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Enron Mail |
Kay, we are working on the Bogey Exhibit and the Profit/Savings Calc. Will=
=20 get back with you re: items 1d. and 2. See assignments and comments in red. Reagan/Kayne/Dave/Jeff responses due = to=20 Kay by noon today. 1) General comments -=20 a) We have not seen a draft of the MPPSA or the MGPSA for review and commen= t.=20 Kay b) All section references in the draft should be reviewed and checked. The= =20 majority of the references checked were incorrect. Kay c) Since financial security is still an outstanding issue, all comments=20 regarding the provisions in the draft pertaining to that subject have been= =20 excluded. Kay d) The draft contains references throughout to exhibits that will be attach= ed=20 to the agreement that were not included in the draft. See bleow. =20 2) Article 1, pages 6 and 7 - Profit and Savings: These definitions referen= ce=20 exhibits that were not included in the draft. One of the most significant= =20 issues we had with the prior drafts were with the definition for "savings" = so=20 it is important to review a draft of these exhibits as soon as possible. = =20 Reagan/Kayne/Dave/Jeff to chech with Marvin. He should have forwarded=20 exhibits with everything else. time is running out on them to do anything= =20 here. Will report more on this issue. =20 3) Section 3.1(b): This section obligates EPMI to =01&Propose=018 a load pr= ojection=20 and stack model. Should this say =01&Prepare=018 as opposed to =01&Propose= =018. =20 "Prepare" is fine. 4) Section 3.1©: First line refers to a =01&request by Customer=018. Cus= tomer is=20 not defined, is this intended to refer to MDEA? If not, include a definiti= on=20 of Customer. "...upon request by Customer" is not necessary. This has=20 already been done. 5) Section 3.2(a): Provides that EPMI will use =01&commercially reasonable= =20 efforts=018. The draft does not include a definition for this term. Sugge= st=20 including a definition since this standard is used throughout the draft. K= ay 6) Section 3.2(a): Suggest adding the following phrase in the second line= =20 after =01&schedule Products=018, =01&in a manner intended to minimize the c= ost of=20 serving MDEA=01,s native load=018. Adding this seems fine; however, are th= ere any=20 legal implications, Kay? If not, add it in. =20 7) Section 3.2©: Line 3 refers to Cajun and EPI, which are not defined in= =20 the draft. Suggest including definitions or inserting the phrase =01&Exist= ing=20 Contract Resources=018 in place of =01&SEPA, Cajun, EPI=018. The substitut= ion is fine. 8) Section 3.2(h): Line 1 provides =01&EPMI will optimize scheduling and us= age=20 or resale (when appropriate)=018. Would suggest deleting =01&when appropri= ate=018 and=20 inserting =01&(in accordance with the terms and conditions of each Existing= =20 Contracted Resources contract)=018. The suggested change is OK. 9) Section 4.1(a): Line 1 requires MDEA to operate and maintain its native= =20 load distribution system in accordance with Prudent Operating practices=01(= .=018. =20 Would suggest deleting the phrase =01&and the Native Load distribution syst= em=018. =20 This agreement does not bear on how the cities would operate and maintain= =20 their distribution systems. Reagan/Kayne/Dave/Jeff [Rorschach, Reagan] (a) Operate and maintain the Facilities and Entergy=20 interconnection obligations in accordance with Prudent Operating Practices= =20 and in accordance with the terms of this Agreement. (b) Responsibilities for operating reliably with respect to Native Load lie= s=20 solely with MDEA and the Cities. 10) Section 6.4: The fourth sentence states =01& due to the use of imprecis= e=20 data such as weather reports, heat rate estimates and the like, it is=20 understood between the Parties that the resulting projections,=20 recommendations and daily plan are consistent with commercially reasonable= =20 industry practices=018. According to this provision, the parties agree in= =20 advance that the resulting projections, recommendations and daily plans are= =20 consistent with commercially reasonable industry practices. We believe tha= t=20 the =01&use of that type of data=018 is consistent with commercially reason= able=20 industry practices, but do not believe that that this automatically=20 translates into the projections themselves being consistent with commercial= ly=20 reasonable industry practices. Text should be changed as appropriate to=20 reflect this change. Reagan/Kayne/Dave/Jeff [Rorschach, Reagan] Section 6.4 Each day, EPMI shall provide a projection = of=20 the next day=01,s Native Load, and project the need for gas, fuel oil and p= ower.=20 Each day, EPMI and MDEA shall jointly run the Load Projection Model and the= =20 Facility Stack Model. EPMI and MDEA will then (1) compare and verify=20 assumptions and results from the models, (2) develop recommendations and (3= )=20 decide upon the operating plan for the day. This analysis will take into= =20 account such considerations as weather conditions, business day/weekend and= =20 holiday load conditions, historical loads, gas/power pricing, unit=20 availabilities, unit operating data, and prior commitments to buy and sell= =20 power. The Parties understand and agree that the development of the=20 projections, recommendations and daily operating plan is complex and requir= es=20 an element of judgment. Further, it is understood that the use of imprecis= e=20 data such as weather reports, and heat rate estimates to make such=20 projections, recommendations and daily plan are consistent with commerciall= y=20 reasonable industry practices.=20 11) Section 7.1: Second sentence provides =01&Risk of loss and all price an= d=20 unit contingency and transmission risk shall be borne by Customer=018. Sug= gest=20 adding the phrase =01& For Back to Back Transactions=018 at the beginning o= f this=20 sentence. MDEA should not be responsible for unit contingency, transmissio= n=20 risk etc. for an EPMI Transaction. Reagan/Kayne/Dave/Jeff [Rorschach, Reagan] Delete the sentence "Risk of loss...shall be borne by= =20 the Customer." 12) Section 10.2(a): Line 3, change =01& MDA=018 to =01&MDEA=018. Kay 13) Section 14.6: Line 3, change =01&and the MPPSA=018 to =01&the MPPSA and= the=20 MGPSA=018. Kay 14) Section 15.1(d): provides three business days written notice to the=20 defaulting party to cure a Financial Event of Default, otherwise the=20 agreement can be terminated. Three days is too short of a time period for= =20 MDEA. Kay/David Hunt 15) Section 17.1: Second sentence, provides that an independent auditor=20 reasonably acceptable to EPMI is entitled to audit all books and records of= =20 EPMI. However this provision goes on to state that EPMI shall be entitled = to=20 audit MDEA=01,s books, not an independent auditor subject to MDEA=01,s appr= oval.=20 Suggest deleting =01&EPMI shall be entitled to audit=018 and adding =01&An = independent=20 auditor reasonably acceptable to MDEA=018. Kay 16) Article 28: As we have previously noted, this section contains language= =20 related to conflict of interest issues and the lack of notification related= =20 to conflicts of interest that should be read carefully reviewed by MDEA and= =20 the Cities. Kay/David Hunt
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