----- Forwarded by Richard B Sanders/HOU/ECT on 02/21/2001 05:46 PM -----

	Marcus Nettelton@ENRON
	02/20/2001 02:34 PM
		 
		 To: Elizabeth Sager/HOU/ECT@ECT, Richard B Sanders/HOU/ECT@ECT
		 cc: Eddy Daniels/NA/Enron@Enron, Garrick Hill/HOU/ECT@ECT, Charles 
Ward/Corp/Enron@ENRON, Roy Boston/HOU/EES@EES
		 Subject: January 2001 Billing Summary for Michigan Power Limited Partnership 
- Next Steps


	


Liz/Richard

I suggest that we seek to rely upon Section 18(c) which says that 
"....pending resolution of the disagreement by arbitration, Seller shall 
continue to operate the Plant in a manner consistent with this Agreement and 
Consumers shall continue to pay all charges required in accordance with the 
applicable provisions of this Agreement."
 
Since arbitration is the final stage in the dispute resolution process agreed 
by the parties and it has been agreed that there should be continuity until 
any dispute is finally resolved, this position should properly apply to each 
stage of the dispute resolution process. I suggest that since the dispute 
resolution procedure envisages continuity, until resolution, that Consumers 
should continue to invoice on the basis that they have done for the last few 
years.
 
Richard, we will need your input as to whether we could argue the above with 
a sufficient degree of confidence to persuade a judge to make an order of 
specific performance as against Consumers to invoice using the basis that 
they have been using for the last few years, pending outcome of the dispute 
resolution process. Further, whether you believe that we will be entitled to 
seek such equitable relief.
 
We need to take control of this process and ensure that Consumers are always 
playing catch-up, if we fail to do so we will be playing catch-up and will be 
out of pocket until the conclusion of the arbitration process. If we do not 
get Consumers to invoice and pay the sums we believe are due, there will be 
no incentive on Consumers to start the process and every opportunity for them 
to delay any resolution of this dispute.
 
I have spoken with Sandy Hollingsworth who will be sending me copies of 
documents that Dynegy have uncovered which she believes further assist our 
case. Once I receive them we ought to meet to review and obtain a better 
understanding of the case we are able to make and the case which may be made 
against us. Is there any other evidence that we, or Dynegy, should be 
collecting at this stage, such as interviewing individuals who were involved 
in the negotiations/discussions with Consumers?
 
Regards,
 
Marcus
---------------------- Forwarded by Marcus Nettelton/NA/Enron on 02/20/2001 
01:15 PM ---------------------------


Ketan.Patel@dynegy.com on 02/20/2001 12:43:54 PM
To: Sandy.Hollingsworth@dynegy.com
cc: ketan.patel@dynegy.com, Garrick.Hill@enron.com, Eddy.Daniels@enron.com, 
Marcus.Nettelton@enron.com, Gerardo.P.Manalac@dynegy.com, 
Aldo.C.Lopez@dynegy.com 

Subject: January 2001 Billing Summary for Michigan Power Limited Partnership


Sandy-

I just received the billing summary of power purchased from Michigan Power
Limited Partnership for January 2001.  As expected, they have used the
capacity charges corresponding to Year 6 (On Peak = $41.99/MWh, Off Peak
= $39.89).  Could you please draft a quick letter as suggested by Marcus
Nettelton.  The correct capacity charges should be On Peak  = $45.90/MWh,
Off Peak = $43.60/MWh.

Rick, I will fax you a copy of the billing summary and then you can forward
it others in your shop.

Thanks,

Ketan




Marcus.Nettelton@enron.com on 02/15/2001 11:48:19 AM

To:   ketan.patel@dynegy.com, shol@dynegy.com
cc:   Garrick.Hill@enron.com, Eddy.Daniels@enron.com

Subject:  Michigan Power Limited Partnership - PPA


Further to the email sent yesterday by Eddy Daniels, we believe that if
Consumers Energy fail to adjust the amount of capacity charges in January
2001, which it appears that they are likely to do following their letter of
February 5, 2001, we are of the view that a notice of disagreement should
be sent to Consumers Energy.

In principle we suggest that the notice should dispute that the correct
capacity charge has been applied, stating the correct capacity charge and
requesting that Consumers Energy re-submit their invoice to reflect the
correct capacity charge.

Please do not hesitate to call me on 713 345 8161 to discuss this further.

Kind regards.

Marcus Nettelton
Senior Counsel