I will call him and make these 3 points.

C

 -----Original Message-----
From: 	Motley, Matt  
Sent:	Monday, September 24, 2001 3:34 PM
To:	Foster, Chris H.
Subject:	RE: Cetrans

Chris,
I think you would be much more helpful to Lorenzo at this stage than I. If you don't mind calling him and touching base I would really appreciate it. I will send him an email tonight and let him know you will be contacting him and let him know that I was the hold-up on our side. Thanks again.
Matt
 -----Original Message-----
From: 	Foster, Chris H.  
Sent:	Monday, September 24, 2001 1:54 PM
To:	Motley, Matt
Subject:	Cetrans


Matt:

Here is where we stand with the Centrans arrangement.

1.  I have spoken to Daniel R. Castagnola, a VP in Finance who has worked with the Centrans and speaks highly of their business acumen in Central America.  The transactions Enron has done with Centrans to date involve equity transactions whereby any Enron credit exposure was hedged by assets.  So, the financial strength of Centrans was not directly in question.  Daniel indicated that we should look at Centrans independently to establish a transaction in Baja.  To this end, we need financial statements from Centrans to establish credit parameters and prepare a Master Power purchase Agreement.  

2.  Stewart Rosman has made a few calls to CFE re: transmission access in Mexico.  CFE has indicated that transmission is available.  We have never purchased transmission in Mexico and although it might be possible to do so, we would prefer if Centrans did it themselves and get the power into the ISO at Tijuana, which is an ISO tie-point.  I would expect transmission on this arrangement is probably worth $5 or so.   

3.  Forward Prices - As you know, the longer term price at SP-15 for Peak is about $36 - $37.  Off peak is about $10 lower.  This nets about $30 to the project in Baja.  I am not sure what fuel price to use, but it seems unlikely that project economics would be supported by such a price.
My recommendation would be to proceed with the credit review and set up contracts with Centrans.  This would require obtaining financial statements from them. 
Let me know if you want me to speak with them or if you are going to handle it.
Thanks

C

Chris Foster
chris.h.foster@enron.com
(W) 503/464-3822
(Cell) 503/702-8568