Tenaska IV Availability

hmmm.........
----- Forwarded by Dan Lyons/HOU/ECT on 11/01/2000 09:35 AM -----

Garrick Hill
11/01/2000 08:04 AM

To: Carl Tricoli/Corp/Enron@Enron, John King/HOU/ECT@ECT, Douglas
Clifford/Corp/Enron@ENRON, Dan Lyons/HOU/ECT@ECT
cc:
Subject: Tenaska IV Availability

You'll love this.

While a strict interpretation of the PPA may get you there (i.e., Monthly
Availability = Delivered Energy / [MIN(Requested Energy,Contract Energy)]),
I'm not sure how this would play out under "force majeure" circumstances. In
any event, isn't it great that we have a "contract employee" that's taken the
time to read the PPA and figure this out!

RH

---------------------- Forwarded by Garrick Hill/HOU/ECT on 11/01/2000 07:51
AM ---------------------------

"Mike Gough" <mike.gough@naes.com< on 10/31/2000 05:11:08 PM
Please respond to <mike.gough@naes.com<
To: "Mazowita, Mike" <MIKE.MAZOWITA@ENRON.COM<
cc: "Hill, Rick" <Garrick.Hill@enron.com<, "Ward, Chuck"
<Charles.Ward@enron.com<
Subject: Tenaska IV Availability

A thought has occurred to me regarding the PPA and I would like for you to
provide a reality check. As you know for the first time ever, Brazos has
elected to purchase gas supplies which would have been used in our plant had
we been capable. Per section 9.05(b) of the PPA, "if the Utility requests
less than the contract energy for such gas day, the Utility may elect to
purchase gas supplies from the Company on such gas day under the relevant
gas supply contracts less the volumes used by the Company to satisfy the
Utility's generation request for such gas day". On both the daily and
monthly (Nov) nomination sheets we fill out our generation capabilities and
send it to Brazos and they intern complete and send back to us. Typically in
the past when we are down (other than the annual scheduled maintenance
outage) Brazos always requests contract generation which effects the monthly
availability calculation (PPA definition is delivered energy/requested
energy). The nominations we are now getting back from Brazos is 0 requested
for generation and 45,000 mmbtu for gas. It would seem to me that if Brazos
is requesting to utilize all of the gas supply and no requested generation
then they can't have it both ways and our availability would not be impacted
(i.e. plant availability would be 100%). This may be splitting hairs but I
thought it might be worth further examination.

MG