Hi Richard,

I wanted to touch base with you about the latest on the Green Power Market Development Group. I've attached the memo I sent them a couple of weeks ago. Last Friday, Mark Crowdis, who is coordinating on behalf of the group called me back and said that they want to see a formal proposal with notional pricing. Their members have operations across the country, and there may be one or two of them who will want to enter into a Kinkoesque arrangement with physical deliver plus green tags, but I imagine that there will also be a significant contingent who will only want tags, or tags with embedded call options as outlined in the memo. We are also looking into developing a green tag product that looks like a swap against an index, as opposed to a fixed price green tag with an out-of-the-money call. I think I have a pretty good handle on tag pricing here in the Pac Northwest and Texas. PacifiCorp power Marketing will probably sell me new wind tags in the $7-8 range, and we have a decent line on existing and new biomass in California. Looks like Texas RECs will be clearing in the $6-7 range. How about the East? Does Community Energy sell their tags outside of their local region? How about the biomass market in the East? As I mentioned this morning, I'm looking forward to working on this issue in depth with you when I am in Houston in September, but I thought you might have a couple of pricing points for me at this point. Another angle I am going to mention is the Canadian angle, as many of these companies probably have operations up there also. Have you ever heard a thing about resources up there in the Tundra? 

Although I imagine that we're going to be looking at pretty tight spreads on these deals, they will hopefully create some liquidity as we move forward.
One other thing -- perhaps you can think of the names of a few key people at EES that we should plan to meet with when I'm in H-town.

Thx,
EM

 

Elliot Mainzer
Renewable Power Desk
Enron North America
121 SW Salmon St.
3WTC-0306
Portland, OR  97201
(503) 464-3706
(503) 464-3740 (FX)
(503) 709-6959 (CL)