Regulatory Support to URM

FYI
---------------------- Forwarded by Richard Shapiro/NA/Enron on 05/18/2001
04:02 PM ---------------------------
From: Amr Ibrahim@ENRON_DEVELOPMENT on 05/18/2001 03:38 PM
To: Steve Montovano/NA/Enron@Enron, Janine Migden/NA/Enron@Enron, Paul
Kaufman/Enron@EnronXGate, Jean Ryall/NA/Enron@ENRON, Harry
Kingerski/NA/Enron@Enron, Stella Chan/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT,
Patrick Keene/NA/Enron@Enron, Richard Shapiro/NA/Enron@Enron, James D
Steffes/NA/Enron@Enron
cc: Tom Chapman/HOU/ECT@ECT, Kathleen Sullivan/NA/Enron@ENRON, Marchris
Robinson/NA/Enron@Enron, Frank Rishe/NA/Enron@Enron, Dan Staines/HOU/ECT@ECT,
Tom Hoatson/NA/Enron@Enron, Howard Fromer/NA/Enron@Enron, Daniel
Allegretti/NA/Enron@Enron, Joe Allen/NA/Enron@Enron, Roy Boston/HOU/EES@EES,
Barbara A Hueter/NA/Enron@Enron, Susan M Landwehr/NA/Enron@Enron, Kerry
Stroup/NA/Enron@Enron, Susan J Mara/NA/Enron@ENRON, Alan
Comnes/Enron@EnronXGate, Jeff Dasovich/NA/Enron@Enron, Sandra
McCubbin/NA/Enron@Enron, Alberto Levy/SA/Enron@Enron

Subject: Regulatory Support to URM

Colleagues:

Stella Chan, Pat Keene and Harry Kingerski would like to communicate a
streamlined process to provide Government and Regulatory support to URM
(Utility Risk Management). The process strives to bring GA in the different
regions, in Houston and URM much closer to each other to provide and
implement GA service as completely, and cost-effectively as possible. The
suggested process includes four steps, namely:
Curve validation Process,
Quantifying of Regulatory Risks/Change,
Coordination of Strategy Development, and
Coordination of Strategy Implementation.
A description of these functions are as follows:
Curve Validation Process: This process aims at reviewing, and validating,
every 90 days, the regulatory inputs of: a) the largest 60 curves in Enron's
books, and b) the new deals that are under approval during the review
period. The curve validation process is currently in progress and GA
personnel in Houston and the regions are already involved.
Quantification of Regulatory Risks/Change: This process aims at
quantifying--in dollars terms--the impact of the change in the regulatory
inputs on a specific position. The model is now in place, and test is in
progress. This process will involve initiation by GA regional personnel
(also possibly by URM) with potential regulatory changes that may impact EES
positions. The quantification exercise will be done jointly by URM and GA.
Coordination of Strategy Development: The outcome of curve validation and
quantification of regulatory risks--functions 1, and 2 above--will likely
call for a group of regulatory measures and action items. The function of
Stella and Pat is to coordinate and facilitate strategy sessions in
association with the owner of the curve in URM, and her/his counterparts in
Midwest/Midsouth, Atlantic Seaboard, the Western Region, and Texas & Oklahoma
Ercot, and SPP. The strategy sessions shall come up with suggested action
items, probability of success, and likely associate costs for
implementation. Stella and Pat shall be responsible for seeking the buy-off,
and approval, of the strategy from URM and securing the needed budget, if
necessary.
Coordination of Strategy Implementation: Once the strategy is approved, it
shall enter the implementation stage. The role of Stella and Pat is to
coordinate between URM requests/positions and their counterparts in the
regions. As the case now, they shall continue supporting the regions in the
implementation as needed.

To facilitate these functions Stella and Pat shall emulate the coverage lines
of the URM. Stella shall coordinate the Eastern Region, while Pat shall
coordinate the Western Region. These regions do not follow the conventional
wisdom, and need to be specifically defined. They are:
Eastern Region: ME, NH, VT, NY, MA, RI, CT, NJ, PA, MD, DE, VA, WV, NC,
SC, GA, AL, TE, KY, and FL.
Western Region: The remaining states (including OH in the east).

From the Regional perspective, the process will naturally be overseen by the
Regional Directors (i.e., Steve, Janine, Jean, and Paul), meanwhile, Harry
shall oversee it from Houston side. The process, however, is designed to
give regional managers and GA in Houston as much autonomy as possible and
shall make the least possible demand on the time and work load of the
regional directors (usually in the final sprint for approvals).

Stella, Pat, and Harry shall visit you shortly to discuss the details of the
processes outlined above and listen to your comments and advise. I shall
contact you to take your suggestion for the most appropriate time for you and
your group.

Of course, please let me know if you have any question and/or advise.

Brgrds

AI
713-853-3037