keyspan / 3 rd party leverage so . . .
mgu , complete utility outsourcing to ena . requires all gas supply and assets are bequeathed to ena with a gas sale to mgu . risks to mgu include performance risk , commission scrutiny , and assets remaining with ena for 60 - 90 days in the case of ena insolvency . they are betting the entire reliability of their utility performance to one counterparty . that is a big bet for any company and was managed completely through trust . . .
peoples is different . keyspan is different . their worse case is ena goes away and they a ) have more money in the bank , b ) grew their diversified earnings at a pace unachievable on their own , c ) will get addicted to this new business and d ) have very little to loose with their alternative being partnering with our closest competitor . the choice for these guys is to grow or not . they will not loose what they had before ena .
i know our role for the unforeseeable future will be that of a broker . even on mgu , i am attempting to find a way to mitigate their concerns with providing a third party back stop . on keyspan , the play is to bring them into the pec deal linking the midwest and the ne .
originators must be optimist ' s and i don ' t like letting a deal i believe in die . mgu will be a challenge due to the commission scrutiny i may not be able to now . . . overcome . i believe more than ever we can link counterparties together and provide the backbone of some new vehicle . peoples has been painful and there are still challenges ahead , but they are willing to provide financial backing for money . they have a taste ( $ 10 mm , 2000 and $ 18 mm , 2001 ) of this new business and do not want it to cease .
so , first , i do want to move ahead with my new role and second , really want to have keyspan and pec together in ny . the ny event is 2 weeks away and chuck , ed and mike have committed . for the group , i want russell and deirdre mccaffrey , 1 analyst and 1 associate to see if we can get anything going . it is an investment of around $ 2 mm to determine if we can get an asset play working .
please reconsider the ny trip to include keyspan and provide me the go ahead to form this group . the below attachment is to show , with time , focus and persistence there is always a way around ( or over ) all problems .
thanx ,
laura
- - - - - original message - - - - -
from : penman , gregg
sent : thursday , november 15 , 2001 11 : 10 am
to : luce , laura ; tomaski , richard ; dickson , stacy e . ; johnson , rudwell
subject : fw : enovate / wps winter deal
it looks like we may have worked out an arrangement for the wpsc deal . essentially , pec will provide the full guarantee , ena will give pec a reimbursement agreement for 50 % , and ena will receive 50 % ( 25 % under bankruptcy ) of the deal proceeds . in exchange , we may need to cover a small ( few hundred thousand dollars ) shortfall on the 25 th of november . this would most likely be accomplished by not cash settling a portion of the transactions and instead delaying payment until enovate has the cash . i am working out the details of whether or not this is feasible . any questions , please let me know . i will let you know if we hit any road bumps , but we are going to try to close this by tomorrow .
stacy - thank you for your excellent suggestion on documentation . hopefully , it will pass through the rest of the pec organization .
gregg
- - - - - original message - - - - -
from : t . hermann @ pecorp . com @ enron
sent : thursday , november 15 , 2001 10 : 28 am
to : a . huprikar @ pecorp . com
cc : j . pokorny @ pecorp . com ; d . zagorski @ pecorp . com ; m . klyasheff @ pecorp . com ; j . nassos @ pecorp . com ; p . kauffman @ pecorp . com ; j . gabel @ pecorp . com ; r . rodriguez @ pecorp . com
subject : enovate / wps winter deal
as most of you are aware , enovate has been finalizing negotiations w /
wisconsin public service for a winter peaking exchange ( ie the non - regulated
version of storage ) . this is a 16 / d , 5 day peaking deal effective only this
winter . it generates fixed revenues of appx . $ 250 , 000 , plus additional
commodity charges that are minor . wps will not accept a pg from enron , and
enron can not issue an lc for their half . wps will accept a pg from peoples
for the entire amount ( the entire amount is $ 5 mm ) .
enron will provide the reimbursement agreement back to pec . enron has
agreed to a 75 / 25 sharing on this deal , which will go to 50 / 50 if they are
not under bankruptcy . in addition , enron is - subject to final management
approval - going to cover a small cash shortfall that enovate anticipates
having during november due to a ) a net operating loss during october , and b )
completion of the $ 18 million cash distribution last week ( gregg and i
inadvertently sent back too much ) .
while this is not an ideal arrangement we feel this is appropriate given the
nature of this deal and current credit circumstances . at this point we are
not viewing this as a template for future deals of this nature .
please let gregg penman , roy rodriguez or myself know if this does not work .
thanks ,
- - tim
the information transmitted is intended only for the person
or entity to which it is addressed and may contain confidential
and / or privileged material . any review , retransmission ,
dissemination or other use of , or taking of any action in reliance
upon , this information by persons or entities other than the
intended recipient is prohibited . if you received this in error ,
please contact the sender and delete the material from any computer .
