Harry and Steve,

Couple of updates on the TVA tolls:

Please change the gas assumption to NYMEX + $.50/mmBtu (this adder is a fixed cost so it should not be affected by volatility)
Also, price the 200 MWs for a 3 year term starting 6/1/03 and the 500MWs for a 3 year term starting 1/1/02.  Sorry for the confusion.

What kind of time frame do you see for providing an indicative offer for these two products?

Thanks.

- Nick

 -----Original Message-----
From: 	Hiemstra, Nick  
Sent:	Wednesday, September 05, 2001 12:44 PM
To:	Arora, Harry; Wang, Steve
Cc:	Meyn, Jim
Subject:	Heat Rate option

Harry,

Here are the inputs for the possible options we spoke with you about:

Power:  Into TVA
Gas:  TETCO-M1 + demand + commodity (see attached file for all-in gas price)
Heat Rate:  10,900 mmBtu/kWh
Variable O&M:  $2.88/mWh
Minimum run:  8 hours
Run hours:  7x24
Term:  6/1/03-5/31/06, 1/1/02-12/31/04 
Size:  200 MW, 500 MW

Please give us an indicative price.  We have also priced this option using our spread option model.

Let me know if you have any questions or need more inputs.

- Nick