Just got an update on the project that won't go away. Dennis has a meeting lined up with DOE decisionmakers on the 25th. He is going to pitch the project as an approximately 100 mw power plant, to be owned by (read "financed by") DOE, with the gas pipeline owned by Dennis and\or third parties (read "Enron"?). Dennis has run economics that show the DOE will get a more than 10% cost savings on the project compared to current PNM rates, even assuming a fairly high gas transport cost because of the smaller gas load. How did he do it? Very easy: they ran the power plant economics using about a $2.00 gas cost instead of current, real world prices. Dennis' argument is going to be: "I'll take the risk on building the pipeline and the power plant at a capped cost, and then sell the power plant to you." "You take the risk on gas cost: if gas cost tracks the 18-24 month average, you will realize your 10% cost savings, but if current fuel costs continue or escalate, you lose." Either way, your reliability improves and you kick PNM in the shins." Dennis and Tino apparently think they can sell DOE on this. By the way, their current story on Richardson is that he won't resign, and won't be forced out by the administration because that would create even more publicity. You'll love this: they think Richardson is even more likely to sign off on the deal now because his chances of being nominated for VP or cabinet are dead and he now has nothing to lose in DC. They think his real angle is now to bring home the bacon to New Mexico and then run for governor out there!! Apparently the rank and file out in the home state think he got hosed and made a scapegoat unfairly. I've asked Lorna Brennan to pull some historical San Juan prices together to give to Tino to confirm whether his $2 price is wacky. Other than that, I just told Tino that we are potentially interested in the pipeline part of the project if the risks and rewards make sense, and that EE&CC might be interested in the design/build on all of it. He said he'd get back to me after the 25th meeting and tell me whether the project is undead. DF

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