THE ECONOMIC TIMES
Friday, May 18, 2001 http://www.economictimes.com/today/18econ09.htm
 DPC lenders put off preliminary termination notice

The above article has also appeared in:

THE TIMES OF INDIA
Friday, May 18, 2001 http://www.timesofindia.com/today/18busi20.htm
DPC lenders meet adjourned for today
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THE ECONOMIC TIMES
Friday, May 18, 2001  http://www.economictimes.com/today/18econ32.htm
India asks Enron to renegotiate Dabhol contract
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THE FINANCIAL EXPRESS
Friday, May 18, 2001    http://www.financialexpress.com/fe20010518/eco5.html
Deshmukh convenes meet to discuss Dabhol crisis Sanjay Jog
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BUSINESS STANDARD
Friday, May 18, 2001 http://www.business-standard.com/today/test5.asp?menu=4
'Affordable DPC tariff must to woo third-party buyers'
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BUSINESS STANDARD
BYSTANDER
Friday, May 18, 2001  http://www.business-standard.com/today/opinion2.asp?menu=8
Dangerous drift on Dabhol
The Central and state governments have failed to manage the Dabhol crisis effectively, writes John Elliott
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BUSINESS STANDARD
Friday, May 18, 2001  http://www.business-standard.com/today/state6.asp?Menu=32
Godbole panel not to seek replacements Our Regional Bureau in Mumbai
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THE ECONOMIC TIMES Friday, May 18, 2001
DPC lenders put off preliminary termination notice Anto Joseph

MUMBAI : THE INDUSTRIAL Development Bank of India has once again prevented Enron-promoted 2,144-mega-watt Dabhol Power Company from issuing a preliminary termination notice. Bowing to pressure from IDBI, off-shore lenders have agreed to extend the deadline to May 25 for the Maharashtra government and Enron to settle the ongoing payment crisis. However, lenders are going to monitor developments on a daily basis.

Lenders who held a conference call late evening at IDBI Tower in South Mumbai have decided to postpone issuing the termination notice by a week. Many off-shore lenders of the $2.9-billion DPC are still in favour of issuance of a preliminary termination notice to the Maharashtra government. A preliminary termination notice gives six months to the government agencies to deal with the problems facing the project. It is the starting point of the process of terminating the project.

When lenders met last time in London on April 23-24, lead lender IDBI had successfully persuaded off-shore lenders not to allow Enron to go ahead with the termination notice. Lenders had informally agreed to lend time -- around two weeks -- to the government of India to sort out payment related issues. The Maharashtra government has, in the meantime, set up the Godbole Committee to renegotiate the project.

In the meeting in London, most lenders had proposed a dialogue between the government and Enron rather than going in for any precipitative action. Without the lenders' approval, Enron could not go ahead with its proposal at its board meeting held on April 25. In the board meeting, the company had authorised two persons -- Wade Cline, managing director of Enron India and Neil McGregor, president and CEO of Dabhol Power Company -- to issue the termination notice, whenever lenders agree.

The Indian lenders, led by IDBI, have continued to oppose the termination move. Termination of the project is expected to hurt Indian lenders since, unlike foreign lenders, their exposure risks are not covered under the government guarantee. While the phase II of the 2184 mega-watt power project is under construction at Dabhol in Maharashtra, and part of which is getting ready for commercial operation in June, the phase I that produces 740 mw of electricity has run into a major payment tussle with the sole buyer MSEB.

Indian financial institutions and banks have contributed around 60 per cent of the debt for DPC with a $1.2 billion exposure. The $2.9-billion project was lead-arranged by IDBI, and a substantial chunk of Indian debt came from IDBI, SBI, ICICI and IFCI. Of the $2 billion debt, $1.6 billion have already been invested in the project. More than 80 per cent of the phase II is already over, and Enron was expecting the phase to go operational by the year-end. The project, the largest FDI in India so far, was financed by a consortium of around 40 commercial banks -- including ANZ Grindlays, Bank of America, Bank of Tokyo and Citibank. Half a dozen governments including the US, Japan, Belgium, Oman and India have participated in the project financing through various state-owned financial institutions and Exim agencies.

The recent stand-off between the state government-owned power utility and the US power major stemmed from a payment crisis. MSEB had delayed the monthly payments of electricity bills from October last year and subsequently defaulted payments, claiming that the cost of power produced by DPC is exorbitant. It also slapped a penalty bill of around Rs 401 crore and is going to slap another Rs 740 crore on DPC for failing to produce electricity within the stipulated time period of three hours after the cold start. Enron India had subsequently invoked state guarantees, counter-guarantees, and political force majeure and then went on to invoke the arbitration clause.

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THE TIMES OF INDIA Friday, May 18, 2001
DPC lenders meet adjourned for today

MUMBAI: The on-going global lenders meet of Enron-promoted Dabhol Power Company (DPC) over allowing the multinational to issue a pre-termination notice to the Maharashtra State Electricity Board (MSEB) has been adjourned for Friday.
"Talks with the foreign lenders would continue Friday as Thursday's session has been adjourned," top financial institution sources said here. The Indian lenders, led by Industrial Development Bank of India (IDBI), on Thursday participated in the discussions with their international counterparts and tried to persuade the latter to restrain DPC from issuing the pre-termination notice to the loss making board, sources said.
Technically, the permission to serve the termination notice could be given if 4 per cent of the total lenders were in its favour. The lenders have been discussing the issue since Wednesday by way of tele-conferencing across the globe. DPC's foreign lenders include J-Exim, Citibank NA, and ABN Amro among others. (PTI)

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THE ECONOMIC TIMES Friday, May 18, 2001
India asks Enron to renegotiate Dabhol contract

HONG KONG : INDIA has told US energy company Enron it should renegotiate its contentious power purchase agreement with the Maharashtra government, finance minister Yashwant Sinha said on Thursday.

"We have suggested to Enron that they should seriously renegotiate the power purchase agreement with the government of Maharashtra, because there are certain elements in that power purchase agreement which can undergo a change," Sinha said.

Enron and India have been sparring for six months over payment defaults by the Maharashtra State Electricity Board for power purchased from Dabhol Power Company. A Dabhol spokesman on Thursday declined to comment on Sinha's statement. He reiterated the company's previously stated position that it is ready for a dialogue to resolve all issues, but a renegotiation of the contract is not on offer.

DPC has already held a meeting with a Maharashtra government committee and is slated to meet them again on May 23. "Since the purpose of the meeting is only to hear out the committee and understand their thoughts, we will not present any proposal," Dabhol said on May 3.

DPC is building the world's largest natural gas fired power plant on India's western coast. The 740 megawatt first phase of the facility began operating in 1999. The plant's generating capacity will triple to 2,184 mw when phase two is completed next month. MSEB agreed in 1995 to buy all the power produced by the plant, but now says the power is too expensive, and is refusing to take the additional second-phase capacity. Its change of mind has sparked concern over the fate of the project. DPC has already issued a notice of arbitration, and last month its board authorised management to terminate the contract. A vote on Thursday by lenders to the project is expected to endorse the board's decision, a source close to the matter told Reuters.

