FW: Consumption Bands

Chris,

Don't forget to include this one in your consolidation of Consumption Band information.

Thanks - MO

-----Original Message-----
From: Herod, Brenda F.
Sent: Wednesday, August 08, 2001 9:07 PM
To: O'Neil, Murray P.
Subject: FW: Consumption Bands

-----Original Message-----
From: Chen, Andy
Sent: Wednesday, August 08, 2001 9:37 AM
To: Perry, Todd
Cc: Herod, Brenda F.
Subject: RE: Consumption Bands

Thanks Todd.

-----Original Message-----
From: Perry, Todd
Sent: Wednesday, August 08, 2001 8:44 AM
To: Chen, Andy
Subject: RE: Consumption Bands

Andy,

For Rexam be sure that you recognize that when Rexam exceeds 110% of its Baseline consumption, Rexam is billed for the entire excess volume above the Baseline multiplied by the Basis adjustment. See Section 5.2.4 of the original contract.

Todd

-----Original Message-----
From: Chen, Andy
Sent: Tuesday, August 07, 2001 4:40 PM
To: Herod, Brenda F.
Cc: Perry, Todd; Donovan, Terry W.
Subject: FW: Consumption Bands

Brenda--

Correction. Per Section 5.2.4 there is a 90/110 band around around all gas and electricity consumption for Rexam.

Apologies for the mistake,

Andy

-----Original Message-----
From: Chen, Andy
Sent: Monday, August 06, 2001 11:27 AM
To: Donovan, Terry W.; Herod, Brenda F.
Cc: Leinauer, Christopher
Subject: RE: Consumption Bands

Springs Industries

Please note that I've asked Chris Leinauer in Baseline to perform a comparison of actual vs. baseline consumption for this transaction.

Consumption band language can be found in Schedule 3.6, "Adjustment Process" of this contract. Section 1.4 pertains to Retail electricity sites and Section 1.5 pertains to Wholesale electricity and Discount gas sites. Non-Discount gas sites are not subject to a consumption band. Note that, while the commercial intent of the contract is for EES to directly serve gas to Discount gas sites, in fact EES is currently not serving gas to one Discount site (Middleton) and is serving a Non-Discount site (Griffin Finishing).

If annual consumption at any gas or electric site is more than +/- 15% of the baseline, then a Material Change is deemed to have occurred. If the circumstances which have caused the Material Change will continue for at least 270 days, then the Material Change will be deemed Permanent. If the circumstances last less than 270 days, then the Material Change will be deemed Temporary.

For Retail sites, Material Changes that result in consumption level changes more than the greater of $25,000 or 10% of the baseline spending will require an Adjustment to be agreed upon by both parties.

For Wholesale electricity and Discount gas sites, in the event of a Temporary Material Change, Excess or Deficiency Volumes in the Contract Year will be calculated based on how much more actual consumption is above or below 10% of the baseline. Wholesale sites subject to Index Pricing (i.e., subsequent to Deregulation) and Discount gas facilities will pay a true-up on Excess or Deficiency Volumes equal to the difference between contract price and market price. Note that for electricity only the Montgomery Site is currently post-Deregulation and subject to the true-up.

In the event of a Permanent Material Change, a true-up will be paid as per the Temporary Material Change above and Cover Damages will be assessed, per Schedule 8.3.2.3.6.

Rexam (American National Can)

There is a cap of 110% of baseline volumes for Deregulated states (AZ, IL, NJ) and for Deregulating states prior to Deregulation (SC, GA, TX, OK, IN, NC). There is no consumption band for gas facilities we serve, Deregulating states after Deregulation, and California. Volumes consumed in excess of the cap are charged the "Deregulated Electricity Price" equal to applicable wholesale index plus fixed basis.

Please contact me at x5-8998 if you have further questions,

Regards,

Andy

-----Original Message-----
From: Donovan, Terry W.
Sent: Monday, August 06, 2001 8:08 AM
To: Vonderheide, Scott; Chen, Andy; Dalia, Minal; John, Saji; Jones, Oliver; Schmidt, Darin; Cross, Edith EES; Perry, Todd; Morse, Brad; Wagner, Joseph; Davenport, Lacrecia
Cc: Ahn, Chris; Watts, Christopher; Stokley, Chris; Herod, Brenda F.
Subject: Consumption Bands

Operations (Brenda Herod) is attempting to complete an analysis on EES billing performance on all contracts that contain consumption bands. Her goal is to highlight those agreements with bands and ensure that EES has billed the customer correctly.

At this point a central location for information of this type does not exist so she was hoping we could provide information on what we have found to date. Can you each please provide information to me on consumption bands in the contracts you have reviewed. (See the list below) Please send this to me as quickly as possible, Brenda has asked for it by this afternoon if possible.

Chase Vonderheide
Rexam Chen
Springs Chen
Tyco Dalia
Starwood John
Quebecor Jones
Packaged Ice Vonderheide
Archdiocese Schmidt
Eli Lilly Cross
IBM Perry
Owens Morse
Pilkington Wagner
Polaroid Davenport