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Enron Mail |
You may wish to quickly skim through the details below, of the Government's=
=20 decree (the final action on the Endesa/Iberdrola merger), modifying slightl= y=20 what the Competition Authority did on the case. If you wish to skip down,= =20 you may go to the heading "Commercialisation" (the Spanish term for=20 marketing/supply function). There you will see the outlines (details to=20 follow) of what I described in the Staff meeting today, which is the=20 limitation on the merging incumbents being able to only obtain 60% of the= =20 business of new/renewing customers, i.e., those customers must seek service= s=20 from other suppliers. I am not aware of such a concession being extracted= =20 anywhere else before, and this is all due to the efforts of Alfredo=20 Huertas. It should bode well for businesses like Enron Direct, and toward= =20 the development of a contracts market where others will need to trade with = us=20 and seek our risk mangaement skills. let me know if you need more. mcs= =20 ---------------------- Forwarded by Mark Schroeder/LON/ECT on 05/02/2001=20 16:25 --------------------------- =20 =09 =09 =09From: Alfredo Huertas 02/02/2001 17:15 =09 To: Ignacio Soneira/MAD/ECT@ECT, Gonzalo Gomez-Navarro/MAD/ECT@ECT, Eric=20 Gonzales/LON/ECT@ECT, Mariano Gentilini/LON/ECT@ECT, Jose Luis=20 Gomez-Banovio/LON/ECT@ECT, David Gonzalez/LON/ECT@ECT, Paul Mead/LON/ECT@EC= T,=20 Pedro Del Rio Alcalde/LON/ECT@ECT, Robert Saltiel/LON/ECT@ECT cc: Mark Schroeder/LON/ECT@ECT, Peter Styles/LON/ECT@ECT=20 Subject: Spanish Govt. authorises the merger, but... We do not know the particulars of the following press headlines (the decree= =20 will be published on Monday). Comments below s/t the actual drafting of the= =20 decree: Generation Market share of 42% of generation: We do not know if this is expressed (in = MW=20 or MWh, etc...). Still unknown if this includes special regime generation; = if=20 yes, the market share of ordinary regime generation may go down to 35% (we= =20 insisted on 30%). Divestiture by auction, as we proposed. This share could not be increased until 2005, but no aparent limitation on= =20 new built generation for the merged. Particulars about the mix are still ambigous. Transmission Reduction on the participation on OMEL and REE to 10% Distribution Market share of 48% of distribution: As above, we do not know yet how this = is=20 expressed, but Vicent was suggesting last Tuesday that a "meaningful"=20 criteria was going to be applied, as opposed to the "meaningless and biased= "=20 suggested by the utilities and the CNE. We recommended 40% as compared to 6= 6%=20 proposed by the utilities. Commercialisation Market share of 40% of new + renew contracts on the whole Spanish territory= .=20 On the top of this, the merged company's market share cannot go beyond 60% = of=20 new + renewed contracts on its own distribution area. Although our proposal= =20 of applying these same limits to existing and new contracts has not gone=20 through (there were actually legal problems involved on that), we could cla= im=20 a great deal of "responsibility" on implementing the second boundary relati= ve=20 to their own distribution area. (We actually had to convinced Sempra and=20 Aquila to support this initiative). Although we do not know yet how the % is expressed (as above), it is very= =20 important the second limitation on their own distribution territory, in ord= er=20 to spur retail competition and tackle distcos' discriminatory behaviour on= =20 access and metering issues. Recall that by 2003 all customers are eligible,= =20 and this limitation will last until 2005.=20 CTCs CTCs rights are passed to new owners, but the capital gains associated to= =20 divestiture to offset CTCs rights of the seller. We battled for this last= =20 piece, but not for the transferral of CTC rights to new owners. We will nee= d=20 to analysed this more carefully in the decree itself. No more securitisation! The 4.5% of the tariff, which was devoted to fund= =20 CTCs has been eliminated. Therefore, we come back to the early days=20 mechanism. Implications:=20 1) the CTC mechanism will be more transparent now, but still opaque=20 overall;=20 2) Will the 1998 CTC write-off be re-established, that is, will CTCs=20 increase? More details on Monday Penalties =14 ?12,020 per day where the conditions above are not satisfied. =20 a.
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