Subject: dash for potential deal with nstar
all :
as some of you may be aware , we appear to be getting close to entering a transaction with nstar to serve its all - requirements power needs for its residential and commercial customer class default service obligations . the deal would be for a term of 6 or 12 months commencing july 1 , 2001 . nstar ' s service territory covers boston and surrounds , as well as south - eastern massachusetts . this prospective deal is very similar in nature to the standard offer service deals we have entered into with united illuminating , nstar , and most recently , central maine power .
here is the status at this point :
nstar achieved various levels of signoff for the basic deal structure ( both with regulators and internal senior management ) . nstar has indicated that it has basically come down to price and they could potentially pull the trigger as early as monday , but certainly within a couple of days at the most .
nstar has requested updated pricing by 10 am eastern on monday 3 / 26 to be held firm through cob same day ( contingent upon execution of definitive agreements by that time ) . they are seeking pricing updates from competing suppliers so we are not exclusive at this point .
nstar / enron have worked through our extensive markups on their proposed contract , and have compiled a list of outstanding contract issues . ( note : marcus nettelton has been leading our legal efforts on this deal , and can be reached at 5 - 8161 to discuss contract issues ) . while the number of outstanding contract items are numerous at this point , my sense is that there are no real deal breakers on either their end or ours . in fact , they have agreed to many of the open issues in our previous contract with them for standard offer service , so they could potentially agree to our terms without much delay , thereby potentially making execution on monday a possibility .
attached is a draft dash for this deal . i request that you review it promptly with a goal to have each of your signoffs for this deal in principle by mid - afternoon on monday so as to enable us to transact on monday if necessary . the parameters that are still in motion are : ( 1 ) price ( again to e updated monday morning ) , but will maintain same npv value ; ( 2 ) term ( they may end up just going for 6 months ) ; and ( 3 ) exact volume they source from us . as for volume , they indicated they may want to go with us for something less than 100 % of their requirements for the first 6 months ( they estimate anywhere between 50 - 100 % ) , and then potentially a smaller percentage for the second 6 months if they do end up doing a 12 - month deal .
please feel free to call me ( 978 - 449 - 9936 office , 978 - 448 - 9260 home over the weekend ) if you would like to discuss in more detail . berney aucoin in structuring will be on point to run internal traps on monday as may be necessary . thanks in advance .
regards
john