Less than a year ago, the Houston-based energy behemoth had everything: money, power, glitz, smarts, new ideas, and a CEO who wanted to make it the most important company in the world. Now its stock is down, wall street is bearish, and the CEO is gone. What went wrong?
by Mimi Swartz </mag/issues/authors/mimiswartz.php>
THE ENRON SKYSCRAPER NEAR THE SOUTH END OF HOUSTON'S DOWNTOWN feels like the international headquarters of the best and the brightest. The lobby in no way resembles the hushed, understated entryways of the old-fashioned oil companies, like Shell and Texaco nearby. Enron, in contrast, throbs with modernity. The people hustling in and out of the elevators are black, white, brown; Asian, Middle Eastern, European, African, as well as American-born. They are young, mostly under 35, and dressed in the aggressively casual uniform of the tech industry-the guys wear khakis, polo shirts, and Banana Republic button-downs. Almost preposterously fit, they move through the building intently, like winners. Enron is nothing if not energetic: A Big Brother-size TV screen frantically reports on the stock market near a bank of elevators, while another hefty black television relaying the same news greets people entering from the garage. A sculpture of the corporate symbol, an E tipped at a jaunty angle, radiates colors as it spins frenetically on its axis; a Starbucks concession on the ground floor keeps everyone properly caffeinated. Multicolored, inspirational flags hang from the ceiling, congratulating Enron on its diversity and its values; one more giant banner between elevator banks declares Enron's simple if grandiose goal: "From the World's Leading Energy Company to . . . The World's Leading Company!"
For a while, that future seemed guaranteed, as Enron transformed itself from a stodgy, troubled pipeline company in 1985 to a trading colossus in 2000. It was a Wall Street darling, with a stock price that increased 1,700 percent in that sixteen-year period, with revenues that increased from $40 billion to $100 billion. "The very mention of the company in energy circles throughout the world creates reactions ranging from paralyzing fear to envy," notes a 2001 report from Global Change Associates, a firm that provides market intelligence to the energy business.
This Enron was largely the creation of Jeff Skilling, a visionary determined to transform American business. Hired sixteen years ago as a consultant by then-CEO Ken Lay, Skilling helped build a company that disdained the old formula of finding energy in the ground, hauling it in pipelines, and then selling it to refineries and other customers. Instead, it evolved into a company that could trade and market energy in all its forms, from natural gas to electricity, from wind to water. If you had a risky drilling venture, Enron would fund it for a piece of the action. If you wanted your megacorporation's energy needs analyzed and streamlined, Enron could do the job. If you were a Third World country with a pitiful infrastructure and burgeoning power needs, Enron was there to build and build. Basically, if an idea was new and potentially-and fantastically-lucrative, Enron wanted the first crack. And with each success, Enron became ever more certain of its destiny. The company would be the bridge between the old economy and the high-tech world, and in February of this year, Skilling reaped his reward when he succeeded Lay as chief executive officer. Enron, says Skilling, "was a great marriage of the risk-taking mentality of the oil patch with the risk-taking mentality of the financial markets."
The Enron story reflects the culture that drove American business at the end of the twentieth century. Like the high-tech companies it emulated, Enron was going to reinvent the American business model and, in turn, the American economy. Maybe it was natural that this Brave New World also produced a culture that was based on absolutes: not just the old versus the new, but the best versus the mediocre, the risk takers versus the complacent-those who could see the future versus those who could not. The key was investing in the right kind of intellectual capital. With the best and the brightest, a company couldn't possibly go wrong.
Or could it? Today Enron's stock trades at around $35, down from a high of $80 in January. The press cast Enron as the archvillain of California's energy crisis last spring, and Skilling caught a blueberry pie in the face for his relentless defense of the free market. A long-troubled power plant project in India threatened the company's global ambitions. Telecommunications, in which Enron was heavily invested, imploded. Wall Street analysts who once touted the company questioned its accounting practices. Some of the change in Enron's fortunes can be attributed to the economic downturn in uncertain times that has afflicted all of American business. But the culture that the company created and lived by cannot escape blame.
ENRON, JEFF SKILLING SAYS, HAD "a totally different way of thinking about business-we got it." At Enron, in fact, you either "got it" or you were gone-it was as simple as black and white. It is not coincidental, then, that the color scheme of Skilling's River Oaks mansion mirrors the corporation he once headed. Here, the living room's white walls shimmer against the mahogany floors. Black leather trims the edge of snowy carpets. Billowy sofas set off the jet-black baby grand. In the entry, white orchids cascade from a black vase on a black pedestal table that in turn pools onto cold, white marble. There is only one off-color note: After almost twenty years, Jeff Skilling is no longer associated with Enron, having resigned abruptly after just six months as CEO. Once, Skilling was hailed as the next Jack Welch (General Electric's masterful CEO), as one of Worth magazine's best CEO's in America (anointed in 2001), and even as a daredevil who hosted the kind of unchained adventure junkets in which, a friend told BusinessWeek, "someone could actually get killed." Today, he sounds more like Ebenezer Scrooge on Christmas morning. "I had no idea what I'd let go of," Skilling says of all the personal sacrifices he made while retooling Enron.
From a black chair in the white library, across from a huge black and white photograph of his daughter and two sons, Skilling clarifies. The demands of working 24-7 for Enron caused him to ignore his personal finances. Divorced, he lived in a 2,200-square-foot house without a microwave or a dishwasher. He almost missed his brother's wedding. "Learning a foreign language-I never learned a foreign language!" he exclaims. He never once took his youngest son to school. "I'm interested in the kids. You don't do kids in fifteen-minute scheduling." Travel: "You can't go to Africa for a week and get anything out of it!" Skilling includes the study of architecture and design on his list of missed opportunities, then he stops and sighs. "I'm not sure that fulfillment in life is compatible with a CEO's job," he says, finally. Then his eyes lock on mine, and his voice, which had softened, regains its pragmatic edge. "It would have been easy to stay," he says. "But that would not have been good for me."
He's a smallish, ruddy-faced man who keeps himself at fighting weight, handsome in the way of corporate titans, with piercing cheekbones and that assiduously stolid gaze. But the impatience Skilling once reserved for cautious underlings and dull-witted utility company executives is now targeted at reporters who have labeled his resignation "bizarre" and associates who are bitterly skeptical of his need for family time. His shrug stretches the limits of his shimmering blue button-down, and his matching blue eyes look put upon. "I'm surprised," he says, "that people have so much trouble understanding this."