Sinha said he had no comment on the vote. He also declined to reveal the Center's opinion of MSEB's refusal to buy the second-phase power. (Reuters)
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THE FINANCIAL EXPRESS Friday, May 18, 2001
Deshmukh convenes meet to discuss Dabhol crisis Sanjay Jog
Mumbai, May 17: Maharashtra Chief Minister Vilasrao Deshmukh has convened a crucial meeting on Saturday with state officials, the Maharashtra State Electricity Board (MSEB), the advocate general and legal experts to take stock of the situation of the ongoing Dabhol crisis.
Mantralaya sources told The Financial Express that the issues relate to renegotiations with Dabhol Power Company (DPC) like the proposed arbitration proceedings, the Centre's reluctance to purchase Dabhol phase-II power, and issuance of preliminary termination notice to the DPC are likely to to come up prominently at the Saturday's meeting. Furthermore, the meeting would also discuss at length the DPC's refusal to pay rebate of Rs 401-crore charged by MSEB for the mis-declaration and default on the availability of power on January 28. MSEB will complete the review of rebate payment by end of this month and serve another rebate of Rs 400 crore to DPC.
MSEB and state energy department are likely to seek chief minister's intervention to take up the issue of despatch of Dabhol power from phase-II by the Centre in view of their inability to bear additional burden. In fact, the state energy department and MSEB were surprised over the recent statement by the union minister of power Suresh Prabhu that neither National Thermal Power Corporation nor Power Trading Corportion are in a position to purchase or trade Dabhol power to other states.
Moreover, the energy department and MSEB were of the view that the Centre, which has provided a Counter Guarantee for Dabhol phase-I, cannot remain as a silent observer, but should bail out the state government and MSEB. The chief minister's meeting is also likely to discuss the "cold" response from the union ministries of power, finance and oil and petroleum in reaching at an acceptable solution. Ironically, the Centre, which has decided to adopt a conciliatory route, has yet to prepare a reply to the DPC's notice served on April 4 for the non-payment of December bill of Rs 102 crore.
Sources said that the state government would make a fresh appeal to the Centre to implement a common strategy in defending the stand of MSEB, Centre and state governments at the proposed arbitration proceedings.
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BUSINESS STANDARD  Friday, May 18, 2001
'Affordable DPC tariff must to woo third-party buyers'
The Centre should benchmark "an affordable" tariff of Dabhol Power Company's (DPC) liquified natural gas (LNG) based power, so as to enable the Central utilities like the National Thermal Power Corporation (NTPC) or the Power Trading Corporation (PTC) to buy and distribute power from the US energy major, according to a senior official of Maharashtra government.
"Now that DPC is ready for renegotiations, why does the Centre not set the terms of tariff for the multinational's LNG-based power?," the official said here today reacting to a statement made yesterday by Union power minister Suresh Prabhu that the Centre would allow sale of power to a "willing buyer" if DPC and the Maharashtra State Electricity Board (MSEB) jointly approach with a concrete proposal.
The Union government is also a part of the Godbole panel and the former should not undermine its responsibility merely by stating that "we would try and offer all the help", the official said. When asked if DPC and MSEB would be able to find a "willing party" for the US energy major's costly power, the official said, DPC was ready to reduce the tariff and bring it down to an affordable level following which either NTPC or PTC could source it and pass on to the power-starved north Indian states.
Last evening, Prabhu had said the Centre would give any status, including a mega project one, if MSEB and DPC approach the Centre for the same together. Prabhu had said that his ministry would extend its cooperation to the state government "in every way" to resolve the imbroglio between MSEB and DPC. The minister also categorically stated that NTPC could not buy DPC's power, as it was a mere "power selling entity". "There was no question of NTPC buying power from the project since long-term power purchase agreements have been signed by NTPC with the buying states," he said.
Earlier in his meeting with state chief minister Vilasrao Deshmukh, the latter had suggested that NTPC sell the excess power over and above the 300-400 mw needed for the state from the 740 mw Phase-I and soon to be commissioned Phase-II of 1,444 mw, to other needy states.
Source: PTI\
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BUSINESS STANDARD Friday, May 18, 2001
BYSTANDER - Dangerous drift on Dabhol
The Central and state governments have failed to manage the Dabhol crisis effectively, writes John Elliott

No-one seems to be terribly concerned that Enron's $3 billion power project at Dabhol, which is India's most high profile foreign investment, looks as if it is heading rapidly into a meltdown.
Even stories that Enron is shifting executives' families out of the country - surely the actions of an organisation that is clearing the decks for a showdown - attract relatively little attention. International lenders have suspended loans, and contractors on the Dabhol site are said to be withdrawing. This is no longer - as Suresh Prabhu, the power minister, has put it - merely the sort of "dispute between a generator and a distributor" that has happened in many other countries.
Sure it started out as that; but it now looks as though Enron plans to take its recent force majeure notice to its logical conclusion and withdraw from India as soon as it can. One does not need a lawyer to realise that Maharashtra has unwittingly been helping Enron assemble evidence of force majeure ever since demands for renegotiation or cancellation of the project came from the state assembly's during its noisy sojourn in Nagpur last November.
After that, the Maharashtra government stoked the flames by calling for cancellation and by demanding on three separate occasions that the plant should move from being idle to full production in three hours. That is a time limit that had never been demanded before and which the Dabhol equipment is not designed to meet. Then the Central government used this time-limit issue as an excuse for not paying Enron money that was due under the project's finance ministry counter guarantee.
This must have confirmed Enron's belief that there is really no chance of it ever being allowed to settle down at Dabhol to a normal business relationship with the Maharashtra government, the state's political parties, and the state electricity board. There is too much history and baggage - starting with the original project's go-ahead against advice from the World Bank and others, and continuing with the way that Bal Thackeray was suddenly converted to the virtues of Dabhol's second 1,440MW phase stage after he met Rebecca Mark, a senior Enron executive.
Then there were blockages on Enron's plans for broadband telecom and gas sales, followed by the Nagpur attacks, and damming statements issued since then by the Maharashtra government. Now the story is lost in a complex array of arbitration and conciliation, lenders' meetings, government meetings, and often contradictory newspaper reports. Seemingly forgotten is the basic fact that Enron's senior executive in India obtained authority last month from Dabhol's board to terminate the project if matters do not improve.
For him not to act on that, India presumably needs to show good faith that it wants to resolve all the disputes quickly. But insisting, as the state government has done, that the interim report of the Godbole committee of inquiry on the dispute should be the starting point for re-negotiating the power purchase agreement is scarcely a conciliatory start.
The best solution of course would be for Enron's 65 per cent stake in Dabhol to be bought out by a another power company which would then, with bankers and lenders, renegotiate the power purchase agreement, lower the rate of return, restructure $2 billion debt, and arrange to sell power across to states outside Maharashtra.
Many foreign power companies have looked at the project, which looks attractive because the 2,144 MW power plant is almost completed, whereas most other big power projects have not even started construction, and because there is a large liquefied natural gas terminal which will be one of the first in the country. But no foreign company wants to pick up the risks and uncertainties involved. That leaves the possibility of an India buyer - with Reliance being frequently mentioned as the most likely candidate because of its proven financial and management capabilities and reach.
But time is running out and it does not look as if Enron will wait much longer. If it does terminate the contract - and maybe puts the Dabhol company into bankruptcy - India's image will suffer because of the government's failure to pay the counter guarantees, which could well be presented as the central issue. The only beneficiary of this disaster would be the company that eventually picks up the pieces at Dabhol because it will obtain the project at a knockdown price.
This may sound as if I am arguing that Enron is in the right. I am not. What I am arguing however is that the Central and state governments have failed to manage this crisis effectively. Instead they are treating it with a characteristic sense of drift - assuming no doubt that, like so many crises in this country, it will solve itself - which it will not.
If anyone doubts Enron's motive for ridding itself of its India business, just look at its recent first quarter results: profits up 20 per cent to $406 million on sales that had almost quadrupled to $50 billion. Does anyone seriously think that Dabhol matters to such an international commodities trader?
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BUSINESS STANDARD  Friday, May 18, 2001
Godbole panel not to seek replacements Our Regional Bureau in Mumbai
Chairman of the renegotiation committee appointed to hold discussions with the Dabhol Power Company (DPC) Madhav Godbole, on Wednesday said the remaining six members on the committee were adequate to fruitfully continue negotiations with the power major.
Responding to a query whether the withdrawal by three appointees on the committee -- EAS Sarma, RK Pachouri and Kirit Parikh -- would hamper negotiations with DPC considering their respective expertise in fields of finance and power, Godbole told Business Standard, "I would not like to get into such an argument. As far as the committee is concerned we would not be seeking fresh inductions." He was reacting to Maharashtra chief minister Vilasrao Deshmukh's statement made earlier on Wednesday, wherein he said the government would wait for the chairman of the renegotiation committee to make a requisition for new members on the committee.
Deshmukh also told mediapersons after the cabinet meeting, "We have repeatedly informed the centre of our inability to absorb the DPC power that would become available following the completion of phase II of the project." He also observed that while Maharashtra was keen to ensure the active participation of individual members from the Union finance, energy and legal ministries for a fruitful dialogue process with DPC, the appointment of retired bureaucrat AV Gokak was not clear on some issues.
"Whether Gokak is authorised by the centre with some powers to negotiate on its behalf is not clear as of now. However, with renegotiations currently on, we would like to await the committee's deliberations," he said. The next meeting of the renegotiating committee with DPC is scheduled for May 23.


We bought 4385 from CPA (deal 155237) and sold it to CES (deal 155238).

We bought 1249 from CPA (deal 155240) and sold it to EES (deal 155244).

Do the emails help??  Is this the way you guys want ot see this?


Dan

This is what I used for Exxon.  This is totally different than the Lubrizol
deal.    Eric will send you the latest (but unsigned and not yet agreed to)
version of the Lubrizol Bill of Sale just as a backup.

Lee - my sincerest apologies for not being able to get to this sooner.

Ann Elizabeth


Stephanie, can you gather two sets of the extra documents so we can send with
the Goldman Sachs and Morgan Stanley agreements with Enron Credit Inc.  I
will forward the agreements to you Monday or tonight.

