Message-ID: <18611879.1075858651554.JavaMail.evans@thyme>
Date: Thu, 4 Oct 2001 11:41:52 -0700 (PDT)
From: 40ees@enron.com
To: steve.wurzel@enron.com, bob.deitz@enron.com
Subject: Comments on GSA Region 1 Projects Transition
Cc: richard.ring@enron.com
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X-From: Bill Hatch/HOU/EES@EES <IMCEANOTES-Bill+20Hatch_HOU_EES+40EES@ENRON.com>
X-To: Wurzel, Steve </O=ENRON/OU=NA/CN=RECIPIENTS/CN=NOTESADDR/CN=A48004B2-B2DBAF2E-86256730-74E818>, Deitz, Bob </O=ENRON/OU=NA/CN=RECIPIENTS/CN=NOTESADDR/CN=2C8C843B-6EF105ED-86256706-76A82D>
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Steve and Bob,

There is a clear assumption in the email history below that suggests that t=
here is a relationship between EFS buying the existing projects under the G=
SA contract and a potential adverse affect on the GSA commodity portion of =
the commodity risk book.  This is not the case.  The potential adverse affe=
ct on the commodity risk book would exist regardless of whether or not EFS =
bought the projects.  That is, if there were no change to the internal stru=
cture of the contract and EES went forward as if nothing had happened, then=
 the issue of this potential adverse affect would still exist.  It would ex=
ist as an internal EES problem which would have to be resolved because we h=
ave an existing contract with the VA.  This commodity risk issue would not =
exist only if we were going to terminate all the VA projects.  But, as far =
as I know, there has never been serious consideration to terminating the pr=
ojects....if for no other reason we have no right to unilaterally terminate=
.  Only the government has that right.

The important point here is that this issue is not an issue pertinent to th=
e indemnification issue.  Whatever needs to be done to complete the indemni=
fication process should proceed uninterrupted.  Once the indemnification ha=
s been resolved, then as a separate matter, EES and EFS should address what=
 affect the projects have on the commodity book.  They are separate issues =
and would have to be resolved independent of any indemnification issue. =20

Bottom line is that by relating the two issues (i.e. the issue of the proje=
cts' affect on the commodity book with the issue of indemnification), someo=
ne has created unnecessary confusion. =20

Just thought I'd add my two cents....

Bill=20

---------------------- Forwarded by Bill Hatch/HOU/EES on 10/04/2001 02:18 =
PM ---------------------------
From:=09Richard Ring/ENRON@enronXgate on 10/03/2001 09:53 AM CDT
To:=09Bill Hatch/EFS/EES@EES
cc:=09=20
Subject:=09FW: GSA Region 1 Projects Transition


Bill,

FYI
 -----Original Message-----
From: =09Ring, Richard =20
Sent:=09Wednesday, October 03, 2001 9:49 AM
To:=09Herndon, Rogers
Subject:=09RE: GSA Region 1 Projects Transition

Rogers,

Enron Energy Services Operations, Inc. ("EESO") and General Services Admini=
stration ("GSA") entered into an agreement, effective November 1, 1998, whi=
ch provides for commodity pricing and value added services, specifically re=
lated to GSA Region 1 -New England and runs through October 31, 2003.  EESO=
 agreed to provide a "Discount to Standard Offer" commodity price for GSA's=
 "Core Load" associated with facilities in Massachusetts, New Hampshire and=
 Rhode Island at such time as the utilities met certain conditions regardin=
g deregulation (State commission formally approves UDC's restructuring plan=
 and State Commission formally approves the UDC's sale of non-nuclear gener=
ating assets).  Individual agencies that have elected to participate under =
the GSA agreement are: Veterans Administration, Coast Guard, National Parks=
 Service, Internal Revenue Service, Department of Agriculture, National Arc=
hives and Records Administration, Hanscom Air Force Base, and Department of=
 Labor, with the total core group consisting of approximately 60 MW's.  The=
 UDC's that have met the above referenced criteria above are Massachusetts =
UDC's (MECO, BECO WMECO, Fitchburg Gas & Electric, Eastern Utilities, and C=
ommonwealth Electric, Cambridge Electric Company) and Rhode Island UDC (Nar=
ragansett Electric).  The only location where EESO currently delivers physi=
cal commodity is Massachusetts - BECO, which represent approximately fifty =
percent of the total "Core Load" or approximately 30 MW's and commenced in =
October 2000.

The agreement has provided other commodity upsell opportunities such as (i)=
 physical delivery of comodity GSA accounts and Coast Guard accounts in Mai=
ne behind Central Maine Power (June 2000 thru October 2003)  and (ii) sale =
and delivery of "renewable energy" to GSA and Hanscom Air Force Base (Octob=
er 2000 thru December 2001, with opportunity to extend thru October 2003).

Value Added Services under the agreement has been responsible for (i) solar=
 panel project development and installation (ii) cogeneration project devel=
opment and installation (in progress) (iii) chilled water project and (iv) =
maintenance agreement, all which total additional 50-55 million dollars.  E=
ESO had asked GSA to allow the contract to be split between commodity and v=
alue added services and GSA refused. A decision was made that would allow E=
nron Facilities Services (EFS) to perform the value added services portion =
of the contract, on behalf of EESO.  To the best of my knowledge the cogene=
ration projects would affect only the Veterans Administration sites, behind=
 Massachusetts-BECO only. =20

There is another issue that we can discuss at your convenience which relvol=
ves around the Master Subcontracting Plan and the requirement, in the last =
two years of the agreement for EESO to spend 1 million each year of the las=
t two years of the agreement utilizing small business concerns, small disad=
vantaged business concerns, and women-owned small business concerns.

Let me know if you would like to discuss any of the above referenced inform=
ation.

Regards,

Richard     =20

 -----Original Message-----
From: =09Herndon, Rogers =20
Sent:=09Wednesday, October 03, 2001 8:25 AM
To:=09Wheeler, Christopher
Cc:=09Ring, Richard
Subject:=09RE: GSA Region 1 Projects Transition

No acceptance.

This is not enough info for me to accept anything.  We have a process which=
 you will need to follow.  I suggest you talk to Sean Holmes and ultimately=
 EWS' structuring group will have to get comfortable with all/any of the is=
sues before I accept.  I expect better documentation than just an e-mail.

Richard what are the issues - this is the first thing I have EVER heard abo=
ut this?

Rogers



 -----Original Message-----
From: =09Wheeler, Christopher =20
Sent:=09Tuesday, October 02, 2001 9:55 PM
To:=09Herndon, Rogers; Ring, Richard
Cc:=09Longbottom, Eric; Nanof, John
Subject:=09GSA Region 1 Projects Transition

Rogers & Richard,

We are in the process of selling (transitioning) the Projects piece of the =
GSA Region 1 Deal to Enron Facility Services, with the commodity piece to r=
emain the responsibility of EES. We would like to confirm that when EFS com=
pletes a project, the resulting reduced consumption figures will not advers=
ely affect your commodity risk position.

Please indicate your acceptance of this transaction by responding to this e=
mail.

Regards,

Chris Wheeler