PEOPLE WHO PASSED THROUGH DOWNTOWN HOUSTON in the late eighties or early nineties couldn't help but notice a funny and, for its time, novel scene unfolding throughout the workday at the base of the Enron Building. From nine to five and before and after, you could see people slipping out of the pristine silver skyscraper to smoke. They perched on the chrome banisters or lurked near the glass doors at the entry, puffing like mad. They always looked hurried and furtive, even ashamed. Whatever people knew about Enron in those days (and most people didn't know much), it was often associated with that scene: Enron boasted one of the first nonsmoking corporate headquarters in Houston, and there couldn't have been clearer evidence of its break with the energy world of the past. What macho engineer would have put up with such humiliation?
But this company was a child of another time, that period in the mid-eighties when chaos enveloped the gas business. Federal deregulation of natural gas turned a steady, secure industry, in which gas pipeline companies frequently enjoyed a monopoly in portions of the areas that they served, into a volatile free-for-all. The situation was compounded five years later by federal deregulation of the pipeline business. So it happened that a gentlemanly gas pipeline company, Houston Natural Gas (HNG) found itself under attack from Coastal Corporation, Oscar Wyatt's less than gentlemanly firm. HNG was then run by Lay, a sturdy, taciturn former economics professor and Transco chief operating officer who had a passion for military strategy. (His doctoral thesis at the University of Houston was on supply and demand in the Vietnam War.) Lay, who was from Missouri and never succumbed-at least outwardly-to Texas brashness, had done well enough: Thanks to canny expansions, HNG's pipelines stretched from Florida to California and throughout the state of Texas.
HNG fended off Coastal, but to protect the company from other takeover attempts, Lay nimbly engineered the sale of HNG in 1985 to a friendly Nebraska pipeline concern called InterNorth, one of the largest pipeline companies in the country at the time. Then, a funny thing happened: HNG started acting in a way that would characterize the company for years to come-a lot like Coastal. What the Nebraskans blithely labeled "the purchase" was being called "the merger" back in Houston, and before long, following some particularly brutal politicking between Omaha and Houston, the company's center of gravity started shifting toward Texas, and shortly after that, Ken Lay was running a new company called Enron. "Over time it became clear that Lay had a better vision of the future," says one person associated with Enron at that time. "He never fought change. He embraced change."
Lay had won, but what exactly did that mean? Enron was saddled with massive debt from the takeover attempt, and thanks to deregulation, no longer had exclusive use of its pipelines. Without new ideas-for that matter, a whole new business plan-the company could be finished before it really even got started.
LIKE MANY PEOPLE WHO TEAMED UP WITH ENRON IN THE EIGHTIES, Jeff Skilling had spent a lot of time in the Midwest, and he was self-made-at fourteen he had been the chief production director at a start-up TV station in Aurora, Illinois. (His mother would drop him off there every day after school.) "I liked being successful when I was working, and I was smart," he told BusinessWeek earlier this year. But unlike many of his Enron colleagues, Skilling wasn't deliberate and soft-spoken and happy to go home at five o'clock; he was anxious and excitable, and nothing, but nothing excited him more than what he would come to call "intellectual capital." He loved being smart, and he loved being surrounded by smart people. He graduated from Southern Methodist University, went into banking-assets and liability management-and took on Harvard Business School, where he graduated in the top 5 percent of his class. Then Skilling took the next step on what was then the new, souped-up path to American success: He joined Manhattan's McKinsey and Company as a business consultant, and that is where Ken Lay found him in 1985.
It is often said of Lay that his instincts for hiring the best are flawless, and his choice of Skilling probably saved the company. Skilling was above all an expert at markets and how they worked. While everyone else was worrying about the gluts and the shortages that defined the gas industry, he alone saw the parallels between gas and other businesses. And so in a world where credit was nearly impossible to come by, Skilling came up with what he called the Gas Bank, which contractually guaranteed both the supply and the price of gas to a network of suppliers and consumers. Enron would not be a broker but a banker. It would buy and sell the gas itself and assume the risk involved. And Enron would make money on transactions, much like an investment bank would.
Skilling worked up some numbers and found them "absolutely compelling." Then the McKinsey consultant took the idea to a meeting of about 25 Enron executives. He had a one-page presentation. "Almost to a person," Skilling says, "they thought it was stupid." Almost. After Skilling left the meeting dejected, he walked Ken Lay to an elevator and apologized. Lay listened and then said, "Let's go."
The Gas Bank was not an overnight success. For months Skilling woke up in a cold sweat, sure he had ruined not only his career but the careers of dozens of colleagues who had assisted him. In fact, he had come upon one of those divides that seem to define his life: "I believed this whole world would be different, a huge breakthrough" is the way Skilling puts it today, and even if he is typically immodest, he was right. Fairly soon after launching, the company sold $800 million worth of gas in a week. True to Skilling's character, success turned out to be a matter of old versus new: He says the joke around Enron was that if a company's CEO was under fifty, "We were in." And he was in too: In 1990 Skilling finally left McKinsey and joined Enron as the head of Enron Finance Corporation, a new division created just for him. In 1991 that company closed a deal that earned $11 million in profit. After that, says Skilling, "we never looked back."
Skilling and Lay also realized that the Gas Bank couldn't work unless it had a trading component. Myriad trades were needed to build the market that would make the project go. But by buying and selling enormous quantities of gas, Enron not only constructed a market but almost instantly came to dominate it. The company had the best contacts, the best intelligence, and the best access to supplies. That, in turn, attracted more customers who wanted to be part of the play. With so many customers in its pocket, Enron could better predict the direction of the market and could use that knowledge to make trades for its own benefit-Enron could in effect bet on which way the price of gas would go, as one might do with pork bellies or soybeans, but with startling accuracy, thereby generating profits higher than anyone could have ever imagined.
THIS CHANGE COULD NEVER HAVE OCCURRED without another change Skilling had made: He created, within Enron, a new culture to match its new trading business. The idea was to build a "knowledge-based business," which demanded a skill set not exactly prized by Enron's employees from the old HNG days. Most were deliberate, cautious, responsible, somewhat defensive people, most of them men, of course-the kind of people you'd expect to find working in an industry regulated by the federal government. But now the company needed bolder people for its bold new era: that included anyone who wanted to make money-lots of money-for themselves and for the company. "Enron was going to create a niche for itself or die," one former executive explains. "The people who had narrow views eventually were forced out, because if they had narrow views about other things, they had narrow views about the market."
