---------------------- Forwarded by Tammie Schoppe/HOU/ECT on 04/05/2001 
08:45 AM ---------------------------


James D Steffes@ENRON
04/04/2001 06:51 PM
To: Louise Kitchen/HOU/ECT@ECT, Lisa Yoho/NA/Enron@Enron, John J 
Lavorato/Enron@EnronXGate
cc:  

Subject: NYPSC Adopts Enron Online as Index

Not sure if you had seen this language from the NY PSC.  While great, this 
clearly means that NY PSC commissioners will begin to think alot about how 
EOL  and its relationships with other Enron companies.

Jim

---------------------- Forwarded by James D Steffes/NA/Enron on 04/04/2001 
06:49 PM ---------------------------
From: Howard Fromer on 04/02/2001 04:38 PM
To: Jeffery Ader/HOU/ECT@ECT, Michael Brown/Enron@EnronXGate, Mark Dana 
Davis/HOU/ECT@ECT, Tom Dutta/HOU/ECT@ECT, John D Suarez/HOU/ECT@ECT, Doug 
Sewell/HOU/ECT@ECT, Richard Ring/HOU/EES@EES, Charles Decker/HOU/EES@EES, 
Gary Keevill/ECP/Enron@Enron, John Llodra/Corp/Enron@ENRON, Tom 
May/Corp/Enron@Enron, Pearce W Hammond/Enron@EnronXGate, Christi L 
Nicolay/HOU/ECT@ECT, Sarah Novosel/Corp/Enron@ENRON, Dan Staines/HOU/ECT@ECT, 
W David Duran/HOU/ECT@ECT, Richard Lydecker/Corp/Enron@Enron, Steve 
Montovano/NA/Enron@Enron, James D Steffes/NA/Enron@Enron, Janelle 
Scheuer/Enron@EnronXGate, Rick Bachmeier/HOU/EES@EES, Lance 
Hinrichs/HOU/EES@EES, Jim Meyn/NA/Enron@Enron, Berney C Aucoin/HOU/ECT@ECT, 
Richard Shapiro/NA/Enron@Enron, Patricia Collins/HOU/EES@EES, Fatimata 
Liamidi/HOU/EES@EES, Dag Joraholmen/HOU/EES@EES, Dwight Fruge/HOU/EES@EES, 
John Campbell/HOU/EES@EES
cc:  

Subject: NYPSC approves market-based backout credit for RG&E; Adopts Enron 
Online as Index

Another big victory for Enron in New York! In an Order issued by the NYPSC on 
March 29, the NYPSC has approved a proposal to modify the existing fixed 
backout credit of 2.8 cents per kwh for energy and capacity and replace it 
with a market-based backout credit. The additional retail adder of 0.4 cents 
per kwh would remain.  Load-serving entities (LSEs) will have the option of 
continuing to buy their energy and capacity from RG&E at the market based 
backout credit which will be determined 15 days prior to the beginning of 
each of the two six-month capability periods, and will be based on "a 
forecast of energy prices derived from Enron Corporation's (Enron) 
EnronOnline trading platform."  To my knowledge, this is the first occasion 
that a regulatory body has agreed to use Enron Online as an index!  LSEs can 
elect instead to procure their own commodity and get a market-based backout 
credit (MBBC). Under this option, the LSEs will get a market based backout 
credit. However, the Enron online prices for the six months determined as 
above will be reconciled on a lag basis against actual market prices.  The 
PSC has capped the amount of the reconciliation for any LSE to the product of 
the LSE's total load for the calendar year and $0.065 per kwh (PSC staff's 
estimate of RG&E's embedded power supply cost).  (The PSC Order actually says 
$0.015 but this appears to be a mistake since the attached settlement states 
$0.065.) A copy of the PSC's Order is available on its website:  
www.dps.state.ny.us