Richard:

This is a long memo - don't worry about reading it all.  However, at the end you will find the Maine Disclosure Label.  I need to pick your brain on who would be the best person to track down the "per kWh" information that is on this and the Mass label.

Thanks.

Heather
---------------------- Forwarded by Heather Mathis/HOU/EES on 08/09/2001 03:36 PM ---------------------------


"SANDY COFER" <SCOFER@LLGM.COM> on 08/08/2001 06:13:28 PM
To:	SARah.dietrich@enron.com
cc:	hmathis@enron.com, MARIANNE.castano@enron.com, "JOHN KLAUBERG" <JKLAUBER@LLGM.COM>, "JOHN MAAS" <JMAAS@LLGM.COM> 
Subject:	ME Direct Mini Form


Sarah --

Attached for your review are (i) a clean version of ME direct mini form; (ii) a redline of the ME direct mini form, marked to show changes against the TX form provided in your 7.26.01 email; (iii) a terms of service document; (iii) a disclosure label; and (iv) a customer authorization statement.

The following is a brief explanation of changes and a few provisions of the Maine Rules we wanted to draw to your attention:

Direct Mini Form

* As discussed, we've updated the term under Section 2.1 (and under "Duration and Kind of Contract" in the terms of service summary) to reflect the customer's option of a 24-month, 36-month, 48-month or 60-month term.

* In Maine, certain consumer protection provisions (such as customer rescission rights and provision of the disclosure label and terms of service summary) apply to residential and small commercial customers (less than 20 kW of demand) only.  As it is our understanding that the direct marketing campaign will target small commercial customers, we have drafted the direct mini form, terms of service, and disclosure label with that customer class in mind.

* We've left the requirement of concurrent execution of the customer authorization form in Section 2.1(i) and Section 3 unchanged although the Rules only require that this document be obtained prior to initiating service . See WCMR 65-407-305(4)(D)(2)(a).  As the goal of the direct marketing campaign is to simultaneously obtain an executed agreement and customer authorization form, we believe this is a clean way to manage the administration of documents and avoid confusion.

* On a similar note, and as discussed in connection with the MA direct mini form, we've drafted the five day customer rescission period in Section 3 to run from the execution of the agreement, with a notation that the terms of service and disclosure label are provided concurrently with the agreement.  The Rules, however, provide that the rescission period runs five business days from the customer's receipt of the terms and service summary which must be received by the customer 30 days following execution of the agreement.  (i.e. the MPUC envisions (i) the execution of the contract, (ii) a time passage of up to 30 days; (iii) the delivery of the terms of service summary and disclosure label to the customer, followed by (iv) a five business day right of rescission running from that date of the customer's receipt of the terms of service and disclosure label) See WCMR 65-407-305(4)(C).  As discussed in connection with the TX direct mini form, we believe many commissions, including the PUCT and MPUC, envision the terms of service document to behave and function more in the manner of how we would typically consider a contract to behave and function.  Our thought process in drafting the rescission period in the ME form to run from the execution of the agreement is provide a clean way for EESI to manage the administration of the documents due to the unique mechanics of the transaction (the simultaneous delivery of the agreement, terms of service, disclosure label and customer authorization statement by the sales rep to the customer followed by the immediate execution of the agreement and customer authorization statement).  We wanted to point out that as drafted, however, this provision is technically inconsistent with the Rules.

*  To provide uniformity across forms, we have not changed the language under 2.6 Security which provides that EESI may request security " as provided in the Rules"   We wanted to point out, however, that the ME Rules do not restrict the amount of deposits required by competitive electricity providers (CEPs).

* We've revised Section 3 "Your Signature and Notices" and the Representations and Warranties section under the GT&Cs to model the ME Rules by deleting references to "Your Rights as a Customer Statement" (a document unique to Texas) and changed references to "electricity facts label" to "disclosure label" (ME's description of the label, as opposed to TX's).

* The ME Rules require a 30 day notice to the customer in the event of termination due to the customer's default.  See WCMR 65-407-305(4)(G)(1).  We've updated the "Default and Early Termination" section of the GT&Cs to reflect this requirement.

