In this case,    Ercot Asset gets allocated the expense of the imbalance.   The enpower deals listed below are under this desk.
The financial swap info is going out,  Frontera being the most logical first customer.

Is there anything else from us that you would want?   Im thinking in terms special entries that would notify your group to withold balancing expense from Frontera,  etc.

Let me know what you think.

JMF



 -----Original Message-----
From: 	Grace, Rebecca M.  
Sent:	Friday, September 28, 2001 7:51 AM
To:	Forney, John M.
Cc:	Jacobson, Michael; Allen, Thresa A.
Subject:	RE: Frontera Proposal for tomorrow

There are two considerations that I can think of.

1)	We need the market clearing prices in Enpower pub code table to accurately book and settle these financial deals.  I have already informed IT of this issue.
2)	If we trade "financial swaps" with customers they MUST have a financial contract with ENA.  This is not necessarily a requirement for Frontera because you can effectuate the trade through ERCOT by buying and selling the physical mw involved.

Question:  When you say you should be allocated the imbalance for HE7-11 as outlined below, do you mean Hourly ERCOT?




 -----Original Message-----
From: 	Forney, John M.  
Sent:	Thursday, September 27, 2001 4:31 PM
To:	Grace, Rebecca M.; Jacobson, Michael
Cc:	Presto, Kevin M.
Subject:	FW: Frontera Proposal for tomorrow


Rebecca,
For September 28th,  we have sold a financial swap to Frontera for hours ending 7- 11.   We bill them $20,  Enpower #794481,  for various hours.
I will take the floating imbalance price for the following megawatt totals :

he7 - 310 mw's
he8 - 310 
he 9- 240
he10 - 140
he 11 - 60

Frontera will be running a resource imbalance for these hours.  (see imbal.  # 794516).       I should be allocated the imbalance charges as listed above and Frontera is responsible for any remaining imbalance for this day..
This is a financial swap that we will be offering our customers and I need your feedback on any requirements that you have in settling this product.

Thanks,
JMF


 -----Original Message-----
From: 	Forney, John M.  
Sent:	Thursday, September 27, 2001 2:45 PM
To:	Kenneth Parker (E-mail); May, Tom
Cc:	Gilbert-smith, Doug
Subject:	Frontera Proposal for tomorrow



Ken,
As discussed earlier,  I am proposing ramping up late for the onpeak sale that Frontera made for tomorrow.       If we must sell the offpeak hours required to affect a 340 mw onpeak schedule,  I show that we would almost negate all profit from the sale.

I am suggesting starting your ramp beginning hour ending 7 and purchasing a fixed price swap from Enron for the short generation.    Basically,  you sold the preschedule for $21 and we would fix your price for hours ending 7-11 at $20.     

The benefit in this swap would be:
hedge against floating price
lock in $1 profit on sale for short portion of the schedule, increasing revenues
avoid losing approximately $10k on selling ramping schedule -  $4 is an optimistic real time sales price at this point,  however,  I used this in the analysis.



Please let me know what you think.      Enron will be offically rolling this swap product out to all of our service customers.   
I  think this would be a good fit your company and I would like to try this for Friday's run.

Additionally,   I think that there may be a good down balancing or OOM down  opportunity for tomorrow because of this preschedule.


Let me know what you think,

JForney
713-853-7160



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