From: chris.gaffney@enron.com
To: rob.milnthorp@enron.com, peter.keohane@enron.com, garrett.tripp@enron.com, greg.johnston@enron.com, paul.devries@enron.com, aleck.dadson@enron.com
Cc: mark.haedicke@enron.com, elizabeth.sager@enron.com
Date: 2000-11-09 18:37:00+00:00
Subject: Ontario Coalition for Standard Physical Bilateral Contracts

The following is a  summary of the OCSPBC meeting held this morning in 
Toronto:

EEI Experience - Andy Katz of EEI together with Elizabeth Sager of ENA legal 
and David Perlman of Constellation presented a history of how the EEI master 
was created and the major issues that arose in creating the document.  Based 
on the crowd reaction to the presentation it was apparent that there was 
support for developing industry standard documentation.   The crowd seemed 
favour recreating the industry consensus approach followed by the EEI master 
working and drafting groups. 
Starting Place; Physical vs Financial nature of the market -  Notwithstanding 
the consensus to move forward, there were two alternative approaches proposed 
as a starting place.  I proposed that the group start with the EEI master, 
create a Canadian version of this document and then proceed to create a 
detailed description of the products.  Greg Johnston's work will be of great 
benefit on this front.  The group was anxious to get a copy of Enron's 
version of the "Canadianized" EEI master.  Ontario Power Generation proposed 
an alternative form that was based off of an ISDA.  OPG's rationale for this 
approach was that the IMO market rules do not provide for physical 
transactions to take place.  This assertion was hotly debated.  The IMO 
experts on hand did nothing of use to clarify the matter and only said that 
the market rules were "subject to interpretation."  My understanding, and I 
welcome any support or criticism, is that notwithstanding the pool settlement 
mechanism that is provided (and which is somewhat similar to NEPOOL) deals 
can be structured which create an obligation on a Seller to deliver, or cause 
to be delivered, physical power.  Most parties present supported the Enron 
position and preferred to start with the EEI document.  I suspect that this 
support was mostly based on animosity toward OPG rather than support for 
Enron or even an understanding of the issue.
Next Steps - The group concluded that the main issue for the next meeting 
should be a discussion of the physical/financial issue outlined above and 
that would help to determine the appropriate starting place.  The next 
meeting is scheduled for November 22, 2000. The group then formed an initial 
drafting committee consisting of:
Enron Canada
AMPCO
TransAlta
a lawyer from Smith Lyons (it was not apparent that he was representing any 
client)
Martine Band, a lawyer from Power Budd (it was not apparent that she was 
representing any client but she was the main drafter of the market rules)
Toronto Hydro
Dan Pastoric (formerly a consultant and now with Hydro One)
AE Sharp
OPG
the IMO
Bruce Power (British Energy)
SMS Energy

As I think it would be of great benefit to provide the OCSPBC working group 
with a draft of the Canadian EEI form that Greg has been preparing, I think 
it is imperative that we resolve the outstanding issues.  In this regard I 
suggest that Elizabeth, Greg and I have a conference call either Friday or 
Monday and plan to have a draft ready by the end of next week.  Greg let me 
know if this is a possibility.  If anyone else wants to be involved in the 
conference call please let me know.
 
In the meantime I will work on developing a product description for Ontario 
which should help get OPG over the hump on the physical/financial issue.  I 
will also review the OPG form of enabling agreement.

Regards
CJG