Enron Mail

Subject:National Power Delivery Opportunities
Date:Fri, 10 Aug 2001 10:23:01 -0700 (PDT)

Dear Mr.. Skilling,
Given the current events of the last several years regarding power generation and delivery across our nation, I have a proposal, I'm sure will interest you.
First, with your position with Enron, you must be keenly aware of the issues that we face as a nation, and direct impact which the energy markets have on our economic health. Additionally, you must also be aware of the capacity imbalance from region to region, lack of capital improvements by the incumbent utilities, ISO's etc, all of which has created a situation that our national grid is in a state of degradation, in which even the delivery and transfer of existing capacity is questionable, must less the additional generation which is being added. This has rendered our national grid, with its many segmented regions to slightly above that of a third world nation.
This lack of capital investment has been exacerbated by a lack of clear direction by the vast number of regulatory bodies, and general lack of aggressive entrepreneurial motivation and vision by the various utilities to develop creative solutions to issues which they have a vested interest to resolve, but haven't. It appears that there are vast opportunities available to an aggressive, first mover organization which can pull together the resources, and bring all the players together along with the capital markets to initiate, develop and build additional capacity or to enhance the existing power delivery and transfer.
While the Bush Energy Policy goes a long way towards bringing federal backing to developing additional generation capacity, it appears to fall short regarding the transmission systems that cross our nation, of which many are already straining under a heavy load, which is only anticipated to grow. Additional transmission capacity must be built, including additional interconnects between the various grids and/or existed interconnects strengthened. The ability to transfer power from the east coast to the west coast, as the power demand peak moves across the country from the east, or the ability to transfer power from such area's as Nova Scotia which has an abundant supply of inexpensive Hydro Power would certainly be the ideal situation.
What I propose, is the development of a new Enron company, of which its vision would be to identify and develop opportunities to build various transmission assets, and/or additional generation capacity or to strengthen existing assets. This would be accomplished by bringing various players together under the Enron lead, and working with the capital markets to develop a strategy, allowing for the asset to be built. All the while keeping in mind, the asset light and capital velocity approach. It would be the goal of this new organization, not to own the physical asset, but to retain the rights to a portion of its capacity. This capacity could then be traded or used for power transfers from regions with inexpensive supplies to areas that shortages exist. I envision long term inexpensive contracts for Nova Scotia hydropower; being transferred to such area's as New York, the Midwest, or even California.
While such an idea is not unique, with several proposals being considered by various organizations across our country. Such as the following:

Path 15, long recognized as the major transfer constraint between North and Southern California. Recently, WAPA has issued a solicitation for equity participation, in which private organizations could participate, in the financing, building and ownership with rights to its capacity. http://www.epa.gov/fedrgstr/EPA-IMPACT/2001/June/Day-13/i14874.htm
Neptune Project a private initiative in the New England states being proposed by a group of companies, mostly non-utility for except ABB. This project has recently been approved by FERC and is currently soliciting bids for capacity rights, ownership, etc. http://www.neptunerts.com/

TransAmerica Project another private initiative being proposed by Black & Vetch along with Siemens. The scope of this project is to build a DC line between the east/west grids, thereby allowing a transfer capacity increase to 6000 MW. This project has already been presented to the National Energy Committee put together by President Bush as a viable project and potential solution. http://www.bv.com/bv/news/pressrel/2001/bv_siemn.htm

While great idea's are plentiful, the problem is funding from the capital markets, or an organization with proven leadership and track record to pull off such a project.
This is just the beginning, and given the historical lack of investment in the grid, many more opportunities will had by an aggressive organization with the foresight to put together the team to capture them as they come available. I envision that this organization would work in conjunction with TranConnect , which Portland General is currently a member, in order to expand or compliment their efforts.
It's my opinion and that of many others, that the only organization on this planet, with the financial strength, entrepreneurial vision, superior management along with political clout, to pull all the components together to make this a success, is Enron.
As a former Enron employee, I am extremely familiar with a number of the organizations, which make up Enron, and feel that this would certainly compliment or augment existing operations.
While I'm not with Enron as this time, I certainly am proud of the contributions I made while with such a progressive organization and I am extremely interested in meeting with you at your earliest convenience to discuss this proposal and it's fit into overall Enron strategic plan.
For further discussion, I can be contacted at (602) 758-4544 (Cell)
Mike Stefanik