Cheryl Nelson
Senior Counsel
EB3816
(713) 345-4693
----- Forwarded by Cheryl Nelson/NA/Enron on 04/27/2001 06:06 PM -----

	Tom Doukas/ENRON@enronXgate
	04/27/2001 01:58 PM

		 To: Cheryl Nelson/NA/Enron@Enron, Sara Shackleton/HOU/ECT@ECT
		 cc: David A Wall/Risk Mgmt/LON/ECT@ECT
		 Subject: RE: Prime Broker Accounts

Please move forward on this as soon as possible
 -----Original Message-----
From:  Doukas, Tom
Sent: Thursday, April 26, 2001 6:17 PM
To: Nelson, Cheryl; Shackleton, Sara
Cc: Wall, David
Subject: RE: Prime Broker Accounts

Thanks Cheryl.

I need only ensure the funds we will need in order to meet the margin call at
Morgan is ready.

David,

I expect the needed margin at Morgan to be under $30mm once we move our longs
out.  Morgan has today agreed to 25% for shorts (from an average of 50%).  Of
the $30mm needed half is already at Goldman and Bear.

I anticipate therefore no more than $15mm in needed funds.  It may in fact be
less I will true up tomorrow

Can we get this by next week, and allow Cheryl to proceed full steam?

Thanks,

Tom

 -----Original Message-----
From:  Nelson, Cheryl
Sent: Thursday, April 26, 2001 5:30 PM
To: Doukas, Tom
Cc: Wall, David; Sage, Richard; Shackleton, Sara; Glover, Sheila
Subject: Re: Prime Broker Accounts

Hi Tom,  at your request the execution of these agreements have been on
hold.  Most of the leg work has been done.  I completed the negotiations on
the agreement so moving forward is a matter of getting a document ready for
signatures and getting it signed, having lawyers on both side proof read it
and getting the agreement and accompanying documents (which are complete)
executed.  This process, which is mainly administrative, could take two or
three days if I focused on as a priority to make sure it gets done.

Let me know how you want to proceed.

Cheryl Nelson
Senior Counsel
EB3816
(713) 345-4693

	Tom Doukas/ENRON@enronXgate 04/26/2001 05:16 PM 	   To: Sara
Shackleton/HOU/ECT@ECT, Cheryl Nelson/NA/Enron@Enron  cc: Sheila
Glover/HOU/ECT@ECT, David A Wall/Risk Mgmt/LON/ECT@ECT, Richard
Sage/LON/ECT@ECT  Subject: Prime Broker Accounts

Sara & Cheryl,

Could you please provide a status on where we stand on the transfer of the
Credit book from ENA/ECT to ECI at Goldman and Morgan.

I had previously asked you to hold up on Morgan until the Bear issue was
resolved.  I am hoping we do not have to much effort ahead of us to move
these two accounts over.

Thanks,

Tom


I'll check.  Thanks for the help.

Kay

Heather Kroll@ECT
03/05/2001 06:39 PM
To: Kay Mann/Corp/Enron@Enron
cc:

Subject: Paige Update

CKM,

I spoke to Althea Gordon in the Recruiting Dept today regarding the poor
treatment Paige received in the recruiting process.  Here is her response.

First of all, Paige should have received a rejection letter and a hold
letter.  The rejection letter was from her submittal to the analyst process
on her own.  The hold letter supposedly says that, based on referrals, she is
on a waiting list and will be contacted for interviews provided there is any
space left in the summer analyst class.  Basically they have offers out to
what they call "first-tier" schools and are waiting for responses.  If they
have any spots left, they will interview any candidates that are "on hold"
based on resume review.

I asked why she didn't merit an interview right out of the gate and she told
me it was because she was from a smaller school where we don't normally
recruit and she lacked experience in Enron industries (sounded like a canned
answer to me).

Will you check with Paige and see if she did get this "hold" letter?  I want
to push to at least get her an interview, but am sensitive to making too big
a deal about it and hurting her chances more than helping them.

I'll also talk to Charlene Jackson who runs the Analyst and Associate program
and see if she has any advice.

Heather


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December 17, 2001

Competition Approved for California's Intrastate Natural-Gas Pipelines

By Will McNamara
Director, Electric Industry Analysis

[News item from Associated Press] California state power regulators voted Dec. 11 to deregulate further the transmission of natural gas within Southern California, a decision hailed by the industry and derided by consumer advocates. The California Public Utilities Commission (CPUC) voted 3-2 to approve a proposal that allows Southern California Gas Co., the nation's largest gas utility, and San Diego Gas & Electric Co. (SDG&E) to sell space on their "backbone" transmission pipelines. These pipelines carry natural gas from out of state to a smaller distribution system in California that then transports it to homes, businesses, factories, and power plants.

Analysis: This controversial vote by the CPUC took place last week, but has not received a great amount of industry analysis. This is rather surprising because the vote carries enormous potential impact for the way in which natural-gas capacity is bought and sold along pipelines owned by Southern California Gas Co. and SDG&E in the southern part of the state. Considering the fiasco that opening the state's electric market became over the last year, it is a risky move for California's regulators to open a competitive market for the right to transport gas along these pipelines at this time, even though the issue has been under debate at the commission for years. However, the rationale for the decision is that the new system will allow customers to better control the point from which their natural-gas supply originates, which theoretically should lower costs and preserve space along the pipelines that the customers don't need. Critics of the plan, especially The Utility Reform Network (TURN), say that allowing competition along the natural-gas pipelines in California could allow fewer companies to control most of the pipeline space, which could in fact cause the opposite of the intended effect and drive up energy costs. A case that has been used by both sides of the debate is that of El Paso Corp., which found itself in a lengthy lawsuit this year when it was charged with giving preferential access to its pipeline to one of its affiliates, which allegedly played a role in driving up energy costs in the state.

Before analyzing the potential impact of the CPUC's ruling, let's first establish specifically what the ruling entails and some background of the companies involved. Put into a nutshell, the ruling creates a competitive market for the right to transport and store natural gas along the pipelines owned by Southern California Gas and SDG&E, which are both subsidiaries of San Diego-based Sempra Energy (NYSE: SRE). As noted, Southern California Gas is ranked as the largest natural-gas distribution utility in the country and serves a territory of 23,000-square-miles that ranges from central California to the Mexican border.

Following a standard that is already in place among interstate pipelines, including the ones that transport power into California, both of these companies will now be allowed to sell large industrial customers space on their intrastate "backbone" pipelines, giving customers firm transportation rights on the pipelines. The pipelines are referred to as "backbone" because they are part of the smaller distribution system that transports power to factories and power plants (along with homes and businesses). It is important to note that the CPUC's ruling impacts only large consumers of natural gas in California, which includes electric generating plants. Residential and small business consumers that use natural gas will continue to have regulated gas-transmission costs.

Under the new auction system, power producers and industrial natural-gas customers of the two companies will bid to buy pipeline space, with preference being given to those bidders that intend to reserve space for the longest period of time. According to the CPUC, the ruling creates three "tiers" of accessibility to the capacity on the pipelines. The first tier includes residential and small business customers, who are not included in the new competition and will automatically have about 1,044 million cubic feet per day of capacity on the pipelines reserved for their use. The second tier includes industrial customers who will now be able to participate in the competition, and will be allowed to bid on half of the remaining capacity. The third tier includes all other market participants, including natural-gas marketers, which will be allowed to bid on whatever capacity is left. Both Southern California Gas and SDG&E reportedly intend to phase in auctions by the end of 2002 for their largest customers to transport natural gas. The auctions will be for transmission rights that can be traded to other parties.

The CPUC also established two different levels of payment options for the bidding process. As one option, bidders can pay a fixed price of 7.2 cents per million British thermal units (MMBtu) that would cover all of the capacity on the pipeline that they have reserved, regardless if it is ultimately used or not. As a second option, bidders can pay for only 50 percent of the reserved capacity at the fixed price of 7.2 cents per MMBtu, and 50 percent at a higher price that only applies to the capacity that they ultimately use. In addition, the ruling allows for the trading of capacity space, an important point that critics claim could allow buyers to gain more control over the pipeline than allotted in the ruling.

As noted, the measure passed the CPUC in a 3-2 vote. The ruling will remain in place until 2006, at which time the commission can decide to renew it. The three commissioners that supported the measure were Richard Bilas, Henry Duque and Geoffrey Brown. Loretta Lynch, president of the CPUC, and Carl Wood voted against the measure. Wood said he opposed the measure because it was based on data accumulated before natural-gas prices dramatically increased during the winter of 2000-2001.

Another reason why the three commissioners voted to approve this measure was a belief that deregulating gas transmission in the state would help to keep large customers from leaving intrastate pipelines in favor of using interstate pipelines, which are not regulated by the CPUC. An exodus among industrial users from intrastate pipelines, according to the three commissioners, could leave residential and small business consumers with higher costs associated with maintaining the pipelines. However, regulators were quick to qualify their vote by saying the decision to allow competition for the cost of transporting natural gas for industrial users did not represent total deregulation. Instead, the commissioners said that the ruling simply amounts to "less regulation."

