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Enron Mail |
Guys, assuming that we receive $7M for the 6B's what is our cost basis in the
Barges? Regards Delainey ---------------------- Forwarded by David W Delainey/HOU/ECT on 10/02/2000 12:53 PM --------------------------- Brian Redmond 09/29/2000 04:56 PM To: David W Delainey/HOU/ECT@ECT cc: Jean Mrha/NA/Enron@Enron, Ron Tapscott/HOU/ECT@ECT Subject: Re: LIPA Dave: Status of the 6Bs: Enron Nigeria has sent us $7.1MM for the two turbines. We have an agreed turbine purchase contract that we have executed and that Enron Nigeria are supposed to execute today. Per our discussion, Wes C. suggested that we push the $2.0MM additional write down as well as the $7.1 turbine purchase revenue to Q4. Status of LIPA/Barges: We are working in two directions. Currently, we are: 1. Finding a buyer for either the LIPA PPA/Barges together, or just the barges by themselves 2. Discussing with LIPA, the Power Desk, and BargeCo to find an acceptable PPA structure and barge price to meet our risk/return criteria. The decision tree for the LIPA deal is as follows: IF: The LIPA PPA can be structured to be unit contingent for energy, AND: The power desk can get comfortable with the capacity availability risk (discussions ongoing) AND: The economics of the deal are acceptable given the price for replacement capacity charged by the desk. AND: All permitting issues are either resolved or resolvable OR, IF: We can find an "as-is, where-is" buyer for the Barges with/without the PPA (ConEd, Montauk, NRG) THEN: ENA will purchase the barges from BargeCo (Barges are currently located in Brooklyn) ELSE: We will not purchase the barges and will shut down the LIPA deal. 1. LIPA: We will fall back on permitting issues and schedule to as a reason to stop working on the deal. 2. BargeCo: The barges will have a lower performance than what was originally stated by BargeCo. Additional capital investment would be required to meet our performance requirements - our position is that this additional cost must be borne by BargeCo. We do not, however, want to implement this action until we have sold the 6B turbines to Enron Nigeria so that we are sure this transaction is completed. David W Delainey 09/29/2000 08:25 AM To: Brian Redmond/HOU/ECT@ECT, Jean Mrha/NA/Enron@Enron cc: Subject: LIPA Guys, what are we going to do with this contract and the barges? My understanding is that we have a done deal on the 6B's. Is this correct? I may be a nervous nellie but I would like to put all this stuff behind us (ie) no more 6B's or barges. Regards Delainey
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