|
|
Enron Mail |
FYI
----- Forwarded by Aleck Dadson/TOR/ECT on 06/08/2001 01:45 PM ----- Aleck Dadson 06/08/2001 01:32 PM To: Rob Milnthorp/ENRON@enronXgate@ENRON cc: Paul Devries/TOR/ECT@ECT@ENRON, Robert Hemstock/ENRON@enronXgate@ENRON Subject: Re: IMO Meeting Highlights This message came back to me (too big) - I am resending and will send garrett's paper separately. __________________ Rob, thanks for the comments from the IMO Board meeting. Three points: a) I am not sure what paper the IMO Board members may be referring to. It could be the briefing note re Moving Forward to Market Opening, the briefing note Satisfying the Government's Four Guiding Principles, or the piece on resource adequacy and pricing that Garrett Tripp prepared and that he and I have been delivering to senior people in the government and elsewhere. I attach those three papers in electronic format. b) The briefing notes above (and the material we are preparing for Ken Lay and John Lavorato) address the Pickering A point. The suggestion that market opening is tied to Pickering A doesn't surprise me but is at odds with what Judy Hubert has been telling stakeholders recently. In any event, it is commonly thought that the government may think that Pickering A will improve reliability and stabilize prices. There may, in fact, be another reason. One of our contacts in the Premier's Office has indicated that Farlinger had told Harris that waiting until the return of Pickering was important from the perspective of OPG's financial position. On reflection, Garrett Tripp and I think that the concern likely relates to OPG's obligations under the MPMA - the concern may be a) that OPG may not be able to claim "force majeure" in respect of the Pickering A delay in order to reduce their rebate obligations ( definition of "force majeure" in sec. 2© may not be broad enough) or b) that, even if OPG can claim "force majeure", the predetermined "force majeure replacement cost" fixed at the time the MPMA was completed in 1999 may be too low to offset the cost to OPG of securing replacement power in 2001-2002. In other words, OPG is asking the government to intervene in market development/market opening to protect OPG from the terms of the deal (maybe, from OPG's perspective, now a "bad deal") that OPG made in 1999. We should discuss whether Lay and Lavorato can make this point to Harris (without compromising our source). c) With respect to Foward Markets , I think we have to distinguish between a binding hour ahead and day ahead market which we may want to have the IMO run (assuming that this will facilitate and standardize trading among the Northeast ISOs - which is a key objective in the East), but anything beyond that they should stay away from. I will speak to Rob Hemstock and to the folks in Houston who have been working so hard on the RTO development in the Northeast. Did any material get circulated as to what they want to do re forward markets? In any event, I think we should have a demo of Enron Online in Toronto for the IMO Board and OEB. ` Rob Milnthorp/ENRON@enronXgate 06/08/2001 12:11 PM To: Aleck Dadson/TOR/ECT@ECT, Paul Devries/TOR/ECT@ECT cc: Robert Hemstock/ENRON@enronXgate Subject: IMO Meeting Highlights Some Brief Highlights from the 06/07/01 IMO Meeting: - Market opening, without question, is now tied to the bringing back of the 1st pickering unit. Govt is clearly not thinking november but the good news is that they have made some statements locking them into may/02. We should have our own intelligence re Pickering return but Boland told me that March was highly probable. - A number of positive comments re Aleck's paper from board members - Aleck I'm not sure which paper they are referring to - can i get a copy. - Forward Market development - IMO "wants to make this happen". Assessing two candidates. I told the IMO that this is not their mandate and that a conditional forward market exists currently and an unconditional forward market will exist when we have a unconditional market opening date. I talked re Alberta and indicated that the Alberta sponsored forward market was a joke (WattEx) and that Enron and others had done 100's of forward market transactions and the Enron has a visible forward market 24/7. ACTION - We need to develop a position paper on why this should be left to the market place and not some regulated central agency. The IMO should be concerned with creating the right environment to promote an efficient forward market (ie information disclosure, etc). OPG would support this position - we may want to co-author the paper. I believe Hemstock/Davies did some work on this already re Alberta. Let's discuss further.
|