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Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Richard B Sanders X-To: Andrew Edison X-cc: X-bcc: X-Folder: \Richard_Sanders_Oct2001\Notes Folders\Sent X-Origin: Sanders-R X-FileName: rsanders.nsf ----- Forwarded by Richard B Sanders/HOU/ECT on 02/21/2001 05:46 PM ----- Marcus Nettelton@ENRON 02/20/2001 02:34 PM To: Elizabeth Sager/HOU/ECT@ECT, Richard B Sanders/HOU/ECT@ECT cc: Eddy Daniels/NA/Enron@Enron, Garrick Hill/HOU/ECT@ECT, Charles Ward/Corp/Enron@ENRON, Roy Boston/HOU/EES@EES Subject: January 2001 Billing Summary for Michigan Power Limited Partnership - Next Steps Liz/Richard I suggest that we seek to rely upon Section 18© which says that "....pending resolution of the disagreement by arbitration, Seller shall continue to operate the Plant in a manner consistent with this Agreement and Consumers shall continue to pay all charges required in accordance with the applicable provisions of this Agreement." Since arbitration is the final stage in the dispute resolution process agreed by the parties and it has been agreed that there should be continuity until any dispute is finally resolved, this position should properly apply to each stage of the dispute resolution process. I suggest that since the dispute resolution procedure envisages continuity, until resolution, that Consumers should continue to invoice on the basis that they have done for the last few years. Richard, we will need your input as to whether we could argue the above with a sufficient degree of confidence to persuade a judge to make an order of specific performance as against Consumers to invoice using the basis that they have been using for the last few years, pending outcome of the dispute resolution process. Further, whether you believe that we will be entitled to seek such equitable relief. We need to take control of this process and ensure that Consumers are always playing catch-up, if we fail to do so we will be playing catch-up and will be out of pocket until the conclusion of the arbitration process. If we do not get Consumers to invoice and pay the sums we believe are due, there will be no incentive on Consumers to start the process and every opportunity for them to delay any resolution of this dispute. I have spoken with Sandy Hollingsworth who will be sending me copies of documents that Dynegy have uncovered which she believes further assist our case. Once I receive them we ought to meet to review and obtain a better understanding of the case we are able to make and the case which may be made against us. Is there any other evidence that we, or Dynegy, should be collecting at this stage, such as interviewing individuals who were involved in the negotiations/discussions with Consumers? Regards, Marcus ---------------------- Forwarded by Marcus Nettelton/NA/Enron on 02/20/2001 01:15 PM --------------------------- Ketan.Patel@dynegy.com on 02/20/2001 12:43:54 PM To: Sandy.Hollingsworth@dynegy.com cc: ketan.patel@dynegy.com, Garrick.Hill@enron.com, Eddy.Daniels@enron.com, Marcus.Nettelton@enron.com, Gerardo.P.Manalac@dynegy.com, Aldo.C.Lopez@dynegy.com Subject: January 2001 Billing Summary for Michigan Power Limited Partnership Sandy- I just received the billing summary of power purchased from Michigan Power Limited Partnership for January 2001. As expected, they have used the capacity charges corresponding to Year 6 (On Peak = $41.99/MWh, Off Peak = $39.89). Could you please draft a quick letter as suggested by Marcus Nettelton. The correct capacity charges should be On Peak = $45.90/MWh, Off Peak = $43.60/MWh. Rick, I will fax you a copy of the billing summary and then you can forward it others in your shop. Thanks, Ketan Marcus.Nettelton@enron.com on 02/15/2001 11:48:19 AM To: ketan.patel@dynegy.com, shol@dynegy.com cc: Garrick.Hill@enron.com, Eddy.Daniels@enron.com Subject: Michigan Power Limited Partnership - PPA Further to the email sent yesterday by Eddy Daniels, we believe that if Consumers Energy fail to adjust the amount of capacity charges in January 2001, which it appears that they are likely to do following their letter of February 5, 2001, we are of the view that a notice of disagreement should be sent to Consumers Energy. In principle we suggest that the notice should dispute that the correct capacity charge has been applied, stating the correct capacity charge and requesting that Consumers Energy re-submit their invoice to reflect the correct capacity charge. Please do not hesitate to call me on 713 345 8161 to discuss this further. Kind regards. Marcus Nettelton Senior Counsel
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