Skilling wanted smart people but not just any smart people. He wanted the smartest people from schools like Harvard, Stanford, and maybe, Rice. And because his firm was now acting more like a bank than a pipeline company, he wanted to draw from the pool of recruits that would be attracted to the biggest and best investment banks, like Merrill Lynch or Credit Suisse First Boston. In addition to being smart, Enron people were also supposed to be "aggressive." You were right for Enron if you didn't want to wait until you were thirty to close your own deals or move up in an organization.
You could see what he was looking for on "Super Saturdays" at the Houston headquarters: eight fifty-minute interviews with ten minute breaks in between-the company might herd as many as four hundred people through in just one day. They were scored from 1 to 5 on their smarts, their problem-solving ability, their passion for hard work, and what at Enron was called "a sense of urgency." People who scored less than 2.5 were scratched. The shrewdest candidates knew how to work Enron before they were even hired: These were the types that automatically turned down the company's first offer, knowing Enron would come back with more. The starting salary was around $80,000. Maybe it wasn't a fortune-yet-but the signing bonus, about $20,000, was more than enough for a lease on the obligatory Porsche Boxster or one of the lofts being renovated close to downtown. (Enron people didn't live in far-flung suburbs. Suburbs were uncool and too far from the office.)
For the lucky winners, Enron offered the corporate equivalent of a gifted-and-talented program. New associates learned the latest techniques for structuring energy deals, and there were rotations at Enron offices around the globe. The hours were long, but every possible need was taken care of. A company concierge handled all the things important people couldn't be bothered with: picking up dry cleaning or prescriptions, shining shoes, cleaning the house, planning a vacation. Of course, a lot of people who worked for Enron never got to take vacations-they were too busy making money-but they could use the company gym and the company's personal trainers. If they were overweight or wanted to quit smoking, they could join Enron's Wellness Program. Massages were offered six days a week, from seven in the morning until ten at night. "They were so cutting edge," rhapsodizes someone involved with the company health care program at the time. "They really thought about the psychology and what it took to keep these people going."
Skilling handed out titles analogous to those at Wall Street firms-analysts, associates, directors, and managing directors-but everyone knew that those titles didn't really matter. Money did. Instead of competitive salaries and decent bonuses, Enron offered competitive salaries and merit-based bonuses-with no cap. "If you really worked hard and delivered results, you could make a lot of money," says Ken Rice, who stayed with Enron for 21 years until resigning recently as the head of the company's faltering broadband division. Or, as the saying goes, you got to eat what you killed. Gas traders with two or three years of experience could wind up with a $1 million bonus. And the more you produced, the closer you got to Jeff: Real hot dogs joined him glacier hiking in Patagonia, Land Cruiser racing in Australia, or off-road motorcycling in a re-creation of the Baja 1,000 race, ending at a spectacular Mexican villa. "Every time he'd speak, I'd believe everything he'd say," one loyalist says.
And why not? By 1995 Enron had become North America's largest natural-gas merchant, controlling 20 percent of the market. But at a company where the buzzword was "aggressive," that was no place to stop: Skilling and Lay believed the Gas Bank model could easily be applied to the electricity business. Firmly committed to the notion that a deregulated market meant better service at lower prices for consumers (and untold profits for Enron), they began barnstorming the country, pressing their case with entrenched power company presidents (who, with their multimillion-dollar salaries and monopoly service areas, had little incentive to change) and energy regulators (who were somewhat more receptive, thanks in part to Enron's generous lobbying efforts).
But the biggest winner of all was probably Jeff Skilling. In 1997 Ken Lay made him the president and chief operating officer of the company. By then, the division known as Enron Capital and Trade Resources was the nations largest wholesale buyer and seller of natural gas and electricity. The division had grown from two hundred to two thousand employees, and revenues from $2 billion to $7 billion. "Mr. Skilling's experience so far with the turmoil in the industry has convinced him that he is on the right track," the New York Times noted. Everyone would certainly have thought so: Enron and Skilling had totally transformed one industry and were well on their way to transforming another.
"FIRING UP AN IDEA MACHINE; Enron Is Encouraging the Entrepreneurs Within," sang the New York Times in 1999. "In the staid world of regulated utilities and energy companies, Enron Corp is that gate-crashing Elvis," crowed Fortune in 2000. Wall Street was demanding tech-size growth on a tech timetable, and Enron, in 2000, obliged with second quarter earnings of $289 million, up 30 percent from the previous year. That year the company seemed to discover a market a minute: Under Skilling, Enron was trading coal, paper, steel, and even weather. No one blinked when a London wine bar became an Enron client. People drank more in warm weather than cold, so why not buy a hedge against the usual winter downturn?
But most exciting to the financial world was Enron's entry into high-tech communications. Because of the company's marketing dominance, EnronOnline became another overnight success, handling $335 billion in commodity trades online in 2000. Enron, as usual, made its money on the spread between the bid price and the asking price. Then there was the broadband business: To Enron, trading excess capacity in large, high-speed fiber-optic networks (empty lanes on the fabled information highway) wasn't that different from trading the capacity of natural gas pipelines. So Enron created a market for what the industry calls bandwidth. Soon after, it also announced a twenty-year deal with Blockbuster to deliver movies on demand electronically to people in their homes. Enron looked like a company that couldn't lose. "Its strategy of building businesses, shedding hard assets, and trading various commodities can help it do well even in an uncertain market," BusinessWeek insisted.
There was, however, another reason Enron did so well in such a short time: the company's hard-nosed approach toward its customers. The old notion of customer service was based on the long haul-you had to nurse and coddle customers to keep them. But Enron had new markets and new ideas-customers had to come to it. Over time, the company stopping referring to its business clients as customers and began calling them "counterparties."
Skilling wanted the biggest profits on the shortest timetable: Gains were maximized by creating, owning, and then abandoning a market before it became overtaxed and overregulated. So if you wanted to launch a high-risk venture quickly-such as Zilkha Energy's new high-tech approach to drilling for oil-you got your financing from Enron because a bank would take forever to underwrite the project, if it ever would. But because Enron invented its markets and subsequently dominated them, Enron could set the terms of its deals, from the timeline to the method of accounting to whether the deal happened at all.
