Pueblo

Speak of the devil. Tino called, all full of optimism and questions. They
have pitched the DOE a deal in which Dennis builds three 50 Mw turbines on
the Isleta, and a 7 mile power line to DOE's distribution lines. The project
will apparently be 100%debt financed, with DOE agreeing to pay a firm demand
charge rate of between 8 and 9 cents/kwh. That rate is supposedly high
enough to service the debt on a 10 year amort. basis (remember, DOE can only
sign 10 year contracts). DOE is interested, says Tino, because of the
redundant, dedicated facilities and enhanced reliability, and because Dennis
and Tino pitched DOE on all the $$$$ DOE will make from the surplus power
sales. Dennis apparently pitched them a "share the upside" deal under which
DOE keeps most of the revenue from surplus sales. Tino showed DOE the July
spot prices at 4 Corners, which Tino said included many days over $200/Mwh
and they got all excited. DOE has done a similar share the upside deal at
one of its facilities in Calif. Tino says and they have occasionally come out
net positive on elec. costs in some months so they like the approach. Tino
had two questions:
1. Does TW have 30-40,000/d of permian capacity available starting sometime
in 2001 or 2002? (I realize we have probably answered this question about 5
times, but lets do it again for him).
2. Is there someone at ENA Tino can talk to about a getting a quote for long
term and/or short term power purchase prices for Four Corners delivery? If
he can get something the DOE thinks is a good price, they m ay just sell all
the surplus power forward. If not, they'll just hang on to it and sell it
into the cash market in monthly and daily deals.

Thanks. DF