, but still have more investigating to do.
If you go drive from Palermo down to Messina, you can cross to Villa San Giovanni.
About 200 km.
(2 hrs) There are ferries every 15 minutes.
The cost depends on the size of the car, but is anywhere from 30,000 to 61,000 ITL.
That is 14.00 USD to 28.00 USD.
That would make your drive farther.
You can find the crossing at the narrowest strait between Sicily and the mainland near Reggio di Calabria.
I'm working on hotels now.
Then the cars.
Dee
| Ferry |
Attached for your review and comments is a draft of a request to FERC to extend the period allowed under the Red Rock certificate for the abandonment and replacement of the compressors at Station 4.
My understanding is that we need to request a one year extension as to Station 4 (but not as to the other three compressor stations included in the Red Rock expansion) due to the fact that we haven't fully contracted for all of the capacity authorized by FERC.
Your comments would be appreciated.
Thanks.
| Transwestern Red Rock Expansion |
Bill, Attached is worksheet that provides some comparables of the USGT volumes that flowed west.
In the scheme of things, the volumes in question our not that significant.
Look at the "comparables" page of the excel file.
This missing section should be given to you by Dennis Lee on Monday.
I'm out next week but I should be available by cell phone or my home phone (713)665-4026.
Mark
| response to PUC protest of USGT deal |
Kim Heard about your cat.
Very sorry about it.
I also understand you got a new cat this past weekend.
Great.
Have you picked a name yet?
H
| (no subject) |
Attached is a draft of Transwestern's response to the protest filed by the California Public Utility Commission in Docket No.
RP97-288-017.
Your comments would be greatly appreciated.
I have gotten some additional information from Mark on USGT's use of westward capacity, which I haven't had the opportunity to review or incorporate in the attached draft.
From what Mark has told me, it further supports the statement in our response that USGT has not made significant use of its westward capacity and that the CUPC's claim that Transwestern is being transformed into a pipeline that is dominated by shippers using negotiated rates is greatly exaggerated.
We need to file the response on Wednesday.
Therefore, I would appreciate receiving any comments by noon tomorrow.
Thanks.
| USGT Negotiated Rate Filing/ Response to CPUC Protest |
No meeting today but here's the update.
We had our meeting with AZ Public Service on Friday 11/16.
Here's the highlights: 30 year term is not a deal killer Rates & fuel are high but San Juan gas price helps They like the pressure guarantee They like being able to swing the volume within the day APS has electric line ROW that may include underground ROW going south towards El Paso.
If so, we may be able to use this path to reach Panda and the El Paso system at a reduced cost.
APS will check it out and get back with me.
Next steps: meetings are being set up with Duke, Sempra, and PG&E for the week after Thanksgiving.
El Paso / FERC full requirments debate: A straw man settlement proposal was floated at FERC by one of the FR shippers.
FERC still wants the parties to negotiate a settlement but so far there has been little progress.
| Sun Devil Update no meeting 11/19 or 11/26 |
Attached is a revised, red-lined version of the extension letter.
I believe that I addressed Keith's question to his satisfaction, so I haven't added the additional language that he suggested regarding the timing of the removal of the existing compressor units at Stations 1, 2 and 3.
Please let me know if you have any additional comments.
Thanks.
| Transwestern Red Rock Expansion- FERC Extension Letter |
Regent Energy in Pact to Develop 500 MW Plant Regent Energy recently executed a contract with Millennium Energy Ventures, a private Houston-based venture capital and project development company, to develop an electric plant with 500 MW generating capacity on Regent's Horseshoe Gallup lease in San Juan County, NM.
Regent will own 75% of the project, while MEVCO will own the remaining 25%.
The estimated cost of the project comes in at $250 million.
Under the agreement, MEVCO will manage the permitting, estimated at 6 to 9 months, and construction process, arranging the equity as needed for same.
Regent will be prepared to give up 50% (total) of its 75% net for the financing, netting a 25% interest following the equity/debt financing.
Further terms of the agreement provide that MEVCO will assist Regent in the acquisition of several gas fields in the Four Corners area, San Juan and Rio Ariba Counties of New Mexico, totaling an estimated 90+ Bcf and 20 MMcf/d current production.
This production will be sufficient to power 100 MW of the power plant, with the remaining supply to be aggregated from other San Juan producers.
MEVCO Managing Director Phillip Gennarelli noted, "We are pleased to be involved in this project with Regent.
The addition of more producing properties in the area that we bring Regent, coupled with Regent's Horseshoe Gallup holdings, which are in direct proximity with the existing Four Corners Power Plant and the route of the recently announced Sonoran Pipeline venture of Calpine and Kinder Morgan, will provide an unequaled opportunity for both companies."
Regent President John Ehrman said, "The additional production from producing properties which MEVCO is assisting Regent in purchasing, currently producing some $1.5 million per month in net operating income, coupled with the additional income through power generation helps Regent to maximize the location of our holdings in relation to the proximity of the existing power plant and transmission lines to key electricity markets in Los Angeles and other western markets.
It is a good use of our surface lease, not related to the current proved mineral reserves of the lease."
The producing oil and properties which MEVCO is assisting Regent in purchasing are in Regent's core area of the Four Corners region near Farmington, NM.
Regent will be required to finance the acquisition of the oil and gas proven producing properties under consideration.
Recently, Regent announced that it was in the process of purchasing the interests of all remaining working interest owners in the field, a transaction that is expected to be consummated by the end of the third quarter 2001, giving Regent 100% ownership of the current minerals on the lease.
| New Mexico Power Plant Project |
Lee and Bill, please find attached two SW Gas Proposals from Kim Watson.
Please review for possible signing by Steve Harris on today.
Kim is on vacation but would like for these letters to go out today.
Again, please review and let me know if there are any changes as soon as possible.
Thanks in advance,
| SWGas Proposal |
Attached is a draft of the letter that we propose to send to the CPUC regarding the AL2837 proceeding in which SoCal Gas is proposing changes to its "windowing" criteria.
Your comments would be greatly appreciated.
We need to file this tomorrow, so please communicate any comments to me by the close of business today, if possible.
Thanks.
| SoCal Gas CPUC Proceeding |
Attached is a revised version of TW's response to the CPUC's protest.
This version reflects comments received from Teb, Mary Kay, Greg and Maria.
I apologize that the attachment is not red-lined.
I'm having computer problems and have not been able to generate a red-lined version that accurately tracks the changes.
| Transwestern Response To CPUC Protest/ Docket No. RP97-288-017 |
FYI: PEP is accessible remotely from the web by typing pep.enron.com into the address bar of your browser.
To enter you must have your user id and password.
The PEP Help Desk line is x34777.
Thanks,
| Remote access is available for PEP |
Kim: I'm in Iran.
It's 1pm here.
I'll be calling in at 7:15pm to say hello to the board this eve.
I hope to have more positive news about insurance today.
I'll be working on it during next several hours.
Houshyar
| (no subject) |
Dawn McNeill just called to ask us to dinner this Saturday night.
I told her about your semiannual "girls weekend" and that unless she wanted to fix me up with a date, we'd have to decline.
She said "next time."
FYI.
JW
| Invitation |
Kim: Were you able to find any savings for the 2002 O&M?
I wanted to review with Steve before he left the office tomorrow.
I appreciate you taking a look at this.
Jan Moore X53858
| 2002 O&M |
Attached is the final version of of Transwestern's response to the CPUC's protest in Docket No.
RP97-288-017.
The attachment was filed with FERC last Wednesday.
| TW Response to CPUC Protest |
Mike & Cheryl - We heard yesterday about Cheryl's illness.
You guys have been such special friends to us, we both wanted to know if there was anything we could do to help.
If Cheryl is going to be going down to MD Anderson for treatment, either on an outpatient or inpatient basis, consider this: our house is less than a ten-minute walk from MD Anderson.
We have a spare bedroom and free parking.
If it works out that Mike drops Cheryl off and needs a place to stay, either overnight or periodically during the day, we'll leave a key at the front desk of the Spires and one (or both) of you can base out of our place.
And if you need someone to take care of the menagerie up north, I'm sure we can figure out how to get that done while you're staying down south.
Remember that I make the reverse commute up there every day, and you both have a lot of friends and co-workers that can pitch in to help out.
We think the world of you guys and want to help.
Let us know how we can.
Kim & John
| Checking in... |
Per the conversation in Steve's staff meeting yesterday, I double checked with Property Accounting and they verified that the funds in the amount of $291,861 were released on 11/6.
If there is anything else you need, please let me know.
Thanks!
| Agave I/C |
Per our phone conversation this morning.....