keyspan / 3 rd party leverage
so . . .
mgu , complete utility outsourcing to ena . requires all gas supply and assets are bequeathed to ena with a gas sale to mgu . risks to mgu include performance risk , commission scrutiny , and assets remaining with ena for 60 - 90 days in the case of ena insolvency . they are betting the entire reliability of their utility performance to one counterparty . that is a big bet for any company and was managed completely through trust . . .
peoples is different . keyspan is different . their worse case is ena goes away and they a ) have more money in the bank , b ) grew their diversified earnings at a pace unachievable on their own , c ) will get addicted to this new business and d ) have very little to loose with their alternative being partnering with our closest competitor . the choice for these guys is to grow or not . they will not loose what they had before ena .
i know our role for the unforeseeable future will be that of a broker . even on mgu , i am attempting to find a way to mitigate their concerns with providing a third party back stop . on keyspan , the play is to bring them into the pec deal linking the midwest and the ne .
originators must be optimist ' s and i don ' t like letting a deal i believe in die . mgu will be a challenge due to the commission scrutiny i may not be able to now . . . overcome . i believe more than ever we can link counterparties together and provide the backbone of some new vehicle . peoples has been painful and there are still challenges ahead , but they are willing to provide financial backing for money . they have a taste ( $ 10 mm , 2000 and $ 18 mm , 2001 ) of this new business and do not want it to cease .
so , first , i do want to move ahead with my new role and second , really want to have keyspan and pec together in ny . the ny event is 2 weeks away and chuck , ed and mike have committed . for the group , i want russell and deirdre mccaffrey , 1 analyst and 1 associate to see if we can get anything going . it is an investment of around $ 2 mm to determine if we can get an asset play working .
please reconsider the ny trip to include keyspan and provide me the go ahead to form this group . the below attachment is to show , with time , focus and persistence there is always a way around ( or over ) all problems .
thanx ,
laura
- - - - - original message - - - - -
from : penman , gregg
sent : thursday , november 15 , 2001 11 : 10 am
to : luce , laura ; tomaski , richard ; dickson , stacy e . ; johnson , rudwell
subject : fw : enovate / wps winter deal
it looks like we may have worked out an arrangement for the wpsc deal . essentially , pec will provide the full guarantee , ena will give pec a reimbursement agreement for 50 % , and ena will receive 50 % ( 25 % under bankruptcy ) of the deal proceeds . in exchange , we may need to cover a small ( few hundred thousand dollars ) shortfall on the 25 th of november . this would most likely be accomplished by not cash settling a portion of the transactions and instead delaying payment until enovate has the cash . i am working out the details of whether or not this is feasible . any questions , please let me know . i will let you know if we hit any road bumps , but we are going to try to close this by tomorrow .
stacy - thank you for your excellent suggestion on documentation . hopefully , it will pass through the rest of the pec organization .
gregg
- - - - - original message - - - - -
from : t . hermann @ pecorp . com @ enron
sent : thursday , november 15 , 2001 10 : 28 am
to : a . huprikar @ pecorp . com
cc : j . pokorny @ pecorp . com ; d . zagorski @ pecorp . com ; m . klyasheff @ pecorp . com ; j . nassos @ pecorp . com ; p . kauffman @ pecorp . com ; j . gabel @ pecorp . com ; r . rodriguez @ pecorp . com
subject : enovate / wps winter deal
as most of you are aware , enovate has been finalizing negotiations w /
wisconsin public service for a winter peaking exchange ( ie the non - regulated
version of storage ) . this is a 16 / d , 5 day peaking deal effective only this
winter . it generates fixed revenues of appx . $ 250 , 000 , plus additional
commodity charges that are minor . wps will not accept a pg from enron , and
enron can not issue an lc for their half . wps will accept a pg from peoples
for the entire amount ( the entire amount is $ 5 mm ) .
enron will provide the reimbursement agreement back to pec . enron has
agreed to a 75 / 25 sharing on this deal , which will go to 50 / 50 if they are
not under bankruptcy . in addition , enron is - subject to final management
approval - going to cover a small cash shortfall that enovate anticipates
having during november due to a ) a net operating loss during october , and b )
completion of the $ 18 million cash distribution last week ( gregg and i
inadvertently sent back too much ) .
while this is not an ideal arrangement we feel this is appropriate given the
nature of this deal and current credit circumstances . at this point we are
not viewing this as a template for future deals of this nature .
please let gregg penman , roy rodriguez or myself know if this does not work .
thanks ,
- - tim
the information transmitted is intended only for the person
or entity to which it is addressed and may contain confidential
and / or privileged material . any review , retransmission ,
dissemination or other use of , or taking of any action in reliance
upon , this information by persons or entities other than the
intended recipient is prohibited . if you received this in error ,
please contact the sender and delete the material from any computer .