As I mentioned, the case against El Paso Corp. (NYSE: EPG) was used as an example to support both sides of the debate over allowing competition among the natural-gas intrastate pipelines. The case against El Paso Corp. is a very complicated one, but it essentially comes down to one core issue. The case revolves around allegations that during the period of May to November 2000, El Paso improperly shared market-sensitive information with one of its affiliates, which drove up natural-gas prices, pre-empted competition from non-affiliated companies and resulted in extra costs for fuel in the range of $3.7 billion for Californians. El Paso Corp. has consistently maintained that it engaged in no wrongdoing. According to a report issued by the state Assembly, natural-gas prices in California increased from $6.6 billion in 1999 to $12.3 billion in 2000 to $7.9 billion for only the first three months of 2001. In October, El Paso Corp. was absolved of the charges of manipulating natural-gas prices in California, but an investigation continues regarding any improper sharing of information between affiliates. The relevance of this case is that those opposed to opening up California's intrastate pipelines to capacity believe the new rules could allow for one company to step in and gain control over a portion of the pipeline and thereby be able to drive up price.

Those in favor of the CPUC's new ruling say the comparisons to the El Paso case are unfounded. For starters, the ruling restricts companies from owning more than 30 percent of the pipeline, which theoretically should prevent a company from gaining an ability to control prices. Critics, however, say that the ruling allows for the trading of capacity space, which could potentially provide a loophole that would give a company control over more than 30 percent of pipeline capacity.

The issue of potential price spikes associated with natural gas is one of the remaining questions that only time will be able to answer. Critics of the ruling such as TURN say allowing competition among the natural-gas pipelines creates the same market dynamics as deregulation of the state's electricity market, which some say opened the door to gaming and market manipulation. In other words, TURN argues, the CPUC ruling opens the door for one company to enter the market and buy up a significant amount of capacity along the intrastate gas pipelines, thereby giving that company the opportunity to control prices. As the new ruling won't take effect until another year when Southern California Gas and SDG&E begin receiving bids for capacity space on their pipelines, we won't know any time soon if prices will be impacted. However, critics claim that a sharp downturn in temperatures in California during the winter season that drives up demand could be the first indicator of whether or not the new ruling will lead to a sharp increase in energy prices.

Moreover, the opening of competition along capacity space on California's intrastate natural-gas pipelines is a surprising departure from the state's discontinuation of deregulation within the power sector. It is too early to tell how the new ruling will impact energy prices, and of course this question is the source of great debate (with one side saying that prices will drop and the other side saying that prices will increase). Perhaps the larger issue, however, is the control over the state's pipelines that could be impacted by this ruling. Even 30-percent capacity control, the amount that the CPUC is opening to competition, would be considered excessive by some other states. For instance, in Texas 20-percent control is considered a maximum standard. Again, whether or not the allowance of competition will spark the abuse of capacity control on the intrastate pipelines is something that remains to be seen. We do know that electric competition in California became a disastrous experiment, but even with this history the state is moving forward with bringing competition to its intrastate natural-gas pipelines.

An archive list of previous IssueAlert articles is available at
www.scientech.com <http://secure.scientech.com/issuealert/>

  _____

We encourage our readers to contact us with their comments. We look forward to hearing from you. Nancy Spring  <mailto:nspring@scientech.com>

Reach thousands of utility analysts and decision makers every day. Your company can schedule a sponsorship of IssueAlert by contacting Jane Pelz  <mailto:jpelz@scientech.com>at 505.244.7650. Advertising opportunities are also available on our Website.

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Our staff is comprised of leading energy experts with diverse backgrounds in utility generation, transmission and distribution, retail markets, new technologies, I/T, renewable energy, regulatory affairs, community relations and international issues. Contact consulting@scientech.com <http://consulting@scientech.com> or call Nancy Spring at 505.244.7613.

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SCIENTECH's IssueAlert(SM) articles are compiled based on the independent analysis of SCIENTECH consultants. The opinions expressed in SCIENTECH's IssueAlerts are not intended to predict financial performance of companies discussed, or to be the basis for investment decisions of any kind. SCIENTECH's sole purpose in publishing its IssueAlert articles is to offer an independent perspective regarding the key events occurring in the energy industry, based on its long-standing reputation as an expert on energy issues.

Copyright 2001. SCIENTECH, Inc. All rights reserved.
  <http://infostore.consultrci.com/spacerdot.gif?IssueAlert=12/17/2001>


Here is the breakdown of 1999 PCB decontamination costs for TW:

Topock mods   $4,675,000
PG&E sample taps  $     90,000
PG&E filter separator  $   600,000
Remove PG&E filter separator $     10,000

If you need the costs broken down in more detail, or need more information,
please give me a call at x30596.


WELCOME TO e-FFICIENCY NEWS

The bimonthly newsletter from the
Alliance to Save Energy

October 2000 Vol. 2  No. 5

********************************

CONTENTS

EFFICIENCY NEWS
- New Proposed Air Conditioner, Heat Pump Standards Fall Short
- Winter Fuel Outlook Bleak, EIA Reveals in New Report
- Gains Expected in Federal Budget for Energy Efficiency Programs
- Avoid Home Energy $ticker $hock
- Energy Heats Up Election
- California, New York Make Dramatic Boosts for Energy-Efficiency
Funding
- EPA, DOE Release Fuel Economy Guide for Energy Awareness Month
- Light Up Your Life with ENERGY STAR
- Living Efficiently and Affordably
- ACEEE Publishes Two New Reports
- Chandler Urges Energy Efficiency in Former Communist Countries

ALLIANCE NEWS
- 'Wha-a-a-s-s-s Up' With Energy Efficiency on TV?
- Nemtzow Named Environmental Professional of the Year
- 'BestPractices' Steams Ahead

HOT LINKS
- Department of Energy Launches Internet Gateway
- Other Web Sites Worth Visiting

EYE OPENERS
- Hypercars - a New Design for the New Century

EFFICIENCY EVENTS
- E-Vision 2000
- Earth Technologies Forum
- International Union of Electricity Applications 2000 International
Conference
- Canada's Energy Efficiency Conference

EFFICIENCY PEOPLE
- Two Major Energy Players Move Onward
- Energy Job Openings
********************************

EFFICIENCY NEWS

New Proposed Air Conditioner, Heat Pump Standards Fall Short

The new air conditioner energy efficiency standards proposed by the U.S.
Department of Energy fall short of what's justified and what's needed to
lighten the load on electricity demand, says the Alliance to Save Energy. In
a humorous ad campaign developed by the Appliance Standards Awareness
project and featuring Energy Secretary Bill Richardson in digitally-inserted
sunglasses, energy efficiency advocates, urge strong air conditioner
standards. Air conditioners are the largest single contributors to peak
electricity demand - an issue the past two summers as peak demands created
and threatened blackouts and brownouts in various locations. This proposed
legislation is currently in a 60-day public comment period, allowing for
input from interested parties, after which the DOE will issue the final
rule.

http://www.ase.org/media/newsrel/press.htm

To see four flaws in the DOE analysis:
http://www.ase.org/e-FFICIENCY/doeflaws.htm

To send an email to Secretary of Energy Richardson urging strong air
conditioner standards:
http://www.standardsasap.org/accac.htm

To view the ad, visit the Appliance Standard Awareness Project at:
http://www.standardsasap.org/wpad.pdf

--------------------------------

Winter Fuel Outlook Bleak, EIA Reveals in New Report

The U.S. Energy Information Administration predicts that natural gas prices
will increase by as much as 40 to 50 percent for consumers this winter over
last winter, or an average of $240 per consumer home, in its Winter Fuels
Outlook, released on October 6. Home heating oil prices are expected to rise
by $190 per home from last year's already high prices in the Northeast,
while electricity prices could increase by as much as 12 percent.
Predictions are based on normal winter weather, and prices could escalate
even further should the weather prove to be colder than normal.

Get the complete EIA report at:
http://www.eia.doe.gov/emeu/steo/pub/contents.html

Check out the Alliance to Save Energy's new white paper web section on
energy prices:
http://www.ase.org/energyprices

--------------------------------

Gains Expected in Federal Budget for Energy Efficiency Programs

Holding a strong hand due to concerns over sharply rising energy prices and
low winter natural gas and heating oil inventories, and backed by a strong
lobbying effort from the Alliance to Save Energy  and others, the Clinton
administration is expected to win substantial gains for energy efficiency
programs in recently concluded negotiations with Congressional appropriators
over the U.S. Department of Energy (DOE) and the Environmental Protection
Agency budget. A total of $814 million is being appropriated for energy
efficiency research, development and deployment programs, run by the DOE's
Office of Energy Efficiency and Renewable Energy, in increase of $94
million, or 13 percent over the previous budget.