I know you are well aware of these happenings (Southern Trails disappointing CPUC decision and the KMI Sonoran pipeline to California) but I thought these two articles were timely.
Since it sounds like the Southern Trails gas is getting stranded wouldn't it be great if we could give KMI some competion for the new Power Plant being proposed in the four corners area.
Southern Trails might be willing to offload some of the system cheap following the outcome of the CPUC decision.
You may or may not be aware, but TW was working with D. Hawkins at providing operating services of this Souther Trails system for Questar so we have pretty good info.
on the Questar system (or Don does I would guess).
Anyhow, I know the Southern Trails system has to be in close proximity to this proposed power plant.
(If I am driving you nuts with this junk mail Kim, please let me know.)
Southern Trails Disappointed by CPUC Decision; Decision Discourages Development of New Natural Gas Pipeline Capacity SALT LAKE CITY, Aug. 8 /PRNewswire/ -- Officials from Questar Southern Trails
| Southern Trails/Regent Power Plant |
Kim- Listed below are the issues, pretty much as written, in the meeting on the West Texas Leg.
Some are self-explanatory while others are somewhat cryptic.
I will follow up with a list that better defines each issue, and you might have your guys think about each as well.
We'll get back together soon (I'm not sure I can do it this week), and discuss an action plan.
- CS 9 fuel - Atoka Lateral We have both supply and market opportunities within the lateral itself - Turbocharge the Atoka #3 units - Look at Zia pressure obligation on the contract - Agave replacement gas at Atoka #3 - Complete the loop between WT-1 and WT-2 - Coolers to WT-2 - Pecos compressor re-wheel and engine upgrade - 200 300 (WT-2 to Pecos) flow study - Look at Block Valve 16 bi-directional interconnect w/Sid Richardson, and ability flow incremental above 340 on the total system - Look at Keystone into NNG; back to TW south of WT-2 - Check pressure of Stations 6 & 7, and PNM receipts - MAOP restriction on Panhandle leg due to encroachment Let's talk.
Thanks,
| WT Leg Issues |
I have 2 Alamo full size 4 dr/5 passenger cars reserved for you.
We do not have to prepay.
The all-inclusive rate is 1,617250.
ITL (approx 742.00) for the 12 days.
This includes collision and theft insurance, taxes and unlimited mileage.
I think that this is very good.
1 car booked under John Watson and 1 under Dennis Dye.
They are manuals.
The ferry from Palermo to Naples is daily, departing at 800pm, arriving 700am.
It looks as though the vehicles will cost between 111,600 and 134,600 each.
The passengers in a double outside cabin are 96,500 to 111,500. )
I believe, per passenger.
The ferry from Palermo to Livorno departs at 1100pm and arrives the next day about 5pm.
The double outside suite is 240,000.
The coach seat is 120,000.
Each car is 175,000 to 205,000.
I need to verify if the cabin rate includes the passenger fee.
I had found a ferry to Salerno, but it only operates 1 day a week, not the day you need.
I'll get back to you.
Dee
| Italy car and ferry |
Attached is SoCal's filing of their peaking service for bypass customers including the specific rates by customer class.
Given the recent press with the dissatisfaction of the rates by Questar/Southern Trails, I would expect they will protest the Advice Letter filing.
I'll continue to monitor the proceeding and any protests filed.
gh
| RLS/Peaking Rate Tariff |
The ferry companies were not receiving requests yesterday or today due to a bank holiday.
I need your home address and phone number for the request.
You are not committed until I get a reply from them and then fax your credit cards.
Can you also get me the credit card numbers?
I will not use them until I check back with you about final costs.
Thanks.
| ferries |
Kim, By italian maritime law, I must have everyone's passport names and ages.
With the credit card nbrs, I will need exp date and cardholder name, address and phone.
Thanks.
| ferries |
Effective August 16th, 2001, the ETS Deal Capture Team will help process all firm agreements on TW.
All requests for firm service should continue to go to Michelle or Dennis for the base agreement processing; however, the Marketer should complete and forward a deal sheet (attached) for completion of the discount amendment and for us to obtain the appropriate approvals.
Deal Capture will also tender the agreements and hand partially executed deals to Contracts for activation.
As time permits, we will reconstruct the TW Firmbook listing of all active agreements by production month.
Please let me know if you have any questions or concerns.
Thanks!
Craig
| TW Firm Contract Processing |
Kim/Morgan: The pottery is finally HERE!!
Please let me know when you would like me to deliver your pottery.
Thanks Sasha Sasha Divelbiss ETS - HR Analyst Wk(713)345-8714 sasha.divelbiss@enron.com
| Pottery |
Kim: I got your voice mail and will take a look at the path you described.
It most likely will be this afternoon, I'll call you later.
PT 3-0667
| Agave short term Firm. |
Following- up on our conversation regarding mercaptan sulfur on Agave's gas: TW- Gas Quality requirements: Shall not contain not more than .3 grains mercaptan sulfur per one 100 cubic of gas.
Their letter indicates that it is more than 0.3 grains/ 100 cf.
Therefore we have to tell them to treat the gas or TW has to install an instrument like Delmar 7200 with on -off shut- in devices to monitor the mercaptan in the gas at the receipt point.
| TW/ Agave |
Michelle, =09I forget that you started with the team after I quit working on the TW A= greements; here's a brief update on what our "normal" process was previousl= y.
We can change anything if you've found a better process...
The Deal Capture Team (Craig & Esther) processes all FTS discount related a= mendments for TW Marketing.
The Contract Group processes the new (base) ag= reement and any POI/MDQ/TERM type changes.
All FTS service requests still = go to Contracts and, after the Capacity/Credit issues are completed and the= contract printed out, the entire contract folder is forwarded to Deal Capt= ure for additional processing (all firm contracts/amendments get sent to De= al Capture for review).
Deal Capture gets with the Marketer to determine i= f a Discount is being offered and then creates the Discount Amendment, Rout= es it for approval (if needed) and Tenders all documents to the Shipper.
D= eal Capture is responsible for obtaining all approvals other than Capacity = and Credit.
When (if) the Agreement is executed and returned by the Shippe= r, Deal Capture will handoff the original documents back to Contracts for a= ctivation and to complete all additional distribution and processing.
Let = me know if you have any concerns or questions.
As the first few deals go t= hrough, we'll need your feedback to see if the process needs some adjustmen= ts.
Thanks for all your help... Craig
| TW FTS Agreements |
Attached is your reservation for Rome for September 29, 2001.
This room is charged to your Amex account but the reservation is in my name.
Print this attachment out and take it with you, since it has the confirmation # on it.
You will have a king, non-smoking, deluxe room at $189.00 per night, including breakfast.
This probably isn't in the downtown area, since it is supposedly a golf resort.
Paul said he would find out the exact location for us.
If you are able to locate something better, feel free.
I could find several hotels on Travelocity that had availability, but the phone # wasn't provided and you can only book one room at a time.
The cancellation policy on this hotel is good -- we just have to cancel by
| Rome reservations |
Kim: The PEPL Del point # 8042 and the NGPL Gray Del point 6839 has available unsubsribed as follows: Darrell will not allow FT at NGPL Hansford like Agave wants.
Agave Rec.
of 7,000 Dth and the Del as follows:
| PEPL unsubscribed for Sep-Dec 2001. |
Can you send them to me in a reply to this e-mail?
I hope you had a good trip to Mexico.
Where did you go there?
Thanks, Dee
| passport numbers and names |
Please read the below letter (Sample) that you will be getting with your packet.
Please confirm that you are planning to attend your session by responding to this email.
This is very important since I will be distributing the packets next week.
Next week you will be receiving the packet spoken of below containing: A Participant Letter (see below) A manager cover letter A manager questionnaire Seven employee cover letters Seven employee questionnaires Seven pre-addressed return envelopes for the completed questionnaires.
Further information will be sent periodically.
Thanks, Maggie **************************************************************************************************************************************** August 27, 2001 Dear Participant: It is our pleasure to welcome you to the Becoming an Exceptional Leader: a manager's level training program on October 31 - November 2 at the Doubletree - Travis 1&2 .
The program is designed to help leaders develop the skills necessary to manage direct reports.
The program focuses on participative management skills and has leaders and their reports working together to shape goals, standards, and operating procedures, that I believe you will find both relevant and enjoyable.
Program Details The program will begin at 8:30 a.m. each day and end at approximately 5:00 p.m. on the first 2 days and at 3:00 p.m. on the third day.
Dress is informal.
Because of the full program schedule, there will be no time for regular business contacts.
Therefore, we ask that you clear your calendar for the 3 days and make arrangements for someone to cover your phone calls.
