Thanks!  This is a really great explanation.  I appreciate it.

Amy and Kimberly, just FYI.  This was on the no reprot this morning.




   Kate Symes                04/20/2001 10:15 AM

To: Sharen Cason/HOU/ECT@ECT
cc:  
Subject: Re: 586775  

I just spoke with Heather Dunton in Risk, and she said they've had problems 
valuing index forward deals that settle at the last 5-day NYMEX average. So 
to remedy the situation, they're taking a fifth of the volume out of the deal 
each day, beginning five days prior to the expiry date. In this case, the 
expiry date is 4/25/01, so they began with taking 5 MW out of deal 585480 and 
putting it into a fixed price forward deal - 586775. Each day Heather will 
take another fifth of the volume in 585480 and put it into 586775, and she'll 
average the fixed prices each day to eventually end up with the last 5-day 
average. That's the long and short of why this new forward deal - 586775 - 
doesn't need to be confirmed. Our position with Deseret stays the same - it's 
just split between two deals temporarily. 

Please call Heather or me with any questions. She's going to add another 
comment in both deals to indicate the changes she'll be making, so it should 
be apparent to everyone that 586775 does not need to be confirmed at any 
point. When we get to the expiry date, Heather will kill that fixed forward 
deal, since the index price will pull into the system and 585480 will value 
properly.

Sorry for the winded explanation, but I thought it was better to give you 
more than less!

Thanks,
Kate


   
	
	
	From:  Sharen Cason                           04/20/2001 06:31 AM
	

To: Kate Symes/PDX/ECT@ECT
cc:  

Subject: 586775

Can you check and see why we are not confirming this deal with Deseret?  It 
is on the not to be confirmed list.

Thanks!