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Enron Emissions Services. Business Plan 2002. Emissions Markets. $4 billion in annual revenues SO 2 makes up 50% of US emissions markets ERCs and DERCs make up a large percentage of market OTR NOx is also a large market. SO2 Market. $2 billion market Very mature and developed market
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Enron Emissions Services Business Plan 2002
Emissions Markets • $4 billion in annual revenues • SO2 makes up 50% of US emissions markets • ERCs and DERCs make up a large percentage of market • OTR NOx is also a large market
SO2 Market • $2 billion market • Very mature and developed market • Very backwardated curve • Take advantage of coal marketers to increase SO2 marketing by factor of 6
OTR NOx • 11 states in OTR • Program rolling into NOx SIP CALL • Banked allowances can be used in SIP CALL, but there is flow control
NOx SIP CALL • 22 States (including NOx OTR) • Obtain a long position at a discounted cost via NOxTech • Trade around our long position
Houston-Galveston NOx Cap and Trade Program • Starts in January 2002 • Opportunity for forward sales • Gain a long position from acquiring Enron Methanol plant’s allowances
Non-Attainment Regions • Emission Reduction Credits (ERCs) and Discrete Emission Reduction Credits (DERCs) • Different regions: • Opportunity to make a few profitable trades each year in many different regional markets
Developing Markets • Greenhouse Gas Markets • International Program • ZEV Market • 5 States • CA, NY, MA, ME, & VT
Enron Environmental Strategies Group (ESG) • Add legal and market intelligence to EGM • Options between EGM and ESG: • ESG would increase attention to EGM • Hire or Dedicate ESG personnel to new EGM effort • Semi-integration of ESG and EGM • Complete integration of ESG and EGM
Environmental Consultancies • Provide a variety of regulatory and monitoring assistance to utility and industrial clients • A partnership would provide Enron Emissions Services an existing relationship and a track record with industrials and power generators • Enron Emissions Services would provide risk management expertise to the allowance portfolio • Two consultancies we have spoken with: • USR • ENSR
Conclusion • Continue to grow while utilizing ESG and possible new hires • Opportunity to earn $10.7 million in 2002