While many businesses used what was known in the industry as "mark-to-market accounting," for instance, Enron used it on an unprecedented scale. The company priced their deals at current market value-but it was always Enron's idea of the market value; companies that balked at their pricing didn't get deals. And while old-fashioned companies spread their profits out like annuities over a period of years, Enron took most of its profit up-front. However many millions would be made on a deal that covered several years, they went on the books in the current year. If a few analysts thought there might be something fishy about what they called "subjective accounting," investors didn't particularly care as long as the profits rolled in. As the market fluctuated and the landscape changed, the company might abandon a project that had been in the works for months because its profit margins weren't going to be high enough. "Enron is known for leaving people at the altar," says one former employee. Winning the highest possible profits for the company could even extend to Enron's attitude toward charity. When a fundraiser for the Houston READ Commission, a literacy group, called on Enron for a contribution, it was suggested that he start raising money for Enron's competing literacy charity: "Even the person who was supposed to give money away for Enron was supposed to make money for Enron," he says.
As Enron became more and more successful, the culture Skilling had created took on a dark side: The competition turned inward. As one member of the Enron family put it, "It became a company full of mercenaries." The change started at the bottom. As Enron's domination of the energy market grew, most of the recruiting frills fell away. New associates were treated much like the commodities the company traded. Global Change's Enron spies reported overhearing orders like "I need a smart person-go buy me one" or "Buy me an intelligent slave, quick." Enron had never been the kind of place where people sang to you on your birthday, but now the workaholism bordered on self-parody: A Random Acts of Kindness program lasted only a few months. It was too disruptive. People couldn't get their work done.
And, of course, Enron had a program for institutionalizing creative tension. The Performance Review Committee, which had initially been installed by Skilling in the Capital group, became known as the harshest forced ranking system in the country. Employees were rated on a scale of one to five, and those with fives were usually gone within six months. (The PRC's nickname quickly became "rank and yank.") It was a point of pride that Skilling's division replaced 15 percent of its workforce every year. As one Skilling associate put it, "Jeff viewed this like turning over the inventory in a grocery store." Skilling's approach to business-get in and get out-had become Enron's attitude toward its workers. In time, it would become many workers' attitude toward the company. Teamwork, never that valuable in a trading culture, went the way of the eyeshade and the abacus. If protocol required an Enron higher-up to come from Europe to help with a project in the Third World, he might help-or he might not, depending on whether another, potentially more lucrative project was pending elsewhere.
Everyone felt the pressure to perform on a massive scale at massive speed: "They were so goal oriented toward immediate gratification that they lost sight of the future," says one former employee. Anyone who couldn't close deals within a quarter was punished with bad PRC scores, as were the higher-ups who had backed them. Past errors and old grudges were dredged up so often as new ammunition in PRC meetings that the phrase "No old tapes" became an Enron clich?. "People went from being geniuses to idiots overnight," says one former Enron executive.
In such a hothouse, paranoia flowered. New contracts contained highly restrictive confidentiality agreements about anything pertaining to the company. E-mail was monitored. A former executive routinely carried two laptops, one for the company and one for himself. People may have been rich at Enron, but they weren't necessarily happy. One recruiter described the culture this way: "They roll you over and slit your throat and watch your eyes while you bleed to death."
BEFORE JEFF SKILLING COULD TRANSFORM ENRON from the world's leading energy company into the world's leading company, he had to make one more change: Just as he had done ten years before, Skilling had to purge the company of its remaining old order. Where Enron once prized cautious executives who dealt with tangible assets like pipelines, it now valued bold executives who dealt with intangible assets. Pipelines, power plants-they may have been Enron's pride, but Skilling wanted them gone. Expensive, long-term building projects had no place when Wall Street was devoted to quick profits and enormous returns on investment capital, and Skilling knew it. "It wasn't the time for long-term approaches," an Enron executive says of Wall Street's mood. "It was the technology era."
To rid Enron of the last vestiges of its past, Skilling had to take on Rebecca Mark, long considered his rival for the CEO's job. Mark was for many years the poster child for the Enron way: Young, attractive, aggressive-her nickname was Mark the Shark-she came from sturdy Midwestern stock but had the requisite Harvard MBA. Mark was largely responsible for the success of Enron International, the asset-heavy side of the company where she developed $20 billion worth of gas and power plants, which accounted for 40 percent of Enron's profits in 1998. For this she reaped breathtaking compensation-one Enron executive estimated $10 million-and adoring press clips, including two appearances on Fortune's list of the fifty most powerful women in corporate America.
But then Mark ran into trouble with a gas-fired power plant in Dabhol, India, one of the largest ever constructed. She had played the game the Enron way: Taking Enron into a new market, she had finagled low import taxes (20 percent instead of the usual 53) and hung in through 24 lawsuits and three changes in government. But the time and expense needed to make India and other Enron plants around the globe successful did not mesh with Enron's goals, and Skilling's impatience with Mark grew.
Forcing Mark out, however, was no easy matter. Key executives left, divisions were dismantled, but she remained. The truth was Enron didn't mind firing lower-level employees, but it hated to fire the kind of aggressive, relentless people it tended to promote. The company preferred humiliation-keeping a director in his cubicle, say, but failing to include him in the glamour deals, or kicking someone upstairs with a fancy title. (One particularly difficult executive won a few years at graduate school, gratis.) A company as smart as Enron could probably deduce too that dispatching one of the most visible businesswomen in the country would provoke a public-relations disaster. So Lay and Skilling did something classically Enronian: They gave Mark her own company. Despite Skilling's contempt for asset-heavy businesses, Enron spent more than $2 billion to buy a run-of-the-mill British water utility that could serve as Enron's entry into the emerging world of water privatization. Mark was put in charge of making Enron, yes, the world's greatest water company. Azurix, as the new business was called, looked like another sure thing: Its IPO in 1999 raised $695 million.
But Mark had to succeed on Enron's increasingly abbreviated timetable in a business fraught with political and emotional complexities. Water is not like gas or electricity-owners and governments are a lot less willing to give it up, even for lots of money. The company stumbled, layoffs commenced, and confidence evaporated. By August 2000 the stock price, which had started out at $19, had fallen to $5. Mark's resignation followed, and Azurix, much diminished, was folded into Enron. "I think it's best for Rebecca to start afresh," Lay, who had been a mentor to Mark, told the Wall Street Journal. Or as one critic put it, "They were more interested in destroying the old culture than running a business."
