Re: Com Ed - Update ,
 A conference call with Steffes, Kingerski, Boston, Roan, Lewis and me took 
place to discuss Enron's position on Com Ed.  

Summary - We discussed a  public position of "No PPO without an RTO"  since 
without a functioning market, Enron is at risk with our current book of 
business.  From a public policy standpoint, we would argue that without the 
protection of the PPO, customers need a functioning market in which to 
procure power.

Privately, in exchange for supporting the Com Ed Proposal, we would negotiate 
for the following (in order of importance):
1. No losses on our existing book of business by negotiating a bulk power 
deal to cover our exposure.  
2.  Build a broad market by seeking changes to Com Ed FERC tariffs as it 
regards balancing and penalties, etc.

As a separate matter or in conjunction with the above, do a default service  
or some other related deal.  A meeting is scheduled for Friday with Chuck 
Decker to talk through the issues related to physical delivery into Com Ed.  

A more detailed memo will follow this weekend.

Janine



	James D Steffes
	04/30/2001 11:59 AM
		
		 To: Janine Migden/NA/Enron@Enron
		 cc: Jeff Ader/HOU/EES@EES, Mark Bernstein/HOU/EES@EES, Edward D 
Baughman/Enron@EnronXGate, Marc Ulrich/HOU/EES@EES, Harry 
Kingerski/NA/Enron@Enron, Roy Boston/HOU/EES@EES, Daniel 
Allegretti/NA/Enron@Enron, Eric Letke/HOU/EES@EES, Mike 
Roan/ENRON@enronXgate, Susan M Landwehr/NA/Enron@Enron, Richard 
Shapiro/NA/Enron@Enron, Ron McNamara/NA/Enron@Enron, Don Black/HOU/EES@EES, 
James W Lewis/HOU/EES@EES
		 Subject: Re: Com Ed

Janine --

The point about load balancing and following is critical.  EES is struggling 
to compete with a physical product in ILL.

I know that Don Black and Jay Lewis are trying to figure out what are the 
critical components of the real-time balancing rules.

Maybe we should try and set up a phone call between Govt Affairs and EES Risk 
Mgmt to define the necessary rules and see how (a) a ComEd / ICC Settlement 
would work and (b) what are the implications of the Order 2000 RTO process in 
the Midwest (MISO and ARTO).

Thanks,

Jim




Janine Migden

04/30/2001 10:09 AM

To: Jeff Ader/HOU/EES@EES, Mark Bernstein/HOU/EES@EES, Edward D 
Baughman/Enron@EnronXGate, Marc Ulrich/HOU/EES@EES, Harry 
Kingerski/NA/Enron@Enron, James D Steffes/NA/Enron@Enron, Roy 
Boston/HOU/EES@EES, Daniel Allegretti/NA/Enron@Enron, Eric Letke/HOU/EES@EES, 
Mike Roan/ENRON@enronXgate
cc: Susan M Landwehr/NA/Enron@Enron, Richard Shapiro/NA/Enron@Enron 

Subject: Com Ed

Last week, Sue and I, along with Phil O'Connor of New Energy met with Frank 
Clark ( Senior V.P. Exelon - Government Affairs, etc) and Arlene Juracek 
(V.P. Rates and Tariffs).  Sue and I also met with Commissioners Hurley and 
Harvill.

Information Gleaned From the Meeting:

1.  Com Ed does not think price volatility will be acceptable to the 
residential customers and wants to create a structured rate.  They are not 
open to any alternative that causes them to lose money.
2.  They will file a rate case in 2004 to be effective in 2005.  They are not 
sure the statute requires them to file an MVI plus 10% at the end of the PPO 
period and need to study the statutory requirements.  Their preference is to 
initiate performanced based ratemaking instead for bundled rates.
3.  Com Ed's view is that the energy situation is a  national problem.  Com 
Ed wants to be protected through its commodity price.
4.  Com Ed does not want the obligation to serve industrial customers and on 
a longer term basis, would like to shed its obligation to serve residential.
5.  Com Ed has arbitrarily defined mass market as 400kw or less and has 
therefore lumped these commercial customers in with their residential, 
however, they are open to separating them out.
6.  Com Ed does not want the legislation reopened which may provide us with 
some leverage.

At the conclusion of the meeting it was decided to start an open forum 
process to get ideas on the table.  Com Ed is shying away from any formal 
process.  Their concern seems to be that they do not want to take the 
political heat for high prices and volatility and would rather give up its 
default customer service obligations.

Possible Deal Opportunities:

1.  Either through negotiations (preferred choice) or through competitive 
bidding, become the default service provider for some or all of Com Ed's 
industrial customers.  This would allow us to upsell additional products to 
the industrial class.
2.  Segregate the commercial customers (100 - 400 Kw) customers from the 
residential customers and negotiate to become the default service provider.
3.  Joint venture between ENA and New Power to be the default service 
provider for portions of the residential class through an opt-out program 
like municipal aggregation or some other format.

Next Steps:

1.  Mark Ulrich is to complete an analysis of the Com Ed proposal in terms of 
its impact on our current book of business
2.   Develop a position boiled down to just a few key points that we can push 
with regulators and Com Ed.  In a conference call with Harry, Mark, Roy, Sue 
and me, we have tentatively distilled the list to the following:
 a.  Default deal for industrial customers
 b.  Negotiate for Com Ed to provide load following and balancing
 c.  Default deal for commercial as opposed to PBR

Janine
james.steffes@enron.com