Preparation Materials Enclosed is the Preparation Materials booklet that you should read over and bring to the program.
Distributing the Enclosed Questionnaires As part of your preparation for the Becoming an Exceptional Leader: a manager's level training program, you will also be distributing the enclosed questionnaires to your direct reports.
Many leaders spend a lot of time trying to figure out what their direct reports are thinking.
To help answer that question, one of the key components of this program is a confidential survey of your direct report's perceptions of your management skill.
The survey will help you to identify your strengths and determine areas in need of improvement.
You are the only person who will see the survey results, unless you decide to share them.
Distribute one of the enclosed questionnaires to each of the seven direct reports that you have selected.
You may wish to hand deliver each questionnaire so that you can personally explain its purpose.
In doing so you should emphasize that: The reason you are asking him or her to fill out the questionnaire is to improve the quality of communication and effectiveness of work that transpires between you.
His or her responses are strictly confidential.
(The survey report that you will see at the program will be the combined results of all your direct reports.)
The completed questionnaire must be received by the Forum Corporation for scoring no later than October 24th.
Please allow 2 weeks for the questionnaire to travel through postal system.
The questionnaire instructions explain that the direct report must fill in the level he or she feels is required in each dimension and the level he or she feel you have attained.
I am confident that your direct reports will be happy to oblige.
The questionnaire should take no more than 10 minutes to complete.
Please note that a feedback report can only be generated for you when you use the questionnaire that I have assigned to you.
Should you or your direct reports misplace a questionnaire do not use a colleague's "extras" or photocopy questionnaires.
The questionnaires that have been assigned to you have a unique coding number which has been assigned specifically for you in order to create a custom feedback report.
The questionnaires assigned to you cannot be duplicated or modified in any valid way without my knowledge.
If you need replacement questionnaires for any reason, please see me and I will provide you with any extra questionnaires you may require.
I look forward to your participation in the program and know you will find it to be an interesting and rewarding experience.
If any questions remain unanswered, give me a call.
Sincerely,
| Manager's Training Class - Per Voicemail - Response Requested |
Summary Though this conference was scheduled to review all issues related to El Paso's capacity allocation method (including those in the pipeline's Order 637 proceeding), and with two complaints filed this summer regarding problems with the pipeline's allocation, major substantive issues were not covered at this conference.
For instance, the battle between Full Requirements (FR) shippers and Contract Demand (CD) shippers came up marginally, but not in terms as substantive as the proposed conversion of FR shippers to CD contracts.
Procedurally, there was also no decision on whether to proceed with a hearing, merits decision from the Commission or settlement, though it looks like a merits decision is the likely avenue for a decision.
Staff did not discuss case merits or ask pointed substantive questions.
Allocation Studies (Models) El Paso opened the conference with a presentation/interpretation of seven capacity studies they have done to illustrate how its allocation proposal (March 27) would allocate the system's receipt and delivery points based on different scenarios.
For nominations, receipt and delivery points were specified and ranked by shippers, and the model used 20 pools.
The scheduling model looked at where constraints occurred (based on those shipper-supplied preferences), solved the largest constraints first, then ran second and third iterations to complete allocation.
There were questions on the studies, what they show, what the assumptions are, etc., and in the end shippers believe they need information not shown by the completed studies.
Shippers have requested six more allocation studies, showing possible impacts of seasonalization (winter and summer) and the difference between CD and Full Requirements Coincidental and Non Coincidental Peaks (winter and summer, 1995 - 2000).
El Paso interprets its studies as showing that the proposed capacity allocation method is workable, and in fact results in 247 MMcf/d of unallocated capacity (230 MMcf coming from the Line 2000 expansion proposal, and an extra 17 MMcf).
Shippers were skeptical of the "slack capacity" finding.
Other Issues ?
Pooling: There was a small amount of discussion on the impact of moving from six to 20 pools.
It was noted that this should be addressed with Order 637 issues, expeditiously after capacity allocation method is resolved.
?
FR vs. CD: Though there were some FR vs. CD shippers discussions, they did not reflect the battle we see going on in the two complaints filed this summer by the TX, NM and AZ shippers (FR) and Aera Energy (CD shippers).
There was also no mention of converting FR shippers to CD service.
Note: never mentioned were the CD and FR complainants' proposals that El Paso (1) dedicate currently proposed expansions to existing shippers or (2) requiring mainline system expansion for existing service (RP01-484 and 486).
?
Release shippers: Shippers contracting for released capacity were concerned about how they would be allocated, as well as those shippers picking up turnback contracts from the pipeline (which would have receipt and delivery points already allocated).
?
Receipt Point Designation: The question was asked if shippers could designate specific receipt points rather than pools.
When asked what Commission policy is on pools vs. receipt points, both shippers and Staff clarified that they are neither mutually exclusive nor to serve as substitutes for one another - both should be available.
However, Staff noted that in the flexibility vs. reliability debate, it could be argued that El Paso should return to receipt point designation to maintain reliability.
Procedure Going Forward The primary issue here ended up being procedural.
The procedural schedule is as follows: ?
El Paso further studies and answers to questions posed at conference or in writing: Sept. 24 ?
Initial comments (on all capacity allocation issues and procedural recommendations): Oct. 15 ?
Reply comments: Oct. 26
| FERC conference on El Paso capacity allocation (RP00-336) |
Transwestern Denies Withheld Capacity to Boost Negotiated Deals A Transwestern Pipeline executive yesterday dismissed allegations that the pipeline withheld firm transportation capacity bound for California from its recourse-rate shippers last winter in order to free up more capacity for contracts at substantially higher negotiated rates.
Mary Kay Miller, vice president of rates and certificates, acknowledged Transwestern may have had discussions and exchanged faxes (prior to posting its available capacity) with two shippers -- Sempra Energy and Richardson Products II Ltd. -- that subsequently entered into negotiated-rate transactions.
But she stressed that requests for capacity by Sempra Energy and Richardson were considered "moot" by the pipeline until after the available operational capacity was posted.
| NGI Article on TW Hearing (After First Day) |
Jennifer, attached is a summary model of the Ft. Pierce evaluation using Enron's curves.
Please note that there are two scenarios provided, based on a best case and worst case pipeline demand charge scenario.
The spread option model was dispatched based on the same assumptions as utilized by the gas group in developing their pipeline cost assumptions.
I've tried to add notes to the models outlining potential areas of additional value as there are some unique characteristics of this deal that should provide additional value to the project.
I'll be over to help review the cash flow model.
Thanks for everyone's help (Edith/Charlie)
| Ft. Pierce Evaluation |
We are bringing in Associate Candidates for Super Saturday this upcoming weekend and we are looking for associates to help host our Saturday evening dinner at Teala's, 3210 West Dallas.
The dinner will be from 6:00 p.m. - 8:30 p.m.
If you are available to help out please email Dolores Muzzy.
We will also have another Associate Super Saturday on the weekend of November 30th - December 2nd.
We will be in need again of dinner host for the Saturday evening dinner.
It will be at the same time and also at Teala's.
If you are not available this weekend but would like to participate on the next Associate Super Saturday please email Dolores Muzzy as well.
Thanks for your participation.
| Associate Super Saturday |
Howdy folks, I'm looking at having our board of directors meeting on Saturday, Dec. 8.
It will likely be at the same location as last time.
Please let me know your thoughts on this date.
Take care, Bobby
| board meeting |
Sorry I did not get to call last night.
I'll try tonight after 8:00.
Can you please call Fidelity at 1-800-544-6666 and update my address?
Your duplicate statements have been going to my old address in Austin.
My new address is 13006 Brayton Court, Houstno, TX 77065.
You will also need to sell $2000 of stocks in your Bidwell account and make your 2001 IRA contribution to this IRA account as we have done the last several years.
We'll talk about what to sell later.
Love,
| Misc |
Loftus, Here's the file.
If you break the date column up into three separate columns for month, day, and year then you can use subtotals and/or pivot tables to analyze the data a little more quickly and dynamically.
For example, you might want to look at the extremes or averages for any particular month or year or whatever.
I c an help you do this if you want.
Remember that this is a very limited data set statistically speaking, especially considering that the last 3 winters were far above normal.
If you want to investigate what the possible extreme scenarios are based on past history then I can get you the data for many decades further back if wish.
Just let mw know.
Thanks,
| Chicago Temps |
SCHEDULE CHANGE A&M athletic director Wally Groff has officially signed off on a football= =20 scheduling change for the 2001 season, as the Aggies will now play at Wyoming on Thursday, Sept. 6.
The move was made to accommodate the popular ESPN Thursday night college=20 football package.