As 2000 drew to a close, Skilling was in total command. In December Ken Lay announced the inevitable: "The best time for the succession to occur is when the company is doing well," he told the press. "Enron is doing extremely well now." In February 2001 Jeff Skilling took over the CEO's job.
ALMOST IMMEDIATELY THE TROUBLE STARTED. Enron's domination of the electric-power market made it an instant target in the California deregulation debacle. Both PBS's Frontline and the New York Times took on Enron, portraying the company as a heartless colossus that used its influence in Washington (Lay and Enron's political action committee are the top contributors to George W. Bush) to force old people on fixed incomes to choose between buying food or electricity. Skilling and Lay appeared on camera singing belligerent anthems to the free market, while another memorable scene juxtaposed one of the company's jackallike traders against a hapless state employee in California, as both tried to buy power online. The Times reported that Lay had tried to persuade a new federal commissioner to change his views on energy deregulation. The bad press was, to say the least, ironic: Just as the media was pounding Enron for its omnipotence, Wall Street was discovering its weaknesses. By late March the stock price had slid to $50 a share from $80 in January.
Within Enron, the asset-based divisions took the rap for the decline. (The India plant continued to be enormously costly, at least in part because of constant turnover within Enron's management team.) But the California situation was more visible and therefore more damaging, despite Enron's claim that the state had never built enough power plants to service its population and never properly managed those it had. "For three months Gray Davis did a very good job of blaming us," says Mark Palmer, a vice president for corporate communications. "We were a Texas company. There was a Texan in the White House. California was a state that didn't put him in office, and his biggest contributor was a Texas energy company. Performance is going to take care of our stock price. The truth will take care of Gray Davis." (California utilities still owe Enron $500 million, another reason stockholders might be panicky.) But more problematic than the crisis itself was Skilling's all too apparent lack of contrition. Facing down his critics, he cracked a joke comparing California with the Titanic. ("At least the Titanic went down with its lights on.")
But the biggest problem was Enron's telecommunications division, which had been responsible for at least one third of its heady stock price. Investors believed that Enron could revolutionize high-speed communications, just as it had revolutionized gas and power. Enron estimated the global market for buying and selling space over fiber-optic cable would grow from $155 billion in 2001 to $383 billion by 2004-but then the tech bubble burst. So too did the much-hyped movies-on-demand deal with Blockbuster. For the first time in its confoundingly successful life, Enron had nothing new to take to market. Like the popular high school girl who suddenly packs on a few pounds, Enron suddenly looked less alluring to Wall Street.
Skilling launched a campaign to keep Enron's most important cheerleaders, the stock analysts, in the tent, but he wasn't cut out to be a supplicant. During the reporting of first quarter profits, he called an analyst who challenged Enron's financial reporting an "asshole." When the company reported hefty second quarter profits, many analysts questioned whether those profits had come from the generation of new business or from the sale of old assets. Ignoring the growing chorus critical of Enron's accounting, Skilling promised, as he always had, that innovations were just around the corner. "There wasn't any positive news," Carol Coale, of Prudential Financial, says now. "Basically, he talked me out of a downgrade."
The business press, so generous in the past, turned surly. Fortune had asked in March whether Enron was overpriced. ("Start with a pretty straightforward question: How exactly does Enron make its money?") The routine cashing in of stock options that were about to expire by key executives was portrayed in the media as a fire sale. (Skilling had sold $33 million worth, Ken Lay and Ken Rice close to four times that amount.) Then the Wall Street Journal reported on a fund run by the CFO that had been a source of strife within the company. (It was essentially risk management against Enron's possible failures.) Every negative story seemed to produce a concurrent drop in the stock price: By late August it had fallen below $40. Enron, so institutionally unforgiving, finally got a taste of its own medicine. "When Wall Street is in love with a stock, they're forgiving of something like accounting," says Carol Coale. "When a company falls out of favor, all these issues carry more weight."
This fact was not lost on people inside the company, who suddenly started experiencing an attack of conscience. Those who had looked the other way as the most powerful Enron executives dumped their wives and married their secretaries or carried on flagrant interoffice affairs now saw the error of their ways. "It just created an attitude," one executive still at Enron says. "If senior people are doing that, why are we held to a higher standard? There was a real culture of 'We're above everyone else.'"
Loyalty had never been prized at Enron, so there was no reason to expect it now. An old-fashioned, slow-moving company like Exxon could demand hardship duty in Baku with the promise of greater rewards down the road. "But," as one Houston oilman explains, "if you have to negotiate a hardship duty with someone who doesn't have loyalty and has money, then you have a corporation that's better suited for good times than bad."
As it turned out, that description applied to Jeff Skilling too. As the stock price stubbornly refused to ascend, he made no secret of his unhappiness and frustration. Then, after a trip to visit the families of three employees killed at a plant in England, he had an epiphany: Life was short; for him, Enron was over. Ever stoic, Ken Lay returned to the CEO's office, named a new president, arranged a trip to New York to calm analysts and investors, and promised a kinder, gentler Enron in the future. Trading anything and everything was out. The company, Lay says, will still innovate but "innovate much closer to our core." As for the culture: "Things like the Performance Review Committee, I think we could have applied better. By trying to categorize people into so many different categories, you ended up creating a morale problem."
That Skilling's supposedly brilliant colleagues were as shocked at the news of his departure as the rest of the business community may be testament to their lack of emotional intelligence. Despite Skilling's lengthy tenure with Enron, he'd always been contemptuous of the long haul; he'd always believed in cutting losses and moving on. But now that he was abandoning them when the company was in trouble, it was different. "Even Jeff's biggest detractors wouldn't have wanted him to walk out the door," one loyalist admits.
But on the day we meet, Skilling is looking forward, not back. "Look," he says with finality, "ninety percent of my net worth is in Enron. Were my interests aligned with the shareholders? Absolutely."
Free of falling stock prices and shareholder pressures, he is nestling himself back into the world of ideas. His eyes flash as he talks about new technologies. "The first wave never gets it right," he says. "The stand-alone dot-coms didn't work, but the technological applications will create a second wave that will change the world." Houston, he promises, will become the world's center of commodity trading, and he intends to be a part of it. In fact, he is already shopping for office space.
"This is the second wave, and Enron's got it," he says, almost breathless. "There are thousands of people running around the streets of Houston that get it."


