Ed, Mike, I am assuming that you two will address all the activity related to the Tallahassee contract going forward.  Let me know if there is something you need me or Robin to do.

Also, Pam Alley at Tallahassee (backup for Pam McCullers) would like for us to let Tallahassee know by 8:00 AM everyday what we are going to do for the next gas day.  It sounds like Tallahassee has not bought any base load supply to replace this gas.


 

-----Original Message-----
From: Doug John [mailto:djohn@jhenergy.com]
Sent: Friday, May 31, 2002 11:22 AM
To: Germany, Chris; McMichael Jr., Ed; Bridges, Michael;
McDonalR@talgov.com
Cc: WES@mail.ci.tlh.fl.us; FernandR@talgov.com; HurleyP@talgov.com
Subject: Re: Gas Sales Contract Between Tallahassee and Enron


Roger/Pat, et al: Should we be drafting an emergency motion to the Bankrupcy Court for rejection of this contract, such motion being prompted by Enron's impending  failure of performance?  I would think that we at least need to have a plan for advising the Court of any intention we have to try to terminate this contract for cause. I am concerned that the Court may take the following view: (i) Enron has just advised us that it values this contract at over $2 million, so it presumably it does not want to terminate it for nothing; (ii) under the terms of the contract, our remedy for non-performance is arguably the right to be made whole for our incremental costs of replacing the underlivered gas supply, rather than contract termination, and there is no indication Enron, as debtor-in-possession, does not intend to honor that obligation.  We probably need Jason's input here, and in any event to proceed carefully before throwing down the gauntlet. Doug

>>> "McDonald, Roger" <McDonalR@talgov.com> 05/31 11:57 AM >>>
Gentlemen,

	Your company has failed to provide gas supply beginning tomorrow,
June 1st, and it is my understanding that Enron will not be scheduling gas
to Tallahassee pursuant to obligations of subject agreement for the entire
month of June.  Moreover, it appears that Enron shall default same contract
for failure to perform, thus terminating the agreement.  In any case,
Tallahassee would appreciate notification at your earliest convenience so
that we may make decisions regarding our energy supply alternatives. 

	Should you have any questions or comments, please do not hesitate to
contact me or Pete Koikos, Director of Energy Services.
Sincerely,

Roger McDonald
Roger McDonald
Manager of Energy Trading
City of Tallahassee - Energy Services
100 W. Virginia Street
Tallahassee, FL   32301
850.891.6897 - Phone 
850.891.6890 - Fax
850.524.6897 - Cell
mcdonalr@talgov.com