I believe the disconnect is that you can't take physical control of the allowances until the annual allotment. However, the tnrcc will issue a letter saying that all future allowances will be designated to party x.  This is why I am satisfied. Natirally we account for these issues on a pv basis, but the deal should be okay. We can discuss further tomorrow. 
 Trevor Woods


-----Original Message-----
From: Bruce, Robert <Robert.Bruce@ENRON.com>
To: Woods, Trevor <Trevor.Woods@ENRON.com>
Sent: Thu Nov 15 18:35:32 2001
Subject: 

I realize you and Mike satisfied yourselves with Matt Baker that HGA NOx Allowances can be sold forward, but I am trying to reconcile that concept with the sentence on the TNRCC website (from the link you sent me):

"Allowances may not be traded until they have been deposited into the compliance account, which occurs January 1 of each year."

I appreciate that there is some difference between the "depositing" of the allowances into an account, which happens year-by-year, versus the forward year allocation the TNRCC does (as reflected on the website link you sent me).  But the sentence above indicates to me that while they can be allocated forward by the TNRCC, they can not be sold forward.

I've got another call into Matt Baker to discuss -- but maybe you can clear up my disconnect on this.  Sorry this is taking me so long to get -- Bob

Robert E. Bruce
Senior Counsel 
Enron Wholesale Services
T (713) 345-7780
F (713) 646-6058