Chris, do you have a deal book -explaining the overall transaction, returns 
and risk?  

This will help me facilitate the process.

Regards
Delainey
---------------------- Forwarded by David W Delainey/HOU/ECT on 10/09/2000 
01:37 PM ---------------------------


Christopher F Calger
10/09/2000 12:16 PM
To: David W Delainey/HOU/ECT@ECT
cc:  
Subject: PSCO

Dave,

Wanted to give you a heads up...

We are looking at a DASH for approximately $1.5MM for development of PSCO.  
This includes cancellation charges of approximately $350K and soft 
engineering/consulting costs through November 30 (expected receipt of air 
permit).  The plan would be to DASH with Board/Exec Committee approval the 
entire project in November.   Chip Schneider of RAC is OK with this approach 
given his understanding of the project risks and economics.  

The plan is to keep this off balance sheet through West LB -> Turbo Park  
with exit to a third party no later than Sep 30, 2001.  there is likely a 
need to bring in LJM to cover $2-3MM of hard costs (moving dirt) from Dec 1 
through Jan 31.

We are planning on executing the PPA with PSCO this week - it has sufficient 
conditions precedent to give ENA Legal (and me) comfort that we can walk if 
there is any problem with permits or site costs (land, water, transmission, 
fuel).  In addition, there is a Board out that ENA Legal drafted, negotiated 
and feels is a tangible out (unlike most Board outs).  We will have a 
definitive deal with NEPCO prior to execution of the PSCO PPA.  I spoke  with 
Jacoby and  Janet and told them we are planning to take the remaining two 
LM6000's for this project.

I am available to talk about it at your convenience.

Regards,

Chris
---------------------- Forwarded by Christopher F Calger/PDX/ECT on 
10/09/2000 09:56 AM ---------------------------


Christopher F Calger
10/08/2000 05:13 PM
To: Chip Schneider/NA/Enron@Enron
cc: Stephen Thome/HOU/ECT@ECT, Jeff G Slaughter/PDX/ECT@ECT 
Subject: PSCO

Chip,

PSCO has modified their position and has accepted some of our negotiating 
points (heat rate, board out, permit conditions precedent) and will accept a 
6-LM6000 project with a June 2001 start date.  The additional two LM6000's 
materially improves our economics as both installed cost/kw and fixed o&m 
decrease.  We plan on executing the PPA later this week (Monday 10/16 latest) 
with inclusion of project permitting conditions and Board-out language 
drafted by and satisfactory to ENA Legal.

In order to hit the June 01 deadline, we must order the following additional 
equipment through West LB ASAP:

6 stacks  $1,188,000
3 Control Modules $375,000
1 CEMS  $675,000
4 230kv Breakers $340,000
Total:   $2,578,000

The above equipment is needed for our remaining LM6000's in any project.  
More importantly, the cancellation charges for the above equipment are 
minimal as follows:

Now through November 1:    $257,800
Now through November 30:  $340,000 (additional $83,000)

Additional soft costs prior to mobilization in December are estimated at:

EE&CC Tasking Letter Year to Date:  $175,000
EE&CC/NEPCO Engineering through October 20:  $75,000
EE&CC/NEPCO Engineering through Nov 30: $700,000

Based on the above, I will exceed $500K around October 18.  Given our Board 
approval flexibility from PSCo and the timing of expediting the equipment 
orders, I thought it might be a good idea to seek approval for a development 
project through the end of November (or perhaps December 15). The amount 
might be $1.5MM which allows for equipment cancellation and engineering 
costs.  That would allow us to move forward aggressively and prepare a more 
complete final project approval for the next regularly scheduled Board / Exec 
Committe meeting in November.

How does this sound to you?

Regards,

Chris