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Enron Mail |
Dynegy has requested a meeting with us to discuss what an "Into Product" is
and how this product works with what is currently going on with transmission and how it may be impacted by future changes in transmission. Attendees from Dynegy will include Griff Jones (Dynegy's head of trading), Matt (whose last name I didn't get) and their lawyer Harlan Murphy. If you think somebody else should attend or if you want them to come over here, let me know and I can talk to Harlan. Assuming the meeting stays scheduled, I will schedule an internal meeting to briefly go over the EEI Into definition before we meet with Dynegy. As you are aware, in connection with the EEI effort we worked extensively with a large group of industry participants to define what an Into Product is. Dynegy and PECO were the two companies that were very outspoken against they way the product ultimately got defined. Dynegy put on a big dog and pony show before a large group of industry participants trying to argue that EEI's Into product was flawed. Their position, while not completely expressed, hinges on the concept that if you sell an Into Product and are making deliveries on firm transmission, then the Seller will always be excused from performance if the firm transmission gets cut for any reason (in general, this is contrary to EEI which obligates the Seller to go to another interface unless the cut was due to Buyer's use of non firm transmission when firm was available or due to Buyer's attempt to move the energy away from the receiving control area). Dynegy's approach was driven by the fact that they have extensive generation and that the vast majority of their deals go physical. At the time, we suggested that if they were worried about cuts in firm transmission, then they needed to sell a transmission contingent product. Dynegy's concept was rejected at the EEI meetings. I hope that the meeting will accomplish the following goals: 1. Get Dynegy to agree to trade Into with us under a common Into definition - Dynegy will not sign an EEI with us because of the Into definition. We trade Into extensively with them, but clearly do not have a common understanding of what we are trading. Critical to clear up this ambiguity. 2. Secure Dynegy as an advocate of EEI - Because Dynegy was so vocal against EEI's Into definition, if they now started using EEI, it would further boost acceptance of the contract and isolate PECO as the only other major voice against the Into definition. 3. Reexamine the Into Product as it is currently drafted and consider what will happen as access to transmission changes - Because the Into product is such an important part of East trading today, it is critical that internally we all agree how it should operate. Additionally, it is critical that we start thinking about how the Into product will be affected by changes in transmission, such as the advent of RTOs (with long term Into deals we may want to consider addressing what happens if the receiving control area goes into an RTO) Call me with any questions/thoughts. Thanks Elizabeth 36349
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