Enron Says It May Have to Pay Off $690 Mln Note Next Week
Bloomberg, 11/19/01
USA: INTERVIEW-Pepco sees electricity deregulation slowing.
Reuters English News Service, 11/19/01
Lawmaker/Andersen -2: Co 'Confident' About Quality
Dow Jones News Service,  11/19/01
Some Pension Funds Consider Legal Action Against Enron
Dow Jones Business News, 11/19/01
Gold Bennett Cera & Sidener LLP Announces Class Action Lawsuit Against Enron Corporation and Certain Officers and Directors
PR Newswire, 11/19/01
USA: UPDATE 2-Congressman urges probe of Andersen on Enron.
Reuters English News Service, 11/19/01
Enron delays closing Indian plant after creditors' legal action
AFX News, 11/19/01
USA company - Enron's trials have just begun.
EIU Viewswire, 11/19/01
$1 Billion Secured Credit Hasn't Calmed Fears About Enron
High Yield Report, 11/19/01
Kaplan Fox Expands Class Period For Investors Who Purchased Enron Corp. Securities
Internet Wire, 11/19/01
DYNEGY TO BUY ENRON: CHEVRONTEXACO PROVIDES $2.5 BILLION CASH FLOW
Octane Week, 11/19/01
ENRON MELTDOWN & HIGH GAS PRICES?
Gas Processors Report, 11/19/01
U.S.'s Dingell Seeks Probe of Arthur Andersen, Dow Jones Says
Bloomberg, 11/19/01

Enron's Azurix May Have to Sell Assets If It Can't Borrow
Bloomberg, 11/19/01

Enron Says It May Have to Pay Off $690 Mln Note Next Week
2001-11-19 18:16 (New York)

Enron Says It May Have to Pay Off $690 Mln Note Next Week

     Houston, Nov. 19 (Bloomberg) -- Enron said a drop in its
credit rating may force it to pay off a $690 million note by Nov.
27 if it doesn't find collateral to guarantee the debt.

     Repayment was triggered by the Nov. 12 downgrade in Enron's
senior unsecured debt rating to BBB- by Standard & Poor's, the
company said in a securities filing.

     Enron must post collateral equal to the amount of the note or
repay it, the Securities and Exchange Commission filing said.

    Without repayment, partners in a Limited Partnership that owns
natural gas assets in Brazil can immediately begin to liquidate
the partnership's assets, Enron said. Enron said it's working with
lenders to come up with an acceptable agreement on the debt.

     A further drop in its debt rating, which would put it below
investment grade, would trigger repayment of $3.9 billion in debt
owed by two affiliated companies.

     The rating drop would trigger repayment of $2.4 billion in
debt owed by Osprey Trust, and $915 million owed by Marlin Water
Trust, the company said in the filing.

     Enron is being bought by Dynegy Inc. for $25 billion in stock
and debt. Enron also said in its filing that if shareholder
lawsuits result in judgments totaling more than $2 billion, the
Dynegy deal could collapse.

    The filing was released after the stock market closed.  Shares
of Houston-based Enron rose 6 cents to $9.06. Dynegy shares rose
$1.13 to $43.60. Shares of ChevronTexaco Corp., which owns 26
percent of Dynegy, fell 54 cents to $82.91.

USA: INTERVIEW-Pepco sees electricity deregulation slowing.
By Christopher Doering

11/19/2001
Reuters English News Service
(C) Reuters Limited 2001.
WASHINGTON, Nov 19 (Reuters) - Several states that delayed plans to deregulate power markets were scared off by the woes of beleaguered energy trader Enron Corp., California's failed electricity market restructuring, and the Sept. 11 attacks, the head of Potomac Electric Power Co. said on Monday.
John Derrick, chief executive of Washington-based Pepco, said in an interview, while utility deregulation will eventually regain momentum, uncertainty in the market has left some states questioning the effectiveness of any near-term change to the volatile power market.
Several states have delayed power deregulation, including Nevada, Oregon, New Mexico, Oklahoma, Arkansas, West Virginia and Montana.
"All things that are happening to the margin, whether it be California, 9-11 (the Sept. 11 attacks), or Enron , will tend to slow down changes that have gone down that path," Derrick said after addressing an Energy Department conference here on coal technology.
Derrick was optimistic about the future of deregulation. "Where it already exists, it's working, and I think we'll stay the course," he said.
To boost customer choice, 23 states and the District Columbia have deregulated retail electricity markets. Deregulation breaks up utility monopolies, giving customers a choice of providers and driving down prices.
Electricity competition is set to begin in Texas, Illinois, Michigan, and Virginia next year.
Derrick said state deregulation efforts will pick up momentum if consumers demand more choice and lower prices.
"People who (live in a market that is deregulated), and move to a place where it doesn't exist, are going to say 'Gee, why can't I have it here'," Derrick said.
"Customers are going to start to demand choice," he added.
Pepco is part of the Pennsylvania, New Jersey, Maryland (PJM) power pool, which operates the electricity grid in the mid-Atlantic region. PJM, which currently coordinates a pooled generating capacity of more than 59,000 megawatts, plans to expand generating capacity by 25 percent in the next few years to meet demand.
PJM also operates a wholesale electricity market with more than 200 buyers, sellers and traders.
California dealt the first blow to electricity deregulation last year, when state power prices soared, bankrupting PG&E Corp.'s Pacific Gas & Electric unit, and forcing rolling blackouts to some customers.
Experts have blamed the California power crisis on the state's ill-fated deregulation plan, which prohibited utilities from passing on wholesale price increases to consumers.
The decline of Enron may slow restructuring because uncertain customers will stick with existing power suppliers rather than seek new energy providers.

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
Lawmaker/Andersen -2: Co 'Confident' About Quality

11/19/2001
Dow Jones News Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)
"Congressman Dingell may not be aware that accounting firms are required to report litigation involving allegations of audit failures to the quality-control inquiry committee of the SEC practice section, which the Public Oversight Board oversees," Andersen spokesman David Tabolt said after reviewing Dingell's request.
Tabolt wasn't sure if Andersen has notified the committee of class-action litigation filed against the firm for its audit of Enron, but said it will do so within the required 30-day deadline.
After it is notified of any legal action, the inquiry committee must study the matter and determine if it represents evidence of systemic quality-control problems.
"We are confident that this process will confirm the quality of our auditing processes," Tabolt said.
-By Judith Burns, Dow Jones Newswires; 202-862-6692; judith.burns@dowjones.com

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
Some Pension Funds Consider Legal Action Against Enron
By Christiane Bird

11/19/2001
Dow Jones Business News
(Copyright (c) 2001, Dow Jones & Company, Inc.)
Dow Jones Newswires
NEW YORK -- Some pension funds with major stakes in Enron Corp. are considering taking legal action against the Houston energy giant following its recent stock collapse and disclosures of possible conflicts of interest among management.
Other institutional investors are taking a more passive approach, waiting to see how developments unfold.
Among those pension funds looking into possible lawsuits are the $112 billion New York State Common Retirement Fund and the five New York City pension funds, which handle a total of $85 billion in assets for the city's firefighters, police, teachers and other workers. The state fund holds about 2.1 million Enron (ENE) shares and the city funds hold about 2.9 million.
"We're looking at a possible lawsuit, but we're not leaning one way or another," said Frank Sobrino, spokesman for the New York State Common Retirement Fund.
"We're looking into [possible legal action], but nothing's been decided yet," said David Neustadt, spokesman for the New York City Comptroller's Office, which oversees the city's five pension funds.
Barclays Global Investors, which manages about $790 billion, mostly for pension funds and other institutional clients, said it would join others in a class-action suit, but wouldn't be the lead plaintiff. Barclays is the fourth-largest investor in Enron, with about 21 million shares as of Sept. 30.
"Our style doesn't lend itself to taking that lead role, but we would be members of a class suit," said Linda Selbach, head of corporate governance. As primarily a passive money manager, Barclays invests according to market forces, not according to company information, and so couldn't claim to have been misled by false information, she explained.
However, "on the macro level, we've been very involved in the shaping of the law with respect to securities litigation, and would be again," she said. The company would be especially inclined to get involved if the suit promised to set a precedent for other cases further down the line, she said.
Pension Funds Among Largest Enron Investors
Institutional investors such as pension funds, mutual fund companies and money management firms are among the largest investors in Enron, once a top-performing company whose stock has plunged 89% year-to-date and is now the subject of a Securities and Exchange Commission probe into outside partnership deals. Several law firms already have sued the company on behalf of shareholders, accusing Enron of misleading investors and artificially inflating its share price.
Last week, the $143 billion California Public Employees' Retirement System, or Calpers, issued a release stating their intention to oppose the appointment of any current Enron board member to the board of any company with which Enron may be contemplating a merger.
The statement came following reports that Enron might be acquired by smaller rival Dynegy Inc. (DYN), and that Enron was seeking the right to appoint three members to the combined company board.
"Until all of these issues are sorted out, the interests of shareholders are best served by retirement of all the current directors," Michael Flaherman, chair of Calpers' investment committee, said in the statement.
However, Calpers has no comment regarding possible legal action against Enron, spokesman Brad Pacheco said.
Calpers owns about three million shares of Enron and also invests in Dynegy.
The $105 billion California State Teachers Retirement System, or Calstrs, is "taking a keen interest, and reviewing our holdings and options" regarding Enron, said a spokeswoman. The board has made no decisions yet, but plans to discuss the subject in a closed session at the next board meeting, she said.
The $96 billion Florida Retirement System, which holds 9.7 million Enron shares, is "still evaluating the situation," spokeswoman Lee Baldwin said. "Our feeling is that there's so much news going on, and the decision is so far off, that we're waiting to see what will happen."
Similarly, among mutual fund companies, Janus Capital Corp., the second-largest holder of Enron with 41.4 million shares as of Sept. 30, is not yet considering legal action, as a spokeswoman said it would be premature.
Alliance Capital Management LP, the largest holder of Enron with 42.9 million shares as of Sept. 30, and Fidelity Management & Research, the fifth-largest holder with 20.8 million shares as of Sept. 30, said that they have policies of not commenting on individual company holdings. The largest actively managed U.S. mutual fund, the $71.6 billion Fidelity Magellan fund, held 5.7 million shares of Enron as of Sept. 30, according to a semiannual report released last week.
-- John Shipman and Frank Byrt contributed to this article.
Write to Christiane Bird at christiane.bird@dowjones.com
Copyright (c) 2001 Dow Jones & Company, Inc.
All Rights Reserved.