The game between the Cowboys and Aggies was originally scheduled for Sept. 8.
A&M, coming off a 7-5 season, will begin the 2001 campaign with a home game= =20 against McNeese State on Sept. 1, followed by the Wyoming game and an early Big 12 contest with Oklahoma Stat= e=20 Sept. 22 at Kyle Field.
The much-anticipated game with Notre Dame at Kyle Field is set for Sept. 29= .
In another scheduling quirk, A&M=01,s traditional late-September or October= =20 matchup with Texas Tech has been=20 moved to November, as the Aggies and Red Raiders will hook up on Nov. 3 in= =20 Lubbock.
BAD TIME OF YEAR TO FLY TO LUBBOCK PLUS THAT'S OPENING ADY OF DEER SEASON= =20 .........
| FYI |
Can there not be an argument made to dive into TXN?
It's trading at 25 forward P/E (2001) with a 5-year consensus growth rate of 24.2.
A PEG of ~1 on a high quality stock with superior technology, good management, great market position and tremendous long-term growth has got to be an opportunity, right?
What's your view?
The technicals (MACD) are not great right now but I think fundamentally this is a tremendous value long-term.
It looks like the economy has really got the brakes on now (too much) but wouldn't you expect the market to begin pricing in rate cuts in 2001 pretty soon and an eventual return to high growth in technology?
I wouldn't touch any peripheral players but some of the megacap stocks with great market positions, like TXN, are sure tempting.
Nasdaq down 46% from its March high and not looking good at the open.
This could be a "buy while there is blood in the streets" opportunity.
| TXN |
Andrew, Note conference room for our meeting today.
I'm also attaching a brief writeup of the deal so far from our perspective.
You might want to review before our meeting so you will know where our current understanding (or misunderstanding :-) ) of the deal currently is.
Thanks,
| Stage Coach |
Investing, One Stock=20 =20 Broad Horizons=20 =20 by Jeff Schlegel=20 =20 December 2000, "Worth" magazine=20 =20 Energy giant Enron is expanding its powerful trading platform into the hear= t=20 of the new economy.=20 =20 Enron (NYSE: ENE) President and Chief Operating Officer Jeffrey Skilling=20 hates his office, a spacious lair on the 50th floor of the energy company's= =20 downtown Houston headquarters overlooking the flat Texas terrain.
To Skilling, its= =20 haughty vastness is a vestige of the old mind-set from the days when energy= =20 markets=20 were highly regulated.
Instead, he prefers strolling through Enron's three= =20 commodity-trading floors =01* the company's nerve centers, where it buys an= d=20 sells products=20 ranging from natural gas to electricity to communications bandwidth.
The=20 often casually dressed Skilling is clearly in his element talking with the= =20 traders.
"That's=20 how you find out what's going on," he says.
Skilling doesn't think like an old-line energy executive, nor does Enron ac= t=20 like an old-line energy company.
With its eclectic product mix and strong= =20 online presence, Enron has become a leader of a new breed of energy company tryin= g=20 to capitalize on deregulation.
The ongoing unshackling of the natural gas= =20 and electric power markets that began in the mid-1980s has left both=20 industries in a tizzy: A dearth of new power supplies, combined with=20 insatiable demand,=20 has jacked up gas and electric prices and put the squeeze on suppliers and= =20 their customers.
That suits Enron just fine.
New Economy Initiatives The company, which 10 years ago earned some 80 percent of its profits from= =20 its regulated gas-pipeline business, has become the nation's largest buyer and seller of natural gas and electric power and has pioneered a powerful= =20 trading platform to make effective markets in both commodities.
But what ha= s=20 really electrified Wall Street during the past year are Enron's new-economy= =20 initiatives.
First, it launched EnronOnline, an Internet-based energy-tradi= ng=20 system, in November 1999.
By mid-October 2000, the new venture had executed= =20 more than 350,000 transactions with a gross value totaling $183 billion.=20 Next it unveiled its strategy to become a dominant broadband player by both= =20 delivering content along its own sizable fiber-optic network and trading bandwidth as a commodity.
The nascent broadband services group had $345=20 million in revenue for the first nine months of this year.
Although energy remains Enron's main source of revenue and earnings,=20 management believes the growth of the Internet will enable the company to t= ap into new markets.
"In five years, we will be a substantially different=20 company," says chairman and Chief Executive Kenneth Lay.
"Underlying=20 everything we=20 do is the ability to make markets more efficient."
Along with bandwidth,=20 Enron has added such mundane commodities as steel, and pulp and paper to it= s=20 trading platform, which will soon include such esoteric fare as DRAM chips= =20 and data storage.
"Trading is the ultimate scalable concept," adds Skilling= .=20 "We're using the same computer systems, processes, controls and people.
The=20 potential to expand into new markets is almost unlimited."
Investors have bought into Enron's vision and sent its shares soaring, whic= h=20 at a recent price of $80 were up 85 percent since the beginning of 2000.
Th= e=20 big question, of course, is how much of that euphoria is already built into=20 Enron's stock price and what happens if the company's broadband strategy=20 doesn't=20 unfold as quickly =01* or become as huge =01* as the company anticipates.
"We are a unique company with a unique set of skills that are perfectly=20 suited for the changing economy."
=01* Jeff Skilling, President and COO, Enron Company Culture Enron is a company that firmly believes in itself and its mission.
From=20 management down, employees have little doubt that they're creating=20 revolutionary new businesses.
This strong sense of purpose is evident everywhere at=20 Enron's headquarters, where throughout the day workers eagerly stop by a=20 ticker-tape kiosk in the main lobby to check on Enron's stock price.
Management Ken Lay, 57, assumed the top job at Enron in February 1986, not long after= =20 the company was formed by the merger of Internorth and Houston Natural Gas,= =20 where he had been chairman and CEO.
The two pipeline companies had joined= =20 forces to compete better as the wholesale natural gas market was being deregulated.
In the past, government authorities set the price that utiliti= es=20 could charge for gas, and customers were bound by rigid, long-term contract= s.=20 But=20 with deregulation, the market determines energy prices, and both suppliers= =20 and consumers have more flexibility in how they buy and deliver goods.
The new Enron moved swiftly to cash in on these changing dynamics by creating = a=20 trading platform to bring together buyers and sellers.
Enron repeated the= =20 process with electricity when the government began deregulating that market= =20 in the 1990s.
Lay has long been hailed as Enron's visionary, but COO Skilling is no slouc= h.=20 "Jeff is one of the brightest and most creative people I've ever known," sa= ys=20 Lay,=20 who began working with him in the mid-1980s when Skilling was a McKinsey=20 consultant helping Enron develop its gas-trading system.
"I've made it clea= r=20 for some time that he's my successor."
The 46-year-old Skilling, who officiall= y=20 joined Enron in 1990, likes to toss around words like awesome and cool when describing the company's business.
Lay's language is slightly less colorfu= l=20 but no less enthusiastic when the CEO is talking about Enron's future.
Lay and Skilling both agree that the best ideas often come up from the=20 bottom.
"We've flattened the organization, made it more entrepreneurial, an= d=20 developed a culture to take risks and try new ideas," Lay says.
Take Michae= l=20 Moulton, 30, who is working in Enron's pulp-and-paper trading unit.
Moulton= =20 came up with the notion to make markets in DRAM chips, and when the new uni= t=20 begins its operations later this year, he will run it.
Wholesale Energy Despite its broad range of businesses and expansive aspirations, Enron is= =20 still at its core an energy company.
During the first nine months of this= =20 year,=20 nearly $56 billion of its $60 billion in revenue came from its wholesale=20 energy operation, which centers around making markets in and creating=20 risk-management=20 products for natural gas and electricity.
Some of what Enron sells comes fr= om=20 its own gas production and electric-power generation, but the bulk of it is= =20 bought=20 from other energy producers with excess capacity.
The company's trading capacity has gotten a tremendous boost from=20 EnronOnline, which now handles about 60 percent of its transaction volume.= =20 Margins are razor-thin =01* maybe a penny per million BTUs of gas or per megawatt = of=20 electricity (standard contract measures).
But Enron isn't doing trades just= =20 to=20 make money; it does them to create liquid spot markets that in turn enable = it=20 to package together risk-management products, such as futures and swap=20 contracts, that companies can use to hedge their energy costs.
Enron is a= =20 principal in every trade, taking full responsibility for actual delivery of= =20 the product,=20 be it gas, electricity, or even pulp and paper.
Overall margins in the=20 wholesale energy business average one to three percent.
Trading is a risky business, of course, but few companies manage risk bette= r=20 than Enron, which has armies of people working to stay on top of sudden pri= ce=20 moves.
