We've recently discovered a new method to enhance EnronOnline prices. It has been used in the past by one of our largest customers, Aquila, and by us for several months. It's simply the addition of 'auto-decrease' to our prices based on competitive offers from other providers. By decreasing the price in this manner, we stimulate the competition. The method is as follows. Let's assume it's May 1st and you submitted a price to us on January 31st. The auto-decrease begins on May 2nd. On that date we look for competitive offers from other providers for that product. If we find one at a lower price than our price, we simply decrease our price to the competitive offer. This continues throughout the month. On June 1st, the price is auto-decreased again. How does this impact the margin and Enron's profit? - It creates additional competition, with the desired result of lowering prices. - It is a downward adjustment, so margins and profit will be greater than under the fixed price. - It transfers the risk from the supplier (Enron) to the customer (Aquila) - We are no longer at risk of being the only mark-up, i.e. the 'inventory risk', and this is a key issue with mark-ups, since the risk is assumed entirely by Enron. - Enron receives the largest part of the margin. If you have questions about the functionality of this product, please contact Mike Maggi at 713.646.3135. Regards, Amelia Alder EnronOnline 713-854-3139 - phone 713-858-4668 - fax amelia.aler@enron.com