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
Gold Bennett Cera & Sidener LLP Announces Class Action Lawsuit Against Enron Corporation and Certain Officers and Directors

11/19/2001
PR Newswire
(Copyright (c) 2001, PR Newswire)
SAN FRANCISCO, Nov. 19 /PRNewswire/ -- Gold Bennett Cera & Sidener LLP announced today that it has filed a class action in the United States District Court Southern District of Texas, Houston Division, Case No. H-01-4009, on behalf of purchasers of Enron Corporation (NYSE: ENE) ("Enron") common stock during the period of November 15, 1998 through November 8, 2001, inclusive (the "Class Period"). Plaintiff seeks to recover damages on behalf of all purchasers of Enron securities during the Class Period.
The plaintiff is represented by the San Francisco law firm of Gold Bennett Cera & Sidener LLP. For over 30 years, Gold Bennett Cera & Sidener LLP and its predecessors have successfully engaged in complex commercial litigation, including shareholder, consumer and antitrust class actions, in federal and state courts throughout the United States, recovering hundreds of millions of dollars for its clients. Purchasers of Enron securities may http://www.gbcsf.com for additional information about the Firm's practice.
The Complaint alleges that Enron and certain officers and directors violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. Specifically, the Complaint alleges that defendants misrepresented and/or omitted to state material facts regarding Enron's business and financial results during the Class Period to artificially inflate and maintain the price of the Company's securities.
On November 8, 2001, prior to the opening of the market, Enron shocked the investing public by announcing that it would restate its financial results for 1997, 1998, 1999 and 2000, and the first two quarters of 2001 to correct accounting irregularities which had caused Enron's to overstate its net income by hundreds of millions of dollars. Enron also admitted that the audit reports which had been issued for its financial reports during those periods could not be relied upon. As a result of the restatements, Enron was forced to reduce shareholders' equity by $1.2 billion. Upon revelation of this news, Enron's stock plummeted to $8.41 per share, down from a Class Period high of approximately $90 per share.
If you are a member of the Class described above, you may, no later than December 21, 2001, move the Court to serve as lead plaintiff of the Class, if you so choose. In order to serve as lead plaintiff, however, you must meet certain legal requirements. If you wish to discuss this action or have any questions concerning this case or your rights or interests, please contact Gwendolyn Giblin, Esq. of Gold Bennett Cera & Sidener LLP, 595 Market Street, Suite 2300, San Francisco, California 94105, by telephone at 800-778-1822 or 415-777-2230, by facsimile at 415-777-5189 or by e-mail at Enron@gbcsf.com.
MAKE YOUR OPINION COUNT - Click Here
http://tbutton.prnewswire.com/prn/11690X53166224

/CONTACT: Gwendolyn Giblin, Esq. of Gold Bennett Cera & Sidener LLP, 800-778-1822, or +1-415-777-2230, or fax, +1-415-777-5189 or Enron@gbcsf.com/ 16:11 EST

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
USA: UPDATE 2-Congressman urges probe of Andersen on Enron.
By Kevin Drawbaugh

11/19/2001
Reuters English News Service
(C) Reuters Limited 2001.
WASHINGTON, Nov 19 (Reuters) - A U.S. Congressman has called for an investigation of Big Five accounting firm Arthur Andersen LLP in connection with its audits of Enron Corp. and Waste Management Inc. , according to a letter released on Monday.
Turning up the heat under the conflict-of-interest issue among the world's largest bean-counters, Rep. John Dingell asked the Public Oversight Board for "an oversight review or special investigation of Arthur Andersen LLP," said the letter made available to Reuters.
Dingell also asked the board to look into peer reviews of Arthur Andersen conducted in recent years by other accounting firms, including Deloitte & Touche, and questioned the value of a triennial peer review process in place since 1978.
"The best accounting standards in the world are meaningless if the accounting and audit processes are so inept or corrupt that they produce unreliable numbers and untruthful reporting," wrote Dingell, a Michigan Democrat, in the letter.
"I request that POB's investigation or review include adequate, transparent and public disclosure of all significant issues identified," Dingell wrote.
As accounting has consolidated into fewer and larger firms with more lines of business from auditing to consulting, it has come under increasing fire on the conflict-of-interest issue. The Dingell letter is only the latest in a continuing barrage of criticism leveled in recent years at Big Five firms.
Arthur Andersen, based in Chicago, was auditor to Houston energy trading giant Enron, rocked in recent weeks by a Securities and Exchange Commission probe of certain outside partnership deals involving company officers. Enron's stock price has plunged, several managers have resigned and numerous shareholder lawsuits are pending. Enron earlier this month said it planned to be bought out by rival Dynegy Inc. .
Critics have said Arthur Andersen should have done more as Enron's auditor to draw investors' attention to its unusual finances. A lawsuit filed in Oregon alleged Arthur Andersen's judgment was swayed by lucrative consulting fees that it was collecting from Enron while it was also being paid as auditor.
ANDERSEN SAYS CONFIDENT IN PROCESS
Responding to Dingell, Andersen spokesman David Tabolt said accounting firms must report litigation involving allegations of audit failures within 30 days to a committee of the SEC's practice section, which the Public Oversight Board oversees.
"Under the profession's self-regulatory processes, which the POB oversees, the committee is responsible for conducting an inquiry to determine whether the matters that are the subject of litigation indicate systemic quality control problems that need to be addressed either by the firm involved or by the profession," Tabolt said.
"We are confident that this process will confirm the quality of our auditing processes," he said.
After the SEC said last month that it was investigating Enron, the company appointed a special internal committee to look into the unusual partnership deals at the heart of the probe. Deloitte & Touche, also a Big Five accounting firm, was named to assist the committee in its inquiry, Enron said.
But, according to Dingell, Deloitte is conducting a triennial peer review of Andersen under a system set up in the 1970s to ensure quality accounting. The peer review process is also supervised by the Public Oversight Board, based in Connecticut. Neither the board nor Deloitte could be reached.
Dingell said Deloitte's dual roles as peer reviewer of Andersen and as internal investigator of its audit client Enron raise further questions of potential conflicts of interest.
"Given the appearance of conflicts of interest, the public record to date regarding allegations of professional malpractice or worse by Andersen in both the Waste Management fraud and the evolving Enron Corp. accounting debacle, as well as the considerable damage to investors, there appears to be little reason for the public to have faith in Andersen or the peer review process," wrote Dingell, ranking member of the House Committee on Energy and Commerce.
In June, Arthur Andersen was fined $7 million by the SEC to settle charges that it filed false and misleading audit reports of Waste Management, a garbage hauling concern, in the largest ever civil penalty against a Big Five accounting firm. Andersen did not admit or deny the charges.

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
Enron delays closing Indian plant after creditors' legal action

11/19/2001
AFX News
(c) 2001 by AFP-Extel News Ltd
BOMBAY (AFX) - Enron Corp's Indian subsidiary said it had to delay serving a final termination notice to close its power project in western Maharashtra state after local creditors filed legal action.
The Dabhol Power Company Ltd (DPC) was originally going to serve the notice to Maharashtra State's Electricity Board (MSEB) after today, when the six-month deadline for resolving a payment dispute ends, an Enron official told Agence France-Presse.
Now, however, it has to wait until after Dec 3, because Indian banks and financial institutions that have lent money to Dabhol Power recently filed a lawsuit to ensure they get their funds back.
"The domestic lenders have gone to the court and secured a stay order against our final notice till their next nearing which is on December 3," an Enron official said.
"We are working on a strategy to help resolve the issue as soon as possible, but obviously can't disclose it now."
The lawsuit was filed by the State Bank of India, ICICI Ltd, the Industrial Development Bank of India and IFCI Ltd.
The Enron official said the bankers have gone to court demanding an immediate resumption of work at the plant to ensure cash flow and to help the owners repay money owed to the lenders.
jds/cmr/jsa
For more information and to contact AFX: www.afxnews.com and www.afxpress.com

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
USA company - Enron's trials have just begun.

11/19/2001
EIU Viewswire
(c) 2001 The Economist Intelligence Unit Limited. All rights reserved.
COUNTRY BRIEFING
FROM THE ECONOMIST
NEW YORK: Lawyers are swarming all over Enron's old financial statements and press releases in the hope of reaping huge fees from securities litigation. More than 20 class-action lawsuits have been filed in recent weeks, and new ones are popping up every day. A formal process has been started to consolidate litigation in Houston, where the troubled energy company is based, with all lawyers interested in the case required to stake their claims by December 21st.
The broadest accusations will be of fraud and material misstatement, legal ways of saying that the company's financial statements were garbage. This week, Enron's founder and chairman, Kenneth Lay, decided to forgo a severance package worth over $60m while admitting that the company's problems "had been exacerbated by the extensive use of debt capital, both on and off the balance sheet". America's Financial Accounting Standards Board (FASB) is looking again at off-balance-sheet financing, having fretted about it on and off for a decade.
There will also be charges of insider trading, because even as Enron was issuing securities amid glowing profits reports, top executives were dumping over $1 billion of Enron shares to "unsuspecting investors", a group that includes anybody who, however briefly, has held one of the company's 750m shares in the past two years. "The number of class members will be huge," says Maurice Pesso, a lawyer at a New York firm that has filed a claim.
There are, however, limits to the company's liability. It has already restated its results going back five years, but federal law restricts litigation to the past three. Moreover, Enron will not take the rap alone. Its auditor, Arthur Andersen (now plain Andersen), is also named as a defendant in at least one of the complaints already filed. The litigation comes after a rough decade for Andersen. It has had to pay hundreds of millions of dollars in settlements after sloppy audits on such companies as Waste Management, Sunbeam and Discovery Zone.
Because Enron evolved from an energy company into a financial firm, it became much like an unregulated bank. The lack of supervision meant that the role of the company's auditor was crucial. Andersen was certainly paid as if it was. In 2000, it collected $25m for auditing Enron's books and another $27m for consulting services. Now how do you account for that?
SOURCE: The Economist.

