Enron Mail

From:mark.taylor@enron.com
To:mark.taylor@enron.com
Subject:Australia and EnronOnline
Cc:
Bcc:
Date:Mon, 1 Nov 1999 07:21:00 -0800 (PST)

---------------------- Forwarded by Mark Taylor/HOU/ECT on 11/01/99 03:22 PM
---------------------------


Louise Kitchen
09/29/99 06:23 PM
To: Paul Quilkey/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, David
Minns/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Mark E Taylor/HOU/ECT@ECT, Alan
Aronowitz/HOU/ECT@ECT
cc: David Forster/LON/ECT@ECT, Bob Shults/HOU/ECT@ECT, Marcello
Romano/LON/ECT@ECT
Subject: Australia and EnronOnline

In the build up to bringing Australia onto the EnronOnline system with a
start date of 1st February 2000, I have outlined a kick off plan as a
suggestion.

The initial work we have done covers the areas outlined belowbearing mind I
may have missed a few things out. In order to kick things off I suggest we
concentrate on the background areas which predominantly will be run by
legal. The teams involved in the project so far include the US and Europe -
where the jurisdictional issues have all been handled are listed at the
bottom of this note for information but I am to a certain extent assuming
that legal is run from the US rather than Europe for Australia (I have left a
voicemail with Alan Aronowitz to chat it through with him). I would like
Mark to co-ordinate the work with David and start off immediately - please
let me know if there are nay problems with this. From my group Dave Forster
and myself will be points of contact at this stage bringing in more resources
as soon as we get the background things rolling.

But firstly we need an idea of what will be traded in Australia, from our
discussions I am assuming Power, Coal and Weather - is that right?

Background:
(i) Due diligence from a regulatory perspective
(ii) Legal review on the framework of our site in its appropriateness to the
market .
(i) Drafting of the password application agreements in line with the market
(ii) Drafting of the electronic trading agreement in line with the market
(iii) Redrafting of the GTCs to incorporate language to cover web
transactions.
(iv) Complete tax review.

Commodities:
(i) Review with Traders on the products they are to offer
(ii) Production of short description of each product for publication on the
web-site quotes page
(iii) Production of long description to be accessed by clicking on the short
description
(iv) Trader training on the Stack Manager
(v) Trader training on the Product Manager
(vi) Trader/originator training on the Web-site

Customers:
(i) Collation of customers to be send a marketing pack including password
application form
(ii) Credit to process customers to set up the credit limits per product for
each customer and the appropriate form of GTC profile to be embedded in the
system.
(iii) Tax to approve customer profile
(iv) Legal to associate customers with any Master Agreements in place.

Support:
(i) Integration of EOL in risk systems
(ii) Daily data management of traders/customers
(ii) Maintenance of system

Technical:
(i) Bandwidth - Arshak Sarkissian is apparently rolling out bandwidth at the
current time between Sydney and Singapore to close the link around the world
(ie we loop the world). Between Houston and Sydney we now have 128k line
which will be increased (approximately doubling the capacity) - we will
fortunately have the experience of EnronOnline going live before then to know
if that will be enough. Arshak can get a T1 if required in approximately
60/80 days.

In order to kick things off I suggest we concentrate on the background areas
which predominantly will be run by legal. The teams involved in the project
so far include (I have left a voicemail with Alan Aronowitz to chat it
through with him). But firstly we need an idea of what will be traded in
Australia, from our discussions I am assuming Power, Coal and Weather - is
that right?

