FYI - Paul agreed with my suggestions. 
----- Forwarded by Aleck Dadson/TOR/ECT on 06/22/2001 05:27 PM -----

	Aleck Dadson
	06/22/2001 05:03 PM
		
		 To: Rob Milnthorp/ENRON@enronXgate@ENRON
		 cc: Garrett Tripp/TOR/ECT@ECT@ENRON, Paul Devries/TOR/ECT@ECT@ENRON
		 Subject: Re: Market Opening


 
With respect to point 1 in your  memo, my sense is that the counterparty 
would have to be either OPG or OEFC.  In my view, the concept would not/could 
not  go forward and be implemented unless it had the support of OPG.  The 
question we should talk through  is how do we best try to get that support 
from OPG.                                        With respect to point 2, I 
think we should be careful about being  too encouraged by Wilson's 
/Purchase's comments  to Lay/Lavorato on June 19 that if positive reports are 
delivered by the IMO and OEB in September, the gov't  will be hard pressed 
not to move forward.  My concern is that Wilson and Purchase may feel 
comfortable saying this precisely because they are expecting a negative 
report from the OEB (or at least one that they can interpret as being 
negative). I agree with you that the likelihood of the IMO delivering a 
positive report is very good. The likelihood of a positive report from the 
OEB is far less certain. The key issues  at the OEB/retail level are EBT, LDC 
access to the data they need from HydroOne, completion of LDC CIS systems,  
the gov't's interest in an industry resolution of  customer duplications 
prior to market opening in order to avoid mass confusion in the initial 
period of the market, the  state of customer education, and a contingency 
plan to accommodate those who are not ready.                                - 
with respect to EBT, I think the best we can do is get onside quickly with 
our  EBT hub of choice  and work with them on perceived difficulties   with 
LDCs, etc.  Ellis, Marryott and I are going to make a recommendation to Paul 
next week on our preferred EBT hub.                          -with respect to 
the info from HydroOne, I  have already raised this issue with the OEB and 
the IMO. The OEB and the IMO subsequently met with   HydroOne and the MEA in 
an effort to resolve this issue.  My understanding, until yesterday's 
discussion with Conway, was that the issue was resolved  and the information 
was now flowing to the LDCs. Paul, Garrett  and I are meeting senior HydroOne 
execs (including Rod Taylor) on Monday re       resource adequacy issues and 
we can press this with them as well.                               - with 
respect to the CIS issue, there is not much we can do since most  LDCs 
already have a CIS vendor; but my understanding is that at least   one CIS 
vendor has backed out of its commitments to a number of LDCs recently (per 
David MacFadden) and perhaps we can get a vendor   to move in quickly to fill 
that gap. I will raise this with Marryott to see what may be feasible at this 
stage.                           - with respect to the customer duplication 
issue, I have already met with the senior people at Direct (last week)  to 
discuss this issue with them and to  propose a resolution that would see the 
retailers involved retaining a third party  (such as E&Y)  to assess the 
degree of overlap and whether   there was an acceptable solution to any 
problem. Direct is convinced that the degree of duplication is not high.  
Direct is talking to Onsource   and Toronto about this.  I am checking with 
our staff in the UK about whether there was a similar issue when the UK 
market opened and, if so, how it was  resolved. 
.                                      -with respect to customer education, I 
and Dick Perdue (Direct's advisor) have contacted TransAlta, OPG, HydroOne, 
Onsource, Enersource,   and Toronto about funding a  Province- wide consumer 
education initiative over the summer.  We are meeting next week to discuss 
this idea    further.  This could require a financial commitment from Enron 
of  up to $200,000.                              - with respect to the 
contingency plan to deal with those LDCs who are not ready, the OEB is 
already on side in recognizing the need for a contingency  plan - it will 
likely be very simple: the IMO  would send a bill to the LDC each month and 
the LDC would bill customers at some fixed rate, with a deferral  account). 
The key  issue will be how many LDCs (in terms of numbers and size)  are not 
ready and what is the minimum number of LDCs that   the OEB/gov't is looking 
for to be ready. This is an issue we will have to talk to the MEST about as 
well as the OEB , since ultimately the    decision of whether enough LDCs are 
ready will be a political one.                             These are the 
OEB/retail focussed things we are doing.  On the  larger political front, I 
have several  ideas about some things  I would like to do that I can discuss 
with you and Paul.                                                     



	Rob Milnthorp/ENRON@enronXgate
	06/22/2001 11:13 AM
		 
		 To: Paul Devries/TOR/ECT@ECT, Garrett Tripp/TOR/ECT@ECT
		 cc: Aleck Dadson/TOR/ECT@ECT
		 Subject: Market Opening


Garrett/Paul - Can you guys work with the North East desk to price out a 
500MW option at the New York/Ontario intertie as an insurance policy for the 
Ontario government re market opening. You will recall that this was something 
we had suggested a while back and didnt receive much support. However, 
following Lavorato's meeting with Harris, Lavo is adamant that we send a term 
sheet to Harris directly outlining both an call option structure and a swap 
structure. 

Second, it is quite apparant to me that everything hinges on the September 
readiness report. If its favorable, I think there is a good chance of a fall 
market opening. With that said however, we are in the hands of the IMO and 
the OEB. I'm comfortable that we can continue to influence the IMO to produce 
a favorable announcement but I dont know what we can do to ensure that the 
OEB says its ready. Any suggestions, comments? I dont want to be in a 
position that one LDC  could halt market opening. 

Regards
Rob