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
$1 Billion Secured Credit Hasn't Calmed Fears About Enron
John Hintze

11/19/2001
High Yield Report
Copyright (c) 2001 Thomson Financial, Inc. All Rights Reserved.
A new $1 billion loan has not done much to calm market participants' fears about the future of Enron Corp. Many bankers are concerned about the energy giant's liquidity, and fear the worst may be yet to come.
The banks in charge of Enron, though, are tight lipped. Lead arrangers for the $1 billion loan - JP Morgan Chase and Citibank/SSB - had scheduled a bank meeting for Nov. 9, but it was postponed, and officials at both institutions declined to say whether or not a new meeting has been set. Market players are speculating that the meeting was postponed partly because of a fear that new troubles may arise as outside auditors review the company's books. That process will take at least a few weeks, Enron chairman and CEO Kenneth Lay said in a conference call Nov. 15.
To be sure, Enron is not in the best financial position. The company has a $1.75 billion loan coming due in April, a facility that will be nearly impossible to refinance at that date if any components of its complicated rescue package fall through in the meantime (this includes a $1.5 billion cash infusion by Dynegy, which last week agreed to buy Enron; another $500 million to $1 billion in private equity that Lay said was in negotiations last week; and the success of a planned $800 million sale of assets by year's end).
The $1.75 billion loan is part of a $3 billion revolving facility, also led by JP Morgan Chase and Citibank/SSB, that was drawn down in October to pay off about $1.8 billion in commercial paper obligations and calm the market's concerns about Enron's liquidity. The facility also includes a $1.25 billion portion that matures in 2005.
"One of the big credit issues from a corporate standpoint is Enron's ability to renew the 364-day facility that matures in 2002," said Ralph Pellechia, a credit analyst at Fitch.
The lead banks declined to comment on the ongoing loan discussions, which include the already agreed to $1 billion facility that is secured by Enron pipeline assets, and other bankers in the close-knit loan syndication community admitted to being in the dark.
It is likely, though, that the discussions have included an attempt to address bankers' concerns about the loan maturing in five months, Pellecchia said.
"I think that in conjunction with the new $1 billion loan, they are attempting to address the revolver," Pellecchia said.
The $1 billion loan, hammered out in late October, was expected to be syndicated among a small, select group of lenders. Incorporating the maturing revolver into the current solution would likely bring in a wider circle of banks, one banker said, noting that "just about everybody was in that [existing] deal."
JPM/Citi Must Save Enron
However the financing unfolds, arrangers JP Morgan Chase and Citibank/SSB's tight control of the deal reflects the banks' urgency in aiding a major corporate client to which they have a broad range of business exposure. That exposure extends beyond corporate loans to credit derivatives and short-term loans financing the company's myriad energy trading-related transactions.
"[JP Morgan and Citi] have the most to gain but also the most to lose with respect to Enron," said one rival banker, adding that the banks' rapid response to Enron's deteriorating situation reflected the importance of those relationships. "I was amazed how quickly that [$1 billion] deal came together, and how Enron - which never did anything secured - pledged its most valuable [pipeline] assets."
The $1 billion loan is secured by Enron's Trans Western and Northern Natural Gas pipeline systems, the latter of which is also pledged to Dynegy for its $1.5 billion investment.
"From a risk standpoint, it's probably the best peace of Enron paper that Chase and Citi have - it's the only secured stuff out there," said one banker. But despite the impressive collateral, the $1 billion loan was priced attractively at 250 basis points over Libor, he said. "I think it's a comment on how bad the news was. Enron's going to have to put up one of its major jewels for a $1 billion credit at Libor plus 250."
In addition to playing major roles in financing Enron's off-balance sheet ventures, such as the Dahbol power project in India, JP Morgan Chase and Citibank/SSB have also been major players in the company's complicated financing initiatives. For example, Citibank/SSB runs Enron's Yosemite credit-linked note program and, along with JP Morgan Chase, is active in other Enron-related credit derivative business.
A recent research report by Goldman Sachs noted that the one-stop shop concept closely tied the banks to Enron and has also made them crucial in these trying times.
"The two banks most involved with Enron in terms of magnitude of credit/derivatives exposure, Citi and JP Morgan, were also obviously involved in selling the company, with each acting as a financial advisor in the sale," the report stated. "The banks were critical (given Enron's liquidity needs and the related high risk to further rating agency downgrades) and likely influential to the outcome reached to sell the company as a means to sustain the operations of Enron and protect all creditors involved. Consequently, in a way, this is another win for the bank/broker model," the report says.
In a separate report, Goldman's fixed income power analyst, Robert Rubin, said that despite Enron's questionable business practices bringing it close to the brink, a merger that maintains its core energy market-making operations is preferable to leaving a vacuum in that arena. He added that despite concerns raised by the ratings agencies and other parties, Goldman believes the merger will close.
"The balance sheet of a combined company could be strong, if Enron completes its asset sales," Fitch's Pellecchia said. "But there are still a lot of moving pieces."

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
Kaplan Fox Expands Class Period For Investors Who Purchased Enron Corp. Securities

11/19/2001
Internet Wire
(c) Copyright 2001 Internet Wire, Inc.
NEW YORK, NY -- (INTERNET WIRE) -- 19-11-2001 -- Kaplan Fox (kaplanfox.com) has filed a class action against Enron Corp. and certain of the Company's officers and directors in the United States District Court for the Southern District of Texas. The suit is brought on behalf of all persons or entities who purchased securities of Enron Corporation ("Enron") (NYSE: ENE) between January 20, 1998 and November 8, 2001, inclusive (the "Class Period").
The complaint charges Enron Corp. and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleges that during the Class Period, the defendants engaged in asset and securities sales to closely related affiliates and interested parties, which disguised Enron's true financial position. Many of the details of these transactions were hidden from the public. Defendants used these asset sales to falsely improve Enron's balance sheet, thereby maintaining Enron shares at an artificially inflated price. Certain Enron executives, who held positions in the affiliates that presented clear conflicts of interest, reaped millions of dollars in personal gains from these transactions.
The complaint further alleges that during the Class Period, defendants made misleading statements regarding the potential value of Enron's Broadband business, in order to artificially boost Enron's share price. With knowledge that Enron's Broadband business would never post a profit and was seriously overvalued, Defendants continued to make misleading statements about the Broadband business in order to maintain the share price at its artificially inflated levels. Defendants used the artificially inflated value of Enron's Broadband business in order to gain millions of dollars in financing. Defendants failed to disclose the risk of these financing arrangements. Defendants hid the true nature of Enron's earnings, its hedging, its businesses, and the correct state of Enron's finances from its investors and the market, further artificially inflating Enron's share price. While the stock was artificially inflated for the above reasons, Enron executives engaged in extensive insider trading, gaining personal proceeds of more than $482 million during the Class Period, before the public became aware of the above practices.
Plaintiff seeks to recover damages on behalf of the Class and is represented by Kaplan Fox & Kilsheimer LLP. Our firm, with offices in New York, San Francisco, Chicago and New Jersey has many years of experience in prosecuting investor class actions and actions involving financial fraud. For more information about Kaplan Fox & Kilsheimer LLP, you may visit our website at www.kaplanfox.com
If you are a member of the Class, you may move the court no later than December 21, 2001 to serve as a lead plaintiff for the Class. In order to serve as a lead plaintiff, you must meet certain legal requirements.
If you have any questions about this Notice, the action, your rights, or your interests, please e-mail us at mail@kaplanfox.com or contact:
Kaplan Fox & Kilsheimer LLP - 805 Third Avenue, 22nd Floor - New York, NY 10022
Kaplan Fox & Kilsheimer LLP - 100 Pine Street, 26th Floor - San Francisco, CA 94111
Contact: Frederic S. Fox, Esq, Kaplan Fox & Kilsheimer LLP
Voice: 800-290-1952
Fax: 212-687-7714
Email: mail@kaplanfox.com
or
Contact: Laurence D. King, Esq., Kaplan Fox & Kilsheimer LLP
Voice: 415-336-1238
Fax: 415-677-1233
Email: mail@kaplanfox.com

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
DYNEGY TO BUY ENRON: CHEVRONTEXACO PROVIDES $2.5 BILLION CASH FLOW

11/19/2001
Octane Week
(c) 2001 Phillips Business Information, Inc.
ChevronTexaco Corp. is backing Dynegy Inc.'s proposed buyout of ailing Enron Corp. by putting $2.5 billion of new equity in Dynegy to support the deal. ChevronTexaco, which currently owns approximately 26% of Dynegy's outstanding common stock, will invest $1.5 billion immediately. The $1 billion balance would be made at the closing of the Dynegy-Enron merger.
"Our relationship with Dynegy has proven to be highly beneficial for both companies, and we are optimistic we will continue to see comparable or better performance in the future," said David O'Reilly, chairman and CEO of ChevronTexaco. Chevron first took a stake in Dynegy in 1996. Dynegy is one of the industry's largest marketers and traders of natural gas, power and coal, as well as a leading producer of electricity. Dynegy Midstream Services is one of the largest marketers and producers of natural gas liquids.
"We are also hopeful that the combination of Dynegy and Enron will restore market and credit confidence in this important energy sector," O'Reilly continued. In October, the Securities and Exchange Commission began investigating Enron's relationship with two questionable partnerships once run by its former Chief Financial Officer Andrew Fastow. In November, Enron revealed that certain off-balance sheet entities should have been included in its financial statements, and the company would restate four years worth of filings The company's stock price plunged from a 52- week peak of $84.87 to $7 two weeks ago. Shell was reported at one time to be a potential buyer of Enron.
Together, Dynegy and Enron have natural gas sales of approximately 40 billion cubic feet per day and 25,000 miles of gas pipelines.
-Carol Cole

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
ENRON MELTDOWN & HIGH GAS PRICES?