Point of contacts
Legal US Mark Taylor / Europe Justin Boyd
Regulatory US Legal team plus various members of Steve Kean's team
Tax Europe Janine Juggins / US Steve Douglas
Commercial team - Louise Kitchen, Dave Forster, Marcello Romano
Global Control Group - Bob Shults


---------------------- Forwarded by Louise Kitchen/LON/ECT on 29/09/99 23:36
---------------------------


Paul Quilkey@ENRON_DEVELOPMENT
29/09/99 09:26
To: Louise Kitchen@ECT
cc: David Minns/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
Subject: Ergon Internet

Louise
Received the click trade folders...thanks.
We would like to get going on the details for implementation.
Can you send me a list of the key people to interface with?
For your information, our lawyer is David Minns.
I have attached an article regarding a local retailers internet initiatives.
You may be interested in the two points in bold.
Cheers
Paul
---------------------- Forwarded by Paul Quilkey/ENRON_DEVELOPMENT on
29-09-99 06:37 PM ---------------------------


Paul Quilkey
28-09-99 08:52 PM
To: Paul Quilkey/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc:

Subject: Ergon Internet

28Sep1999 AUSTRALIA: Computers - Power supplier seeks vital spark on net.
By Mandy Bryan.
e-Strategy

As electricity retailers prepare for deregulation, Ergon Energy chief Kim
Griffith is looking to the internet for competitive advantage.
Around this time next year, NSW and Victorian consumers will be able to
choose their own electricity suppliers, ushering in a period of massive
change for Australia's 30 electricity retailers.
Among them will be Queensland's Ergon Energy, which now services 550,000
customers and earns 50 per cent of its revenue from the consumer market.
Ergon chief executive Kim Griffith has chosen to make the internet a key part
of his survival plan as he jostles for mind share.
"There really isn't an established way of doing this because electricity has
always been a monopoly and suddenly 10 million contestible customers will
appear in an industry that is probably turning over $10 billion in sales a
year," he says.
While studies show Australian utilities are lagging behind overseas
counterparts in moving operations online, Ergon Energy is considered to be at
the forefront of internet adoption by an Australian utility.
Ergon's website allows customers to connect and disconnect their electricity
service and submit complaints and enquiries.
"If you look at electricity retail, it is fundamentally an information-based
business and we will survive based on the information we can gather about
customers," says Griffith.
He also hopes that by 2001 customers will also be able to pay their bills and
select from more flexible pricing billing arrangements, as well as buy
products and services online.
"The internet is an obvious way of doing business because it also allows you
to increase interaction with customers at an appropriate cost. We are now
selling a commodity with low margins, so a cost-effective channel to market
is key."
The $3 to $4 cost of over-the-counter transactions is more than 10 times the
cost of an internet transaction, Griffith says.
As electricity margins shrink, he says Ergon will increasingly diversify into
non-electricity and electricity-related services and products.
"We are looking to add value and differentiate in areas other than price. We
are releasing a number of products into our domestic market related to
electricity and electricity consumption such as energy-efficient light
bulbs," he says.
"The next big challenge I've put to my people is to put significant product
on to the site and to generate real revenue."
But he acknowledges that winning in this market is not as simple as being
first on the web.
Ergon faces competition not only from traditional electricity retailers but
also nimble virtual electricity brokers such as Exco Energy (www.exco.com.au)
and possibly banks and supermarkets. Woolworths, for instance, has flagged an
interest in electricity retailing.
Yet Griffith believes that these same organisations also present
opportunities to utilities given the reach of their established customer
bases.
"If you look at electricity, and particularly the mass market, there really
isn't a channel to market," Griffith says. "In the future, companies will be
out there trying to create national brands as well as looking to alliances
with established brands and channels to markets."
In addition to seeking such alliances, Ergon is building up its own customer
database to hold and analyse the information it gathers from its website.
"Each time a customer hits our website, we can gather more information and
continue to build business based on that information."
For the time being, though, the major challenge lies in drawing people to its
site.
"We are offering a number of freebies on our site to get people used to
visiting it," he says.
Ergon also has comprehensive educational information on its site relevant to
the school curriculum which it is building up into a full virtual power
station tour.
"If we want people to keep visiting, we have to keep increasing the value of
the site to existing and potential customers," Griffith says.
"There are two groups, the ones that will not want to change suppliers in
2001 and those that do, and they are the people who will be on board with
technology."
Copyright John Fairfax Holdings Limited 1999. Not available for
re-dissemination.

Sources:AUSTRALIAN FINANCIAL REVIEW 28/09/1999 P29