For more information:
http://www.ase.org/e-FFICIENCY/fedbudget.htm

Check this link regularly over the next few weeks as we update this
information based on Congressional and Presidential action.

--------------------------------

Avoid Home Energy $ticker $hock

If you thought it was expensive to pay up to $2 a gallon for gas this
summer, you'll have continued "$ticker $hock" when your home energy bills
arrive this winter with predicted increases. How to avoid it -- check out
the Alliance to Save Energy tips to cut home heating oil and natural gas
bills.

http://www.ase.org/media/newsrel/stickershock.htm

Or, check out the Alliance's popular consumer booklet, Power$mart, Easy Tips
to Save Money and the Planet. View an animated version online or order your
own hard copy. Organizations and companies may also order in bulk,
customized for distribution to their members or to the public.

To view online: http://www.ase.org/powersmart
To order bulk copies: http://www.ase.org/powersmart/order.html
To order single, free copies, call the Consumer Information Center toll-free
at 1-888-878-3256.

--------------------------------

Energy Heats Up Election

Each presidential candidate stated his energy policy in the first
presidential debate in Boston, MA, on October 3. Vice President Al Gore's
plan focuses on increasing supply and decreasing demand, while Texas
Governor George W. Bush's plan emphasizes developing domestic energy
supplies. The vice presidential candidates faced off in Danville, KY on
October 5, both echoing the positions of their presidential running mates.

Source: Washington Post

For a comparison of the Presidential candidates on energy issues:
http://washingtonpost.com/wp-srv/onpolitics/elections/comparison_energy.htm

--------------------------------

California, New York Make Dramatic Boosts for Energy-Efficiency Funding

In California, bills signed by Governor Gray Davis last week re-assert
California's leadership status on support for energy efficiency and other
clean energy sources. Two bills extend California's system benefits charge
through 2012, while adding an inflation adjustment, creating more than $5
billion of investment in clean energy from 2002-2012. This may be the
largest clean energy fund ever created. A third major bill will speed the
adoption of cost-effective buildings and appliance standards. These measures
are expected to maximize peak energy savings for the summer of 2001, and to
lessen future energy reliability problems.

To see complete bill texts:
http://info.sen.ca.gov/pub/bill/sen/sb_1151-1200/sb_1194_bill_20000831_enrol
led.html

http://info.sen.ca.gov/pub/bill/asm/ab_0951-1000/ab_970_bill_20000831_enroll
ed.html

And in Los Angeles, the City Council approved a 10-year power plan that will
meet roughly half of the 1000 megawatts of new power capacity with renewable
energy sources, distributed generation, and demand side management.

http://www.ase.org/e-FFICIENCY/losangeles.htm

The New York State Public Service Commission has proposed increasing the
state's System Benefits Charge from its current $78 million to $139 million
per year, and extending it for five years. About 70 percent of the current
$78 million is used for energy efficiency programs. If this formula holds,
efficiency funding would increase to about $97 million - an 80 percent
increase from current levels. Energy advocates are seeking SBC funding
closer to the $200 million level.

For more information:
http://www.ase.org/e-FFICIENCY/nycalif.htm

For the full report:
http://www.dps.state.ny.us/SBC_Proposal.PDF

--------------------------------

EPA, DOE Release Fuel Economy Guide for Energy Awareness Month

Kicking off Energy Awareness Month in October, the U.S. Environmental
Protection Agency and the U.S. Department of Energy issued the latest
version of the Fuel Economy Guide. Including the 2001 model year, this guide
ranks the fuel efficiency of vehicles in various class sizes. The Toyota
Prius and Honda Insight currently top the list for fuel efficiency.

http://www.energy.gov/HQPress/releases00/octpr/pr00247.htm

--------------------------------

Light Up Your Life with ENERGY STAR

ENERGY STAR's Lighting Change Out program takes place this week. A
first-time event involving utilities and retailers across the U.S., the
program encourages consumers to trade in halogen lamps for cooler, ENERGY
STAR labeled, efficient models. Each halogen torchiere that is replaced by
an ENERGY STAR torchiere can save $25-$50 per year in energy costs.

For more information:
http://www.epa.gov/energystar/changeout/

For event sites:
http://www.epa.gov/appdstar/estar/changeout/events.html

--------------------------------

Living Efficiently and Affordably

The U.S. Department of Energy has partnered with the housing industry
through the Building American Program to build affordable, highly
energy-efficient homes throughout the U.S. The Fairburn Commons complex in
an Atlanta suburb opened with 33 units, each of which will cost less than
$1/day to heat and cool.

http://www.doe.gov/news/releases00/seppr/pr00240.htm

Meanwhile, the National Affordable Housing Network released a report on new
energy-efficient, affordable homes built in Texas. Built in partnership with
Habitat for Humanity International, these 40 homes use up to 42 percent less
energy than an average new home. Reduced monthly energy bills are
particularly critical for low-income residents.

http://www.nahn.com/txrep.htm

--------------------------------

ACEEE Publishes Two New Reports

Check out the latest report and study by the American Council for an Energy
Efficient Economy (ACEEE). National and State Energy Use and Carbon
Emissions Trends and ACEEE 2000 Summer Study highlights.

http://www.aceee.org/new/index.htm

--------------------------------

Chandler Urges Energy Efficiency in Former Communist Countries

William Chandler, senior staff scientist and director, Advanced
International Studies at Alliance Associate Pacific Northwest Laboratories,
urges governments to do more to promote energy efficiency in the formerly
communist countries in his new book, Energy and Environment in the
Transition Economies.

http://www.ase.org/e-FFICIENCY/chandler.htm

********************************

ALLIANCE NEWS

'Wha-a-a-s-s-s Up' With Energy Efficiency on TV?

The advertising agency that produced the Budweiser frogs and hot and
much-quoted "Wha-a-a-s-s-s Up" (What's Up) TV commercials is in the process
of producing new TV and radio public service ads (PSAs) for the Alliance to
Save Energy which will be completed and distributed to stations in late
November. The new ad begins filming next week.

http://www.ase.org/e-FFICIENCY/newpsa.htm

--------------------------------

Nemtzow Named Environmental Professional of the Year

David M. Nemtzow, president of the Alliance to Save Energy, was named
Environmental Professional of the Year by the Association of Energy
Engineers, National Capital Chapter, for his work with the Alliance and his
contributions to the local energy industry throughout the past year.

--------------------------------

'BestPractices' Steams Ahead

Steam system managers: Are you concerned about the anticipated increases in
fuel oil and natural gas bills this winter? Find out about the BestPractices
Steam workshops, produced by the Alliance to Save Energy and hosted by
utility companies at various locations.

http://www.oit.doe.gov/bestpractices/steam/steam.shtml

********************************

HOT LINKS

Department of Energy Launches Internet Gateway

The U.S. Department of Energy recently launched its Energy Information
Portal designed to expand citizen access to the department's online
information and services. This new, easy-to-use consumer-friendly site
provides hundreds of links energy content on health, the home,
transportation, schools, businesses, the community, world and future.

http://www.energy.gov

--------------------------------

Other Web Sites Worth Visiting

Energy Central
www.energycentral.com

Federal Consumer Information Center
http://www.pueblo.gsa.gov/

********************************

EYE OPENERS

Hypercars - a New Design for the New Century

Ever heard of a Hypercar? Energy efficiency expert Amory Lovins,  and his
Rocky Mountain Institute, have developed a design for an ultra-light hybrid
car that, according to Lovins, could get as high as from 90 to 200 miles per
gallon.

http://hypercarcenter.org

********************************

EFFICIENCY EVENTS

E-Vision 2000

The Department of Energy will host a conference on
October 11-13, 2000, entitled E-Vision 2000:  Key Issues That Will Shape Our
Energy Future.

http://www.rand.org/centers/stpi/events/index.html

--------------------------------

Earth Technologies Forum

Conference on Climate Change and Ozone Protection, October 30-November 1,
2000, Washington, D.C.

http://www.earthforum.com

--------------------------------

International Union of Electricity Applications 2000 International
Conference

Electricity for Sustainable Urban Development, Lisbon, Portugal November
1-4, 2000

http://www.edp.pt/uie/index.html

--------------------------------

Canada's Energy Efficiency Conference

Canada's Energy Efficiency Conference, Awards and Trade Show 2000, Ottawa,
Canada, October 10-12, 2000

http://wwwoee.nrca.gc.ca/conference

********************************

EFFICIENCY PEOPLE

Two Major Energy Players Move Onward

Two key players in the energy efficiency world will be leaving their current
positions at two of the top energy organizations. Scott Sklar of the Solar
Energy Industries Association and Roby Roberts of Renewable Energy Policy
Project and the Center for Renewable Energy and Sustainable Technology move
on to new ventures. Geller will head ACEEE through next spring.

http://www.ase.org/e-FFICIENCY/movingon.htm

--------------------------------

Energy Job Openings

Looking for a position in the energy non-profit field? There are several
positions available, including:

Alliance to Save Energy
Director of Development
Transition Country Program Manager
Media Relations/Publicist

http://www.ase.org/about/humanr.htm

American Council for an Energy-Efficient Economy
Transportation Director

http://www.aceee.org/job/trnsdir.htm

Sustainable Energy Coalition
Coordinator

http://www.americangreen.org/index.html

********************************

CONTACT US

Need to reach someone at the Alliance to Save Energy? Check out our staff
listings by name and by area of expertise.

http://www.ase.org/about/staff.htm

--------------------------------

This e-mail newsletter is sent bimonthly to anyone interested in
energy-efficiency issues.