11/19/2001
Gas Processors Report
(c) 2001 Phillips Business Information, Inc.
October Henry Hub Bidweek Cash Price $1.87, November $3.16. Why?
Over the past several weeks there have been several articles in the trade press about how the wholesale markets for natural gas and electricity, where Enron holds a commanding 25% market share, have been "unaffected" by the crisis enfolding the Houston trading giant. Enron was having no trouble during October finding counterparties for its trades, so not to worry, there was no lack of liquidity plaguing the market. Gas prices were responding "normally to supply and demand fundamentals." So the rosy scenario observers were saying, anyway.
Excuse us? November's bid week price was a full 70% over October's, and we can find no earthly fundamental reason for that surge. This had nothing to do with fundamental supply and demand. The weather during October was warm; storage was chock-full, so much so that little could be injected because cavern pressures were too high. Sure, there was a lot of weather hype about a cold winter coming, but that was only a forecast. That was meaningless even if it came true, because the winter would have to be 7-8% colder than normal just to burn up the 375 billion cubic feet (Bcf) surplus already in storage, to get next April's inventories in line with last April's levels. Anybody could see that surplus was also due to get much bigger by the end of November because there were huge 70-90 Bcf weekly withdrawals last year due to the fact that month was bitterly cold in 2000.
In face of all those bearish facts, which could have been willing to bid cash prices up at spot for most of October, then bid them up even higher during the last week, which was bid week for November? We are talking about obligations that committed the buyers for baseload supply for the entire month of November - not just a spot price for a day or two of swing supply. No Big Storage Arbitrage Game, Either
No, the cash market strength couldn't be explained by the arbitrage game of buying cash gas cheap, injecting it into storage and then shorting the out months' futures to lock in a margin. There wasn't much of a gap between the November screen index and cash prices. Most cash deals went at index minus a few cents during October. True, there was a nice gap between cash and the December futures screen, but there was not much chance to profit by this. Storage was so full that little volume could have been injected during October.
So if someone says the price surge that month was all due to "the expected workings of supply and demand," we would have to ask him what he was smoking. Sunspots would have been a more likely explanation. Lack of Confidence in Enron as a Counterparty is a More Likely Explanation
A better idea emerges after we note that spot prices continued high into November, in spite of continued record- breaking warmth. Henry Hub cash tags reached $3.24 on Friday, Nov. 2. Then that all reversed suddenly on Nov. 7-9, which was just when serious rumors that Dynegy was going to buy Enron and put it out of its misery began, and then became fact. By presstime last Wednesday, Nov. 14 -- a mere one week later -- the Henry Hub had collapsed all the way to $2.29 and was still falling like a stone -- getting back to where it should have been all October. Can this be just a coincidence?
We think it likely that the reason prices were not that low in October is that with rumors of Enron troubles circulating, the wholesale market had been given a flat tire by a fear of a potential lack of liquidity. There could have been a perceived need for somebody with a better credit rating to back up the Enron traders who took the opposite side of one trade in four nationally. In fact, recent news reports say that after the first reports of Enron's problems emerged in mid-October, there was a falloff in the willingness of commercial users of gas (and electricity as well) to buy fixed- price supply contracts with Enron because the firm's corporate credit risk hampered its ability to hedge its obligations. "How comfortable would you feel signing a fixed-price deal with a company with no assets of its own to produce your gas or generate your power, and whose ability to obtain those supplies via futures or swaps was eroded because its credit was on the verge of being downgraded to junk?" an energy banker asked. This Could Have Favored the Long Side of the Market
In normal circumstances, consumers such as utilities could almost have stayed out of the November bid week cash market, backed as they were by huge storage and warm weather. Instead they must have bought heavily, perhaps fearing that with Enron sick there wouldn't be enough counterparty weight to take the other side and supply them later if they stayed short. The fear could have been that over the counter swaps to hedge later spot purchases might just not be available on Enron Online the way they usually are. Other traders might not have been able to take up the slack, since they trade often with Enron. Commercial players might have perceived them as being infected with some of the same weakness.
After the Dynegy deal was announced, however, prices could have been freed to fall back to where they were at the end of September, with users now unafraid to play the short side because Enron was back in business with a better credit rating. By Nov. 14, with cash prices more than $1 below where they were during bid week, Enron spokesman Eric Thode said, "Volumes on Enron Online have returned to the normal range. The 30-day moving average has improved to a more normal 5,700 transactions per day with a notional value of $1.7 billion." Even allowing for some exaggeration by Enron's PR man to instill market confidence, that points to a correlation of falling prices and a revived Enron. They Don't Speak German at Enron, Do They?
If so, what happened to gas prices last month could have been the mirror image of the Metallgesellschaft AG- induced crisis on the oil futures market in early 1994. That crisis pushed oil prices down instead of shoving gas prices up. This German firm, a trader and user of oil, had used a very aggressive strategy to obtain its supplies of oil. In order to lock in a price for the coming year, the Germans "stacked" all their contracts covering their oil needs for the coming year as long positions on the near month. They would go to delivery on just the portion they needed for the next four weeks, then would "roll" the rest of the contracts onto the next futures month. They did that by selling the remainder of the expiring month's contracts and using the money to buy the same number of the next month's contracts. But to be sure of being able to do that without losing their lederhosen, the Germans had to be sure that the next month's contracts would be cheaper than the prompt month ones they had just sold. Well, due to last minute purchases by consumers going to delivery, the prompt month usually is higher than the next one. So the Germans thought they had a strategy that would guarantee them a profit every month when they flipped their futures stack, a nice kicker on top of having locked in the underlying cost of the oil they would use for the year. Yeah, right. Well, one month that didn't happen, mostly because other traders got wind of what the Germans were doing and decided to hold their feet to the fire by bidding up the next month (which is a variant of what happened to Long Term Capital Management four years later.) So, losing another Battle of the Bulge, this time to Nymex traders instead of to General Patton, Metallgesellschaft cratered. As a trustee unwound the train wreck of long futures, he went on a selling spree that kept the Nymex price low for months.

NGL PRICE BOXSCORE
Data from Altrade(tm) NGL Indexes
MTD Averages in Italics
Mont Belvieu TX
Eth Pro Norm Iso Pen+ NGL Bbl
Nov 8 - 14, '01 22.53 35.45 41.44 39.36 45.34 $13.99
Nov 1 - 7, '01 23.85 35.91 41.24 40.38 45.5 $14.28
Oct 25 - 31, '01 24.63 39.22 43.74 43.15 ### $15.30
Oct 18 - 24, '01 23.95 39.27 43.96 43.34 47.84 $15.07
Oct '01 24.05 39.44 45.06 44.44 50 $15.34
Sept '01 25.62 42.4 52.65 51.8 59.68 $17.19
3rd Qtr '01 26.55 41.12 49.94 49.7 56.31 $16.75
2nd Qtr '01 36.27 49.57 55.22 64.89 64.68 $20.50
3rd Qtr '00 39 59.39 66.99 66.35 75.29 $23.47
Nov 9 - 15, '00 43.46 61.35 73.24 72.02 82.94 $25.39
Conway KS: Group 140
Nov 8 - 14, '01 21.08 37.67 37.13 41.5 44.16 $13.78
Nov 1 - 7, '01 22.57 40.69 38.5 43.68 43.78 $14.48
Oct 25 - 31, '01 22.21 44.22 39.86 48.5 49.21 $15.41
Oct 18 - 24, '01 21.72 44.74 40.84 47.17 50.44 $15.50
Oct '01 21.7 44.21 39.63 46.37 54.04 $15.59
Sept '01 21.83 46.97 44.93 51.87 78.11 $18.00
3rd Qtr '01 23.86 45.33 44.72 52.77 74.4 $17.88
2nd Qtr '01 32.27 54.15 53.99 76.12 76.01 $21.44
3rd Qtr '00 37.11 63.91 65.8 67.48 78.9 $23.93
Nov 9 - 15, '00 42.26 62.63 73.27 74.8 83 $25.43
Individual product prices in cents per gallon. NGL Barrel: dollars per
42
gallons.

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.

U.S.'s Dingell Seeks Probe of Arthur Andersen, Dow Jones Says
2001-11-19 15:24 (New York)

     Washington, Nov. 19 (Bloomberg) -- U.S. Representative John
Dingell, a Michigan Democrat, has requested a special
investigation of Arthur Andersen LLP's audits of Enron Corp. and
Waste Management Inc., Dow Jones Newswires reported.

     Dingell sent a letter to Public Oversight Board Chairman
Charles Bowsher asking for the review, the newswire said.

      Andersen, the world's fifth largest accounting firm, served
as Enron's outside auditor for more than a decade, assuring
investors the company's financial statements conformed with
generally accepted accounting principles. Earlier this month, the
company reported that it overstated earnings by $586 million over
four-and-a-half years, inflated shareholder equity by $1.2 billion
because of an ``accounting error,'' and failed to consolidate
results of three affiliated partnerships into its balance sheet.

     In June, Andersen reached a $7 million settlement with the
Securities and Exchange Commission in which it neither admitted
nor denied allegations of fraud related to its audit of Waste
Management, Inc. Andersen is now undergoing a peer review by
Deloitte & Touche, Dow Jones said.

Enron's Azurix May Have to Sell Assets If It Can't Borrow
2001-11-19 14:35 (New York)

Enron's Azurix May Have to Sell Assets If It Can't Borrow

     Houston, Nov. 19 (Bloomberg) -- Azurix Corp., Enron Corp.'s
water unit, may have to sell assets if it can't find financing to
continue operations, the company said in a regulatory filing.

     Enron took Azurix public in June 1999 and then, after the
water company's stock plunged, took it private and paid off
investors in March.

     Azurix isn't sure it will be able to renew or refinance about
$113.3 million in long-term debt, including bank loans, that
matures before Sept. 30 at a ``reasonable'' cost, it said in a
filing with the U.S. Securities and Exchange Commission. The
company also had $326.3 million in short-term debt as of Sept. 30.

     The loans are Azurix's ``primary sources of liquidity,'' the
filing said. If the company can't raise the funds, it might have
to use the proceeds from planned asset sales to refinance debt and
get cash, the filing said.

     If those asset sales don't generate enough money, ``Azurix
may need to sell other assets, which could result in Azurix
incurring losses in future periods,'' the company said.

     Azurix, though it still must file with the SEC, no longer
trades as a separate stock. The shares of Houston-based Enron fell
8 cents to $8.92 in early afternoon trading.

     Enron agreed earlier this month to be acquired by rival
Dynegy Inc. in a transaction currently valued at $24.9 billion.
The buyout came after Enron's shares plunged amid an SEC
investigation of the company's dealings with affiliated
partnerships.