"Enron seems to make all the right calls because it has the best=20 modeling systems, hires the brightest people, and has trading experience=20 throughout=20 the country," says Gregory Phelps, a portfolio manager at John Hancock Fund= s=20 who closely follows the utilities sector.
Enron employs a dozen=20 meteorologists=20 on its gas-trading floor to monitor any weather changes =01* from an oncomi= ng=20 cold snap in Chicago to a potential hurricane in the Gulf of Mexico =01* th= at=20 could affect=20 supply and demand.
Now Enron has turned its sights on Europe, which is in the early stages of= =20 deregulation.
Enron established a presence in the U.K., Germany and=20 Scandinavia=20 in the early to mid-1990s.
It currently has 18 offices in 16 countries,=20 making markets and hedging risks in a region where state-owned utilities=20 still loom large and=20 national differences present formidable hurdles.
"We're the only company wi= th=20 pan-European operations," says Mark Frevert, who heads the wholesale energy unit.
"There's a lot of complexity, but we like markets where it's=20 difficult."
Broadband Operations The roots of Enron's bandwidth trading go back to 1997, when the company=20 bought Portland General Electric to gain a foothold in the West Coast energ= y market.
At the time, the utility was laying fiber-optic cable alongside it= s=20 gas pipeline that ran between Portland and Salt Lake City, and as it was=20 being deployed,=20 "the Enron mind-set of 'Can we trade this stuff?'
kicked in," says Kenneth= =20 Rice, CEO of Enron Broadband Services.
"Bandwidth lends itself well to bein= g=20 traded like=20 a commodity."
Today Enron buys excess bandwidth from Internet service providers and from= =20 carriers such as AT&T (NYSE: T), Global Crossing (NYSE: GX) and Qwest (NYSE: Q).
As it does with energy, Enron bundles together bandwidth, then= =20 sells and delivers it on an as-needed basis to content providers, network= =20 carriers, and other end-users.
Enron promises to deliver capacity at a set time and= =20 for a specified period over a fiber-optic network that stretches nearly=20 15,000 miles and connects some 30 major cities in the United States, Europe,and Japan.
Enron is certainly ambitious.
It wants to change the way bandwidth is sold,= =20 which up until now has been in fixed-rate monthly contracts that lock buyer= s=20 into=20 paying for capacity they don't always need.
Enron provides bandwidth on=20 demand that users can purchase and procure on short notice for short period= s=20 of=20 time =01* for instance, if a company wants to broadcast a streaming video o= f its=20 CEO to its offices around the globe.
The company made its first bandwidth trade last December when it sold a=20 monthly contract for DS-3 bandwidth between New York City and Los Angeles o= n=20 a Global Crossing network.
(DS-3 is an industry standard for moving data at= a=20 speed of 45 megabits per second, fast enough for streaming video.)
Enron delivered 1,399 months' worth of DS-3 broadband capacity in the third=20 quarter alone and is on target to meet its year-end goal of 5,000 DS-3=20 months.
Both Lay and Skilling think bandwidth trading will contribute $1 billion in=20 annual operating profits in five years, or nearly as much as wholesale ener= gy=20 contributed=20 in 1999.
Meanwhile, the company expects to pour another $650 million into= =20 broadband services during each of the next two years, offset by the pending= =20 $2=20 billion sale of Portland General to Sierra Pacific Resources (NYSE: SRP).
The other major piece of Enron's broadband strategy centers on delivering= =20 streaming video.
Using Sun Microsystems (Nasdaq: SUNW) servers and switches made by Lucent Technologies (NYSE: LU) and Cisco Systems (Nasdaq: CSCO) ,= =20 along with its own internally developed software, Enron's broadband system is built to whisk data around Internet traffic jams.
Content customers ran= ge=20 from corporations doing video conferencing to retail chain Blockbuster (NYS= E:=20 BBI),=20 which this summer inked a 20-year deal to distribute video-on-demand over= =20 Enron's network.
"Video will be the king application," Skilling says.
"That= 's=20 where=20 it's all going to happen."
Other Growth Drivers Some people may have questioned Enron's decision to plunk down $100 million= =20 for the 30-year naming rights to Enron Field, the Houston Astros' new=20 retractable-dome baseball stadium.
But the deal also helped Enron seal a=20 30-year, $200 million agreement to outsource the energy management of the= =20 stadium.
So Enron not only boosted its corporate profile but also made $100= =20 million in the process.
Energy outsourcing is a potentially immense market, considering that U.S.= =20 businesses spend more than $240 billion on heat and electricity to run thei= r=20 operations every year.
Enter Enron Energy Services, which does everything= =20 from analyzing a company's energy supply chain to pinpointing its=20 energy-guzzling equipment to financing the cost of buying more-efficient=20 gear.
The group spent nearly a year under the hood at Simon Property Group (NYSE: SPG) before making recommendations that landed it a 10-year, $1.5= =20 billion contract to buy and manage the energy for Simon's 253 real-estate= =20 properties.
"The complexity of this business is so enormous that if you're= =20 going to be the leader, you've got to know every detail," says Marty Sunde, head of the group's North American unit.
Energy savings can be significant.
Enron guarantees eight to 13 percent, bu= t=20 sometimes the savings can be even greater.
The business, which began=20 in 1997, recently started turning a profit and is expected to have earnings= =20 before interest and taxes, or EBIT, of $80 million this year.
Enron is on= =20 target to=20 land $16 billion in customer contracts in 2000, double last year's total.= =20 "There's no reason this business can't roughly double in each of the next f= ew=20 years,"=20 Lay says.
"Enron is very, very confident.
Their tone borders on excessive confidence,= =20 but their track record warrants that."
=01* Erik Gustafson, Senior Portfolio Manager, Stein Roe & Farnham The Competition Some of Enron's trading partners are also its biggest rivals in reshaping t= he=20 deregulated energy markets and forging ahead in telecommunications.
Dynegy (NYSE: DYN), located just a few blocks away from Enron in Houston a= nd=20 called "Enron Jr." by at least one analyst, has its own gas- and=20 electricity-trading operations and is looking into bandwidth trading.
The= =20 same goes for Williams Companies (NYSE: WMB), whose fiber-optic network is much larger than Enron's.
A consortium of six energy companies, including= =20 Aquila Energy, a leading power marketer, just launched an online=20 energy-trading=20 system to rival EnronOnline.
Several existing bandwidth traders, including Arbinet-thexchange,RateXchang= e=20 (AMEX: RTX) and Band-X, essentially provide Web-based bulletin boards for companies to find trading partners.
They don't actually deliver the=20 product, which Enron feels gives it an advantage.
In the energy-services=20 business,=20 Enron competes with a whole host of players, including consultants, regiona= l=20 utilities and energy outsourcers, but none have Enron's geographic scope.
"It's a challenge to value Enron's stock, because it's such a hybrid.
It=20 always seems expensive, but it continues to outperform expectations."
=01* Zach Wagner, Analyst, Edward D. Jones & Co. What It's Worth Analysts and Enron management alike prefer to break down the company along= =20 its four reported business lines using a sum-of-the-parts model.
They=20 also typically value the company's businesses in terms of EBIT, judging tha= t=20 to be a more consistent way to evaluate Enron's income because its business= es are so capital intensive.
Using those metrics and a recent stock price of= =20 $80, Enron's pipeline transportation and distribution business is roughly= =20 valued at $5, wholesale energy at $40, energy services at $20 and broadband services at= =20 $15.
Skilling believes the multiple of 30 times EBIT assigned to wholesale= =20 energy=20 is too low considering that business is expected to grow 35 percent this=20 year, to $1.8 billion, some 70 percent of Enron's projected total EBIT.
And= =20 wholesale=20 energy's EBIT growth is likely to exceed 30 percent annually for at least t= he=20 next five years on the strength of further deregulation of global energy=20 markets.=20 Combine that with similar expected growth rates in both energy services and= =20 broadband,=20 not to mention the potential for new commodity-trading markets, and, Skilli= ng=20 argues, Enron's stock is easily worth $130.
Analysts are more cautious.
Most agree that wholesale energy deserves a=20 higher premium than the market is currently willing to pay, but bandwidth i= s=20 still=20 a couple of years away from profitability.
In the meantime, Salomon Smith= =20 Barney analyst Ray Niles suggests that investors focus on the market=20 potential=20 of bandwidth trading, and that the quick acceptance of this product in the= =20 market could mirror the steady early growth of electricity trading in the= =20 mid-1990s.
Niles thinks Enron's overall energy operations alone are worth more than= =20 Enron's current share price.
