re Westland Energie BV - capacity deals for 2000 ,
 FYI
---------------------- Forwarded by Mark - ECT Legal Taylor/HOU/ECT on 
09/22/99 04:53 PM ---------------------------


Robert Quick
09/22/99 07:27 AM
To: ECT London European Trading
cc: Michael R Brown/LON/ECT@ECT 
Subject: re Westland Energie BV - capacity deals for 2000

The Netherlands power origination team have concluded the first of the 
so-called transmission deals with the above counterparty. This is a sale and 
buy back structure whereby Enron sells on a border basis to a Dutch 
distribution company who then sells back to Enron a proportion of the power 
on a free on Koppelnet basis. The Koppelnet is the Dutch grid.

The deals are designed to secure as much cross border capacity to take 
advantage of the still significant arbitrage between power prices within the 
Netherlands and those outside. At the moment the grid operator, TenneT, 
allocates transmission capacity on a pro rata basis without charge. This has 
led to significant gaming of the system with huge oversubscription for cross 
border capacity, and the structure we have developed in Enron has been 
designed to take advantage of the system and still stay within the rules laid 
down by TenneT and the regulator, the DTe. Should anyone like to have a copy 
of the 2 transaction agreements, then pls call me. 

We are in negotaitions with other distribution companies in relation to this 
structure.

tks
elizabeth.sager@enron.com