Kay, we are working on the Bogey Exhibit and the Profit/Savings Calc.  Will get back with you re: items 1d. and 2.


See assignments and comments in red.  Reagan/Kayne/Dave/Jeff responses due to Kay by noon today.


1)	General comments - 
a)	We have not seen a draft of the MPPSA or the MGPSA for review and comment. Kay
b)	All section references in the draft should be reviewed and checked.  The majority of the references checked were incorrect. Kay
c)	Since financial security is still an outstanding issue, all comments regarding the provisions in the draft pertaining to that subject have been excluded.  Kay
d)	The draft contains references throughout to exhibits that will be attached to the agreement that were not included in the draft.  See bleow.  

2)	Article 1, pages 6 and 7 - Profit and Savings: These definitions reference exhibits that were not included in the draft.   One of the most significant issues we had with the prior drafts were with the definition for "savings" so it is important to review a draft of these exhibits as soon as possible.   Reagan/Kayne/Dave/Jeff to chech with Marvin.  He should have forwarded exhibits with everything else.  time is running out on them to do anything here.  Will report more on this issue.
   
3)	Section 3.1(b): This section obligates EPMI to "Propose" a load projection and stack model.  Should this say "Prepare" as opposed to "Propose".  "Prepare" is fine.

4)	Section 3.1(c): First line refers to a "request by Customer".  Customer is not defined, is this intended to refer to MDEA?  If not, include a definition of Customer.  "...upon request by Customer" is not necessary.  This has already been done.

5)	Section 3.2(a): Provides that EPMI will use "commercially reasonable efforts".  The draft does not include a definition for this term.  Suggest including a definition since this standard is used throughout the draft.  Kay

6)	Section 3.2(a): Suggest adding the following phrase in the second line after "schedule Products", "in a manner intended to minimize the cost of serving MDEA's native load".  Adding this seems fine; however, are there any legal implications, Kay?  If not, add it in.
 
7)	Section 3.2(c): Line 3 refers to Cajun and EPI, which are not defined in the draft.  Suggest including definitions or inserting the phrase "Existing Contract Resources" in place of "SEPA, Cajun, EPI".  The substitution is fine.

8)	Section 3.2(h): Line 1 provides "EPMI will optimize scheduling and usage or resale (when appropriate)".  Would suggest deleting "when appropriate" and inserting "(in accordance with the terms and conditions of each Existing Contracted Resources contract)".  The suggested change is OK.

9)	Section 4.1(a): Line 1 requires MDEA to operate and maintain its native load distribution system in accordance with Prudent Operating practices?.".  Would suggest deleting the phrase "and the Native Load distribution system".  This agreement does not bear on how the cities would operate and maintain their distribution systems.  Reagan/Kayne/Dave/Jeff
[Rorschach, Reagan]  (a)	Operate and maintain the Facilities and Entergy interconnection obligations in accordance with Prudent Operating Practices and in accordance with the terms of this Agreement.
(b) Responsibilities for operating reliably with respect to Native Load lies solely with MDEA and the Cities.


10)	Section 6.4: The fourth sentence states " due to the use of imprecise data such as weather reports, heat rate estimates and the like, it is understood between the Parties that the resulting projections, recommendations and daily plan are consistent with commercially reasonable industry practices".   According to this provision, the parties agree in advance that the resulting projections, recommendations and daily plans are consistent with commercially reasonable industry practices.  We believe that the "use of that type of data" is consistent with commercially reasonable industry practices, but do not believe that that this automatically translates into the projections themselves being consistent with commercially reasonable industry practices.  Text should be changed as appropriate to reflect this change.  Reagan/Kayne/Dave/Jeff
[Rorschach, Reagan]  Section 6.4	Each day, EPMI shall provide a projection of the next day's Native Load, and project the need for gas, fuel oil and power. Each day, EPMI and MDEA shall jointly run the Load Projection Model and the Facility Stack Model.  EPMI and MDEA will then (1) compare and verify assumptions and results from the models, (2) develop recommendations and (3) decide upon the operating plan for the day.  This analysis will take into account such considerations as weather conditions, business day/weekend and holiday load conditions, historical loads, gas/power pricing, unit availabilities, unit operating data, and prior commitments to buy and sell power. The Parties understand and agree that the development of the projections, recommendations and daily operating plan is complex and requires an element of judgment.  Further, it is understood that the use of imprecise data such as weather reports, and heat rate estimates to make such projections, recommendations and daily plan are consistent with commercially reasonable industry practices. 


11)	Section 7.1: Second sentence provides "Risk of loss and all price and unit contingency and transmission risk shall be borne by Customer".  Suggest adding the phrase " For Back to Back Transactions" at the beginning of this sentence.  MDEA should not be responsible for unit contingency, transmission risk etc. for an EPMI Transaction.    Reagan/Kayne/Dave/Jeff
[Rorschach, Reagan]  Delete the sentence "Risk of loss...shall be borne by the Customer."

12)	Section 10.2(a): Line 3, change " MDA" to "MDEA".  Kay

13)	Section 14.6: Line 3, change "and the MPPSA" to "the MPPSA and the MGPSA".  Kay

14)	Section 15.1(d): provides three business days written notice to the defaulting party to cure a Financial Event of Default, otherwise the agreement can be terminated.  Three days is too short of a time period for MDEA.  Kay/David Hunt

15)	Section 17.1: Second sentence, provides that an independent auditor reasonably acceptable to EPMI is entitled to audit all books and records of EPMI.  However this provision goes on to state that EPMI shall be entitled to audit MDEA's books, not an independent auditor subject to MDEA's approval. Suggest deleting "EPMI shall be entitled to audit" and adding "An independent auditor reasonably acceptable to MDEA".  Kay

16)	Article 28: As we have previously noted, this section contains language related to conflict of interest issues and the lack of notification related to conflicts of interest that should be read carefully reviewed by MDEA and the Cities.  Kay/David Hunt