RE: HOME DEPOT, ETC --- TEXAS CUSTOMERS GREATER THAN 1 MW

My understanding is that we are sending out an affirmative consent letter to these customers.

-----Original Message-----
From: Steffes, James D.
Sent: 07 December 2001 17:30
To: Gahn, Scott; Rexrode, Stuart; Schwarz, Angela; Blachman, Jeremy; Sharp, Greg; Sharp, Vicki; Herndon, Rogers; Wagner, Joseph; Kingerski, Harry; Frank, Robert; Greiner, Kevin; Hughes, Evan; Smith, Mike D.; Keller, James E.; Mahoney, Peggy
Subject: HOME DEPOT, ETC --- TEXAS CUSTOMERS GREATER THAN 1 MW

There was a discussion today involving Home Depot and our inaction regarding not having sent out a DASR.

To make sure that we are all on the same page (please let me know if anyone disagrees with the following) --

1. We (meaning EES broadly) do have customers with metered demand greater than 1 MW (otherwise known as non-Price to Beat).

2. For non-Price to Beat customers that have not been DASRd or have no contract, the Affiliated REP will provide service to the customer beginning on their first meter reading after Jan 1, 2002 under a blanket Term of Service Agreement (let me know if you want copies) under the following price terms =

TXU Energy Services cost = $5 per kw for Demand (based on highest demand in last 12 months) + $50/Mwh + $100/month + Delivery Costs + Taxes.
Reliant Energy Services cost = [1.5 * Daily Gas Index * kwh] + [{1.15 * Capacity Price} * kw (billing demand)] + $490/month + Delivery Costs + Taxes.

3. If the customer does not pay their bill, they will then be placed on POLR service.

4. The AREP offers month-to-month service with a 30 calendar day notice provision for cancellation.

5. Next opportunity to DASR these customers will be Dec 16, 2001.

6. When we find a buyer for the Texas book or all of the company, EES intends to obtain permission from the customer to assign the non-Price to Beat customers. This implies that we will not be sending out the Opt-Out provision to non-Price to Beat customers.

Jim