For your information.
---------------------- Forwarded by Kay Mann/Corp/Enron on 09/15/2000 12:37 
PM ---------------------------


Reagan Rorschach
09/14/2000 06:09 PM
To: Heather Kroll/HOU/ECT@ECT, Ozzie Pagan/HOU/ECT@ECT, Ben 
Jacoby/HOU/ECT@ECT, Jeffrey Keenan/HOU/ECT@ECT, John Moore/Corp/Enron@Enron, 
Kay Mann/Corp/Enron@Enron, Karen E Carter/NA/Enron@Enron, Rebecca 
Walker/NA/Enron@Enron, Tom Chapman/HOU/ECT@ECT, Dave Kellermeyer/HOU/ECT@ECT, 
Regan Rorschach/NA/Enron
cc:  

Subject: Notes from Wednesday (9/13/00) Development Meeting



CPCN
Allyson filed the ammended application 9/13/00.
Intervener and staff testimony is due 9/15/00.  This changed to 9/22 based on 
Allyson's email.
Enron rebuttal testimony is due 9/22/00.  This will be moved back as well.
Commission hearing is on 10/2/00.  This should stay firm based on Allyson's 
email.

Note:  If the AG's office and NCNG, the intervenersm, elect not to file 
testimony on 9/15/00, they can still come to the hearing and cross-examine.

Commission may issue CPCN conditional upon execution of the PPA; however, 
this is not certain.
Staff is worried about Merchant Plants--the VEPCO PPA has the shortest time 
period they have seen.
Allyson will call the AG's office 9/14/00 to discuss the AG's intervention.
The Commission's hearing will be October 2, 2000.
We will ask for an expedited briefing schedule (i.e. 2 weeks)
Optimistically, CPCN may be issued by the end of October.
We can only do site preparation work without the CPCN.  NO CONSTRUCTION.

Action Items:
Get a copy of the AG's intervention papers.
What is the status of NCNG's intervention?
Get Allyson to define the schedule going forward including potential hurdles.


Electrical Interconnect

Reagan and Terri spoke with Tim Talmadge (VEPCO) 9/13/00.  It appears that 
VEPCO is not far along in the study process.  We will follow-up with Wayne 
Duman of VEPCO and set a meeting as necessary.  Before we talk with VEPCO 
again, however, we need to understand the interconnect process with respect 
to the Edgecombe project.  Are we subject to the VEPCO tariff interconnect 
procedures, does PPA specify, or is this VEPCO's problem not ours? 

Action items:
Meet with Heather to discuss interconnect as it stands to date (i.e. with 
respect to VEPCO RFP and PPA negotiations).
Review VEPCO tariff.
Review PPA for reference.
Review draft interconnect agreement and submit/negotiate with VEPCO.
Followup with Wayne Duman to further discuss VEPCO interconnect issues and 
set meeting, as necessary.
We need to find out who VEPCO's attorney is who is working on the 
Interconnect and Operating Agreement.


Gas

The gas deal is a function of annexation of the property by Rocky Mount 
insofar as Rocky Mount will be the gas supplier.

Action Items:
Where does Rocky Mount (LDC) stand with repsect to getting their allocations 
from NCNG increased?
Is our site behind the Rocky Mount gate?
Do we need to work on an interconnect agreement with NCNG concurrently (as an 
insurance policy)?
Develop a construction schedule.
Check with Bill Sherk to see what his progress has been regarding NCNG 
negotiations.
Meet with Heathe and Ozzie to discuss/strategize.

Annexation/Zoning/Conditional Use Permit

Bill Sherk referred us to Bill Hoyle, attorney for the city's planning 
commission.  Hoyle referred us to Deck McCain, senior planner for the city.  
Discussions with McCain (9/13/00) reveal some timing issues with respect to 
annexation.  If we begin construction prior to annexation, we must go through 
the county's process--Stuart Bass is the county planning director.  Once 
annexation happens, we go through the city's process.  

The city process would include re-zoning as I2CU (CU = conditional use).  
This would take care of zoning and the conditional use permit at the same 
time.  This does involve filing notice AND holding a public meeting AND is 
expected to take approximately 60 days.  McCain was to prepare a package of 
information including the annexation petition, general statutes, and a letter 
describing the city's process and Enron deliverables.

In a follow-up conversation with McCain (9/14/00), he indicated that the 
city's expectation is that Enron would begin construction before annexation.  
We would, therefore, be subject to the county's zoning and conditional use 
permit processes.  He put his submittal preparation on hold as a result.

Action Items:
Talk with Kay Mann regarding expansion of Kilpatrick's scope to define these 
processes (zoning, annexation, and conditional use permitting) for us.
We need to build the "road maps" for annexation, zoning, and conditional use 
permitting processes.
Understand how zoning and conditional use permitting-- at the city and county 
levels--effect construction.
Begin Conditional Use Permitting process with county and city, concurrently.
Discuss our timing for option transfer.

Taxation

Rocky Mount made a verbal tax proposal totaling approximately $750,000 over 4 
years.  We have not evaluated or discussed with them further.  Financial 
model uses Enron tax assumptions.

Action Items:
Calculate present value of the Rocky Mount proposal.
Get with Kay Mann to see if Kilpatrick can get a copy of the deal Dynegy 
negotiated for their project.
What is the legal framework through which Rocky Mount has to offer such a tax 
deal?
What else does the legal framework offer, and can we negotiate a position we 
like?
Determine what depreciation schedule the city will use.
Determine what we think the taxes ought to be and PV it as a point of 
comparison.


Land 

Mayor of Rocky Mount was contacted by Bill Sherk last week about getting the 
ball rolling on acquiring more land.  Bill Sherk is going to begin the 
discussions with Ms. Ryerson and wants to make sure how much additional land 
we are asking for.

Action Items:
Review site map with respect to additional land desires.
Followup with Bill Sherk.
Talk with Kay regarding option conveyance document and lease agreement.

Air

Air permit is in-house.  To finalize the permit, we need to get a letter from 
the city, the county or both.

Action Items:
Get Janet's signature on the permit application.
Get check cut for application fee.
Get necessary letter from City of Rocky Mount and/or Edgecombe County (ENSR 
is engaged on this).
Send it all in.

Regulatory

During thsi politically driven CPCN process and considering the critical 
juncture, we should enlist external support, as we can.

Action Items:
Get with Tom Chapman to find out the "do's and don'ts" with regard to 
mustering political support.
Senator support letter, as appropriate.
Supportive inquiry phone calls, etc.