Why is this formulation of the EESI Energy Price  any different than saying "plus the Fixed Basis" and then defining the Fixed Basis as a $/kWh amount?  Isn't it exactly the same?  We've written it the way it was before so it is easy to plug in the fixed basis number.

Why have you changed the calculations of excess and deficiency usage charges during the index period?  Why have you used the reference to a Management Fee in the new language?  Why are there no charges for Excess Usage during the index period--are you really giving them the fised basis position for unlimited usage?




Jevaughn Sterling
10/23/2001 05:29 PM
To:	Berney C Aucoin/Enron@EnronXGate, Phil Layton/HOU/EES@EES, Liqun Pan/HOU/EES@EES, Richard Ring/HOU/EES@EES, Michele Raque/ENRON@enronXgate, Jim Brown/HOU/EES@EES, Nina Nguyen/HOU/EES@EES, Christopher Riley/HOU/EES@EES
cc:	NJ Team, James M Wood/HOU/EES@EES, Mike D Smith/HOU/EES@EES, Bob Hansen/HOU/EES@EES, Gillian Johnson/HOU/EES@EES 
Subject:	NJ Index plus

Following today's discussions with the Transaction Accounting group to discuss fixed basis Mark to Market, Product Management has modified the definition of the EESI Energy Price.   

The conclusion of the discussion with Transaction Accounting was that the Index product does in fact create a commodity position that the commodity desk can "choose" to manage.  The "revenue" position that is created when the contract is signed with the customer will be settled based on the published PJM Zone LMP, nevertheless the commodity desk may choose to manage their "cost" otherwise.  The proposed fixed basis will be treated as ONE with the index in determining the EESI Energy Price.   This approach is very similar in nature to the definition of the "Plus" that is defined in the ENovative Lite Energy Service Agreement for Gas products.  

Therefore, the EESI Energy Price will now read:

""EESI Energy Price" means the sum of the weighted average (weighted in accordance with the Account's hourly usage or the Utility rate class usage profile) of hourly Real Time Locational Marginal Price for the applicable Utility load zone as posted by the ISO plus $0.0[    ] per kWh."

Please see the attached transaction confirmation and comment on the new definition of the fixed basis.  All references to the fixed basis ("Management Fee")  as a separate component of the EESI Energy Price should be removed from the contract language.  


 

Please provide your comments accordingly.

Thanks