Problem: BODY: Nancy, Here are some come comments to the draft PPA: As a general note, we would have these goals: 1. Keep the PPA has streamlined as possible, putting as much as we can in the interconnection agreement. 2. Minimize ties to specific unit. 3. Maximize optionality, especially delivery points. 4. Keep construction/ownership of the facility off the balance sheet. 5. Signing the interconnection agreement must be simultaneous, or a CP. More specifically we would like to: Move start up/metering terms to interconnection agreement. Megawatts will probably change due to change in equipment. Bracket 192 for now. The capacity will change for summer and winter, also, specifics to be determined. Make sure we are protected from any liability caused by their delay. Comments on specific articles: Definition of emergency start up will belong in interconnection agreement. 2.2 Expiration is Dec. 31, 2004; move bracketed language into interconnect. 2.3 We need an out in case we don't commence construction/achieve commercial operation as a result of Buyer's action/inaction, and the term "breach" should include failure to timely perform any of buyer's obligations under any of the agreements. Any reason why we shouldn't want an extension if there is a delay due to action/inaction of any governmental authority? We can add change of law as an event which gives us schedule relief, but we might want to broaden the definition of change of law. Also, we don't have the site acquired yet, so we may need an out in case we encounter a problem, unless we will not sign this agreement before acquiring the site. 3.4 Peak period is July and August. 3.5 (b) Amount left over will depend on the summer and winter capacity. Might just leave blanks as placeholders. 3.5 (c) Let's try for 4 hours notice. 3.5 (d) suggest title "Start-Up Minimum Run Time". 3.5 (e) add maximum of ___ per year.
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A: SUBJECT: VEPCO PPA

Problem: BODY: Julia sent me a copy of your memo following up on one of the questions asked at the session earlier this week. I would like to ask a follow-up question: Do we lose the benefit of the special treatment under the bankruptcy code when we enter into cross-product (i.e. physical and financial products) netting and joint credit support arrangements. If we agree with a counterparty to net all of our trading exposures under multiple agreements (swap agreements and gas, power, steel, coal, etc. trading agreements) to determine how much credit support should be posted and then only ask for a single LC that supports the whole shebang, do we lose this protection since arguably we are no longer just "under a swap agreement?"
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A: SUBJECT: Letters of Credit; Preference; Swap Transactions

Problem: BODY: Ted, Attached is a revised draft of a letter. Please review and let me know if you have any comments. Please note the following with respect to this issue: 1. We should make sure we have performed a gas analysis at each producers delivery point and are sure they are creating or contributing to the quality problem. I recommend attaching such gas analysis to this letter. 2. The BRG Petroleum Corp. contract doesn't give us any cause to send this letter. The contract requires BRG to meet the quality specs. of the the pipeline which receives the gas downstream of the Point of Delivery on the Confirm. Such Point of Delivery is at the wellhead and HPL is the downstream pipe. HPL's specs (unless they have changed, don't have a limitation on gas richness). 3. The Texlan letter will be slightly modified from the attached, since we will reference Force Majeure. 4. Do we have a accurate list of producer names and address? If you are okay with the letter, I can have a paralegal prepare the letters with addresses.
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A:
SUBJECT: Nacogdoches Letter