FYI
----- Forwarded by Aleck Dadson/TOR/ECT on 06/08/2001 01:45 PM -----

	Aleck Dadson
	06/08/2001 01:32 PM
		 
		 To: Rob Milnthorp/ENRON@enronXgate@ENRON
		 cc: Paul Devries/TOR/ECT@ECT@ENRON, Robert Hemstock/ENRON@enronXgate@ENRON
		 Subject: Re: IMO Meeting Highlights

This message came back to me (too big) - I am resending and will send 
garrett's paper separately.

__________________

Rob, thanks for the comments from the IMO Board meeting.  Three 
points:                               a) I am not sure what paper the IMO 
Board  members may be referring to.  It could be the briefing note re Moving 
Forward to Market Opening, the briefing note Satisfying the Government's Four 
Guiding Principles, or the piece on resource adequacy and pricing that 
Garrett Tripp prepared and that he and I have been delivering to senior 
people in the government and elsewhere.  I attach those three papers in 
electronic format.                          b) The briefing notes  above (and 
the material we are preparing for Ken Lay and John Lavorato) address the 
Pickering A point.  The suggestion that market opening is tied to Pickering 
A  doesn't surprise me but is at odds with what Judy Hubert has been telling 
stakeholders recently.  In any event, it is commonly thought that the 
government may think that Pickering A will improve reliability and stabilize 
prices.  There may, in fact,  be another reason.  One of our contacts in the 
Premier's Office has indicated  that  Farlinger had told Harris that  waiting 
until the return of Pickering was important from the perspective of OPG's 
financial position.  On reflection, Garrett Tripp and I think that the 
concern  likely relates to OPG's obligations under the MPMA - the concern may 
be a)  that OPG may not be able to claim "force majeure" in respect of the 
Pickering A delay in order to reduce their rebate obligations  ( definition 
of "force majeure"  in sec. 2(c) may not be broad enough) or b) that, even if 
OPG  can claim "force majeure",  the predetermined "force majeure replacement 
cost" fixed  at the time the MPMA was completed in 1999 may be too low to 
offset the cost to OPG of securing replacement power in 2001-2002.   In other 
words, OPG is asking the government to  intervene  in market 
development/market opening to protect OPG from the terms  of the deal (maybe, 
from OPG's perspective, now a "bad deal") that OPG made in 1999.  We should 
discuss whether Lay and Lavorato can make this point to Harris (without 
compromising our source).                       c) With respect to Foward 
Markets , I think we have to distinguish between  a binding hour ahead  and 
day ahead market which we may want to have the IMO run (assuming that this 
will facilitate  and standardize trading among the Northeast ISOs - which is 
a key objective in the East), but anything beyond that they should stay away 
from.  I will speak to Rob Hemstock and to the folks in Houston who have been 
working so hard on the RTO development in the Northeast.  Did  any material 
get circulated as to what they want to do re forward markets?  In any event, 
I think we should have a demo of Enron Online in Toronto for the IMO Board 
and OEB.          `                                



	Rob Milnthorp/ENRON@enronXgate
	06/08/2001 12:11 PM
		 
		 To: Aleck Dadson/TOR/ECT@ECT, Paul Devries/TOR/ECT@ECT
		 cc: Robert Hemstock/ENRON@enronXgate
		 Subject: IMO Meeting Highlights

Some Brief Highlights from the 06/07/01 IMO Meeting:

 - Market opening, without question, is now tied to the bringing back of the 
1st pickering unit. Govt is clearly not thinking november but the good news 
is that they have made some statements locking them into may/02. We should 
have our own intelligence re Pickering return but Boland told me that March 
was highly probable.

 - A number of positive comments re Aleck's paper from board members - Aleck 
I'm not sure which paper they are referring to - can i get a copy.

 - Forward Market development - IMO "wants to make this happen". Assessing 
two candidates. I told the IMO that this is not their mandate and that a 
conditional forward market exists currently and an unconditional forward 
market will exist when we have a unconditional market opening date. I talked 
re Alberta and indicated that the Alberta sponsored forward market was a joke 
(WattEx) and that Enron and others had done 100's of forward market 
transactions and the Enron has a visible forward market 24/7. ACTION - We 
need to develop a position paper on why this should be left to the market 
place and not some regulated central agency. The IMO should be concerned with 
creating the right environment to promote an efficient forward market (ie 
information disclosure, etc). OPG would support this position - we may want 
to co-author the paper. I believe Hemstock/Davies did some work on this 
already re Alberta. Let's discuss further.