VEPCO PPA ,
 Per your request.
---------------------- Forwarded by Kay Mann/Corp/Enron on 06/13/2000 04:57 
PM ---------------------------


Linda J Simmons@ECT
06/13/2000 08:45 AM
To: Kay Mann/Corp/Enron@Enron, Heather Kroll/HOU/ECT@ECT, Ozzie 
Pagan/HOU/ECT@ECT, Jeffrey M Keenan/HOU/ECT@ECT, Tom Chapman/HOU/ECT@ECT
cc:  

Subject: VEPCO PPA


----- Forwarded by Linda J Simmons/HOU/ECT on 06/13/2000 08:44 AM -----

	"Nancy Wodka" <nwodka@bracepatt.com>
	06/12/2000 04:20 PM
		 
		 To: <linda.j.simmons@enron.com>, <lisa.mellencamp@enron.com>
		 cc: "William Frederking" <wfrederking@bracepatt.com>
		 Subject: VEPCO PPA


Lisa:  Attached is a draft of the Power Purchase Agreement with VEPCO, based 
on the current version of the term sheet.  In preparing the draft, we did 
encounter several additional questions for Enron's consideration.  These are 
noted with brackets and, in some cases, italicized notes, in the draft and 
are also highlighted below.  You may want to address these issues before this 
goes to VEPCO.

Cover and first page-- Should the party to the agreement (for the moment) be 
ENA or a special purpose company?

Definitions--  We included a defined term "Emergency Start-Up" (a start up or 
increase in energy scheduled during a day) and a place in Exhibit A to 
include a price for this, although this was not covered in the term sheet.

Section 2.2--  We included a provision for VEPCO to take test energy (energy 
charge only; no demand charge)--do you want this?

Section 2.3--  This was taken from the term sheet, but is it correct that COD 
will be July 1 (since the demand charge is supposed to start June 1?)  Also, 
it would be best to define "commencement of construction" to avoid 
controversy down the road.  We could either do this now or put in a 
placeholder that indicates it needs to be defined or be silent, whichever is 
your preference.  Also, bear in mind that we have not included a specific 
remedy (e.g., liquidated damages) if the Seller does not achieve that 
milestone on time.  Under the default provision (Section 8.1(c)), there would 
be a 30 day period to cure before Buyer could terminate (extendible to 90 
days if a longer period of time is needed and Seller diligently pursues the 
cure).  Would you prefer the right to pay ld's and extend the time period?

Section 3.1(b)--  Should the 1400 hour limitation apply to all sales under 
this PPA or only sales from the Facility?  I.e., would you use this Agreement 
to sell to VEPCO power in addition to what would be available from the 
Facility?  Also, is this a calendar year limitation--i.e., could they take 
1400 hours in the period June-Dec. 2001 or does the 1400 hours need to be 
pro-rated for the first year?

Section 3.4-- Since this is not a base load plant, the normal definition of 
Availability as the number of hours in a year of operations compared to the 
total hours in the year would not seem to be applicable.  Instead, we stated 
that the Facility would be capable of being available 92% of the year (other 
than due to Force Majeure and 336 hours (2 weeks) of scheduled 
maintenance)--i.e., that if they tried to schedule it, it is expected to be 
available.  Is that what Enron intended?  Additionally, the term sheet stated 
that a remedy for failure to meet Availability would need to be agreed--why 
wouldn't cost of cover damages be appropriate? Also, please note that we 
included language stating that Seller will not perform maintenance during 
peak periods.

Section 3.5(b)-- Please note the bracketed language re taking Blocks of 
Energy.  We have 50 MW minimum blocks but the capacity is 223--should we 
allow the last Block to be 23 if they've scheduled all the rest?

Section 3.5(c)-- Please see the bracketed language at the end of this Section.

Section 4.7-- Should there a required minimum take of Energy?

Article 6-- The Genco/Santee Cooper form of PPA we used as a model did not 
have any provisions on metering.  (See placeholder note in Article 6.)  Do 
you want to add such a provision, ignore it or just include a placeholder for 
now?

Section 9.1-- Is 30 days from invoice correct for the payment due date or 
would you prefer a shorter period?

Article 15-- The Genco/Santee Cooper form had mediation as a required step 
prior to arbitration.  Should we keep that?  Also, the form of arbitration is 
"baseball" arbitration--i.e.,  the arbitrators have to chose one party's 
position or the other's.  Is that what you want?

Section 16.2--  We used New York for governing law, on the premise that it 
will be difficult to get VEPCO to agree to Texas law and we would not 
recommend Virginia law for this contract.

Exhibit A-- There are a number of questions on the pricing exhibit--please 
see the bracketed notes therein.

Please call and let us know how you would like to proceed on this draft.

 - VEPPPA.DOC
sheila.tweed@enron.com