Lorenzo:

I apologize for our tardiness in getting back to you re: your generation project in Baja.  

Here is where we stand with the Centrans arrangement.

1.  I have spoken to Daniel R. Castagnola, a VP in Finance who has worked with Centrans and speaks highly of your business acumen in Central America.  The transactions Enron has done with Centrans to date involve equity transactions whereby any Enron credit exposure was hedged by assets.  So, the financial strength of Centrans was not directly in question.  Daniel indicated that we should look at Centrans independently to establish a transaction in Baja.  To this end, we need financial statements from Centrans to establish credit parameters and prepare a Master Power purchase Agreement that could be used to conduct business.  

2.  Stewart Rosman has contacted CFE re: transmission access in Baja.  CFE has indicated that transmission is available.  We have never purchased transmission in Mexico and although it might be possible to do so, we would prefer if Centrans contracted for it themselves, delivering energy to Enron into the ISO grid at Tijuana, which is an ISO tie-point.  I would expect transmission on this arrangement would cost about $5/MWh.   

3.  Forward Prices - As you know, the longer term price at SP-15 for Peak is about $36.  Off peak is about $24.  After subtracting the cost of transmission, this nets about $30 for peak energy and $19 for off peak to the project in Baja.  I am not sure what your fuel price would be, but it seems unlikely that project economics would be supported by such a price.
Please contact me and let me know if you want to continue efforts to proceed with this project.  If so, we need to obtain your financial statements to proceed with the credit review and set up contracts with Centrans.  
Thanks

Chris Foster
chris.h.foster@enron.com
(W) 503/464-3822
(Cell) 503/702-8568