EdF/EnBW decision

While the conditions relating to approval of EdF's merger with EnBW are not
strong enough for Enron (they never are!), I did want to call to your
attention the concessions/remedies the European Commission Merger Task Force
will require of EdF, which is SOLELY, in my view, attributable to the efforts
of Enron, and in particular efforts lead by Peter Styles. You will see below
that EdF must make available, on a "virtual" (hence "VPP") basis capacity in
some of its facilities (something I think they once accused us of "dreaming"
about when we asked for it). It may not make for a fully vibrant and
competitive market, but it is a start which could not have been made without
this effort. let Peter or me know if you need more. thanks mcs
---------------------- Forwarded by Mark Schroeder/LON/ECT on 07/02/2001
16:27 ---------------------------

Nailia Dindarova
07/02/2001 15:41
To: Philip Davies/LON/ECT@ECT, Viviana Florio/FRA/ECT@ECT, Bruno
Gaillard/EU/Enron@Enron, Paul Hennemeyer/LON/ECT@ECT
cc: Mark Schroeder/LON/ECT@ECT, Peter Styles/LON/ECT@ECT

Subject: EdF/EnBW decision

Please see attached the Commission's press release (EN, FR and DE). We need
to look into the full text of the decision (not yet available in the Official
Journal) to judge any changes to the terms and conditions of VPP auction in
reflection of our comments/criticism.

So far the news are:

EdF makes available 6,000 MW (instead of 5,000!) to competitors, out of which
5,000MW are released via VPP, 1,000 through PPAs. This is meant to constitute
30% of eligible market.
This undertaking is limited to 5 years - subject to Commission's review upon
expiration - possibility of prolongation if compet. market will not have
evolved
EdF renounces its voting rights in CNR + withdrwa representatives in the
Board of CNR + EdF won't be involved in CNR's commercial policy and market
conduct (until we see detailed conditions difficult to judge whether any
additional restrictions have been added since we saw the text of this
undertaking alst time)
EnBW divests its shareholding in WATT (we have to see whether any
ring-fencing conditions were added)

Let's discuss later.