fyi from the bankruptcy attorney.

-----Original Message-----
From: melanie.gray@weil.com [mailto:melanie.gray@weil.com]
Sent: Wednesday, January 16, 2002 11:02 AM
To: Nicolay, Christi L.
Subject: Re: FW: PGE Transmission Contract



Thanks for the email.  In connection with this transmission agreement, a
business decision needs to be made as to whether EPMI can realize value
from it.  That depends on what EPMI's long term needs for the transmission
are?  It is very risky to assume a 13.5 year deal if EPMI only needs the
transmission for the next year because once EPMI assumes the contract, all
payment obligations under that contract are postpetition, administrative
claims.

If EPMI can find a good buyer for this contract, the EPMI can assume and
assign the contract and realize the value through the consideration paid by
the buyer for the contract.

I understand that PGE may want us to assume or reject promptly, but with
this kind of contract, we need sufficient time to allow the business plan
to be fully developed and a firm understanding of what EPMI's long term
needs are going to be.

I hope this helps.  Thanks.




"Nicolay, Christi L." <Christi.L.Nicolay@ENRON.com> on 01/16/2002 10:12:33
AM
cc:   Melanie Gray/HO/WGM/US@WGM
Subject:  FW: PGE Transmission Contract


I spoke last evening with Rich George, a lawyer at Portland General
Electric.  He said that EPMI needs to make sure that it only pays the
post-petition part of the Dec transmission services invoice (received by
EPMI on 1/2/02).  Apparently, this bill had Dec 1-2 (pre-petition)
separated.  I understand that Steve Thome is retrieving the bill to make
sure that EPMI pays only the post-petition amount (bill is in line to be
paid this Friday).

Rich understands that EPMI is not going to pay the pre-petition at this
time and said that PGE is not planning to curtail EPMI's transmission.
However, he asked that EPMI consider accepting or rejecting the
transmission agreement in bankruptcy court fairly soon.  MELANIE -- Can you
please let us know what to do in this regard?  This is a Long Term (13.5
years remaining) electric transmission agreement with an estimated in the
money value to EPMI of $5 mill.  EPMI would consider transferring it or
possibly holding it for its value.  Thanks.

>  -----Original Message-----
> From:   Baughman, Edward
> Sent:   Friday, January 11, 2002 1:12 PM
> To:     Nicolay, Christi L.
> Subject:     FW: PGE Transmission Contract
>
>
> Christi:
>
> Would you please follow up on this transmission issue as well ? Thanks.
>
> Ed
>  -----Original Message-----
> From:   Thome, Stephen
> Sent:   Friday, January 11, 2002 12:59 PM
> To:     Sewell, Doug; Schneider, Chip
> Cc:     Crandall, Sean; Scholtes, Diana; Baughman, Edward; Wax, Brandon
> Subject:     RE: PGE Transmission Contract
>
> Structuring just estimated the value of this contract at $5 MM.
>
>  -----Original Message-----
> From:   Thome, Stephen
> Sent:   Friday, January 11, 2002 10:41 AM
> To:     Sewell, Doug; Schneider, Chip; Aucoin, Evelyn; Helton, Susan
> Cc:     Crandall, Sean; Scholtes, Diana; Baughman, Edward; Wax, Brandon
> Subject:     PGE Transmission Contract
>
> We have not paid PGE Transmission for November (invoice 12 on my
schedule).  This contract has intrinsic value going forward.  Anytime Mid-C
and COB spread exceeds $1 this contract is in the money.
>
> This is firm transmission.  Regardless of the issue pre-petition claims
by utilities, if we do not pay these invoices PGE can terminate this
contract and force us to go back to OASIS for transmission on a non-firm
basis.  Significant value will be lost by the estate.
>
> Structuring is running an NPV of the basis differential.  We would like
to do whatever necessary to convince the estate to pay this pre-petition
claim.
>
> Steve


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"Baughman, Edward" <Edward.Baughman@ENRON.com>; "Thome, Stephen"
<Stephen.Thome@ENRON.com>; "Crandall, Sean" <Sean.Crandall@ENRON.com>;
"Scholtes, Diana" <Diana.Scholtes@ENRON.com>; "Wax, Brandon"
<Brandon.Wax@ENRON.com>; "Sewell, Doug" <Doug.Sewell@ENRON.com>;
"Schneider, Chip" <Chip.Schneider@ENRON.com>; "Aucoin, Evelyn"
<Evelyn.Aucoin@ENRON.com>; "Helton, Susan" <Susan.Helton@ENRON.com>;
"Steffes, James D." <James.D.Steffes@ENRON.com>; "Racicot, Paul"
<Paul_Racicot@ENRON.net>; "Nord, Sue" <Sue.Nord@ENRON.com>; "Kingerski,
Harry" <Harry.Kingerski@ENRON.com>; "Frank, Robert"
<Robert.Frank@ENRON.com>; "Comnes, Alan" <Alan.Comnes@ENRON.com>; "Hall,
Steve" <steve.hall@enron.com>; "Belden, Tim" <Tim.Belden@ENRON.com>






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