If that's true, tacking on the $15 EBIT value= =20 for bandwidth would make Enron a $100 stock.
Ultimately, many investors will look at plain old earnings per share.
If=20 Enron meets analysts' consensus earnings forecast of $1.65 a share next yea= r=20 =01* and maintains its current multiple of 56 times earnings =01* it would be worth= $92.
Social Responsibility Enron has won awards each of the past three years for its efforts to reduce= =20 methane emissions and has been applauded for its wind-power division.
But= =20 certain Enron projects, such as the construction of its Dabhol power plant = in=20 India, have been mired in controversy.
The state police there squelched=20 protests=20 against the plant in 1996 and 1997 with beatings and jailings, and Human=20 Rights Watch asserted that Enron was complicit because it benefited from th= e=20 suppression of dissent and didn't speak out against human rights violations= .=20 Enron has since built a 50-bed hospital in the area and committed $500,000 to improve the community's water and sanitation infrastructures.
The Upside With less than half of the residential power market in the U.S. open to=20 competition, electricity deregulation is far from over.
Some analysts belie= ve=20 the entire=20 market will be deregulated within five years.
This would enable Enron to=20 expand its leading energy-trading business.
On the retail side, Enron could= =20 get a=20 boost from the New Power Company, a partnership it formed with AOL (NYSE:= =20 AOL) and IBM (NYSE: IBM) aimed at selling electricity to homeowners via the Internet.
Enron's attempt to sell residential electricity in Californi= a=20 ended in failure in 1998, and the company readily admits this isn't one of= =20 its strengths.=20 So it's relying on IBM's back-office expertise to handle the paperwork and= =20 AOL's Internet service to penetrate homes while Enron procures the power.
The Downside The much-ballyhooed broadband revolution has failed to meet expectations.= =20 Currently, only five percent of U.S. households have broadband access, and Forrester Research analyst Maribel Dolinov says the rollout of so-called= =20 last-mile connections, which take broadband signals into homes, is moving= =20 very=20 slowly.
She doesn't expect wide-scale availability of video-on-demand befor= e=20 2004. Who Needs It?
Enron's mix of the old and new economies should appeal to all but the most= =20 conservative investors.
Its energy trading and pipeline businesses give it = a=20 stable source of cash flow, while its new Internet-based ventures give it t= he=20 great growth potential of a tech stock.
=20 =20
| Enron Article |
I bought it at 41 and 42 ovver the last week and it's looking good.
I bought them based on industry, strategy, and PEG.
Check it out.
| CPN |
Doug, This note is just to confirm my voicemail message this morning indicating that the charges for the Fuel Oil sample check for vanadium should be charged to Co# 0413, RC # 106230.
According to the spec sheet I have, the ASTM method for vanadium is D3605 and the units of measurement are ppm (wt).
Again, I appreciate your patience in this frustrating issue.
Charlie
| Fuel Oil Sample |
Vince, Mr. Horn's request has been taken care of.
He has the data he wanted and knows how to call it up on his Bloomberg terminal in the future.
Charlie
| Bloomberg Request |
I am writing to inform you that the deadline for your offer of employment from Enron has been extended until January 2, 2001.
More information will follow between now and then.
If you have any questions regarding this extension, please call me at 1-800-97ENRON (extension 57229) or Kristin Gandy at extension 53214.
Thank You,
| Enron Offer Deadline Extension |
Dr. Wilkens, Thank you for your time and advice.
I would appreciate if you would be able to provide me with contact information for Dr. Jim Jones at the University of Florida as well as Dr. Joe Ritchie, per your offer to do so.
Thanks again,
| DSSAT |
Bill, I enjoyed talking with you about our potential software needs.
It sounds like you may have something to offer in which we are interested, and we are looking forward to a visit from you or one of your representatives in early January.
If you want to contact me, I can be reached at 713-345-7229 or by reply to this E-mail.
Thank You,
| Agricultural Modeling Software |
Jonathan, Hope you had a good Thanksgiving weekend.
I'd like to catch up with you today if possible regarding recruiting etc.
Can I reach you by phone.
If so, where?
You can call me toll free at 1-800-97-ENRON and follow the menu.
My extension is X57229 or you can use the voice activated system.
Thanks,
| Misc |
This is an excerpt from an internal Weather Channel (Landmark Communications) newsletter..... BLIZZARDS PRODUCE HIGH RATINGS FOR WEATHER CHANNEL, RECORD PAGE VIEWS More people turned to The Weather Channel instead of their local TV affiliates to get news about this week's blizzards in Chicago and Detroit, and nearly 25 million viewers - a record - went to weather.com to follow the storms.
In a survey by Survey USA, 25 percent of TV viewers said they found out about the blizzard from The Weather Channel, compared with 17 percent who watched their local NBC affiliate station, and 12 percent who tuned into a local radio station for news.
TWC also was the winner - at 30 percent - with those who said the weather network did the best job of covering the storm.
Another 16 percent said their NBC affiliate did the best job, and 13 percent said Chicago and Detroit CBS affiliates were tops.
A record number of pageviews - 24.6 million - were recorded at weather.com.
TWC produced a 6 a.m. to 12 p.m. rating of 0.751 on Monday, delivering an average of 586,000 households.
This performance is well over twice the average December monthly rating to date.
Kansas City and St. Louis recorded the highest metered market ratings during the blizzard, followed by Detroit.
The Chicago rating also was within the top 10.
| FYI - Weather Channel Ratings |
Had a great time this weekend.
I'm sure glad that Travis got another good buck under his belt.
I think he is now ready to move it up a notch on the next deer and if everything stays good at the ranch then it should be pretty possible next year.
I was also wondering if you and Mama talked about paying Melissa for her painting.
Mama mentioned to Melissa that she "owed" her but nothing more than that.
She worked for no less than 20 hours and was disappointed that she would not be able to do the rest of the house as we really need the money.
Our negative checking balance needs some injection of cash and Melissa had hoped to use the money to buy a few things for Christmas this week as well.
If you haven't already, I'm sure that you can broach the subject with Mama without letting her know that I asked.
Anyway, Melissa really wanted to be able to paint more and is upset that she wasn't able to "prove" to Mama that she is willing and able to work hard.
She still gets those not so subtle jabs all the time from Mama about not working outside the home.
For the record, she busts her ass keeping our house clean, clothes washed and ironed, meals cooked, and doing lots of things to make sure we have a happy, healthy, and well adjusted son.
If there is a way (later) that you can subtly encourage Mama to hold back on these jabs when we next visit, it will go a long way toward ensuring a good Christmas for everyone.
Anyway, definitely keep all of this confidential between me and you.
There is no major problem here but I wanted to check off with you on this so we can help keep everything going smooth and folks getting along.
I'm sure you see my point of view here.
Thanks!
| Misc |
Shares of Enron Corp. (NYSE: ENE - Quotes, News, Boards) were smacked around again yesterday, following close on the heels of seven-session decline that sent the stock down more than 13 points, or 16%, from its recent high of $84.63 (December 28), all amid uncertainty and considerable volatility.
The pullback doesn't appear to be company-specific exactly, although the rumblings in a certain geographic region, namely California, are triggering aftershocks throughout the U.S. energy community.
As we outlined in a report on January 4, the energy situation in California has rapidly reached crisis proportions.
Strict environmental legislation and the uncertain profit potential post-deregulation has kept utilities from installing sufficient generating capacity in the state over the last 10 years.
The state's two major utilities, PG&E Corp. (NYSE: PCG - Quotes, News, Boards) and Edison International (NYSE: EIX - Quotes, News, Boards) , are facing the prospect of eventual insolvency due to the spiraling costs of electricity purchased on the open market.
However, the rates the utilities can charge their customers for power represent a fraction of the costs that prevailed during the gradual rollout of full-scale deregulation.
The risks to Enron are two-fold.
For one, the crisis in California may result in a default of payments to the state's major wholesale energy providers, including Enron.
Although the company does operate in California, the bottom-line impact would likely be shielded to a considerable degree because of Enron's size, strength, and diversified global revenue streams.
In addition, Enron would likely be high on the list of default payees given its importance to future wholesale energy supplies in the region.
More significantly, investors are concerned that California legislators may pull the plug on deregulation entirely, or at least until the current crisis abates.
Some also fear this mess might derail utility deregulation in other states as regulators and politicians alike become fearful of adverse and unintended economic consequences.
Neither scenario is probable.
For one thing, the airline industry was deregulated in fits and starts, with plenty of mistakes and recrimination along the way.
And a strong argument can be made that the shortage of electric power would have pressured rates sharply higher even in a fully regulated environment.
