A GISB can be used for deals longer than a month if they are fully 
interruptible.  However, we would only use the GISB for firm business If they 
limit their business to one month or less which would include a 31 day 
month.   The $20MM credit line represents the mark-to-market exposure of all 
business that ENA would be doing with the customer so that any deal that 
would tend to exceed the aggregate credit line would need to be separately 
supported with additional credit documentation, i.e., a letter of credit or a 
increase in the coverage under a parent guarantee.



	Phil DeMoes@ENRON
	03/07/2001 01:07 PM
		 
		 To: Dan J Hyvl/HOU/ECT@ECT
		 cc: 
		 Subject: RE: Physical Contracts

Lets discuss.
---------------------- Forwarded by Phil DeMoes/Corp/Enron on 03/07/2001 
01:07 PM ---------------------------


"Bergen, Laurence" <laurence.bergen@opc.com> on 03/07/2001 05:46:41 AM
To: "'Phil.DeMoes@enron.com'" <Phil.DeMoes@enron.com>
cc: "Mitchell, Clarence" <clarence.mitchell@opc.com>, "Walker, Tara" 
<tara.walker@opc.com>, "Brown, James" <james.brown@opc.com>, "Cook, Jim" 
<jim.cook@opc.com>, "Autry, Charles" <autry@ahclaw.com> 

Subject: RE: Physical Contracts


Phil,

Thank you for your explanation of the billing process.  Your email raised
some questions for us.

Specifically, we do not understand your statement that the GISB is an
interruptible contract for gas supply that is 30 days or less.

The GISB form you mailed us is similar to GISB's which we have received from
other companies.  All specifically state in the bottom disclaimer paragraph
of the first page that "This Contract is intended for Interruptible
transactions or Firm transactions of one month or less and may not be
suitable for Firm transactions of longer than one month."  Further, in the
interior of the GISB, on Exhibit A, there is a place to check whether one
wants firm or interruptible.

The intent of this email is to clarify.  Our interpretation is that GISBs
can be for firm (which is what we would want to do), and they would be for
31 day months as well as 30 day or less. Do you agree with this?

If our interpretation is correct, it is not clear why a Master Firm is
needed.  Can you explain what the value add is to our doing business?
[Perhaps it would be useful for a case where we wanted to cover our long
term purchases for a combined cycle plant which we intended to operate every
day of the year other than scheduled maintenance outages.]

Lastly, in our notes from our meeting, I wrote that Enron had offered an
initial $20MM credit line for Oglethorpe. When doing physical contracts
either under a GISB or your Master Firm, does this amount represent a Mark
to Market limit or a nominal limit?

We have our people reviewing GISB, ISDA, and Master Firm as I write this. We
look forward to your responses.

Larry Bergen
--------------------------------------------------------------------
-----Original Message-----
From: Phil.DeMoes@enron.com [mailto:Phil.DeMoes@enron.com]
Sent: Friday, March 02, 2001 4:14 PM
To: Bergen, Laurence
Subject: Re: Physical Contracts



Hey Laurence,

Good meeting you and Larry yesterday.   I think we had some good discussion
yesterday and it seems like we have some things we can work on together.

As far as the contracts, a couple of clarifications and an answer to your
question below.

You should have received a Master Firm Purchase/Sale Agreement via email
and hard copy.  Additionally, you have already received  a GISB contract
and a ISDA Agreement.  Here is a brief description of what each of them do:

   GISB - Gas Industry Standards Board Agreement - this is an interruptible
   contract for gas supply that is 30 days or less.  OPC would not be able
   to lock forward NYMEX prices on this contract but can purchase short
   term supplies.
   ISDA - this contract is for financial positions only.  If you wanted to
   enter into swaps or derivative based products, you can perform them
   under this contract without ever having to take physcial delivery.
   Master Firm - Under this contract, OPC will be purchasing firm gas
   supply and will be able to lock forward values on the NYMEX.  Note that
   this is a physcial contract which will require OPC to take delivery.
   OPC will receive a bill from Enron around the 5th after the month of
   delivery and will be required to pay no later than the 25th.  If the
   25th is on a weekend or holdiay, then the invoice will be due on the
   next business day.  OPC payment obligations are always after the month
   of delivery no later than the 25th with no need for any payments
   beforehand.  Note that under Triggering Event in Section 4.2, either
   party may need to provide additional credit assurances in the event of a
   material change which could cause a letter of credit to be issued.

Let me know if you did not receive the Master Firm Agreement or if you have
any more questions.

Thanks.

Phil DeMoes





"Bergen, Laurence" <laurence.bergen@opc.com> on 03/02/2001 11:26:46 AM

To:   "'phil.demoes@enron.com'" <phil.demoes@enron.com>
cc:

Subject:  Physical Contracts


Phil,

One quick question we forgot to ask yesterday.  If OPC were to to place an
order for physical contract for a delivery month of this summer,  when
would
we have to pay for this?  Would it be so many days after the end of the
month in which
received, etc? Would there be any cash due upon placing the order?

Larry Bergen
Oglethorpe Power Corporation