1 / 9

Partnership Solutions

Partnership Solutions. Enron North America October 19, 2000. Agenda. Partnership goals Advance Sempra’s corporate goals Advance Sempra’s financial goals Advance Sempra’s constituency goals Partnership solutions Electricity Natural Gas Next steps. Partnership Goals.

palti
Download Presentation

Partnership Solutions

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Partnership Solutions Enron North America October 19, 2000

  2. Agenda • Partnership goals • Advance Sempra’s corporate goals • Advance Sempra’s financial goals • Advance Sempra’s constituency goals • Partnership solutions • Electricity • Natural Gas • Next steps

  3. Partnership Goals • Advance Sempra’s corporate vision • “Pipes and wires” delivery company • Increased focus on unregulated businesses • Advance Sempra’s financial goals • Enhance earnings • Reduce procurement risk • Advance relationship with constituencies • Financial community • Customers • Policy makers

  4. Electricity Solutions • Fixed price power for 5-year term(*) • 25 MW, on peak (6X16): $53/MWh • 25 MW, base load (7X24): $45/MWh • 500 MW, on peak (6X16): $55/MWh • 500 MW, base load (7X24): $47/MWh (*) Prices are indicative and subject to change based on market conditions. • On-line competitive auction services • Sempra gets better access to markets and market prices

  5. Benefits of Online Independent Auction • Transparent • Produces lowest price by seeking variety of customized products • Reduces Sempra customers exposure to price volatility • Improves Sempra’s financial position • Reduce regulatory prudency risk • Reduce volatility risk • Provide “headroom” under cap to pay down undercollections

  6. Enron Can Help • Enron can provide a stand-alone online energy auction system. • Enron, or independent audit firm (e.g., Arthur Anderson), can manage auction system • Enron is willing to assist by dedicating power markets, regulatory and information technology expertise to ensure success • Auction would be structured to best meet objectives: • Lot formulation: Size, Term, Shape • Pre-Qualification: Experience, Credit, License • Contracting requirements: Industry standards, terms and conditions • Auction Design: Live Auction, Multiple Round • Auction Process: Timing, Approvals

  7. Gas Solution: Procurement Outsourcing • ENA assumes wholesale aspects of Sempra’s core load procurement under a 10-year outsourcing agreement • Price: Discount to the SoCal Border 1st of month, index plus as-billed intra-state transport • Services: ENA responsible for procuring, nominating, scheduling and balancing deliveries to city-gate

  8. Gas Solution:Procurement Outsourcing • Sempra maintains primary interface with customers • Sempra continues its role in distribution, metering, billing and customer service • ENA manages Sempra’s core-related upstream assets: supply, transport and storage • ENA assumes risk of fluctuations in core demand, including weather, imbalances and bypass

  9. Benefits of Procurement Outsourcing • Benefits to Sempra • Increased earnings—Enhance performance under GCIM and PBR frameworks • Increased flexibility to manage earnings—Structure agreement to time cash flows • Responsive to financial community—Reduce regulatory risk tied to procurement • Benefits to customers • Reduced service costs • Below market gas prices

More Related