FW: EES @ Silicon Valley Power (City of Santa Clara) ,
 Just a little noise from the field offices...no need to do anything but I t=
hought you should be aware of a little skirmish.  Ader's version is differe=
nt -he says he only precluded Mike and Laird's involvement after receiving =
a lot of negativism from them about the EES concept.  Also, he thinks that =
SVP liked the product offering.   My opinion is that this a wholesale custo=
mer/opportunity. =20

Chris Calger
503-464-3735

 -----Original Message-----
From: =09Dyer, Laird =20
Sent:=09Thursday, July 26, 2001 10:33 AM
To:=09McDonald, Michael; Calger, Christopher F.
Subject:=09EES @ Silicon Valley Power (City of Santa Clara)

Mike & Chris,

I received a phone call from Wayne Ware of Silicon Valley Power ("SVP") thi=
s morning.  Apparently, EES met with SVP on Tuesday, July 24th to discuss t=
he sale of power and services through the City to targeted end-use customer=
s on an exclusive basis.

Based upon Wayne's comments, SVP staff's response was not favorable.  Ware =
offered the following comments:

1)  SVP dismissed the exclusivity element at the outset.
2)  EES's product is perceived to compete directly with SVP's core competen=
cy - provision of a fixed priced, load followed product.  SVP indicated tha=
t it currently offers term (up to 5 years), fixed priced, load followed pow=
er to its customers.  According to Wayne, over 100 MW's (20% of SVP's load)=
 is served this way.
3)  Ware opined that EES does not understand what SVP does or offers its cu=
stomers.  SVP was perplexed by this given that Wayne Truxillo (the EES rep.=
) worked for SVP and set up many of the fixed price programs that are curre=
ntly in place.
4)  SVP views EES's offering as a wholesale product.
5)  SVP also had concerns about EES's reputation and history in California =
citing the University of California fiasco.  SVP didn't think an EES produc=
t would be well received among its customers.

What is disturbing is that Mike and I asked both Truxillo and Ader if we co=
uld be included in these meetings or, at a minimum, be given the opportunit=
y to talk with our customers beforehand.  EES excluded us from this process=
.  Mike indicated that Ader was worried I would sabotage EES's efforts; tha=
t I would tell SVP that EES's proposal is a wholesale product replicating S=
VP's core competency of delivering a fixed priced, load followed product.  =
Mike and I had a somewhat heated discussion with Ader about their product o=
ffering.  Ader characterized the product as retail on the basis that it wou=
ld be sold one customer at a time and involved load following.  That the pr=
oduct is to be sleeved through SVP (actually sold to SVP for re-sale) and t=
herefore is a wholesale product was dismissed.  Ader also indicated that EE=
S would be offering behind the meter demand related services, which further=
 characterized their product as retail.  What is clear is that EES is searc=
hing for physical power sales.  They can offer behind the meter solutions w=
ithout the help or involvement of SVP.  Their product offering, once the de=
corations are removed, is a physical power sale.

As was our concern, we will now have to manage this issue, reacting to EES'=
s actions.

Ugh!!!

Laird
louise.kitchen@enron.com