The California Public Utility Commission will attempt to decide the best course of action this week.
It appears inevitable that, regardless of PG&E and Edison's ultimate fate, the state's energy consumers will likely absorb much of the burden through an increase in the prevailing rate cap.
Enron has also fallen victim to the rotation out of strong defensive stocks on the heels of the Federal Reserve's unexpected interest-rate cuts last week.
The initial euphoria has waned, however, upon the realization that the sharp rate cuts will serve to offset what appears to be a rapid rate of erosion in domestic economic growth, rather than generating a rebound in economic activity.
As a result, we expect investors once again to seek the shelter of well-capitalized defensive plays like Enron.
We would emphasize that several factors that weigh in Enron's favor have been overlooked amid the California crisis.
The November-December period was 18% colder than normal and the second-coldest start to the winter months in the past 50 years.
Coupled with an uncertain supply situation, particularly in natural gas, Enron stands to profit handsomely from energy volatility and pricing, an environment that is likely to exist for at least the next 12 months.
In addition, Enron's diversification into still more new avenues of growth help to insulate the company from additional challenges of this sort in the future.
The markets for EnronOnline, a real-time commodities exchange vehicle, and Enron's broadband services unit are expected to at least triple over the next year.
An eventual inflection point in the groups' profitability would serve to send profits measurably higher in the long term.
Despite the recent turmoil, Enron's consensus earnings estimate for 2001, according to First Call, has come down a mere penny, to $1.65 a share.
Although the stock's rich price/earnings multiple of 43 times may aggravate its near-term volatility, the absence of a complete collapse of the stock indicates the market approves of Enron's maneuvers so far and is confident in its prospects going forward
| Enron |
We'll get pointed questions related to Europe and broadband thanks to Steve Bergstrom.
Suggest we answer that we feel confident that the first mover advantage will give us superior returns in the long run.
USA: INTERVIEW-Dynegy feels gradual approach in Europe vindicated.
By Andrew Kelly 10/15/2001 Reuters English News Service (C) Reuters Limited 2001.
HOUSTON, Oct 15 (Reuters) - Natural gas and power marketer Dynegy Inc. said on Monday it felt vindicated in its step-by-step approach to building a business in Europe in view of recent retrenchments by rival Houston-based companies.
Dynegy recently opened an office in Madrid to market natural gas, electricity and derivatives.
Spain is the fifth country in continental Europe where Dynegy has set up an office since it started up its European operations in Britain in 1994.
By contrast Enron Corp. has recently announced plans to cut staffing at its European operations by 5 percent to 10 percent amid concerns about slow and piecemeal progress toward deregulation of European natural gas and electricity markets.
"Enron threw 800 bodies at it and tried to do it in a hurry.
We've been going at it much more slowly because we thought it would take some time," Dynegy President and Chief Operating Officer Steve Bergstrom told Reuters in an interview.
Another Dynegy rival, Reliant Resources Inc., said last month it was considering a possible sale of its electricity generation business in the Netherlands.
"Reliant bought one utility in one country and realized that's not really the way to enter the market in Europe," Bergstrom said of the move which cost Reliant $2.4 billion.
Bergstrom said his own company differed with Enron and Reliant in the execution of its entry into the European market, rather than in its assessment of the market's potential.
"We've gone at this much more cautiously.
We've made sure that we staff it appropriately for the market timing and we think we've done it the right way," he said.
Bergstrom said there were similar differences between Dynegy and Enron's approach to the broadband telecommunications market where Enron has also cut jobs after admitting that it probably overestimated the market's short-term potential.
"They're having to retrench, but you're not hearing them give up on the telecommunications business.
Our cost structure is so much less than theirs, that's why we're a lot more optimistic, because they have to go through cutting a bunch of costs whereas we never added those costs," he said.
Dynegy reported on Monday its third-quarter net earnings rose 62 percent as its wholesale energy business nearly doubled its returns.
Dynegy has said it expects its broadband business, created late last year, to generate a positive net income next year.
The business posted a $15 million loss in the third quarter of 2001.
Dynegy's Chief Executive Officer Chuck Watson told analysts in a conference call on Monday that the unit's revenues had doubled in the latest quarter to $8 million.
"We believe the industry touched the bottom in this communications market in the third quarter, with bandwidth demand picking up sharply in the foreseeable future," Watson said.
Copyright ?
2000 Dow Jones & Company, Inc. All Rights Reserved.
| Reuters story on Dynegy 3Q earnings |
All, Attached, for your information, is a 2 page financial and statistical fact sheet for EGM (as a consolidated unit and for each business unit).
I obviously would have liked our gross margin and EBIT to be a lot larger but all the other facts show enormous growth and progress.
I wanted to at least get it into your hands in case you needed a quick reference.
Thanks,
| EGM Q3 fact sheet |
In the wake of US and British military action in Afghanistan, Washington has become increasingly concerned about the potential for a major military conflict between Pakistan and India, according to a high level US intelligence official, and the control of nuclear weapons in the region is being monitored.
There is also fear for instability in Saudi Arabia, where little information is available about the capabilities and intentions of Islamic extremist elements.
Consensus opinion has been built in Washington that Iraq was involved in the 11 September terrorist attacks on the US, exacerbating fears that the situation in the region could spiral out of control.
According to a senior US intelligence official, US policymakers have become increasingly concerned about the prospects for instability in the Middle East and South Asia.
Washington is focused particularly on the potential for a major conflict between Pakistan and India, and intelligence officials are attempting to track the location and control of nuclear weapons in the region.
Secretary of State Powell's trip to the two countries, although portrayed publicly as part of the effort to ensure support for US military action in Afghanistan, is in fact intended to address tensions between Islamabad and New Delhi, which have grown in recent days.
(India shelled several Pakistani military outposts in the disputed Kashmir territory today; an Indian army general described it as a "punitive action.")
Washington is also significantly more concerned than media coverage would suggest over the potential for major unrest in Saudi Arabia.
This fear is heightened by a lack of detailed information available on the royal family's grip on power and the capabilities of Islamic extremist elements in Saudi Arabia, which share similar goals: removal of the Saudi dynasty, establishment of a true Islamic state, and the removal of the US military presence.
Saudi and US officials regard bin Ladin as one of the prime perpetrators of Islamic extremist violence in Saudi Arabia and elsewhere in the region.
Bin Ladin has been outspoken in his criticism of what he calls 'military occupation' of Saudi Arabia.
Unrest in Saudi Arabia could have a relatively dramatic impact on regional stability and the global economy because of its leading role both in the Arab world and in OPEC.
US government officials are now generally convinced that the Iraqi government played a role in supporting the 11 September terrorist strikes in the US.
The well-publicized difference of opinion between senior State and Defense Department officials over the handling of the Iraq question has been reported accurately in the media.
Concern is growing within Washington that the situation in the Middle East could spiral out of control if Iraq were drawn into the military conflict precipitously, if major hostilities between Pakistan and India were to break out, or if the Saudi royal family's grip on power were to loosen.
| Increasing Washington Concerns over Potential Instability in Pakistan, India, and Saudi Arabia |
Recently, EPI completed the sale of Enron's remaining equity ownership in Hanover Compressor.
I want to thank Dick Lydecker and Mark Meier, who managed the sale of this investment for their very effective effort.
The total proceeds from the sale over the last 3 months totals $107 million.
The total return on the $30 million Hanover Compressor investment, was nearly $150 million (excluding substantial profits from other financing transactions with Hanover).
Kevin Howard and others have played an important role in this investment over the last several years.
The exit used a proprietary and confidential structure executed by Bear Stearns.
It is a true sale and there will be no remaining structures by the end of the year.
Our exit has not been made public.
This completes part of a continuous effort by EPI to sale many of Enron's remaining equity investment positions.
Thanks,
| Sale of Hanover Compressor Position |
The following three products will begin trading today on Dynegydirect.
Please take a few moments to add them to your trading floor.
US NG BasisSwp EP SJuan Dec01-Mar02 Usd/MMBtu US NG BasisSwp NWPL Rky Dec01-Mar02 Usd/MMBtu US NG FP Swap Nymex Dec01-Mar02 Usd/MMBtu Dynegydirect e-Care Dynegy Inc. 1000 Louisiana, Suite 5800 Houston, Texas 77002
| New Products on Dynegydirect |
Ken I understand a Turkish industrialist named Nuri ?olakoglu has been in contact with you through Bill Miller and possibly Jerry Giest.
Colakoglu is an extremely wealthy and well regarded Turkish industrialist who has aggressively expanded into the Turkish energy sector.
We have had a number of meetings with Colakoglu over the years and although we appreciate his potential prospects for the future we do not see a win-win opporutnity with his organization at this time.