Maria Y. Lima, Editor, mailto:mlima@ase.org
David Nemtzow, Publisher, nemtzow@ase.org

To be removed from this list, do not reply to this message. Instead, send a
message to:

mailto:Majordomo@lists.ase.org

In the body of the message type in "unsubscribe e-fficiencynews" (without
the quote marks). Do not include any other message in the body, including
your signature file.

If a friend has forwarded this message to you and you'd like to get it
yourself, send us a message at:
subscribe@ase.org

--------------------------------

Do you have news you'd like to share with us? Do you have comments about
e-FFICIENCY NEWS? We'd enjoy hearing from you. Send your news and comments
to mailto:mlima@ase.org.

Alliance to Save Energy
1200 18th St., NW, Suite 900
Washington, DC 20036
202/857-0666
info@ase.org
www.ase.org/


July 26 FINAL NOM

---0--- Inlet HPL @ Eastrans

 7,800    FCV / HPL  (Incremental Sale to HPL)  Please call Bruce McMills at
(713) 627-6467
     -0-     Tenn / HPL
     -0-     Mobile Beaumont / HPL
     -0-     HPL Cartwheel
  7,800   Total Gas

Please note, the excess volumes for July 26 will be considered an incremental
sale.
If you have any questions, please call Bruce McMills or Chad Cass at (713)
627-6202.

Thanks,
Chad Cass


Hi Lauren and John!

Timely request on your part for the "final" draft of the Harvard cases.  I
just finished working with the authors (Chris Bartlett and Meg Wozny) this
past weekend, editing the last drafts.  _Please see the attachments below.

The Enron OnLine Case will be taught by HBS Professor Don Sull on April 26th,
to 5 different sections of Harvard MBA students.  I met with Don last
weekend.  We discussed having an Enron rep in each class to hear the
discussions and offer perspective , as may be requested.

The classes will be taught in the morning.  Following,  Jeff Skilling will
address ALL sections over the lunch hour.  In essence, it's "Enron day" at
Harvard Business School.

John, any chance you'll be in the States to participate?

Thanks for your participation!

--Christie.
----- Forwarded by Christie Patrick/HOU/ECT on 03/08/2001 07:46 AM -----

	Meg Wozny <mwozny@hbs.edu>
	03/07/2001 11:06 AM

		 To: Christie.Patrick@enron.com
		 cc:
		 Subject: Enron cases

Hi Christie,

I'm enclosing the two Enron case drafts, which incorporate your
suggestions.  Sorry it took me so long, but we were totally snowed in in
Wellesley.  (This morning, my neighbor took pity on me and came over with
his snow blower and cleared my driveway!) I hope the final section in the
general case, Passing the Baton, meets your approval.

I wanted to thank you for all your help with this project.  At some point,
I'll send you our multimedia case, with links to Ken, Jeff and Louise video
clips, for your approval.

Hope you were able get out of New England before the storm hit.
Best,
Meg

 - 301064.doc
 - 301085.doc
-------------------
Meg Glinska Wozny
Research Associate
Harvard Business School
Gallatin Lounge C
Soldiers Field
Boston, MA 02163

voicemail: (617) 496-0802
facsimile:  (617) 496-6943
email: mwozny@hbs.edu


On the attached wish list, of the US companies only, the ones that cannot be
approved until I get additional info are:  Baltimore Gas & Electric, Lucent
Technologies, Monsanto, Sun Microsystems, Union Carbide and Viacom.  I will
get additional ones to you Weds am.

To: Lori Pinder/HOU/EES@EES
cc:
Subject: Re: Reference credits

Lori - here is the initial "wish list" from the credit derivatives people.
If you can focus on these first and let me know about them I'd appreciate it.
---------------------- Forwarded by Mark Taylor/HOU/ECT on 03/06/2000 03:21
PM ---------------------------

David Forster
03/05/2000 12:46 PM
To: Bryan Seyfried/LON/ECT@ECT
cc: Mark Taylor/HOU/ECT@ECT, Paul Simons/LON/ECT@ECT, Edmund
Cooper/LON/ECT@ECT, Debbie R Brackett/HOU/ECT@ECT, David Weekes/LON/ECT@ECT,
William S Bradford/HOU/ECT@ECT, Rod Nelson/HOU/ECT@ECT, Mark
Dilworth/LON/ECT@ECT, David Forster/HOU/ECT@ECT, Martin
McDermott/LON/ECT@ECT, John Metzler/LON/ECT@ECT
Subject: Re: Reference credits

Bryan,

I believe Mark Taylor is out of the office until Wednesday.

At this point, I believe there are 6 approved Reference Entities for
EnronOnline.

We will add more up to the previously discussed 20 as approvals are received.

Dave

Bryan Seyfried
03/05/2000 04:43 PM
To: Mark Taylor/HOU/ECT@ECT, Paul Simons/LON/ECT@ECT, Edmund
Cooper/LON/ECT@ECT, Debbie R Brackett/HOU/ECT@ECT, David Weekes/LON/ECT@ECT,
William S Bradford/HOU/ECT@ECT, Rod Nelson/HOU/ECT@ECT
cc: Mark Dilworth/LON/ECT@ECT, David Forster/HOU/ECT@ECT, Martin
McDermott/LON/ECT@ECT, John Metzler/LON/ECT@ECT

Subject: Reference credits

After reviewing all of the lists, attached is the list of reference credits
that I forwarded to Mark to load on Enorn Online.

Call me if you have any concerns.


fyi
---------------------- Forwarded by Steven J Kean/NA/Enron on 04/02/2001
02:42 PM ---------------------------

Rosalee Fleming on 04/02/2001 10:52:12 AM
To: Steven J Kean/NA/Enron@Enron
cc:

Subject: Re: Advisory council meeting

Steve, we have not heard from him.  Vanessa followed up Stelzer's call with
the letter.

From: Steven J Kean on 04/02/2001 09:46 AM
To: Rosalee Fleming/Corp/Enron@ENRON
cc:
Subject: Advisory council meeting

See last question.
----- Forwarded by Steven J Kean/NA/Enron on 04/02/2001 09:46 AM -----

	Stelzer@aol.com
	04/02/2001 08:47 AM

		 To: klay@enron.com
		 cc: skean@enron.com
		 Subject: Advisory council meeting

    Let me review where we stand for the April 10-11 meeting.
1.  I have spoken with Gavyn and asked him to add to his usual review
comments on the significance of recent developments for Enron.
2.  I have asked Bill Kristol to do the same.
3.  I have asked Paul Portney to review "the lay of the land" in the
environmental policy area.
4.  Since we couldn't locate a speaker to address the question of how Enron,
now larger and more corporate than in the past, can continue to attract the
best, the brightest (and the oddest?), I have asked Pankaj to give a brief
talk about what the literature generated by his colleagues has to tell us on
this subject.
5.  I couldn't get anyone on the "monopoly-too-big-and-powerful" question,
although I am still trying.
I assume you folks will brief us on California and the national energy supply
picture. Have we heard from the author of "When Genius Fails"?


---------------------- Forwarded by V Charles Weldon/HOU/ECT on 01/29/2001
12:16 PM ---------------------------

"Paul W Juneau" <Paul.W.Juneau@usa.dupont.com> on 01/29/2001 08:41:02 AM
To: V.Charles.Weldon@enron.com
cc:
Subject: Avi Nash - Goldman Sachs - Nylon and Polyester Strategy

 (Embedded     Kenneth W Wall
 image moved   01/23/2001 01:31 PM
 to file:      (Embedded image moved to file:
 PIC15112.PCX) PIC01729.PCX)

To:   Ferdinand Bauerdick/DuPont@DuPont, Mike Estep/DuPont@DuPont, Ben D
      Herzog/DuPont@DuPont, Dennis W Broughton/DuPont@DuPont, Patricia S
      Murdock/AE/DuPont@DuPont, Hunter H Ficke/AE/DuPont@DuPont, Rick
      Otero/AE/DuPont@DuPont, Ignac R Matocha/DuPont@DuPont, Jeffrey
      Crudgington/EUR/DuPont@DuPont, Dave K Findlay/DuPont@DuPont, Charlene
      D Thomas/AE/DuPont@DuPont, Dilip Kumar/PO/DuPont@DuPont
cc:
Subject:  Avi Nash - Goldman Sachs - Nylon and Polyester Strategy

INTERSTING READING!