Mike,
;
Following up on your voicemail earlier today, below is a summary of our ideas
regarding additional options for acquiring artwork.; If you would like to
discuss further, we would be happy to address our ideas in greater detail.
;
Derryl
;
;

Enron Art ) An Alternative Approach

;
;
Global Strategic Sourcing proposes an alternative to the traditional process
utilized when sourcing art for Enron Center South.
;
We recommend dividing the artwork requirements for the new headquarters into
three categories:
;
1.;;;;;; 1.;;;;;; Source artwork using your existing process.;
;
2.;;;;;; 2.;;;;;; Include pieces that would be displayed in a specific area
of the building and rotated on a schedule authorized by your committee.;
Utilizing a contest format, these pieces would be submitted by community
members of all ages and ethnic backgrounds including area high school,
college and university students, who exhibit an interest in art.; Entry
requirements for this segment could be centered around an Enron-based theme,
such as innovation, energy or communication.; Rewards for winning entries
could be provided to individual artists, as well as teachers, professors or
the recipient,s institution.; Emphasis would be placed on the community
relations aspect of the program and would, at the same time, demonstrate
Enron,s desire to be a good corporate citizen.;
;
3.;;;;;; 3.;;;;;; Obtain higher-quality pieces from artists who may or may
not have international recognition, but whose works would be an asset to the
world-class operations center being constructed. Enron,s public relations
departments in the U.S. and abroad, could serve as points of contact for
identifying this talent on a world-wide basis and for generating publicity
for the program.; This competition would focus on lesser-known artists and
provide Enron with an opportunity to discover new ideas and fresh
perspectives, while emphasizing the artist's true creative spirit.; With this
new approach, your committee will have the opportunity to obtain high caliber
pieces from a variety of creators, while at the same time provide the artists
with international recognition and financial rewards.;
;
Specific program rules, regulations and reward options for the above
categories of artwork would be at your discretion.;
;
The following objectives could be achieved by implementing this alternative
approach:;
;
?;;;;;;;; obtain quality artwork for Enron Center South
?;;;;;;;;; strengthen Enron,s community and international relations, while
supporting Fine Arts Programs on a world-wide basis.
?;;;;;;;;; develop Enron,s image of a company rich in innovation, integrity
and excellence
?;;;;;;;;; demonstrate the value of diversity among all people and cultures,
regardless of ethnic and/or social status, and
?;;;;;;;;; contribute potential savings to Enron,s bottom line.
;
;


I think there is merit in pursuing this.  A couple of comments:
It may be unduly complicated to get customers to provide the funding.
Perhaps we should focus on the banks instead.  The deal might be further
funding in exchange for legislative and regulatory concessions on rates,
transmission and generation siting and the rest of the items you outline.
Rubin would be great to have, but having watched Summers in action I'm not
sure we need another ex-treas.  Summers is superb, up-to-speed, and
apparently willing to work on this.  Linda -- how would Larry feel if we
brought in his ex-boss (I know they're buddies but does Summers really need
the help?).
Need to keep an eye on the ball for large customers-- many of whom are ours.
they will continue to need some access to better rates.  Perhaps the proposal
could be converted to cash in exchange for demand reductions.

	Jeff Dasovich
	Sent by: Jeff Dasovich
	01/20/2001 10:54 PM

		 To: skean@enron.com, Richard Shapiro/NA/Enron@Enron, James D
Steffes/NA/Enron@Enron, Sandra McCubbin/NA/Enron@Enron, Susan J
Mara/NA/Enron@ENRON, Paul Kaufman/PDX/ECT@ECT, Linda Robertson/NA/Enron@ENRON
		 cc:
		 Subject: Summary of Proposed Short-term Solution for California's Energy
Crisis

----- Forwarded by Jeff Dasovich/NA/Enron on 01/20/2001 10:52 PM -----

	Jeff Dasovich
	Sent by: Jeff Dasovich
	01/20/2001 10:51 PM

		 To: tyson@haas.berkeley.edu, pverleger@compuserve.com
		 cc:
		 Subject: Summary of Proposed Short-term Solution for California's Energy
Crisis

Dean Tyson:

It was a pleasure to see you again today. Phil, it was a pleasure to meet you
and I look forward to working together.  Since time is of the essence, I
wanted to summarize where we left off at today,s meeting regarding California,
s energy crisis.  That summary is attached.  I've also attached three
articles from the business section of today's Chronicle that arguably bolster
our arguments for adopting the approach that we discussed at today's meeting.

 Given the fact that the legislative process is moving rapidly, bankruptcy is
a daily threat, and Dean Tyson will be attending the meetings in Davos, it
appears that our window of opportunity is very small.  It seems that success
requires a meeting of the principals by the end of the week, if not sooner.
The chances of success are obviously limited, but I think that we agreed that
all concerned have nothing to lose and everything to gain by taking a shot.
Your offer to help in the effort obviously increases the likelihood of
success and is greatly appreciated.

My apologies in advance if I have mischaracterized any of the points made at
the meeting.  It represents a &first cut,8 it will undoubtedly change as the
details get worked out, and I,m sure I,ve missed something.  So please don,t
hesitate to edit the draft.

Please keep in mind that I have not had a chance to discuss this proposal
internally.  As such, I can,t yet commit Enron to the specifics of the
proposal.  But I,m confident that the company can support something akin to
this structure and can let you and Phil know first thing Monday.

In addition, given the political environment in California, Enron has played
a constructive role by providing low-key, behind the scenes advice and
analysis to policy makers.  That approach seems preferable in this effort as
well.

Finally, Dean Tyson, I mentioned that Linda Robertson heads-up our Washington
D.C. office.  If she can help in any way, please don,t hesitate to let me
know.  Both of you should feel free to call me at home over the weekend to
discuss things further.  My home phone is 415.621.8317.

Best,
Jeff


"The person who goes farthest is generally the one who is willing to do and
dare. The sure-thing boat never gets far from shore." -- Dale Carnegie

ERisk is pleased to announce an iConference on

Practical Methodologies for Operational Risk Management

Keynote Speaker: Tony Peccia, Vice President of Operational Risk at CIBC

Followed by a panel discussion, which will include the following
distinguished panelists:

Marcelo Cruz, Director of Operational Risk at UBS AG
Tony Peccia, Vice President of Operational Risk at CIBC
Karim Rajwani, Senior Manager of Operational Risk at Royal Bank of Canada

When: Thursday, December 14 at 12 noon EST/5 p.m. London time.

Topics to be covered: the battle between "quantitative" and "qualitative"
approaches, measuring the success of operational risk management, applying
large institution methodologies to smaller institutions, and much more.

Recommended background reading:
The Operational Risk piece in our Risk Jigsaw
You will need to log in to be able to click through to this tutorial, which
features insights from "expert witnesses" (including panelist Marcelo Cruz),
the 12 steps of the operational risk management process, and links to
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Registration: This conference is totally free, and you can participate by
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You will need to register for this conference in advance by clicking here

If you have any questions regarding our iConferences, please send email to
iConferences@erisk.com

See you at the iConference!

Your friends at ERisk.com (formerly eRisks.com)

P.S. The archived slides, polling results, and real-time replays of our
previous iConferences, including our last iConference on compensation for
risk managers, can be accessed here free of charge.

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BW2037  OCT 24,2001       4:25 PACIFIC      07:25 EASTERN

( BW)(TX-INDUSTRIAL-INFO-RES) Dredging Angolan Diamonds Beats Rain
Season Hazard, in an Advisory by Industrialinfo.com

    Business Editors

	   HOUSTON--October 24, 2001--The following is an advisory by
Industrialinfo.com (Industrial Information Resources, Inc., Houston,
Texas). When licensing and share details of the Canadian company
SouthernEra have been finalized between the Angolan government and the
mining partners by March 2002, work will be able to proceed on the
Camafuca diamond project which has a diamond bearing kimberlite pipe
with a surface area of 167 hectares. Time and the rainy season are
crucial factors in the venture as the exposed part of the pipe can
initially be exploited by bulk-sampling whereas when the rainy season
hits the 80m wide Chicapa river floods over the area.
	   SouthernEra will use barge mounted dredges fitted with cutting
heads to recover the 23.2m carats worth $2.3 billion. This innovative
technique surmounts the natural obstacles, which have hitherto
prevented the exploitation of the pipe. The Israeli company Welox is
providing funding up to $20 million and will hold 33% of the joint
venture. Endiama, the Angolan government diamond corporation, will
hold 20%. SML, which is a combination of the Portuguese SPE and
Endiama, will take 15% and SouthernEra 32%.
	   Industrialinfo.com provides daily news related to the industrial
market place including industry alerts and databases for the energy
and industrial markets. For more information on trends and upcoming
construction activities for the Metals & Minerals industry as well as
other industrial sectors send inquiries to
metalsandmineralsgroup@industrialinfo.com or visit us at
www.industrialinfo.com.

    --30--JB/na*

    CONTACT: Industrial Information Resources, Inc., Houston
             Joseph Govreau, 713/783-5147

    KEYWORD: TEXAS INTERNATIONAL CANADA AFRICA/MIDDLE EAST
    INDUSTRY KEYWORD: MINING/METALS
    SOURCE: Industrial Information Resources, Inc.

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Agree, especially if the guy doesn't even want it anymore!

For background, this directory id one I set up for Dave Ryan and Todd deCook
to deposit there forecast data and exchange with mine

- - - Mike


Miss Tana ---
How soon will this be processed?
Thanks,
Griff


Daren - Meter 1351 has flow everyday for Feb. '01.  The last deal associated
with this meter was 559843 in Jan. '01.  Let me know if you extend the deal
or create a new one.  This meter has an average daily flow of  102.

Thanks.
AL


Jim:  Thanks for following up.  Sara

	Jim Armogida@ENRON
	11/28/2000 09:49 AM

		 To: Sara Shackleton/HOU/ECT@ECT
		 cc: Rex Rogers/Corp/Enron@Enron, Stephanie Panus/NA/Enron@Enron
		 Subject: Re: ISDA Master with Lehman Brothers Finance S.A.--comments

Sara--  The arbitration set-up is OK, and JVD has approved.  My only comment
is that eight years experience may be too much to ask, insofar as the third
arbitor is concerned.   I won't have heartburn if we stick with that, but I
do suggest that the agreement provide that less experience is acceptable upon
request by the two arbitors and approval of both parties.


ABX2 2 (Corbett) was just heard by the Assembly Appropriations
Committee. The bill was placed on the Suspense File which is reserved
for bills with a projected fiscal impact in excess of $150,000.  Bills
on the Suspense File are, for all intensive purposes, debated in
private, then voted on in a public hearing.  The Suspense File will be
taken up on May 31. The following amendments are being considered by
Assembly Member Corbett:

Exempt co-generation
Exempt new power plants
Exempt existing long term contracts
Raise the price to $100 versus $60


On Wall Street, people are talking about Enron.  At Enron, we're talking
about people...our people.  You are the driving force behind every success
that our company has experienced, including our high-performing stock price,
which surpassed the $50 mark only a few days ago. You made it happen!

To show our appreciation for your hard work and commitment to Enron,s
continued success, eligible regular full-time and regular part-time employees
who were on the payroll of a wholly-owned Enron company at Dec. 31, 1999 will
receive 50 Enron stock options.  A special stock option award certificate and
a copy of the stock plan will be sent to you in the next few weeks.