We expect he may try and contact you so wanted to let you know in advnace the background on his proposal.
Colakoglu has proposed that, in order to manage our Trakya payment issue, Enron utilize the Arcos turbines to build, on balance sheet, a 1200 MW power plant at the tailgate of his recently completed specualtive LNG regas facility in Turkey.
The plant would be part of a comprehensive proposal to the Turkish Ministry of Energy and Natural Resources to reduce the prices at Trakya, in exchange for an agreement by TETTA?
(the new Turkish power trading company resulting from the split up of TEA?, the former electricity monopoly) to purchase power from the new facility.
All three plants would be fuelled by LNG provided by Enron and tolled through the Colakoglu's regas facility.
In essence, Nuri wants us to build a power station as soon as possible to use the capacity at his LNG terminal which is now idle and has the potential to be a white elephant.
Our team has explained to Colakoglu that they thought the fact that the proposal relied totally on TETTA?
's credit was fatal, but that they would discuss it with EEL management.
Lloyd Wantschek has responded to Colakoglu in the attached letter (we have highlighted the relevant portion for your information).
| Turkish industrialist Nuri Coalkoglu |
Liz, Greg told me on thurs to contact you regarding if he had anytime on tues aftn.
If he even has 15 min that woud suit as I'm just want to bounce some two or three ideas off him.
Greg, If you have sometime to comment in writing or if you want to have a brief meeting on tues aftn I would appreciate it.
I am seeking your guidance as a mentor not as a manager.
1) The group is trying something that it would seem only Morgan Stanley has achieved.
We want to be a trader and marketer of both physical oil and financial derivatives.
I liked the sound of this one year ago but thinking now we need to develop a franchise in one first rather than trying to do both in tandem.
2) Jeff would like to see this group move away from 'view' trading to 'flow' trading.
I'm not convinced this is the right direction given our lack of existing customer business and traders with experience trading in this manner.
we seem to be taking a bunch of hockey players and asking them to go play basketball.
If we are going to go this course I would like some advise on trying to convince people to change and we need to think about the cost of changing the group to go this route.
3) I feel we should stick to improving our fundamental analysis and working on developing a greater physical presence.
The approach to achieving that physical presense should come through aggressive pricing of physical supply to major consumers.
This is the only group that at a price will willingly outsource their oil exposure.
We should still work on trying to adapt to being more of a flow shop and develop customer business but not make it our top priority.
| next tues |
Greg, I've been helping the HR team draft this memo.
Cindy asked that I run it by you prior to having it sent out.
Any comments?
As we continue to address a number of issues facing Enron, it is critical that the company remain focused on attracting, motivating and retaining our diverse and talented workforce.
We strongly believe that our workforce is world-class - the best in any industry, so we will continue to develop and reward this tremendous talent base.
Because the lasting strength of our company is determined by the strength of our workforce, we are elevating the role employee-focused functions play within Enron.
We are pleased to announce that effective immediately Human Resources, Employee Responsibility, and Executive and Corporate Compensation will report directly to the Office of the Chairman.
David Oxley, Vice President, will continue to oversee Enron's Global HR function.
The lead HR representatives for the individual business units will report to David in addition to their respective Office of the Chairman.
Besides managing Recruiting, Staffing, Training, Compensation and the Performance Evaluation Process, David will also add Payroll and Labor Relations to his list of responsibilities.
Cindy Olson, Executive Vice President, will have responsibility for Employee Relations and Corporate Responsibility, which includes Social Responsibility, Community Relations, Diversity, Employee Relations, Redeployment, Alumni Relations, Employee Events and Programs, Benefits, Wellness, and Worklife.
Mary Joyce, Vice President, will continue to have responsibility for Executive and Corporate Compensation in addition to Global Employee Information Management and Reporting and Analysis.
David, Cindy and Mary will each report to the Office of the Chairman.
A detailed organizational chart is attached.
Please join me in congratulating them on their new responsibilities.
| Organizational Announcement |
Hi Greg, Whassup?
I tried to contact you recently via your personal e-mail address, and then by sending you a letter, but got no reply.
I guess your admin staff has you behind their firewall..;~).
Hey, I'm working temorarily on a project here in Dallas until X-Mas, and just talked with Woody Woodmansee this morning.
He gave me your work address.
Said he spoke to you when you were in London recently.
We outta try to hook-up sometime while I'm here in Texas.
Please send me an e-mail or give me a call sometime, when you've got a free moment.
I'm looking forward to hearing from you...
Thanks, Alex
| Hey Beast-Barracks-Buddy...!!! |
Attached for your review is the current agenda for the Management Conference.
While there are a few remaining speaking slots to be filled, I wanted to give you each an opportunity to comment on it.
We plan to send an email invitation to Enron management early next week with a link to an online registration website.
The agenda will appear on the website.
Also, please note that each of you are scheduled to speak at the conference.
This is in direct response to feedback received after last year's conference that attendees want to hear more from Enron leadership.
I'll be working with Steve Kean and his team over the next few weeks to develop potential messages.
Steve, Cindy and I will schedule time with each of you to discuss proposed messages for your individual presentations.
I look forward to any feedback on the agenda.
Regards,
| Current Enron Management Conference Agenda |
Attached is a revised draft of the letter from Ken Lay to employees about the healthcare benefits plan.
Specifically, this letter points out that Enron has elected not to increase medical costs for employees this year, but emphasizes that employees should plan for increased costs next year.
The letter will be part of an Open Enrollment package that employees will receive at their homes.
Please forward comments on the letter to me or Mikie Rath.
| CEO Letter - Open Enrollment Package |
Hello Greg--A belated congrats on the new post at Enron--We had, as you probably read, a sort of pool going about who would get tagged for the big desk-- Most of the emails we received offering their thoughts on the question seems to favor you--most were also fmr Enron traders and the like.
I had to chuckle about the stories that ran about you in the past few weeks--you must be tired of the tanker reference by now.
I seem to recall the last time we traded emails and calls was around the time you took over the wholesale group--most of the stories at that time were equally clever--"he should know about volitility, he used to drive a tank in germany...blah blah blah.
Anyhow, hope all is well chief, would like to do an interview at some point, for either The Desk or The Risk Desk.
Your call.
By the way, who is the nominal head of the bandwidth desk these days--hawthorne?
| congrats |
The Commission discussed its market based rate policy at today's meeting.
They did not vote out an order today, but expect to take up this issue again next meeting.
The staff memo recommended the following: For an interim period, FERC will deal with pending requests for market based rates and with triennial reviews of those rate authorizations, using a new test called the "Supply Margin Assessment" (also called a jazzed up version of the hub and spoke test) where a seller's capacity will be reviewed against the generation reserve margin in a market.
The test takes into account constraints based on TTC.
If the capacity of a seller is not necessary to meet peak demand,the seller does not have market power.
This test is applicable to all markets that are not part of an existing RTO or ISO.
For those selling into an RTO/ISO, the FERC will continue to allow market based rates subject to the market monitor and mitigation.
Staff also recommends that FERC initiate a Section 206 investigation to require each seller with market based rate authority to change its tariff by adding a provision stating that if the seller acts in an anticompetitive manner, the FERC can require refunds.
Through questioning by Commissioner Massey, it was revealed that, even if a seller did not engage in bad behavior, but sold into a disfunctional market, refunds could be required.
In the staff memo, apparently staff had left vague the definition of anticompetitive behavior in order to be able to interpret it most broadly.
However, Commissioners asked staff to better define the anticompetitive actions that could trigger refunds.
This policy will be brought up again at the next Commission meeting on October 11.
It will be issued as a proposed action, giving parties an opportunity to comment within 15 days and then also file reply comments, Final action is expected within 60-90 days.
Last, for the long-term, FERC will hold outreach meetings looking for answers as to how to detect market power and what to do when it is detected.
Since the interim measure is only a "snapshot" approach according to Commissioner Massey, he is willing to support it only along with the above described tariff provision.
Commissioner Breathitt is very uncomfortable with an open refund requirement, stating that it adds to regulatory uncertainty at a time when the Commission is most interested in giving certainty to the industry in order to assure reliability.
| FERC Meeting: Market Based Rate Review |
First, good luck next week.
Also, I will be in the office all next week and if you need anything, ENW related or not, call me or have someone call me and I will help.
I am focused on making sure EOL and ENW do not pop up on your list of things to think about.
Webb and Richter have been told that EOL up and performing well is critical.
As you know, the trade counts looked good last week and Jay and Brad have been getting data to Louise on the specifics of certain counterparties, etc.
| next week |