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Enron Mail |
Peggy, this is a summary version of the original information from Richard Ring. Richard's input about the below was that
it might not be suitable for direct distribution to customers but that it was acceptable for internal reference or talking points. I don't think it can be condensed any more without losing important information. SUMMARY Upon becoming a NEPOOL member, EESI chose to satisfy the Financial Assurance Policy requirement by issuance of Performance Bond(s) via Fireman's Fund Insurance Company, which issued a Performance Bond in the amount of $8,000,000. On or about October 12, 2001, EESI received a letter from ISO New England dated October 10, 2001, indicating that EESI's current Performance Bond was insufficient and that EESI needed to increase the amount to $11,703,018.75 to cover EESI's current activity level. In telephone conversations with ISO-NE, EESI was informed that in order to avoid Financial Assurance Default the matter needed to be resolved within ten (10) days of the date of the October 10, 2001 letter (October 19, 2001). By October 16, EESI had requested a bond increase in the EESI NEPOOL Performance Bond to $20,000,000, but encountered delays in working with the bond company. EESI Credit Department personnel sent ISO-NE personnel on October 19, 2001, via FAX, a copy of the request to the bond company for revisions to the Performance Bond, and indicated EESI was working diligently to resolve the matter. EESI was unable to comply with the October 19, 2001 deadline to resolve the Financial Assurance Default due to delays with the bond company as mentioned above. On October 19, 2001 another letter was sent to EESI by NEPOOL indicating that because EESI had not maintained the required level of financial assurance for 10 days or more, and this had occurred in combination with two other technical defaults, that this information was being forwarded to the NEPOOL Membership Subcommittee for action. Following resolution of delays with the bond company, a bond increase was issued by the bond company on October 23, 2001, executed by EESI on October 23, 2001 and forwarded via FAX and Overnight Mail to ISO-NE on October 23, 2001. However, according to Protocol for the Initiation of Membership Termination Proceedings the issue should be resolved with the receipt on October 24, 2001 of the Performance Bond by ISO-NE.
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