This is a deal where we purchase restricted power certificates.  I think the "market" is similar to the SO2 (if that is the pollution credits) market here.

Brazil is having a power crisis worse than California.  The large end users are required to reduce their power consumption by 20% from last year's usage.  My understanding 
is that for example July 01 must be less than 80% of July 00.  If the consumer lowers their consumption by more than 20%, they can sell the excess reduction to another user or marketer - and it is called a certificate.    

I will copy you on the valuation model that they just requested that I complete.

Martha

 -----Original Message-----
From: 	Cancian, Eduardo  
Sent:	Tuesday, July 10, 2001 9:29 AM
To:	Martha Stevens/HOU/ECT@ENRON
Subject:	RE: Alcoa DASH

Martha

See attached the DASH. Do you think we need to model the accrual also or just the MTM ?
I'll send you the IOF rate as soon as I have it.
Thanks
Eduardo

 


---------------------- Forwarded by Eduardo Cancian/SA/Enron on 07/10/2001 11:29 AM ---------------------------
From:	Mary Kimball/ENRON@enronXgate on 07/09/2001 08:48 PM CDT
To:	Eduardo Cancian/SA/Enron@Enron
cc:	Brett R Wiggs/SA/Enron@Enron, Remi Collonges/SA/Enron@Enron, Joe Kishkill/SA/Enron@Enron, Sami Arap/SA/Enron@Enron, Ricardo Lisboa/SA/Enron@Enron, Roberto Schloesser/SA/Enron@Enron 

Subject:	RE: Alcoa DASH

Eduardo,

Could you please confirm that the following taxes are in the model used for the financial projections.

PIS/COFINS----3.65% of the gross

CPMF of .38% on all cash transfers

total 34% Brazilian income tax    

IOF----what is the rate for this transaction?      (Ricardo, I believe Sami indicated you could provide in an earlier note?)     

I have also been asked to add a section regarding the effective tax rate in Brazil.    Since I have not seen a copy of the model, can someone please fill in the blanks below regarding the rates?    I'd also appreciate a copy of the model for my records here.    

The section will need to indicate that the effective tax rate on this transaction in Brazil is ________________, which includes 3.65% PIS/COFINS (gross receipts tax), 34% Brazilian income tax and .38% CPMF on all cash disbursements, and _______________IOF.    Repatriation of the cash back to the U.S. will also trigger U.S. income tax at the rate of 37% of the cash dividend repatriated.    

Also, please add Stephen Douglas name to the tax sign-off list.   He is the lead member of the tax planning group for Enron Wholesale Group.    

Mary 
5-2541







 -----Original Message-----
From: 	Cancian, Eduardo  
Sent:	Friday, July 06, 2001 5:27 PM
To:	Lavorato, John; Kishkill, Joe; Gonzalez, Orlando; Wiggs, Brett; Collonges, Remi; Buy, Rick; Gorte, David; Kimball, Mary; Assad, Sergio; Schloesser, Roberto; Arap, Sami; Bradford, William S.
Subject:	Alcoa DASH

See attached the very last version of Alcoa DASH incorporating comments from Brett, Remi and Kishkill. Please indicate if you have additional comments on that version, otherwise we are ready to coordinate the signatures from Brazil first and then we can forward you for final signatures.

Regards,

 << File: ALCOA.doc >>