Kevin,

As we discussed, TECO is offering up to 500MW (of a total 960MW) beginning 5/1/04 off the Gannon facility (which is being converted from coal to a gas-fired CC plant, called Bayside).  The plant is in Tampa, FL and the offering is unit-contingent.  

TECO prefers to sell a toll where we bring the gas, but is open to other proposals.  I figure we can bid for any of a few structures: 1) toll where we bring the gas, 2) toll indexed to a gas hub, where TECO is respons. for gas supply, 3) fixed price call.  

I think an at the money call would be the cleanest solution (avoid inefficiency's associated with the heat rate curve which varies by MW amount utilized, gas supply risk, etc.).

What is your preferred structure?  How many MW would you like to show a bid for?  Structuring ran an initial valuation for a 3-year, $35 daily call, 100MW.  Results are below.


TECO RFP				
				
Curve	Into FRCC			
Strike	$35 			
Size	100 MW			
Availability	95%			
Term	5/1/04-4/30/07			
				
				
	$/kW-mo	$/MWh	PV'd $ Premium	
Bid	2.66	3.84	8,033,628	
Mid	5.09	7.33	15,337,981	




Billy Braddock
Manager - Enron Power Marketing Inc.
713-345-7877 (work)
713-646-4940 (fax)
713-503-2166 (cell)