Thomas,

I talked to Scott shortly this afternoon. I was confused between his idea and 
Ben's model. As it is clear from Scott's proposal letter to Calpine, Enron 
would enter into a short-term tolling agreement to buy power from Calpine. 
Ben's economic model for 20 year is to understand Calpine's position, so that 
we could bid reasonably and properly. Sorry about the previous email. I think 
I started my first work very nicely. Thank you. Jinsung
 




Thomas M Suffield@ENRON
02/17/2000 02:44 PM
To: Jinsung Myung/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc:  

Subject: Re: Calpine Update  

Sounds good.  It appears we are at risk from years 5 to15 years.  We'll have 
to talk about it later.  Thanks, Thomas.



Jinsung Myung@ENRON_DEVELOPMENT
02/17/2000 02:27 PM
To: Thomas M Suffield/Corp/Enron@ENRON
cc: Benjamin Rogers@ECT 

Subject: Calpine Update

Thomas,

Here is a quick update for Calpine project.

1. Ben and I had a meeting with Scott this morning. Basic idea is to have 3 
and 5 year tolling agreement with Calpine and sell to the market after the 
expiration of the  agreement.

2. Ben prepared a preliminary model. Scott's target unlevered equity IRR is 
8.5% ~ 9%. Key value driver will be a capacity payment ($/kw/month) for 3 or 
5 years, which we will charge to Calpine. As soon as we get VOM from EE&CC, 
we will ask Structuring group to get the capacity payment for 3 and 5 years.

3. Things to be done
 - 3 and 5 year capacity payment to get 8.5% ~ 9% IRR of unlevered equity
 - 20 year power curve (capacity and energy) for Eastern PJM. We got gas 
curve.
 - VOM

I think this idea could be good if Calpine is willing to pay more than what 
we see for next 3 or 5 year Eastern PJM pool price, and/or we can leverage up 
more by taking advantage of 3 or 5 year tolling agreement. This is just my 
thought. Please correct me, if I am wrong. I will continue to work on the 
model with Ben and I will talk to Scott to find out more. Thank you.

Jinsung Myung