Chris, when did BP Amoco get involved?  I thought we were dealing with Avista.

Regards
Delainey
---------------------- Forwarded by David W Delainey/HOU/ECT on 05/15/2000 
09:57 AM ---------------------------


Christopher F Calger
05/13/2000 02:29 PM
To: David W Delainey/HOU/ECT@ECT
cc:  
Subject: Deal Update

Dave,

Update from Friday Afternoon:

Coyote:  Avista Board approved a 50% equity investment in Coyote Springs II 
and publicly announced their intention to move forward.  Their equity 
partner, BP Amoco, indicated that they need 30 more days to "get comfortable 
with the market".  This thirty day period coincides with the expected 
financial close of June 15 so it may just be posturing to let us know that 
they are not committed until the deal actually closes.  Nevertheless, we 
(Avista and Enron) will pursue fallback investors that have already seen the 
project and previously expressed interest in a 50% share.  In parallel, we 
will try to get BP Amoco "comfortable".  It might make sense to consider 
someone else that can move quickly.  Deal probability drops from 80% to 50%.

LVCogen:  Vickers and Gilbert met with Sierra Pacific and confirmed their 
interest in and ability to effect a restructuring of the PPA.  Although 
timing of "securitization" is open-ended, Sierra has agreed to a contract 
valuation that supports a valuation uplift of $10MM - $14MM.  If we assume a 
40%-50% probability of restructuring, we get to the hotlisted $5MM gain for 
QII.   Attached is a spreadsheet that shows the breakup value of LVCogen.  
CTG and Power Structuring are finalizing the RAC models that support this 
approach.

Regards,

Chris