Jeff --

As always, your proposal is creative.  After reviewing your presentation,
here are some tough questions that we can discuss tomorrow:

1.    Would the replacement energy from the market be obtained under
contracts of similar length and firmness as the QF contracts that the energy
replaces?  If not, why would the CPUC want to replace long-term, committed
QF power with short-term firm energy?

2.    Why would the CPUC want to replace long-term QF power over which it
has substantial regulatory leverage (through SRAC pricing) with market
energy from sources over which it may have less control?

3.    Are there 8,000 MWs of low-cost replacement energy available in
California, or in the WSCC with firm transmission to California?  How steep
is the supply curve for replacement energy?

4.    After a QF is bought out, I assume that it would simply operate in the
electric market as a merchant plant, if it continues to operate to provide
on-site power and thermal energy.  Is this correct?

5.    How sensitive are your calculated ratepayer and QF benefits to changes
in the relationship between SRAC (i.e. gas) and electric market prices?

6.    Assuming that there are both ratepayer and QF benefits from QF
contract buyouts, why is there a need for a formalized auction process, when
the same benefits might be captured through bilateral negotiations (such as
the QF buyouts done to date)?

7.    Doesn't your proposal require the utilities to be back in the power
procurement business?  If not, why not?

As you perhaps can tell, my questions focus on whether now is the right time
for such a broad plan to buyout QF contracts.

Talk to you tomorrow,

Tom

-----Original Message-----
From: Dasovich, Jeff <Jeff.Dasovich@ENRON.com>
To: tomb@crossborderenergy.com <tomb@crossborderenergy.com>
Date: Tuesday, October 23, 2001 8:41 AM
Subject: QF Presentation



Tom:
Here's the presentation that we'll go over with you tomorrow.
If you have any questions between now and then, just give me a call at
415.782.7822.
What number should I call you at tomorrow?

Best,
Jeff


>  <<QF Auction General.ppt>>
>
>


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