---------------------- Forwarded by Kenneth W Wall/DuPont on 01/23/2001
01:31 PM ---------------------------

Below is a report written by Avi Nash of Goldman Sachs that was issued this
morning:

>                  Goldman, Sachs & Co. Investment Research
>
>             DuPont: Nylon and Polyester Strategy Crystallizes.
>
>
**************************************************************************
> *
> * We believe there is greater clarity now on DD's strategy in nylon &
> * polyester. 1)DON'T EXPECT OUTRIGHT SALE. No buyers in polyester. Nylon
> * still too close to DD's heart. 2)POLYESTER SOLUTION IS MESSY. Defacto
> * partial disposition via JVs i)films w/Teijin (global), ii)All other:
> * Europe/ Africa w/Sabanci, iii)American staple w/Alfa, iv)American
> * filament w/Unifi, v)American intermediates, resins and all Asian: still
> * looking and vi)engineered plastics: will keep. 3)NYLON: KEEPER FOR NOW,
> * MOSTLY? i)Getting out of 'heavy denier' nylon industrial via JV with
> * Sabanci, global. ii)Keeping the rest? 4)ISSUES. Apparel & carpet mkts
> * are mature & softening near term. Competitive position eroding slowly
> * with time.
> *
>
**************************************************************************
>
>         Avi Nash (New York) 1 212-902-9192  -  Investment Research
>
> ====================  NOTE  9:14 AM  January 23, 2001
>
>                              Stk  Latest  52 Week  Mkt Cap   YTD Pr
Cur
>                              Rtg  Close    Range    (mm)     Change
> Yield
>                              ---  ------  -------  -------   ------
> -----
> E.I. duPont de Nemours        MO  42.31    64-38   43939.1   -12%
> 3.3%
>
>                   --------------Earnings Per Share---------------
> DD (US$)           Mar     Jun     Sep     Dec      FY       CY
>       2001 FY                                       2.50
>       2000 FY      0.85A   0.90A   0.51A   0.41     2.68
>       1999 FY(A)   0.66    0.78    0.59    0.56     2.59
>
>                    -Abs P/E on-   -Rel P/E on--   EV/NxtFY   LT EPS
>                     Cur    Nxt     Cur     Nxt     EBITDA    Growth
>                    -----  -----   -----   -----   --------   ------
> DD        FY       15.8X  16.9X    0.7X    0.8X     7.10        9%
>
>
==========================================================================
> =
> A THIRD OF DUPONT'S SALES COME FROM THE OLD 'FIBERS' BACKBONE.
>
>                             1999          5 yr            Avg
>                            sales        avg profit       margin
>
> Spandex                     1650           400           24.2%
> Nylon (1)                   5525           480            8.7%
> Polyester (1)               3000           110            3.7%
> (1)Includes engg plastics and auto fibers/plastics that are reported
under
> the 'Performance Coatings and Polymers' segment. The above excludes
> nonwovens and Kevlar/Nomax businesses since they are more 'stand alones'
> with less overlap between them and nylon/polyester.
>
> POLYESTER, AN IMPAIRED ASSET, IS BEING DEALT WITH PIECEMEAL. The combined
> value is unlikely to exceed $2 billion. We estimate $1.5 billion.
>
>                 Revenue        Americas        Europe          Asia
>                   $ mn                        Mid East
>
> 1)Films           850           duPont-Teijin global joint venture
> 2)Staple                         Alfa         Sabanci           ?
>                   920
> 3)Filament                      Unifi         Sabanci           ?
>
> 4)Resin                           ?           Sabanci           ?
>                   870
> 5)Intermediates                   ?           Sabanci           ?
>
> DuPont has a put option 5 years hence that can force Unifi to buy the
> American filament assets within a predetermined price range. There is no
> clear solution yet regarding Asian and US intermediates and PET resin.
> They are making money at present, but are not industry-leading assets and
the
> value continues to erode with time.
>
> IMPLICATION: This asset was impaired enough that it could not be disposed
> of in one swoop. It has ended up requiring multiple, painstakingly
crafted
> deals, each tiny for a company duPont's size.
>
> NYLON IS INTERTWINED WITH OTHER DIVISIONS: COMPLICATES SOLUTION.
> Note the role of nylon in duPont's apparel/textile and in engineered
> plastics businesses.
>
> End Markets        Nylon     Lycra      Polyester    Others     DD's
total
>                        1999 revenue $ mn                       for end
mkt
>
> Intermediates       750       100           NA         NA           NA
> Carpet              2000       0            ?          -           2000
> Industrial          625       100           NA         NA           NA
> Apparel, textile    1100      1400         920        880          4300
> Engg plastics       1050       -           300        850          2200
>
> Total               5525      1600         1220       1730          NA
>
> DUPONT'S NYLON ACTION TO-DATE HAS BEEN MINISCULE BUT IS A CLUE TO ITS
> THINKING.
>
> - ACTION TO-DATE: partially disposed of half of the $600 mn industrial
> nylon business. But this RECENT NYLON JV (DIVESTITURE) IS TINY. DuPont
has
> consolidated several JVs with Sabanci in a tiny part of nylon: heavy
> denier industrial nylon. This was barely over $300 mn in revenue. The
inclusion
> of Sabanci's assets raises the revenue but net-net this is a tiny
business.
> DuPont is actually divesting part ownership since Sabanci's contribution
> is smaller.
>
> - CLUES A)DuPont is reluctant to part with the bulk of the nylon
business.
> It doesn't seem ready to let this business go . . . yet. It may want to
> unload the carpet spinning or apparel fiber business . . . but not the
> associated intermediates production.
>
> NYLON'S WEAK LINKS ARE INDUSTRIAL (PART) AND APPAREL: THE LATTER HAS NO
> EASY FIX.
>
> 1)IN OUR VIEW, STAYING IN APPAREL nylon will be painful. DD HAS SAID IT
> WILL RELATIVELY DE-EMPHASIZE THE BUSINESS (in the long run such a
strategy
> is tough to implement without impairing the business . . . better to
> exit). Witness what happened to the polyester chain where disposition is
coming a
> decade late in the minds of some . . . at little value. Meanwhile,
> competitive advantage is eroding slowly. i)Maturity allows others to
close
> the gap. ii)Customers have gotten stronger, especially in carpet (45% of
> div revenue). Several years can go buy waiting for recovery. Unfavorable
> volume and raw material costs are hurting near term. Growth slowed down
> some time back. Its unlikely to resume. Industry mix continues to shift
> slowly towards Nylon 6 in which DD is a tiny regional player, vs Nylon
66.
> Further, growth is in Asia, not a DuPont strong hold.
>
> 2)BACKING OUT OF APPAREL (OR CARPET) WILL BE TRICKY. (It's not even clear
> DuPont is serous about this option). In any event, it will be difficult
to
> find buyers for just the fiber SPINNING operation, if they will need to
> buy raw materials from duPont. Further, nylon does provide critical mass
to
> the large apparel effort, picking up cost allocations that otherwise may
need
> to be shouldered by Lycra! Another problem: All nylon producers seem to
> want to exit the fiber spinning step . . . Solutia, Honeywell, DuPont.
> Makes one wonder about the potential disposition value!
>
> 3)SHUTTING DOWN IS NOT AN OPTION: There is incremental profit in the
> intermediate step and that would be lost. A)Apparel is nearly 25% of the
> nylon polymer outlet and without it the scale of operations is hurt.
> B)Apparel nylon is a very large part of duPont's apparel business, which,
> after automotive, is the largest end market.
>
> Likewise, engineered polymers make up a large part of the nylon family
> (though DD books revenue and profit for these under its
coatings/polymers)
> segment. Shrinking 'the rest of nylon' would hurt profitability of the
> engineered plastics area. The rest of nylon picks up overhead!
>
> DuPont seems to be forced to keep a large chunk of nylon because of its
> presence in Engineered plastics and Lycra.
>
> i)Lycra is largely an apparel business. The $1.65 bn Lycra has been a
high
> margin business. It's growth has slowed and competitive position is
> slipping. Yet DD is increasing its commitment to Lycra. The problem is
> that the Lycra franchise encourages a greater commitment to apparel nylon
than
> otherwise. Apparel nylon is 25% of the nylon div revenue.
>
> ii)The $2 bn engineered plastics business has nylon resin as its
flagship.
> This is NOT included in the nylon division. (Likewise, polyester
> engineered plastic is not included in the polyester div). Part of the
competitive
> advantage in the plastic comes from a low cost position in raw materials,
> in turn partly based on scale.
>
> iii)DD seems to like its nylon ingredients business. (In our view it's
ok,
> not a growth vehicle). The combination of the interest in Lycra, nylon
> intermediates and engineered plastics means DD is forced to keep nylon
> carpet (45% of div) and apparel (25%). These end markets don't make as
> much money and are more vulnerable. But they provide over 60% of the
outlet for
> the intermediates and their sheer volume helps provide greater scale and
> lower cost.
>
> SO THE NYLON PROBLEM IS NOT SOLVED.
> 1)ROC has been poor. How will that improve? Asset monetization has been
> small. 2)Growth has been low. How will that change? If anything, US
> consumer spending is slowing. 3)The competitive edge is not increasing .
.
> it could actually be slipping just a bit as a powerful new competitor,
GE,
> takes shape assuming GE's acquisition of Honeywell goes through.
>
> Important Disclosures (code definitions attached or available upon
> request)
> DD         : CF, CP
>
>
> ______________________________________________
> Goldman, Sachs & Co.
> One New York Plaza | New York, NY 10004
> Tel:  212-902-9193 | Fax:  212-346-3703
> email: sandra.vizzacchero@gs.com
>
> Sandra Vizzacchero                   Goldman
> Executive Assistant to Avi Nash      Sachs
> Chemicals Equity Research Team
> ______________________________________________

