---------------------- Forwarded by Thomas A Martin/HOU/ECT on 03/29/2001 12:37 PM ---------------------------
From:	Jaime Williams@ENRON on 03/29/2001 07:48 AM
To:	tmartin@enron.com, John Hodge/Corp/Enron@ENRON, Agustin Perez
cc:	Francisco Pinto Leite/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT 
Subject:	Gas Supply proposal for EDF

Hello Tom, I hope bid week is over, and you can breathe now?I met PACE Global Energy yesterday to talk about the EDF RFP, and I think it looks much better now:

1.- Term: They are planning on having 3 interconnections into 3 different pipelines (Tetco, PG&E and Coral Mexico Pipeline), so they think the banks can get comfortable with less than 25 years of supply, because the 3 interconnections lowers their risk of not getting fuel supply in the future. They are asking now to a proposal of minimum 5 years, and upto 12 if we can make it. So they will be taking the risk of not having a fuel supply that matches de 25 year Power Purchase Agreement.

2.- The Points of Sale will be in the U.S. Mexico Border, so we will not have to get an export permit of any sort.

3.- Swing: This is going to be a base load plant, that will be dispatched around 90% on a yearly average.  However CFE has the right to take zero power at their full discretion, so Edf does not wsant to take the risk of not being dispatched and not being able to swing down to zero during the 25 years of the gas supply.  However, the plant will most certainly displace other less efficient plants in the first 10 years, so that such risk is much lower. In our proposal we can include either zero swing or which ever we feel we are the most competitive. They will evaluate whether such risk could be taken by them. 

4.- Modifying Swing every 2 years.  They believe that in the long run (25 years), the dispatching rules or conditions of the plant could change. So they want to have the option to review the swing every 2 years. Can we price this optionality ? Is there a re-purchase of such optionality in the market ? 

5.- Resale formula. They need us to include a daily re-sale fomula for the gas not taken.

6.- Other Provisions: We need to review the other provisions in the RFP and tell them which ones can we comply with and which ones we don't. 

I am faxing you the entire RFP, together with the latest letter we received from them. Please give me a call whenevr you have a chance.   

Best regards.