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Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Peggy Mahoney X-To: Karen Denne, Mark Palmer, Steven J Kean, Jeff Dasovich, James D Steffes, Susan J Mara, Paul Kaufman, Richard Shapiro, Sandra McCubbin, Mona L Petrochko, Mary Hain X-cc: X-bcc: X-Folder: \Steven_Kean_June2001_4\Notes Folders\Discussion threads X-Origin: KEAN-S X-FileName: skean.nsf fyi ---------------------- Forwarded by Peggy Mahoney/HOU/EES on 08/09/2000 01:01 PM --------------------------- djcustomclips@djinteractive.com on 08/09/2000 02:00:36 PM Please respond to nobody@mail1.djnr.com To: 1529@WCTOPICS.djnr.com cc: Subject: Enron Corp.: Calif. city contracts with Enron to protect from volatility Calif. city contracts with Enron to protect from volatility 08/08/2000 Megawatt Daily © Copyright 2000 Pasha Publications, Inc. All Rights Reserved. A small California city that currently buys one-third of its electricity on the wholesale market has turned to Enron Power Marketing for protection from price volatility. The City of Roseville, which operates a municipal electric utility, last week signed a five-year contract with Enron, beginning Sept. 1, under which Enron will provide the city with 50 MW around-the-clock at a fixed price of $49/MWh. The total bill to the city will come to $114 million. "One-third of our needs today, we have to go the market," said Tom Habashi, director of Roseville Electric. The muni, which has a peak summer load of 240 MW to 250 MW, obtains about one-third of its power needs from the Western Area Power Administration and the remaining third from generating units it owns through the Northern California Power Agency. Hot weather in June drove demand much higher than Roseville had predicted earlier in the year, Habashi said. Power consumption in July was below predictions, but prices were twice as high as had been forecast. The cost for power in August is expected to remain much higher than predicted, Habashi said. Once the summer months have passed, Roseville expects to pay about $6 million more than it had budgeted for wholesale power expenses. That, Habashi said, led the city to look for alternatives. "We had to weigh things out, see whether we are willing to take the risk of market price fluctuations and pass those prices along to customers," he said. On the flipside, he noted, prices could go below the fixed rate Roseville will pay to Enron through September 2005. The city, through a vote of the City Council last Friday, chose to contract with Enron despite the potential risk. Habashi said the contract "will give us some stability." Another unknown variable, Habashi said, is how many Roseville customers will switch power providers. A few were given the option at the beginning of this year, but none have left yet. Choice for all customers will be phased in over four years. The city, which is located about 15 miles from Sacramento, expects rapid residential and business growth, and is forecasting that its electricity needs will double by 2005. ML Folder Name: Enron Corp. Relevance Score on Scale of 100: 83 ______________________________________________________________________ To review or revise your folder, visit http://www.djinteractive.com or contact Dow Jones Customer Service by e-mail at custom.news@bis.dowjones.com or by phone at 800-369-7466. (Outside the U.S. and Canada, call 609-452-1511 or contact your local sales representative.) ______________________________________________________________________ Copyright © 2000 Dow Jones & Company, Inc. All Rights Reserved
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