Molly - here are the actual tariff conditions they can rely on -

if a supplier does not meet the minimum requirements (and we don't), NIMO can call for security up to amount based on:
(30 days x MDQ (Maximum Daily Quantity) x highest month's average daily NYMEX Henry Hub closing price)

The MDQ is the maximum quantity that the marketer may deliver daily to the City Gate.  It is based on historical usage patterns and expected weather conditions but must be less than the MPDQ.

The MPDQ (Max Peak Day Quantity) is the max gas the customer can take on a winter day, based on a day with 75 heating degree days.  Customers are assigned a MPDQ based on a "Base and Thermal Methodology", which calculates an expected peak day usage.

SO the point here is that there is some latitude in how they define MDQ.  Let's talk ASAP about how to get these details from them and perhaps negotiate the $4.3 million. 

 -----Original Message-----
From: 	Harris, Molly  
Sent:	Wednesday, November 21, 2001 2:00 PM
To:	Steffes, James D.; Leff, Dan
Cc:	Ogenyi, Gloria; Kingerski, Harry; Black, Don; Castano, Marianne; Keller, James
Subject:	NIMO


And the winner is .............. "me" to coordinate.  I have been leading with Legal and Trading.  Legal confirmed their right under the gas tariff (due to our downgrade).   Don's team, myself and the credit contact at NIMO reviewed the exposure calculation and believe it to be accurate at first review.  I am inquiring to a lock box to reduce the requirement by 50%.  Deadline to deliver is next Thursday, Nov 29th.

Harry/Gloria - could you please review their requirement?  NIMO is asking for collateral in effect to cover EES base load for the Supplier Select program, assuming EES does not deliver for 30 days and assuming the coldest day (in the past 30 years) which in effect mutiplies our load by a factor of 3.  However, NIMO has agreed to use forward Jan price in lieu of the past 12 months as stipulated in their tariff.

Regards
Molly

 -----Original Message-----
From: 	Steffes, James D.  
Sent:	Wednesday, November 21, 2001 1:43 PM
To:	Harris, Molly
Cc:	Leff, Dan; Ogenyi, Gloria; Kingerski, Harry
Subject:	FW: Performance / Surety Bonds

Molly --

Please let either Gloria or Harry know if you need our assistance.

Jim

 -----Original Message-----
From: 	Leff, Dan  
Sent:	Wednesday, November 21, 2001 12:32 PM
To:	Harris, Molly; Mihalik, Teresa; Fite, Rebecca; Kingerski, Harry; Steffes, James D.; Hughes, Evan
Cc:	Ogenyi, Gloria; Sharp, Vicki; Herndon, Rogers; Black, Don; Richter, Jeff; Bradford, William S.
Subject:	RE: Performance / Surety Bonds

When is this due?  What is our gas exposure in NIMO's service territory?  Who is on point?

Thanks - Dan



 -----Original Message-----
From: 	Harris, Molly  
Sent:	Wednesday, November 21, 2001 10:39 AM
To:	Mihalik, Teresa; Fite, Rebecca; Kingerski, Harry; Steffes, James D.; Leff, Dan; Hughes, Evan
Cc:	Ogenyi, Gloria; Sharp, Vicki; Herndon, Rogers; Black, Don; Richter, Jeff; Bradford, William S.
Subject:	RE: Performance / Surety Bonds



EES received a margin call for $4.3MM on Nov 19th from Niagara Mohawk for EES gas business to cover settlement and imbalance risk for NIMO's "Supplier Select" Program.  The Enron Corp. gaurantee is no longer acceptable at our current rating.  Legal has confirmed NIMO's rights under its gas tariff.  

Regards
Molly