 - PIC15112.PCX
 - PIC01729.PCX


Mike, I'll be down in Houston Thursday and Friday the 11th and 12th.. Would
either day be a good one to meet with Robbie Walls?  I've got lunch open both
days.  DF


i have to hold off until vegas.  my liver is sore from this past weekend.  i
have to go home and nurse it at night.


I will attend. Don't ask me for any $.

	James Grace@ENRON
	02/25/2001 10:14 PM

		 To: Teresa G Bushman/HOU/ECT@ECT, Alan Aronowitz/HOU/ECT@ECT, Barbara N
Gray/HOU/ECT@ECT, Monica Jordan Richards/HOU/ECT@ECT, Cristina
Juvier/MAD/ECT@ECT, Elizabeth Labanowski/Enron@EnronXGate, Gerald
Nemec/HOU/ECT@ECT, Christi L Nicolay/HOU/ECT@ECT, Kristina Mordaunt/Enron
Communications@Enron Communications, Ann Ballard/enron@enronxgate, Shelley
Corman/Enron@EnronXGate, Davis Maxey/Enron@EnronXGate, Dorothy
McCoppin/Enron@EnronXGate, Michelle Parks/Corp/Enron@Enron, Louis
Soldano/Enron@EnronXGate, Kriste Sullivan/Enron@EnronXGate, Stephen
Wallace/Corp/Enron@ENRON, Bonnie White/ENRON@enronXgate, James
Derrick/Enron@EnronXGate, Stephanie Harris/Enron@EnronXGate, Lance
Schuler-Legal/HOU/ECT@ECT, Travis McCullough/HOU/ECT@ECT, Julia
Murray/HOU/ECT@ECT, Rex Rogers/Enron@EnronXGate, Richard B
Sanders/HOU/ECT@ECT, Mark E Haedicke/HOU/ECT@ECT, Sheila Tweed/HOU/ECT@ECT,
Eddy Daniels/NA/Enron@Enron
		 cc: James Grace/Corp/Enron@ENRON
		 Subject: Meeting with Dean Rapoport

Dear Fellow UH Law Center Alumni and Friends:

The new dean of the Law Center, Nancy Rapoport, is coming to Enron for a meet
and greet with Enron's UH Law Center Alumni and friends on Tuesday, March 6
at 8am in the 50M Dining Room.

Dean Rapoport has been visiting all of the big law firms and law departments
in an effort to introduce herself to the Houston legal community.  She has
promised to give us a briefing on her vision and plans for the Law Center.  I
have met the Dean already, and she is very impressive.  She should really
invigorate the place.

Please RSVP by responding to this email or by calling Jim Grace at x57702.

Also, please examine the address list.  If you see that any UH grad has been
missed, please forward this on that person.  Thanks.


Jeff, my team believes that there should be a premium to book in the range we
quoted to you; however, I appreciate your interest.  I would agree that we
have spent enough time on this and it is time to move on.

Regards
Delainey
---------------------- Forwarded by David W Delainey/HOU/ECT on 07/19/2000
09:27 PM ---------------------------

Jeffrey Sherrick@ENRON
07/19/2000 02:03 PM
To: David W Delainey/HOU/ECT@ECT
cc:
Subject: Re: C-Gas

Dave,  I met with my team today and based on the data and information
supplied by Steve, it is doubtful that the assets and on-going organization
would command a current market value equivalent to book.  I am still willing
to move the assets onto our balance sheet at book for the benefit of Enron,
although if this was a third party bid, I would be surprised if we could pay
this price.  Furthermore, due to your desire to maintain this discussion
among the Houston teams only, I am assuming the PDP reserves are solid, no
major enviornmental issues exit, legal problems are minimal and contracts are
standard.  Let me know what you want to do. I think we have all spent enough
time on this effort.

On a side issue, are you aware that this is a JEDI I property?  My
understanding is that Jedi I owns 100% of C-GAS and the Jedi I fund WILL be
liquidated before the end of the year.  At what price will your unit pay to
liquidate the fund?

jeff

David W Delainey@ECT
07/13/2000 08:12 PM
To: Jeffrey Sherrick/Corp/Enron@ENRON, Steve Pruett/Corp/Enron@Enron
cc:

Subject: C-Gas

Steve, please call Jeff and go through in detail how we got to our valuation
of approximately $39 M.  Please ensure that this is a reasonable facsimile of
value that ENA would accreate over the short to medium term assuming your
continued management.

Let me know where you end up.

Regards
Delainey


Steve -

Thanks for the comments.  Here are my responses:

1.  Introductory Paragraph - Section (a) is unacceptable as this places an
administrative burden on Enron that currently does not exist.  Section (b) is
acceptable.

2.  Paragraph 3 - Changes are acceptable.

3.  Paragraph 4 -  Changes in this section are acceptable, however, it is
Enron's strong preference that no indemnity language be included.

4.  Paragraph 5 - Deletion of this provision is unacceptable.

5.  Paragraph 6 - This deletion is fine.

6.  Paragraph 7 - This change is acceptable.

7.  Paragraph 9 - This change is acceptable.

If we still need to discuss the above items, please call me.  Otherwise,
please confirm that we can move forward based upon your changes and Enron's
responses.

Thanks.

Mark
Senior Counsel, EWS
Phone:     713-345-8897
Facsimile: 713-646-3490
E-Mail:      Mark.Greenberg@enron.com

	Steve Howarth <steve.howarth@bea.com>
	05/01/2001 11:52 AM

		 To: mark.greenberg@enron.com
		 cc:
		 Subject: [Fwd: BEA - ENRON:  NONDISCLOSURE AGREEMENT/LETTER]

    Mark,

    Sorry, but I misspelled your name when I first sent the following
message this morning.

    Regards,

    Steve

X-Mozilla-Status2: 00000000
Message-ID: <3AEEE8FB.2FBD727D@bea.com>
Date: Tue, 01 May 2001 10:48:59 -0600
From: Steve Howarth <steve.howarth@bea.com>
X-Mailer: Mozilla 4.61 [en] (Win98; I)
X-Accept-Language: en
MIME-Version: 1.0
To: mark.greenburg@enron.com
CC: Francis Minor <fminor@bea.com>, Mike Thack <mike.thack@bea.com>,  Chuck
Hixson <chuck.hixson@bea.com>
Subject: BEA - ENRON:  NONDISCLOSURE AGREEMENT/LETTER
Content-Type: multipart/mixed ;
boundary="------------2161B611D0F97A4065FF80B8"

    Mark,

    I have been asked to review the proposed NDA/letter submitted by
Enron to BEA.  Attached are redlined and clean versions of Rev2 of the
letter showing our proposed modifications.  If this Rev2 is acceptable,
I will be pleased to print, sign and return to you the clean version on
BEA's behalf.

    Please feel free to contact me at 720.528.6007 if you have any
questions.

    Regards,

    Steve

 - ENRON  NDA 01 05 01, rev2redline.doc
 - ENRON  NDA 01 05 01, rev2clean.doc
 - steve.howarth.vcf
 - steve.howarth.vcf


At Enron, performance is formally evaluated twice a year and your feedback
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You can access PEP at http://pep.corp.enron.com and select Performance Review
under Performance Review Services on the menu bar. Also, don,t forget to
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If you have any problems accessing the system or any questions regarding the
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  In Houston:
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Mark Frevert