TRENDS IN

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TRENDS IN ENERGY TRADING CONTRACTS
January 22, 2004
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Trends in Energy Trading Contracts

• Use of standardized energy trading contracts
  continues predominance
• of deals negotiated under standardized energy
  trading agreements has
• facilitated the sale of books in a number of
  ways
• A. Evaluation of the book and the due
  diligence process.
• B. Transfer of transactions from one Master to
  another Master.
• C. Negotiation of new Masters to accommodate
  transfer from
• Seller to Buyer.
• D. Assignment concerns.

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Trends in Energy Trading Contracts
II. EEI, WSPP, ISDA, NAESB and MNA
Updates A. EEI agenda items ? New
products ? Clarification of existing
provisions ? Gas annex B. WSPP agenda
items ? Payment of disputed amounts ? Confid
entiality language ? Integration of
agreements ? FERC three-year retention
requirement ? Credit annex C. NAESB
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Trends in Energy Trading Contracts
II. EEI, WSPP, ISDA, NAESB and MNA Updates
(continued) D. ISDA ? Bridge
agreement ? Novation ? 2002
ISDA E. Master Netting Agreements
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Trends in Energy Trading Contracts

• Using Energy Trading Contracts for Origination
  Transactions
• Trends in General
• A. One-way payment
• B. Dispute resolution mechanisms
• C. Close-out calculations (Bid-Ask vs. Mid)
  (Loss vs. Market)
• D. Set-off across contracts / affiliates
• E. Credit and collateral

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