* By obtaining a license as a CEP in ME, EESI thereby agrees to (i) submit to jurisdiction in the courts of the state of Maine; (ii) that all legal proceedings relating to disputes will be maintained in ME courts or before ME administrative agencies; and (iii) that all contracts for generation service in ME with a demand of 100 kW or less will be interpreted according to ME law.  See WCMR 65-407-305(2)(B)(8)  We've updated the governing law provision to reflect Maine jurisdiction.

Terms of Service

As discussed, the Maine Rules were modeled after the Massachusetts Rules and many items, such as the terms of service summary and disclosure label, are practically identical in format and content.  As such, we've modeled the ME terms of service summary and disclosure label after the documents provided in MA, with a few notable exceptions:

* The ME Rules require a listing in the terms of service summary of "conditions under which a credit reporting agency is contacted for an applicant's credit history or under which the Competitive Supplier reports the customer's payment history to a credit reporting agency".  See WCMR 65-407-306(2)(D)(2)(d).  Under "Credit Information", we've provided general information that the agreement will not be effective unless and until the credit standards established by EESI are met, that it is EESI's practice to perform credit checks on all applicants whereby EESI may contact a credit reporting agency to obtain the customer's credit history, and that in the event of nonpayment under the Agreement, it is possible that EESI would report such nonpayment to a credit reporting agency.

* The Rules do not restrict the amounts of deposits nor is the CEP required to pay any interest on deposit in ME.  The terms of service, however, requires the CEP to notify the customer as to deposit requirements and interest on deposits (most likely as a measure for the customer to compare services offered by competing CEPs). See WCMR 65-407-306(2)(D)(2)(e).  As currently drafted, the terms of service provides that security deposits may be required and interest will not be paid to the customer if such a deposit is obtained.

* The Rules require that the terms of service, if applicable, notify the customer of the CEPs ability to assign the agreement to another CEP without the customer's consent. See WCMR 65-407-306(2)(D)(2)(m).  We've provided under "Assignment" that EESI will notify the customer in the event of an assignment which in any way affects the customer's rights and obligations under the agreement.

* The Rules require the terms of service document to conspicuously disclose the customer's right of rescission and how it may be exercised. See WCMR 65-407-306(2)(D)(2)(i).  We've drafted the "Information on Rescission Rights" section with a box around it to satisfy the requirement that the disclosure be conspicuous.

* Please note that the Rules require the terms of service to list, and we have left brackets around, the toll free number and hours that a customer can contact the CEP for customer questions and complaints. See WCMR 65-407-306(2)(D)(2)(j)

Disclosure Label

* As the ME label is almost identical to the MA disclosure label, we've made similar changes to convert the label to a fixed price rather than variable price product.. Heather Mathis is coordinating with the commercial team to verify the accuracy of the data (esp. the avg price per kWh of 5.08 cents).  As discussed with Heather, please note that EESI must file all new product labels with the MPUC. See WCMR 65-407-306(3)(D).  The Rules are silent as to the timing of this filing and it is unclear whether the filing must be made prior to or concurrently with the distribution of the new label to customers.  Please let me know if you would like us to seek clarification on this point.

Customer Authorization Statement

The Rules regarding the content of the customer authorization statement are identical to the MA Rules and, as such, we have modeled the ME form after MA.  The only change is the correction of the rule referenced in the opening sentence of the letter.  Although, as we may have discussed, the reference to such rule is not a requirement and is therefore probably not essential in either the MA or ME forms, we've left the reference in for uniformity's sake.


If you have any questions about the attached or would like to discuss further, please give me a call.

SC


Sandy Cofer
LeBoeuf, Lamb, Greene & MacRae, LLP
1000 Louisiana, Suite 1400
Houston, Texas 77002
direct dial: 713.287.2002
fax: 713.287.2100
cell: 713.416.7486


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==============================================================================
 - CLEAN ME DIRECT MINI FORM.doc 
 - RED ME DIRECT MINI FORM.doc 
 - ME terms of service.doc 
 - ME disclosure label.doc 
 - ME customer authorization statement.doc