Wind

I like Wind.

I have two people pursuing opportunities. Elliot Mainzer and Scott Healy. Elliot managed our structuring group and has been interested in renewables for some time so Tim and I pushed him out of his nest and gave him a mandate to start a renewables desk. His vision is to make a market for green power and start a renewables power exchange ("RPX") on EOL. Scott is a generalist originator but developed wind projects prior to joining Enron so I have pulled him in to work with Elliot.

In this high-priced market, Wind is economic. Wind development is able to come online quicker than nat gas. The challenges are related to firming, or at least being able to pre-schedule the energy. BPA, Pacificorp and LADWP have expressed interest in taking intermittent wind energy and redelivering it to a market point with a weekly pre-schedule. They charge approximately $10/MWh for this service. Given the value of supply, we are trying to buy energy or partner in development. Current supply initiatives:

- Executed MOU with Enexco/Cinergy for joint development - non-binding, EPMI markets, Enexco builds and operates; Cinergy provides equity
- Proposed to Pacificorp purchase of 50MW block from their Stateline project
- Proposed to ENE Wind purchase of energy from four of their CA projects
- Proposed to ENE Wind the purchase of one of their PNW sites
- Discussions with Morongo Tribe re joint CA development

Demand is coming from municipal and investor utilities, BPA, DWR, select Fortune 50 industrials with green portfolio requirements. BPA put out an RFP for 1000MW. We are meeting with municipal utilities to promote the concept of the RPX and to get some notional long-term bids.

This has all heated up in the last two months, but I like the fundamentals and I think we will have a small, profitable new business by the end of the year.

Chris

Louise Kitchen
04/03/2001 02:05 PM
To: Christopher F Calger/PDX/ECT@ECT
cc:
Subject: Re: turbine swap

I like the innovative approach to GE.

What are you doing on wind by the way?

Louise

Christopher F Calger
04/02/2001 07:39 PM
To: Louise Kitchen/HOU/ECT@ECT
cc:

Subject: turbine swap

We received two financing commitment letters from Hancock. In general, the letters are good and suggest that Hancock is genuinely in the deal, but they include some flakey language about not having final committee approvals. Chip is going to push them a little more and if necessary get Hancock to call Ben Glisan to assure us that they are in (Hancock wants a lot of future business from Enron). In the meantime, we are innovatively stalling GE by requiring some consent language up front so we get another day from them. I think we will get both sides of this trade done.

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