(See attached file: HPLN0106.xls)

 - HPLN0106.xls


----- Forwarded by Jeff Dasovich/NA/Enron on 07/18/2001 07:00 PM -----

	JBennett <JBennett@GMSSR.com>
	07/18/2001 05:32 PM

		 To: "Harry Kingerski (E-mail)" <Harry.Kingerski@enron.com>, "Jeff Dasovich
(E-mail)" <jdasovic@enron.com>, "Jim Steffes (E-mail)"
<James_D_Steffes@enron.com>, "Sue Mara (E-mail)" <smara@enron.com>
		 cc:
		 Subject: FW: Attachment A to ACR re: DWR/CPUC Proposed Rate Agreement

-----Original Message-----
From: Wong, John S. [mailto:jsw@cpuc.ca.gov]
Sent: Wednesday, July 18, 2001 10:17 AM
Subject: Attachment A to ACR re: DWR/CPUC Proposed Rate Agreement

This is Attachment A to the July 18, 2001 ACR inviting comment on the
proposed rate agreement between CDWR and the CPUC.

<<963924.pdf>>

 - 963924.pdf


FYI
---------------------- Forwarded by Mary Hain/HOU/ECT on 01/17/2001 11:17 AM
---------------------------
To: Alan Comnes/PDX/ECT@ECT, Mary Hain/HOU/ECT@ECT
cc:
Subject: Requested information

---------------------- Forwarded by Chris H Foster/HOU/ECT on 01/17/2001
10:34 AM ---------------------------

	Enron Capital & Trade Resources Corp.

	From:  Eric.Lavik@sce.com                           01/17/2001 10:34 AM

To: chris.h.foster@enron.com
cc:
Subject: Requested information

(See attached file: StraightTalk.pdf)(See attached file: history.doc)(See
attached file: straight.doc)(See attached file: 8K.pdf)

 - StraightTalk.pdf
 - history.doc
 - straight.doc
 - 8K.pdf


You have received this email because you are listed as a security approver.
Please click
http://itcapps.corp.enron.com/srrs/auth/emailLink.asp?ID=000000000010210&Page=
Approval to review and act upon this request.

Request ID          : 000000000010210
Request Create Date : 12/13/00 11:33:00 AM
Requested For       : sirinart.lott@enron.com
Resource Name       : EOL US Backoffice  Product Data Manager
Resource Type       : Applications


?
TradersNews Energy's?three new hourly  indexes,?ERCOT, TVA and ComEd hubs,
are attached. We will distribute these indexes to you at no charge via e-mail
during  the beta testing period, which?concludes March 19.
?
On that date,?we will formally launch the  indexes on our Web site, at:?
www.tradersnewsenergy.com.
?
There, you will find market coverage, industry news  and the indexes we
launched last fall: hourly, daily and term for Cinergy, AEP  and Entergy/SPP.

If you are interested in receiving the new ERCOT  hourly index during?its
testing,?e-mail Suzanna Strangmeier, at suzanna.strangmeier@ipgdirect.com,
or call her at 713/647-7325. For information about subscribing to
TradersNews  Energy, contact Jeff Maack, at 713-647-8802.

