============= Page 1 of 6 ============= Alberta Power Purchase Arrangements (PPA) (The Next Phase in the Deregulation of the Alberta Power Market) E0004391655 EXH005-00955 ============= Page 2 of 6 ============= •:• Strategy -3 Bid up to a predetermined level on 2 PPA's that create significant expected value that will more than offset the unusual credit and legal risks. •:• Benefits of Participating -*The size and complexity of the PPA process has led to only 7 approved bidders. Each bidder can buy up to 1390 MW's of the 4000 - 5000 MW's that will be auctioned. Therefore, at least 3 or 4 bidders will win a PPA. > Enron has a real opportunity to buy a PPA at a very low price. -Success in the auction will immediately make Enron a significant player in the Alberta Power Market and lead to numerous origination opportunities. y9 D :XH005-00956 ============= Page 3 of 6 ============= Example of a PPA Unit Term Fuel Capacity Target Variable Fixed Total Commitment Availability Cost Cost Cost Sundance C 2020 Coal 710 MW 85% $7.78 $14.18 $21.96 Swap Bid Equals $25.20/MW PPA Auction Bid $169 Million The $169 Million is Paid Up-front to the Balancing Pool Value of PPA's Sundance A,B,C Wabamun and Keephills 17 - 20 years 3 years $25.20/MWh $31.05/MWh Term Maximum Bid Level (implied swap price) Mid Curve New Build Curve (Gas) Spread to Mid at Libor * For a more detailed financial analysis see DASH. $28.95/MWh $39.30/MWh $32.40/MWh $32.40/MWh $135 - 222 Million $73 Million y~ w 0 E0004391657 :XH005-00957 ============= Page 4 of 6 ============= Annual power demand growth has been 2.8% over the last four years and 3.9% over the past 12 months. B.C. Hydro imports megawatts to Alberta as well as the Northwest U.S. market which leads to some correlation between the two markets. The coal units in Alberta are large relative to the size of the market which leads to price spikes when unexpected outages occur. 1*4~ Gas or imports are on the margin and will continue to be in the future. 4 Our disaster scenario occurs if coal is on the margin and this would require power demand falling by 10 to 20 percent. All buyers of power in Alberta will be exposed to the pool price on January 1, 2001. +All potential hedgers. ECOOq'391658 EXH005-00958 Alberta is the most fiscally responsible province in Canada and is in the middle of a significant economic expansion. ============= Page 5 of 6 ============= $65 $60 $55 $50 -Alberta Mid Curve Min Bid* -- Mid-C 0 $45 s $40 U) D $35 $30 $25 $20 $15 r N C) U)