About the stock options grant:
? The grant was effective Jan. 18, 2000, therefore, the option grant price is
$55.50.
? Options will have a seven-year term, which means you must exercise these
options before seven years have passed.
? Options will vest 25 percent on Feb. 28, 2000 and 25 percent each
subsequent January 18th thereafter until fully vested, as long as you are an
employee of Enron.  This means you may exercise 25 percent of these options
as early as Feb. 28.
? This grant is made in accordance with the terms and provisions of the Enron
Corp. Stock Plans and the award documents, which you will receive in the
coming weeks.

Due to varying international restrictions and legalities, Enron employees in
certain international locations will receive some other form of recognition.
Your local management and human resources representative will communicate
further details.

Visit home.enron.com for additional information.  There you can access a list
of frequently asked questions regarding stock options.  And you can view a
special message from Ken Lay.  To access the special message, you must have
IP-TV and a sound card. If you are not able to view Ken,s message, a
transcript is available.  If you encounter any technical difficulties, please
contact your PC Help Desk.

Again, thank you for all you do to make Enron a successful global energy and
broadband services company and a great place to work.


Attached is PIRA's extended Daily Demand Report.

Please contact Morris Greenberg and Victoria Watkins for more information
regarding these reports at [mailto:morris@pira.com] and
[mailto:vwatkins@pira.com], respectively. For distribution requests, contact
John Graziano at [mailto:jgraziano@pira.com]. We can all be reached at (212)
686-6808.

 - ed042301.pdf
 - ed042301.xls


Here is Chris' rewrite of Section 9.

Ross M. Levine, Esq.
Director of Contracts and Contracts Counsel
FuelCell Energy, Inc.
3 Great Pasture Rd.
Danbury, CT 06813

(203) 825-6057
(203) 798-2945 (fax)
rlevine@fce.com (email)

This transmittal and its attached files (if any) may contain proprietary or
confidential information belonging to FuelCell Energy, Inc. If you are not
the intended recipient, you are hereby notified that you have received this
transmittal in error. Any review, disclosure, use, dissemination,
distribution or copying of this information is strictly prohibited. If you
suspect that you have received this communication in error, please notify us
immediately by telephone at 1-(203) 825-6000, or e-mail at jryan@fce.com and
immediately delete this message and all its attachments.

> -----Original Message-----
> From: Bentley, Chris
> Sent: Tuesday, October 31, 2000 4:35 PM
> To: Levine, Ross
> Subject: Section 9
>
>  <<Inspection Section.doc>>
> Chris

 - Inspection Section.doc


When: Wednesday, May 30, 2001 4:00 PM-6:00 PM (GMT-06:00) Central Time (US & Canada).
Where: EB 3259

*~*~*~*~*~*~*~*~*~*

 Please plan to attend the KE Southern LNG Deals meeting

	Date: 		Wednesday, May 30, 2001
	Time:	 	4:00 - 6:00
	Location: 	EB 3259

 If you have any questions please contact Mark Breese x36751.

Melissa Solis
x35167


As discussed in Richards's prior memo, as discussed in Donna's prior memo,
the scheduled quantities have now been turned off from now until midnight.
---------------------- Forwarded by Randall L Gay/HOU/ECT on 11/30/2000 01:26
PM ---------------------------

Richard Pinion
11/30/2000 12:57 PM
To: George F Smith/HOU/ECT@ECT, Randall L Gay/HOU/ECT@ECT, Victor
Lamadrid/HOU/ECT@ECT, Edward Terry/HOU/ECT@ECT, Pat Clynes/Corp/Enron@ENRON,
Robert Superty/HOU/ECT@ECT
cc: Donna Greif/HOU/ECT@ECT, Chris Schomer/Corp/Enron@ENRON, Katherine L
Kelly/HOU/ECT@ECT, Patti Sullivan/HOU/ECT@ECT, Diane E Niestrath/HOU/ECT@ECT,
Kathryn Bussell/HOU/ECT@ECT, Matt Pena/NA/Enron@Enron, Brian
Ripley/NA/Enron@ENRON
Subject: EDI Scheduled Quantities now turned off`

Sceduled quantities have now been turned off from now until midnight as
explained in Donna Greif's previous memo regarding month end close.  They are
set turn back on automatically at midnight.

RP


Shirley,

I have been summoned for jury duty and plan to be out tomorrow, Wednesday,
May 2.

Thanks,

Stinson


Thanks Peter for the updated exhibits.

Can you also send me by COB on Mon. a copy of the open issue list revised to
reflect our discussion with GE this past Wed as I want to use it for purposes
of our internal meeting/conf. call on Tue.

Thanks again.


Dear Jeff,

     I want to say thank you so much for speaking at our 2001 Deer Valley
Conference.  I know how difficult making, and then keeping, commitments
like this can be.  You are a great great friend to have taken the time to
help us out.  Hopefully it was helpful to you as well.
     I thought this year's conference was the best ever and the feedback we
have already received supports that.  We had a fascinating mix of guests
and panels and thanks to you it was a smash hit.
     Deer Valley is our premier client event and you are a premier client.
Thank you for being generous with your time.  On behalf of all my partners,
we appreciate your friendship.

With kind personal regards,

Sincerely,

Jimmy


Speaking of chargers, when is Ryan Leaf going to be stoned to death in the
town square?
PL


Attached for filing in docket V010003 are Enron Corp.'s comments.  Hard
copies have been sent by U.S. mail.

Thank you for your assistance in this matter - if you have any questions,
please contact me.

Bob Frank
713-853-3180


Hi all-

I will be out this Friday, 8/3/01.  I will have my pager with me if you have
any emergencies.

Thanks.
April Hrach
Administrative Coordinator
Phone: 415-782-7825
Fax: 415-782-7851
Pager: 888-463-2072


Please follow up.  Also, we need to follow up with Chuck Gilbert (counsel for
CP) for docs.  Thanks.  Sara
---------------------- Forwarded by Sara Shackleton/HOU/ECT on 03/21/2000
04:46 PM ---------------------------

"Gallaway, Ray" <REGALLAW@coxsmith.com> on 03/21/2000 04:00:01 PM
To: "'sshackl@enron.com'" <sshackl@enron.com>
cc: "Walker, Ann" <AWALKER@coxsmith.com>
Subject: Statex Master Agreement

Sara:

Please send me a fully executed copy of the Master Agreement dated March 21,
2000, between Statex Petroleum I, L.P. and Enron North America Corp. for my
files.

I enjoyed working with you on this matter and appreciate all of your help on
such short notice to complete the agreement.

Raymond Gallaway, Jr.
COX & SMITH INCORPORATED
112 E. Pecan, Suite 1800
San Antonio, Texas 78205
(210) 554-5314
regallaw@coxsmith.com
www.coxsmith.com

THIS ELECTRONIC MAIL MAY CONTAIN INFORMATION THAT IS SUBJECT TO THE
ATTORNEY-CLIENT PRIVILEGE, THE ATTORNEY WORK PRODUCT PRIVILEGE OR BE
OTHERWISE CONFIDENTIAL AND EXEMPT FROM DISCLOSURE UNDER APPLICABLE LAW.  ANY
DISSEMINATION, DISTRIBUTION, COPYING OR USE OF THIS E-MAIL BY OR TO ANYONE
OTHER THAN THE DESIGNATED AND INTENDED RECIPIENT(S) IS UNAUTHORIZED AND
STRICTLY PROHIBITED.  IF YOU HAVE RECEIVED THIS MESSAGE IN ERROR, PLEASE
DELETE IT FROM YOUR SYSTEM IMMEDIATELY.


Thanks.  These are Feb. only numbers, right?  Do you have something showing
year to date?  I'll give you a call.  DF

	From:  Eric Benson                           03/08/2000 05:19 PM

To: Drew Fossum/ET&S/Enron@Enron
cc: Michael Moran/GPGFIN/Enron@Enron

Subject: RC 0014 (Transwestern) and RC 0026 (Northern) Variance Report

Drew -

I have received and reviewed the February RC reports for Transwestern and
Northern.  My comments are indicated below:

TRANSWESTERN

RC report total actuals (total before allocations) were $50,090.  RC report
monthly budget (total before allocations) is $79,424.  The variance between
RC report actuals and monthly budget is $29,334 under budget.

RC report total legal fees (expense only) for February is $2,619.  The RC
report monthly budget for legal fees (expense only) is $22,833.  The variance
between RC report total legal fees (expense only) and RC report monthly
budget for legal fees (expense only) is $20,214 under budget.

There is no budget for legal fees (charged to work order) nor were there any
legal fee charges to work order.

Total estimated legal fees (expense only) for February is $12,715.  The
variance between estimated total legal fees and monthly budget is $10,118
under budget.

Total estimated actuals (expense only) for February is $60,186.  The variance
between total estimated actuals and total budget is $19,238 under budget.

A hard copy of your RC report will be provided under separate cover.

NORTHERN

RC report total actuals (total before allocations) were $83,254.  RC report
total monthly budget (total before allocations) is $171,536.  Total monthly
budget less non-payroll to work order is $131,953.  The variance between RC
report actuals and monthly budget less non-payroll to work order is $48,699
under budget.

RC report total legal fees (expense only) for February were $12,488.  The RC
report monthly budget for legal fees (expense only) is $60,361.  The RC
report monthly budget for legal fees (work order) is $39,583.  The variance
between RC report total legal fees (expense only) and RC report monthly
budget for legal fees (expense only) is $47,873 under budget.

Estimated legal fees (expense only) for February is $52,338.  Estimated legal
fees (charged to work order) for February is $123,234.  Total estimated legal
fees (expense and work order) for February is $175,572.  The variance between
total estimated legal fees (expense and work order) and total monthly budget
for legal fees (expense and work order) is $75,628 over budget.

Total estimated actuals (expense and work order) for February is $175,572.
The variance between total estimated actuals and total budget (expense and
work order) for February is $4,036 over budget.

A hard copy of your RC report will be provided under separate cover.

If you have any questions or concerns, please advise.

Eric


I will arrive a little late tomorrow,  due to car repairs.  I should be here
by or before 9:30.

Debra Perlingiere
Enron North America Corp.
1400 Smith Street, EB 3885
Houston, Texas 77002
dperlin@enron.com
Phone 713-853-7658
Fax  713-646-3490


Interest Rates Have Never Been More Attractive!

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all of your high interest credit card debt. Get all the Smart Cash you'll need!

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our  mailings to receive them. Please click here to be deleted from further communication
CLICK HERE TO BE EXCLUDED <http://www.e-mortgage-company.com/remove.html>


We have received an executed Assignment and Assumption Agreement effective
November 17, 2000, whereby Florida Power & Light Company assigned a
transaction to FPL Energy Power Marketing, Inc.  Copies will be distributed.