Your participation is vital to produce  the most comprehensive and accurate
indexes. You may e-mail your prices and  volumes (or a bid/ask spread for
each peak hour) to tradersnewsindexes@ipgdirect.com,  or fax them to
713-647-7552.

?
As always, feel free to e-mail or call me with any  comments or questions.
?

Bobette  Riner???????????????????????????????
Senior Power Markets Analyst??????
TradersNews Energy
713/647-8690
FAX: 713/647-7552
cell:  832/428-7008
bobette.riner@ipgdirect.com
http://www.tradersnewspower.com
?
?
 - comedhrly022601.doc
 - enthrly022601.doc
 - ercothrly022601.doc


work with ed on this and please do this asap.  Check the rest of your books as well please.  Rember this will be any deal with Transcanada and any other canadian counterparty.  Or search in TAGG for your book with ECC as the Enron counterparty - should take 5 minutes.  Thanks.
PL

-----Original Message-----
From: Vallejo, Stacey
Sent: Monday, October 01, 2001 12:50 PM
To: Love, Phillip M.
Subject: Deals to be flipped from GD-Central book

Hey Phillip,

Could you please make sure these two deals get flipped to the FT-US/CAND-ERMS book as soon as possible.

Y20134.1
Y20477.1

I need to invoice for them this afternoon.  Please let me know if you have any questions on these, and when
they've been flipped.

Thanks
Stacey


Dear Sara,

I have been advised that a response regarding the Cargill, Inc.
guarantee of Cargill-Alliant, LLC was returned with comments to
Ed Sachs early last week.  Are you aware if the language was found
acceptable?

Also, regarding the modification we requested to the Set-Off
language of the most recent draft, can you please advise if we've
come to agreement on these?  (What was the reason behind adding
the second paragraph of the Set-Off provisions?)

Regards,
Mara Alexander
Sr. Documentation Analyst
Cargill, Incorporated
Tel: 952.984.3417
Fax: 952.984.3872
e-mail: Mara_Alexander@Cargill.com

-----Original Message-----
From: Alexander, Mara /xtwn
Sent: Tuesday, February 27, 2001 7:38 AM
To: 'Sara.Shackleton@enron.com'
Subject: RE: ISDA Master Agreement

Sara,

My Credit Manager advises that he needs to consult with one of our
Corporate Treasury's attorneys on the Cargill, Inc. guarantee, but
that attorney will be out all this week.  Hopefully I can get a
response to you on the guarantee early next week.

Meanwhile, attached please find one small change to Set-Off language
from the latest draft.  Can you please explain the reason behind
adding the second paragraph -- is this bankruptcy related?

Regards,
Mara Alexander
Sr. Documentation Analyst
Cargill, Incorporated
Tel: 952.984.3417
Fax: 952.984.3872
e-mail: Mara_Alexander@Cargill.com

-----Original Message-----
From: Alexander, Mara /xtwn
Sent: Monday, February 26, 2001 5:09 PM
To: 'Sara.Shackleton@enron.com'
Subject: RE: ISDA Master Agreement

Sara,

I'm sorry, but I'm still awaiting word on the Cargill, Inc. guarantee
of
Cargill-Alliant, which was in the hands of our Credit Manager for a
final
once-over.  (Unless they've by-passed me?  Have you seen a revised copy
of
this guarantee?)

I also need that same Credit Mgr. to give his final nod of approval to
the
Set-Off language you'd put into the last draft.  Our Legal only had on
a
couple of minor comments on it.

Thanks for the follow-up!  I intend to press hard this week for a final
response so we can at last get this wrapped up.

Mara Alexander
Sr. Documentation Analyst
Cargill, Incorporated
Tel: 952.984.3417
Fax: 952.984.3872
e-mail: Mara_Alexander@Cargill.com

-----Original Message-----
From: Sara.Shackleton@enron.com [mailto:Sara.Shackleton@enron.com]
Sent: Monday, February 26, 2001 4:45 PM
To: alexander, mara /xtwn
Subject: ISDA Master Agreement

Mara:  Are we done?  I don't think we have heard from you about the
master?
Can we go ahead and have the guaranty executed?  I don't think we have
any
outstanding issues.

Sara Shackleton
Enron North America Corp.
1400 Smith Street, EB 3801a
Houston, Texas  77002
713-853-5620 (phone)
713-646-3490 (fax)
sara.shackleton@enron.com


here is the most current file.
PL


Here are the facts to be converted into Talking Points / Facts Sheet for CA
TEAM.

Thanks,

Jim

----- Forwarded by James D Steffes/NA/Enron on 02/27/2001 02:14 PM -----

	Mary Schoen
	02/22/2001 02:55 PM

		 To: Neil Bresnan/HOU/EES@EES, Alan Comnes/PDX/ECT@ECT, Jubran
Whalan/HOU/EES@EES, Kristin Walsh/HOU/ECT@ECT, Clayton Seigle/HOU/ECT@ECT,
Jeffrey Keeler/Corp/Enron@ENRON, James D Steffes/NA/Enron@Enron, Harry
Kingerski/NA/Enron@Enron, Richard Shapiro/NA/Enron@Enron, Janel
Guerrero/Corp/Enron@Enron, Jeff Dasovich/NA/Enron@Enron, Sandra
McCubbin/NA/Enron@Enron, Susan J Mara/NA/Enron@ENRON, Paul Kaufman/PDX/ECT@ECT
		 cc:
		 Subject: CA Supply Realities

Attached is a memo comparing the CEC's forecasted supply and a more realistic
look at what additional resources might be available this summer.

The bottom line is that:

1.  The CEC significantly underestimates the outages that may occur this
summer.  They estimate in their 5,000 MW supply deficit for the summer that
expected outages will be around 3,000MW.  However, November and December saw
significantly higher outage levels.  (7,265 MWs) The FERC has investigated
these outages and found no improprieties- just that the plants are overtaxed
from running at higher than normal capacities.

