Luis,

It may be important to substantiate officially Furnas' need to show 300MW 
available even if constrained.  Is there a way to demonstarte that from 
public records?

Secondly.  can you provide the technical description of the system 
constraints and what is involved in overcoming them.  For instance does a new 
transmission line have to be built or new transformer installed? How long 
would it take to obtain these or other items and correct the problem?




Jose Lucio Reis@ENRON
12/21/2000 09:46 AM
Sent by: Jose Lucio Reis@ENRON
To: Rob G Gay/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc: Tracee Bersani/HOU/ECT@ECT, Richard A Lammers/SA/Enron@Enron, Laine A 
Powell/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Christiaan 
Huizer/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Felipe Ospina/NA/Enron@ENRON, 
Marcus Stephan/SA/Enron@Enron, Lutz 
Speidel/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT 

Subject: Re: EPE Dispatch

Rob:
Until now  FURNAS has not agreed to pay for the oil for 300MW. If ONS 
dispatch the power plant for 300MW we do not have reinburshment for the 
amount above 150 MW. We are asking and discussing with ANEEL to receive oil 
on combined cycle and when the power plant produces using two gas turbines at 
the same time. They asked for some data and they will be doing the analysis 
and giving the answers at beginning of the new year. About if there is any 
documents about this subject, the answer is no.

Second point: Under the FURNAS's point of view these constrains in the 
transmission system is good for both ( FURNAS and EPE ) because from the 
EPE's side we receive all invoice (  available capacity ), and even if the 
plant is in the merit order, it will  not be dispatched because these 
constrains. So in this case we do not consume oil more than 150 MW and FURNAS 
will not be exposed in the spot market because they will be "constrain off" 
in this market and will receive from the MAE by all this energy not 
dispatched .

Best regards

L?cio Reis     
---------------------- Forwarded by Jose Lucio Reis/SA/Enron on 21/12/2000 
12:09 ---------------------------


Rob G Gay
19/12/2000 12:49
To: Jose Lucio Reis/SA/Enron@Enron
cc: Tracee Bersani/HOU/ECT@ECT, Richard A Lammers/SA/Enron@Enron 

Subject: Re: EPE Dispatch

Could you please take a moment to rspond on the attached. Thanks You
---------------------- Forwarded by Rob G Gay/NA/Enron on 12/19/2000 09:21 AM 
---------------------------


Christiaan Huizer@ENRON_DEVELOPMENT
12/19/2000 06:20 AM
To: Rob G Gay/NA/Enron@ENRON
cc: Laine A Powell/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Richard A 
Lammers/SA/Enron@Enron, Tracee Bersani/HOU/ECT@ECT@ENRON, Felipe 
Ospina/NA/Enron@ENRON 

Subject: Re: EPE Dispatch  

Rob,

Regarding items 1 and 2, please contact Lucio Reis in Sao Paulo office and he 
can explain.

Item 3 is incorrect. The 300 MW would be generated by the two gas turbines at 
about 100 MW each and the remaining 100 MW coming from the steam turbine. The 
steam turbine receives its energy from the exit gases from the gas turbines 
and they both contribute equally to the resulting steam turbine output 
(theoretically at least, in practice depending on optimization of machines)

Again, please talk with Lucio.

Regards,

Christiaan



Rob G Gay@ENRON
12/18/2000 04:41 PM
To: Laine A Powell/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Christiaan 
Huizer/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Richard A Lammers/SA/Enron@Enron
cc: Tracee Bersani/HOU/ECT@ECT 
Subject: EPE Dispatch

Here is what we have concluded based on discussions this morning:

1) We believe that Furnas has agreed to contract and pay for 300 MW on oil to 
meet regulatory requirements concerning required capacity and reserve 
margin.  We do not believe that they intend for us to be dispatrched above 
220 MW. (Do we have any document which could substantiate this?)

2) Although  dispatch on a merit order basis would suggest that EPE runs full 
time (with 300 MW available),  there are practical constraints in the 
transmission system which will prohibit this from actually occuring. [ Please 
describe these constraints using some official sounding jargon but minimal 
detail and in particular indicate what is involved to de-bottleneck and how 
long this will take.  I presume that Furnas is solely responsible for the 
corrective measures.]

3) Based on our analysis, the optimal operating approach would be to generate 
220MW with  one turbine and 91 MW with the other for a total of 311 if 
dipatched above 220 MW.

If we can prove that 1) & 2) are correct or convince the lenders that they 
are, then I think we can suggest that fuel oil exposure is negligibe if gas 
is ready by April 01.  We will have to see how it looks when we add the Sue 
Garvin flex months.

Therefore, a merit order analysis is only necessary if i) our supposition 
about Furnas' motivations are incorrect and/or ii) the transmission problem 
is cleared.  If this happens it would be nice to be able to predict reduced 
fuel utilization due to a) reduced dispatch during daily off-peak hours or 
seasonal impacts, b) due to scheduled outages, and c) due to managing our 
availabilty in such a way as to reduce fuel consumption operating losses.  
Any data you can provide will be helpful.


Have I successfully connected the dots here?

If you have previously sent these materials to Felipe or Tracee please simply 
grumble to yourself if you have to do an extra e-mail to me.  Remember, you 
don't have to be nice to a short timer unless you need them to get something 
done.


Regards,

Rob