Hmmm.  Very interesting.  I doubt AIG thinks of itself as being in the middle.




Heather Kroll@ECT
02/20/2001 03:07 PM
To: Kay Mann/Corp/Enron@Enron
cc:  

Subject: Re: New Albany & Alamac Plants

Thought you'd find this interesting.
---------------------- Forwarded by Heather Kroll/HOU/ECT on 02/20/2001 03:06 
PM ---------------------------
   
	Enron North America Corp.
	
	From:  Kevin M Presto                           02/20/2001 03:02 PM
	

To: Ozzie Pagan/HOU/ECT@ECT
cc: Don Miller/HOU/ECT@ECT, Stuart Zisman/HOU/ECT@ECT, Heather 
Kroll/HOU/ECT@ECT, Steve Van Hooser/HOU/ECT@ECT 
Subject: Re: New Albany & Alamac Plants  

Ozzie,

I want to retain the option of keeping Alamac (create a control area), and 
selling New Albany.   From a desk perspective, retaining at least one control 
area is strategically important, and if I can sell New Albany for $175 
million and keep Alamac for $20-30 million, we may want to do that.   

Given the strength in the long term gas market ($4.50 - 5.25/MMBtu over a 15 
year period), it is much easier to hedge the forward value of a coal plant.   
On  the other hand, peakers are literally worth zero on a forward basis, 
given low heat rate forward pricing.

Can we remove AIG from the middle, if necessary?