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Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Rob G Gay X-To: Peter E Weidler X-cc: X-bcc: X-Folder: \Randall_Gay_Nov2001\Notes Folders\Discussion threads X-Origin: GAY-R X-FileName: rgay.nsf Pete, The F/M relief sited may not apply in all instances because technically we may have failed to preserve our rights by not notifying Furnas for 6 months. They have responded as such although they have not assessed any penalties to date. The real test is may 4 when we are supposed to be in Phase 3 on Gas. ---------------------- Forwarded by Rob G Gay/NA/Enron on 01/17/2001 04:27 PM --------------------------- Christiaan Huizer@ENRON_DEVELOPMENT 01/17/2001 02:04 PM To: Peter E Weidler/NA/Enron@ENRON cc: Laine A Powell/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Richard A Lammers/SA/Enron@Enron, Mariella Mahan/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Celso Bernardi/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Rob G Gay/NA/Enron@Enron, Jose Bestard/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Rafael Rangel/NA/Enron@Enron, Felipe Ospina/NA/Enron@ENRON, Joao Carlos Albuquerque/SA/Enron@Enron, Jose Lucio Reis/SA/Enron@Enron, John Novak/SA/Enron@Enron, Johannes.Walzebuck@shell.com.br Subject: Re: Period after commissioning on oil - PPA availability penalties vs. diesel cost exposure Pete, There are two types of penalties under the PPA for the account of EPE (the latter can be used as a hedge to diesel cost exposure and we don't have any penalties right now) (1) Delay penalties in being unable to provide the guaranteed capacity of 480 MW on gas starting May 4, 2001 (this is where the Force Majeure extension is able to provide relief). The penalties here are calculated as R$ 400 per delayed MW per day. (2) Penalties due to capacity shortfall (basically - are we able to meet dispatch requests). If the moving average of the monthly average of the projects equivalent availability, calculated in accordance with provisions of annex-7 of the PPA, is less than 92%, a penalty shall be assessed in the amount of monthly capacity portion of the tariff for each phase times the guaranteed capacity for the phase multiplied by (92% - moving average of the monthly availability). Penalties type (1) does not apply in the concept analyzed as it relates to delay in gas (Force Majeure Claim issue). Refusing a dispatch request above 220 MW has an impact on penalties type (2) (guaranteed capacity is 300 MW). Given that the plant currently has a moving average of the monthly availability of about 99.7%, there is a margin built up that can be used to accept an availability hit by refusing a dispatch request above 220 MW. Therefore, to avoid the huge fuel costs associated with being dispatched above 220 MW, the PPA availability penalty concept can be utilized as an alternative. If we continue to decline to be dispatched above 220 MW for a long period however, the built up margin will be reduced and eventually we'll have to pay penalties because the 12-month moving average moves below 92%. Please let me know if additional questions Christiaan Peter E Weidler@ENRON 01/17/2001 09:41 AM To: Christiaan Huizer/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT cc: Laine A Powell/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Richard A Lammers/SA/Enron@Enron@ENRON_DEVELOPMENT, Mariella Mahan/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Celso Bernardi/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Rob G Gay/NA/Enron@Enron@ENRON_DEVELOPMENT, Jose Bestard/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Rafael Rangel/NA/Enron@Enron@ENRON_DEVELOPMENT, Felipe Ospina/NA/Enron@ENRON@ENRON_DEVELOPMENT, Joao Carlos Albuquerque/SA/Enron@Enron@ENRON_DEVELOPMENT, Jose Lucio Reis/SA/Enron@Enron@ENRON_DEVELOPMENT, John Novak/SA/Enron@Enron@ENRON_DEVELOPMENT, Johannes.Walzebuck@shell.com.br@ENRON_DEVELOPMENT Subject: Re: Period after commissioning on oil - PPA availability penalties vs. diesel cost exposure Why do we have penalties - I thought we had force majuere extension until september or so. Christiaan - please clarify thanks Pete
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