Stephanie Panus


-----Original Message-----
From: 	Frihart, Bryant
Sent:	Wednesday, November 14, 2001 1:13 PM
To:	Perlingiere, Debra
Subject:	Oklahoma Gas Transportation Agreements

Debra,

I forwarded down to you the subject several months ago. We had a conversation a few weeks ago and you advised me it had been forwarded to someone for review. I still have not seen the documents back and have been advised by OGT that we can not nominate gas on that agreement until we return it to them.

Would you be so kind to check on it.

Thanks.

Bryant


Should we reschedule when Scott Neal is available?

 -----Original Message-----
From: 	Jones, Melissa
Sent:	Thursday, October 11, 2001 9:17 AM
To:	Shively, Hunter S.; Grigsby, Mike; Neal, Scott; Mrha, Jean; Gomez, Julie A.
Cc:	Rangel, Ina; Villarreal, Alexandra; Brown, Kimberly; Coleman, Venita
Subject:	REMINDER - CAPACITY CENTER MTG TODAY AT 11
Importance:	High

REMINDER:

Please plan to attend the above referenced meeting.  Details as follows:

	Date:		Thursday, October 11
	Time:		11:00 AM
	Location:	EB 3567
	Subject:	Capacity Center
	Invitees:	Julie Gomez
			Jean Mrha
			Hunter Shively
			Mike Grigsby
			Scott Neal (Unable to attend)

If you have any questions, or are unable to attend, please give me a call.

Thank you,
Melissa Jones
x37960


Yes.  They want us to record the amounts loaned, normal loans, as a reduction of equity, if ENE does not currently have the ability to repay from either cash or other assets or credit capability.  They do not want to count the 1.5B or the bank loans since they will simply increase the size of the notes.  They are specifically concerned about the current intercompany notes.
--------------------------
Sent from my BlackBerry Wireless Handheld (www.BlackBerry.net)


Please respond to Here is the NEON lesson for March 28th!

 - Experiencing God Week 4.doc


I will forward it on and see what I can do, we really like kids straight out
of school...they are green and uncorrupted by the working world..Plus we can
work them like dogs.
PL


This appears clear to me. We do not hold any risk with the CNV unless we
create it.

Mark do we need any further clarification from your perspective?

The worst would be we are warned, asked to make a change or shut down. I do
not have anything to loose in an emerging market with limited liquidity
already. It would be different if there was an existing business that would
be harmed. This is all incremental value from today.

MFG

Andrea Calo
09/11/2000 06:05 PM

To:   Michael Guerriero/SA/Enron@Enron, Mark.taylor@enron.com., Patrick
      Hansen/SA/Enron@Enron
cc:

Subject:  EOL - CNV

Please see Sebastian Iribarne's memo on the referenced issue in the
attachment below.

---------------------- Forwarded by Andrea Calo/SA/Enron on 09/11/2000
06:06 PM ---------------------------

IRIBARNE Sebasti?n M. <SMI@marval.com.ar> on 09/11/2000 05:16:31 PM

To:   "'andrea.calo@enron.com'" <andrea.calo@enron.com>
cc:
Subject:  memo

Andrea,

Te adjunto el memo con relacion al tema CNV.? Hemos tratado de ser breves y
no entrar en detalle en todos los requisitos de las normas de la CNV, ya
que hay mas de un interrogante debido a la falta de antecedentes.? De toda
maneras hemos tratado de resaltar lo complicado que seria establcer un
nuevo vmercado de futuuros y opciones en electricidad.

Cualquier cosa no dudes en llamar.

 <<o1088180.doc>>

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(See attached file: o1088180.doc)

 - o1088180.doc


Here's the answer to your question about paragraphs 42 and 44 of Duke's
complaint.  Although CDWR is technically the SC for the UDCs in the short
term bilateral market and the ISO, as a practical matter, if CDWR does not
like the prices offered in the bilateral market, it waits to buy the power
from the ISO.  Then  CDWR reviews the price of the ISO's purchases and
(according to an article in Megawatt daily) it "does not authorize the
payment at prices it deems unreasonable."


Here is the project cost model.
Ben


Frank,

Thanks a lot. Look forward to meeting you again
on campus.

Vince

"Frank Qian" <fqian@andrew.cmu.edu> on 11/05/2000 05:10:06 PM
To: <Vince.J.Kaminski@enron.com>
cc:
Subject: Thank you!

Dear Mr. Kaminski:

It's a great pleasure to have you visiting us and a great honor to have
dinner with you. I'd like to thank you for your wonderful presentation. It's
the most interesting topic we had so far. This is not just my personal
opinion, all my classmates I talked to agree with me.  I like Enron's style
and culture and I think it played a big role in Enron's success. I look
forward to discuss career opportunities at Enron during your on-campus
interview session.

Regards,

Frank Qian
fqian@andrew.cmu.edu


I have not talked to Kurt yet,  but I will call him tonight or tomorrow and
let you know.  Remeber we have a baseball game Sun. in the heat !

Debra Perlingiere
Enron North America Corp.
1400 Smith Street, EB 3885
Houston, Texas 77002
dperlin@enron.com
Phone 713-853-7658
Fax  713-646-3490


Sure, unless I'm on a flight.


who is this?


Tana:  attached are the L/C provisions for the Deutsche Bank Master.  Would
you please verify that the provisions are in fact our language?  Thanks.  Sara
----- Forwarded by Sara Shackleton/HOU/ECT on 09/15/2000 04:10 PM -----

	kelly.habenicht@db.com
	09/15/2000 11:19 AM

		 To: sara.shackleton@enron.com
		 cc: marcus.tarkington@db.com
		 Subject: Letter of Credit Provisions

Per Steve Kessler's request, attached please find Exhibit A to Paragraph 13
of Annex A:  Letter of Credit Provisions.  Please let me know if I can be of
further assistance.

Regards,
Kelly

(See attached file: Exhibit A.doc)

 - Exhibit A.doc


Jane,

- could you let me know what the Japanese lawyers think of John's argument
that this deal is to hedge weather risk arising in the ordinary course of our
Japanese business. Seems to me that we honestly believe this to be the case,
even though it is too early in the development of our Japanese business to
prove it today. Perhaps we should change "arising" to "which will arise"?
Does that help?

- if that is not a runner, all Mark Taylor's suggestions seemed eminently
sensible. Do those work? How about booking the deal from Australia? Tax
issues? Does where the deal is booked override the fact that the telephone
call was made within Japan?

- if none of these work, then cancelling the deal (even if the counterparty
is willing) must be the least attractive answer as it is effectively
acknowledging fundamental (possibly insuperable) regulatory issues with the
weather derivatives trading in Japan.

- the other things I would want to understand before reaching a decision
would be:

 - how have other derivatives traders in Japan dealt with this issue? (I
presume this is not a problem unique to   weather and must have been
addressed before in Japan as it has in most other jurisdictions)

 - how grey an area is this? If we take a reasonable position in this grey
area, how real is the risk of both the grey area  being resolved against us
and criminal sanctions then being invoked against us?

 - following up on Mark's idea, could we not reduce the (hopefully already
minimal) risk of criminal sanctions by going  after the event with clean
hands to the regulator for an answer. We have done exactly that on a similar
issue which   arose in the Netherlands recently.

I hope that helps. Could we please discuss this on the phone before a
decision is made.

Thanks.

      Mark

From: John Viverito@ENRON on 20/10/2000 11:18 CDT
To: Jane McBride/AP/Enron@Enron
cc: Alan Aronowitz/HOU/ECT@ECT, Jeremy.Pitts@BAKERNET.com, Jonathan
Whitehead/AP/Enron@Enron, Joseph P Hirl/AP/ENRON@ENRON, Mark
Evans/Legal/LON/ECT@ECT, Mark Taylor/HOU/ECT@ECT, Morten E
Pettersen/AP/Enron@Enron, Paul.TYO.Davis@BakerNet.com

Subject: Re: ... Urgent Weather Derivative Advice ...

Jane-

Has Jeremy or any of his colleagues, specifically commented on Mr. Wani's
(ToaRe's attorney) comments regarding clause 5 c (ii), which were distributed
by you on 10/17?

By being in the business of trading weather derivatives, may we be considered
to be "entering into the deal to hedge weather related risks arising in the
ordinary course of business"?  I seem to recall that when Alan and I
discussed the risks related to trading weather derivatives in Japan with Mr.
Wani, he believed that this may be a sufficient argument to legitimize the
transaction.  We need to confirm with B&M.

Cheers,

John

	Jane McBride
	10/20/2000 03:57 AM

		 To: Alan Aronowitz/HOU/ECT@ECT, Mark Taylor/HOU/ECT@ECT
		 cc: Jeremy.Pitts@BAKERNET.com, John Viverito/Corp/Enron@Enron, Jonathan
Whitehead/AP/Enron@Enron, Mark Evans/Legal/LON/ECT@ECT,
Paul.TYO.Davis@BakerNet.com, Morten E Pettersen/AP/Enron@Enron, Joseph P
Hirl/AP/ENRON@ENRON
		 Subject: ... Urgent Weather Derivative Advice ...

Dear Alan and Mark,

I am going to need you to help me make a risk decision.  I welcome input from
Mark Evans but he may be more comfortable leaving this up to Alan and Mark
because Alan and Mark have been involved in this gambling issue from the
beginning.

Jeremy Pitts and I have had a brief conversation re my email to him below,
this afternoon, but he will not be able to get written comments signed off by
Japanese lawyers to me until Monday.

The situation relates to the Tokyo's office's first weather derivatives deal,
which is with a company called Toa Reinsurance.  In a nutshell the situation
is that negotiations have come to a standstill because neither side can move
on their positions re the gambling warranties.  The deal of course though has
already been done over the telephone several weeks ago.

In a nutshell then, based on discussions with Jeremy Pitts, but to be
clarified by Japanese lawyer on Monday, the situation is:

1. In terms of Enron Japan's ability to trade weather derivatives here, we
are operating in the grey even if we can get warranty 5(c)(ii) from them.

2. ToaRe will not give us the important warranty - 5(c)(ii) below, because
they say they can't.  They say they are not actually "entering into the deal
to hedge weather related risks arising in the ordinary course of their
business" - which is what the subject warranty says.  B&M have advised that
the obtaining of this warranty from a counter party helps keep us in the grey
and out of the red in terms of what we are doing and also gives us comfort
that the counter party can do the deal.

