John:

Keep me posted on this matter.  Thanks.

Mark



	John Novak@ENRON
	03/28/2001 02:04 PM
		 
		 To: Mark E Haedicke/HOU/ECT@ECT, Bruce 
Lundstrom/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Michelle 
Blaine/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Robert C 
Williams/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
		 cc: 
		 Subject: Cuiab? EPE -- Fine

FYI, I received verbal notice today that EPE has been fined in the amount of 
R$2.2 million (approx US$1.1 million) for failure to comply with its IPP 
license -- specifically, the failure to dispatch at 450 MW per the 
instructions of the ONS.  Aneel previously had delivered a notice of 
noncompliance to EPE and our response was delivered to Aneel on Friday, so 
the fine probably crossed our response in the mail.  

This is another salvo in the ongoing dispute as to whether our PPA, which 
pre-dates the new regulatory scheme, is to be treated as an exception or 
whether it needs to be completely renegotiated in order to be able to comply 
with the current regs.  In any event, it is not good news.  I will keep you 
posted as I get more details.

Regards,
 John