Problem: BODY: Elizabeth, Background: On Wednesday, October 10, the NPUC voted to authorize its General Counsel to seek to void or renegotiate certain SPP/NP long-term power contracts by either going to court or filing a complaint at FERC. According to the utilities, the contracts are out-of-the-money by approximately $800 million. Enclosed, you'll find. . . . : Attached is a spreadsheet showing all of the physical Enron-SPP/NP deals that are (1) currently flowing or (2) scheduled for future delivery. I have left off transactions that have been completed because the tenor of SPP/NP's statements indicates that they are seeking prospective relief, not refunds. I am also going to fax to you two pages showing our credit exposure to SPP and NP. Worst case, back of the envelope, we are looking at approximately $400 million in MTM exposure for all deals. However, the prices under these deals range from $27.50/MWh to $311/MWh (the $3.60 deal is for transmission). It's extremely unlikely that FERC would (1) void every transaction or (2) reduce the price for every deal to $0. Therefore, the true amount at risk is less than $400 million. Bottom line: All in all, I think the risk of FERC undoing these transactions is unlikely for the following reasons: 1. The ALJ in the Pacific Northwest refund case rejected claims for refunds of bilateral transactions because (1) the non-California long-term market was competitive, and (2) because of the concern about "ripple" claims. Although the Commission has not yet adopted the ALJ's recommendation, I expect they will because it's the path of least resistance and has popular support. 2. SPP/NP is the only party arguing that the Southwest market is uncompetitive. This aspect was fatal to the Pacific Northwest claims because the majority of the market did not want refunds. 3. SPP/NP was not required to buy power under these contracts----unlike the California utilities, which were required to buy from the PX. Presumably, these were the lowest prices available at the time.
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A: SUBJECT: Sierra Pacific Power/Nevada Power

Problem: BODY: Due to Labor Day the next Prometheus File will be on September 7th. In this issue: - Feature: The Future of Asset Free Returns - The California Public Utilities Commission delays votes on rate increases. - All the news, commentary, and earnings reports, plus price performance and valuation charts. <<prometheus010824.pdf>> Best regards,
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A: SUBJECT: The Prometheus File - Energy Technology Weekly 08/27/01

Problem: BODY: Have you decided who will be assisting tax-wise for these two countries? I have a conference call this afternoon at 3 pm (Houston time) with Antonio Felix de Araujo Cintra from the Tozzini firm regarding further research on derivative products for trading in Brazil. Attached is a summary of products and the various Enron groups seeking answers. If you would like to participate in person or by conference, please let me know. I will be in Sao Paulo from Sept 20-22 and Buenos Aires from Sept 23-24. In Brazil, I will be meeting again with Tozzini lawyers. In BA, I'll be meeting with Marval lawyers. Let me know if you would like to participate in any way. Sara
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A:
SUBJECT: Argentina and Brazil tax assignments