Janet, its your book - if you feel we have the LM's licked and we need the 
resources/the value at risk is minimal, I would go ahead.

I would get Calger on side as well.

Regards
Delainey
---------------------- Forwarded by David W Delainey/HOU/ECT on 07/18/2000 
11:50 AM ---------------------------


Janet R Dietrich
07/18/2000 09:02 AM
To: David W Delainey/HOU/ECT@ECT
cc:  
Subject: Re: Cogentrix Turbine Inquiry

Dave, have you had a chance to give this much thought? 
---------------------- Forwarded by Janet R Dietrich/HOU/ECT on 07/18/2000 
09:00 AM ---------------------------


Janet R Dietrich
07/14/2000 08:46 AM
To: David W Delainey/HOU/ECT@ECT
cc: Christopher F Calger/PDX/ECT@ECT 
Subject: Re: Cogentrix Turbine Inquiry  

As a matter of fact, this is on my list to discuss with you. I think we 
should pick up the 7EA's and maybe the 501D's as well (doubt we could pick 
and choose). I met with Mark Frevert yesterday afternoon to discuss the East 
Generation Strategy (along with Ben Jacoby and Don Miller) and he wanted me 
to talk with Larry Izzo about us taking all 4 turbines. Should I go ahead and 
have that discussion or would you like to discuss this in more detail first? 
The LM6000 position looks like this:

24 turbines allocated:

4 City of Austin
4 Enron South America
4 Las Vegas Cogen
6 Public Service of Colorado
6 Florida Merchant plant


Heather Kroll and Ozzie Pagan are bringing their VEPCO/North Carolina deal to 
a point where we will probably need to make a decision in the next 2-3 weeks. 
It has a 4-year PPA and we are basically obligated to build a power plant to 
back-fill the position. The PPA will be able to be served from the market or 
plant, and we would need to use 4 of the 6 dual-fuel LM's currently allocated 
to Florida. There is a possibility we could go back to the 501D's but we'll 
have to see. The ecomomics of the deal leave Enron with about a 40-45% 
residual value on the plant at the end of 4 years, and Bruce Sukaly is in the 
process of showing this entire project to 4 counterparties in order to 
monetize the entire position.

We still have 2-3 other customers looking at the LM's although they are 
moving fairly slow.

I'd like to discuss our development strategy in a little more detail with you 
when you return but here are the highlights: Ben and his team will be looking 
to increase the sites we have under our control in several regions: PJM, 
ECAR, Georgia, and Florida to name a few. I think we may want to consider 
some configurations that include combined-cycle options that have a 5-year 
term (vs. our standard 2-year currently), primarily in Florida and maybe 
Georgia. Ben is putting this on paper along with the incremental resource 
needs and incremental developmental dollars needed. I think we should talk 
about increasing our site bank/development portfolio in Canada as well.  

Let me know your thoughts! Thanks.