3. ToaRe is, in addition, separately asking us to give them the same
warranty.

Jane McBride analysis

Re 3 - Given that our legal situation is grey at best, I do not think we
should be giving the warranty they have requested.  They say they will not
give us that warranty.  The issue then is whether we can go ahead without
getting the warranty from them, bearing in mind that a binding telephone deal
has been done.

If you agree with me that we can't give the warranty, then we have to decide
whether we can go ahead without getting the warranty referred to in (2)
above, from them.  I am not sure however that in practice we even have a
choice given that the trade has been done.

If we go ahead without giving and without getting the warranty, the risk to
us is that we are more likely to be in breach of the prohibition on gambling
in the Criminal Law.  Are we willing to take this risk and who needs to give
me this answer?

Jane

	Jane McBride
	10/20/2000 02:06 PM

		 To: Jeremy.Pitts@BAKERNET.com
		 cc: Paul.TYO.Davis@BakerNet.com, Alan Aronowitz/HOU/ECT@ECT, John
Viverito/Corp/Enron@Enron, Mark Evans/Legal/LON/ECT@ECT, Jonathan
Whitehead/AP/Enron@Enron, Mark Taylor/HOU/ECT@ECT
		 Subject: ... Urgent Weather Derivative Advice ...

Dear Jeremy,

I would like to refine the following instructions.  There are two (only)
issues on which we need specific written advice and they both relate to
Warranty (c)(ii) of the draft which says "XYZ is entering into a weather
derivative transaction to hedge weather related risks arising in the ordinary
course of its business".

1. (a) Can Enron Japan give the warranty at this stage in its growth?  Have
we already had any written advice from you on whether Enron Japan can warrant
along these lines?  If so, when?  If not, the facts seem to be that:

Enron Japan plans to trade commodities which are energy related but because
we are still building up the business we are not trading these products yet.
As you know, we are getting into the power market.  If we have done a weather
derivative, then we can of course offer better prices on the electricity
deals we are negotiating.
Other Enron companies are of course already trading many weather dependant
commodities and power.

It could be argued therefore that unless we can rely on the weather related
risks of other Enron companies to justify our weather derivative transacting
in these early days, that this is a speculative transaction constituting
gambling (depending on how the law on this works).  It is understandable that
ToaRe would want us to warranty in effect that we are not gambling because we
are asking them to do so.  I know we have had sign off from B&M re our
weather derivative trading but I wonder if anyone considered what the
situation would be before we ourselves had other transactions giving us
weather related risks.

(b) If not, how could it be amended so that we can give it?

(c) If still relevant in the context of your answers to (a) and (b) above,
they did offer previously to take out all warranties so that neither party
gives any warranties.  The deal cannot be cancelled because it was done on
the telephone late Sept.  Accordingly, what is the practical risk of us
proceeding without the benefit of any warranties from ToaRe (including the
warranty that they are under the Insurance Business Law - ie an insurance
company.)?

2. They are insisting they not give (ii) and that we be satisfied with (iii)
only for the purposes of the Gambling Law  Pls confirm in writing whether you
think we can still go ahead on this basis.

Thanks.

Jane McBride
Senior Legal Counsel
Enron Japan Corp.

Otemachi 1st Square Bldg.
West 11th Floor
1-5-1 Otemachi, Chiyoda-ku
Tokyo 100-0004
Japan

Tel.:       81-3-5219-4500 (Main)
              81-3-5219-4553 (Direct)
Fax:       81-3-5219-4510

Assistant (Maggy Yamanishi)
Tel.:        81-3-5219-4554
Email:      Yo.Yamanishi@enron.com

	Jane McBride
	10/20/2000 10:57 AM

		 To: Jeremy.Pitts@BAKERNET.com, Paul.TYO.Davis@BakerNet.com
		 cc:
		 Subject: RE: ToaRe documentation


Kim,  I made a few tweaks to the letter.  Nothing substantial.  I still have
a few questions noted and some dates that need to be filled in. Please review.


---------------------- Forwarded by Kay Mann/Corp/Enron on 04/20/2001 08:43
AM ---------------------------

"Campbell, Carolyn" <CCampbell@KSLAW.com> on 04/19/2001 10:05:16 PM
To: "'kay.mann@enron.com'" <kay.mann@enron.com>
cc: "Keffer, John" <JKeffer@KSLAW.com>

Subject: Salmon Closing Memorandum

 <<30C_01!.DOC>>

Kay:

Enclosed is the initial draft of a closing memorandum for the Salmon
transaction.  Please review and advise of any comments.  Thank you.

Carolyn M. Campbell
King & Spalding
713-276-7307 (phone)
713-751-3280 (fax)
ccampbell@kslaw.com <mailto:ccampbell@kslaw.com>

Enclosure: 140424v1

                    Confidentiality Notice
This message is being sent by or on behalf of a lawyer.  It is intended
exclusively for the individual or entity to which it is addressed.  This
communication may contain information that is proprietary, privileged or
confidential or otherwise legally exempt from disclosure.  If you are not the
named addressee, you are not authorized to read, print, retain, copy or
disseminate this message or any part of it.  If you have received this
message in error, please notify the sender immediately by e-mail and delete
all copies of the message.

 - 30C_01!.DOC


Ken,  FYI

----- Forwarded by Gerald Nemec/HOU/ECT on 08/02/2000 02:20 PM -----

	Gerald Nemec
	08/02/2000 02:07 PM

		 To: Dan J Bump/DEN/ECT@ENRON
		 cc: Scott Josey/Corp/Enron@ENRON, Brian Redmond/HOU/ECT@ECT, Joan
Quick/HOU/ECT@ECT, Barbara Gray, Teresa G Bushman/HOU/ECT@ECT
		 Subject: Re: Summary of Tom Brown Meeting

Confidential Work Product - Attorney Client Privilege

Dan,  Our letter was definitely structured to encourage a quick solution.  As
the situation stands now, Wildhorse's possible responses to the letter are as
follows:

1.  Declare Unprofitability wrt to the gas covered by the amendment.
 If they do so, then they have the obligation to provide alternatives to
Crescendo, one of which is release of the gas.  You are right, there is no
time frame in the contract under which they must resolve these alternatives.
That is a risk I pointed out early.  However, in our letter to Wildhorse, I
proposed a time frame to resolve these issue of 2 weeks.  If Wildhorse is not
working with us in good faith within a commercially reasonable time then we
will have to make a choice:
  A.  Go for a Declaratory Judgment to have the gas released from the
contract.  This will take time.  Depending on court docket loads, 6 months
to 1 year.

  B.  Inform Wildhorse that we have been unable to reach an agreement within
a commercially reasonable time and they have not negotiated in   good faith
and we consider the gas released (contract breached by Wildhorse) and that we
will build our own system.  Then Crescendo would   build its own system and
risk a suit by Wildhorse.

2.  Not declare Unprofitability
 If Wildhorse does not declare unprofitability, then they have the obligation
under the contract to take the gas in accordance with its terms.  The only
complication is that under the contract, Wildhorse's obligation to take the
gas is subject to the downstream carriers ability to receive the aggregate
gas stream.  Depending on Wildhorse's flow dynamics and our plant placement,
Wildhorse could use this as reason to refuse delivery of our gas.  After your
field meeting and our engineering assessment, hopefully we will have a better
understanding of that situation.  If Wildhorse does not declare
unprofitability, we would demand evidence and assurances that they will be
able to take the gas upon start up of the treating plant.

If Wildhorse does not declare unprofitability, but continues to discuss
renegotiating of this deal, I would very directly ask them "under what
provision of the contract do they believe they have the right to renegotiate
any fees?".  They don't have a right to renegotiate under the contract
without unprofitability.

	Dan J Bump@ENRON
	08/01/2000 05:23 PM

		 To: Gerald Nemec/HOU/ECT@ECT
		 cc: Scott Josey/Corp/Enron@ENRON, Brian Redmond/HOU/ECT@ECT, Joan
Quick/HOU/ECT@ECT
		 Subject: Summary of Tom Brown Meeting

I wanted to provide a summary of my meeting with Tom Brown today.  I met with
the Business Development Director, Bob Mustard.

1)  Tom Brown (as 45% owner of Wildhorse) is pushing Kinder Morgan to come up
with solutions to the production problems (quality, pressure, et al)
currently being experienced in the Piceance Basin.

2)  Tom Brown is also encouraging KMI to develop plans to take Crescendo (and
other producers) low Btu gas; they see these as a new business opportunity
for Wildhorse.

3)  Tom Brown is focusing their drilling efforts in other regions of the
Rockies, therefore TBI would be interested in discussing Entrada development
ventures with Crescendo.  Bob worked at Amoco with Ken Krisa and is very
familiar with the nitrogen treating technology.  (I passed all this info on
to Ken/Jim).

4)  Here's the interesting part...Bob discussed (confidentially) that for the
past 6-8 monthsTom Brown has been trying to negotiate a buy-out of Kinder
Morgan's interest in Wildhorse (they have a right-to-match provision in their
LLC agreement).  The snag is on the last increment of valuation which is now
being negotiated by the very top mgmt (Kinder & Evans).  If they are
successful, (which he thinks TBI will be), then TBI will turn-around and look
to spin off the non-strategic systems (like the Piceance Basin assets) to
third party purchasers.

This conversation with Tom Brown led me to a worst case scenario with regard
to our negotiations with Wildhorse..............Wildhorse has been
slow-playing negotiations since I first met with them in late May and #4
above may be the reason why.  Now that we've sent the letter recently to
Wildhorse requesting (essentially) to clarify their understanding / status of
the contracts so we can get to work, my feeling (based on the transaction
between KMI & TBI) is that Wildhorse may try to continue stalling until their
transaction with TBI is complete, (how much longer will this take?).  Of
course, if the transaction is completed, TBI has already made it clear they
would like to sell this system, so even if ENA is interested, will TBI
negotiate a gathering deal during this transition period or delay until the
system is divested?

The point is this......I'm anticipating a generic, non-commital response to
Crescendo's letter from Wildhorse.  Although I realize there are no time
deadlines in the contract, could you suggest anything we can submit in
writing to encourage a quick resolution to our contractual issues in the
event my above worst case scenario begins to play itself out?

I'm off to Grand Junction to meet with Wildhorse.  I'll keep you informed of
any developments.

Thanks.

Dan


You might also want the attached for the Enron Joinder.  It is the most
recently effective FERC Enron rate schedule (along with the FERC filing
letter).