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Enron Mail |
Jeff,
Good to see you in New York last week at the Guggenheim -- I enjoyed your company at the dinner. Lisa Yoho passed on your questions about the Bush Energy Plan and opportunities for EGM, so I thought I'd outline a few from Lisa Jacobson's and my perspective. Many of the recommendations in the Energy Plan are very broad and could take months (if not years) to approve. However, there are certainly a few areas where EGM could find more immediate opportunity, or where we could weigh in to make the longer-term components of the plan beneficial to Enron. Short-term opportunities $2 billion over ten years for Clean Coal Technologies: There may be opportunities to pursue R&D funding, pilot projects, or tax incentives for technologies such as NOx Tech. While the bulk of this money could take several years to approve, there is "clean coal" program money available now for FY 2002, and DOE is already structuring programs for 2003 money. I have already discussed this briefly with the Clean Energy Solutions folks, but we have good contacts at DOE and they are very anxious to work with Enron, as they see us as a company who can help make the most of their R&D money because we are serious about moving technologies to market. Climate Change R&D: Any financial support the government puts toward climate change R&D could likely also be utilized for new generation/control technologies, but this would be a longer-term opportunity. New Source Review (NSR) Reforms - NSR has been an obstacle to constructing new generation, but also a huge thorn in the side of big coal-using utilities who would like to make modifications to keep grandfathered plants alive as long as possible. The Clinton/Browner EPA brought major enforcement lawsuits against a number (Southern, TVA, AEP, Cinergy) and a few have settled (Cinergy, TECO). The Bush Energy Plan asks the EPA and Justice Dept. to look at 1) possible changes to the NSR enforcement lawsuits and 2) longer term changes to NSR regulation -- all in the name of bringing more energy supply on line. The utilities are mounting very aggressive lobbying efforts to change NSR. A DOJ decision on the enforcement could be forthcoming in the short term (summer 2001). In the big picture for Enron, letting the big, coal-using utilities off the hook would not be the best outcome -- enforcement relief only holds benefits for the incumbents and not new entrants in the power development market. But if it happens, we'll make sure the EGM folks have good advance warning so that they can take advantage of any coal trading or technology plays that they might find as a result from these utilities moving forward with plant modifications or capacity increases. Any NSR regulatory changes will be fought over the longer-term (with resistance from environmentalists), and could also likely be addressed in the multipollutant debate -- see below. Long Term Opportunities/Advocacy Multipollutant legislation - A regulatory program that all at once streamlines regulation of NOx, SO2 and mercury as well as provides relief from NSR requirements could be extremely beneficial for EGM's emissions trading and technology businesses (as well as a number of other Enron businesses). Nationwide trading for these pollutants would open up markets and create liquidity far beyond the current programs. Regulatory certainly for generators seeking to upgrade, expand and improve efficiency at power plants could provide incentives for technology and risk management services. Our Environmental Strategies group has developed a multipollutant plan that achieves a number of goals for Enron, including nationwide cap-and-trade for 3 (or even 4, if CO2 is included) pollutants in a way that provides incentives for new technologies, promotes fuel diversity, and has economic safeguards in place. We've structured it to have multiple benefits to Enron, and we are working on getting key Administration and congressional officials to adopt our ideas. We're making progress, but expect this debate to go on for at least a few years. Here are some excerpts from recent slides summarizing our plan, if you're interested. Please let us know if you have any questions - we are happy to work with you and anyone in EGM to take advantage of opportunities in these environmental proposals. Regards, Jeff Keeler Director, Environmental Strategies Enron (202) 466-9157 Cell Phone (203) 464-1541 Lisa Jacobson Manager, Environmental Strategies Enron (202) 466-9176
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