2.  There are a lot of uncertainties surrounding the 1,244 MWs of projected
supply from rerating/restarting existing thermal and renewable projects.  It
is very unclear how much of this will be able to come on line by this summer,
if at all.  As evidenced by the e-mail I sent out this morning, local
communities may be very opposed to restarting shut down units.  In addition,
these units are likely to be uneconomical.

3.  In the existing resource pool, there are roughly 1,430 MWs of peaking or
other generation units that are running up against their operating hour
limitations from air quality regulations.  The Governor has ordered the local
air quality districts to address these restrictions,  We are beginning to
seem some movement; however, the US EPA has yet to weigh in on these relaxed
standards.

4.  The distributed generation/back-up generation capacity to make up some of
the shortfall is still an unknown.  While there has been some relaxing of the
limitations on run hours for back-up generation at "essential public
services" the increase in DG is expected from "clean" sources, not diesel
emergency generators.

5.  The CEC is doing everything it can to get 50+ MW peaking units on-line by
this summer.  They are promising a 21-day permit application approval process
and are offering to pay half of the cost of offsets, for "clean" sources of
generation in critical areas.

Please let me know if you have any questions or need additional information.

CEC's Summer Forecasted Peak Demand - Resource Balance:

List of Peakers running into their operating hour limitations:

Also available in hard copy format only:
(please e-mail me your fax number if you'd like a copy)

Table 1:  Fully Executed CA ISO Summer Reliability Agreements (the ISO
Peaking Facilities)
Table 2:  Summer 2001 Supply Options - Renewables Construction Status Summary
Table 3:  Summer 2001 Supply Options - Rerate of Non-CEC Projects
Table 4:  Summer 2001 Supply Options - CEC Rerate Status Summary
Table 5:  Idle Biomass Plants Potentially Capable of Restart
Mary Schoen
Environmental Strategies
Enron Corp
713-345-7422


Thanks so much, Kate!  This has already been helpful to me.

Cheers!

Caroline


Robert Michaels is proposing a consultant study looking at the California
electricity chaos (see attached).  It is roughly a $100,000 study before
printing and distribution costs with a delivery date of December 1.  The
study would also involve Ken Malloy's Center for the Advancement of Energy
Markets.

I think Robert would do a good job but raise these issues:

1) This is expensive.  It is at consultant rates and is not an academic study
where a think tank can get the professors to do something at less cost

2) Malloy is pretty heavy into this at a cost of $14,400 of about 40% of
Michaels.  His NARUC connections are very important, and we would want him on
the popularization side, but this is too much.

3) The study might need a co-author with lots of academic credibility to join
Robert as good as he is.

I'm glad that we have this proposal--it will force us to think about what we
want, who does it, and how it should be distributed.  We should also think
about how much industry money we could gather to fund such an effort (it
should be large given the stakes).

Can you provide your impressions so I can get back to Robert?

- Rob

Robert Michaels <rmichaels@fullerton.edu> on 08/18/2000 03:34:12 PM
Please respond to rmichaels@fullerton.edu
To: wbrough@cse.org, kmalloy@caem.org, Rob_Bradley@enron.com
cc:

Subject: Initial memo on California study proposal

All --

Here's the memo I said you'd have today, and a preliminary budgeting
sheet.  Gimme a call as soon as is reasonably possible.

Thanx,
RM

 - 818 Proposal Memo.doc
 - 818 Malloy California Report (Michaels).xls


I believe we are in a position to finish this contract today (or tomorrow) if
we can get buy in on the change in assignment highlighted in red below (last
paragraph of 22.2).  Previously, the unfettered right to assign arose at
Acceptance.  This change allows us the flexibility to pay for a unit and
assign it to anyone, and not have to wait until the unit is satisfactorily
completed, installed, etc.

Please let me know if this change is ok, and if WestLB will be in a position
to sign this agreement tomorrow.

Thanks,

Kay

ARTICLE XXII.  ASSIGNMENT

22.1   Assignment by Seller.  This Agreement may not be assigned by Seller
without the prior written consent of Purchaser, which shall not be
unreasonably withheld.

22.2   Assignment by Purchaser.  This Agreement or any right or obligation
contained herein may be assigned, from time to time, by Purchaser or Agent
without Seller,s consent to:

(i) Agent (in the case of an assignment by Purchaser) or an Affiliate of
either Purchaser or Agent;

(ii) a joint venture, partnership, limited liability company or other similar
entity in which Agent or any of its Affiliates is a venturer, partner or
participant with no less than a nineteen and one-half percent (19.5%) equity
interest;

(iii) any Lender;

(iv) any Indemnified Party;

(v) any entity for the purposes of financing or sale of the Facility;

(vi) any party (1) for which Agent or any of its Affiliates has agreed to
construct or develop a facility using the Equipment, or (2) to which the
Agent or any of its Affiliates has agreed to convey a power plant project
which it has under development; or

(vii) any contractor or developer (including, without limitation, Enron
Engineering & Construction Company and/or NEPCO) which is retained by
Purchaser or Agent or any of its Affiliates to construct or develop a
Facility using the Equipment.

In the case of an assignment to a party described in (ii), (vi), or (vii)
(other than  Enron Engineering & Construction or NEPCO), Seller shall be
entitled to request and receive an appropriate guaranty, letter of credit,
payment bond or other reasonable form of payment security, in amount not to
exceed the amount of the Purchase Amount remaining to be paid at the time of
the assignment, unless the assignor agrees to remain liable for all future
liabilities under this Agreement.  A letter of guaranty, letter of credit, or
payment bond provided by an entity rated BBB+ or better shall be deemed to be
an appropriate form of security for the purpose of this provision.

Except for (i) through (vii) above, this Agreement or any rights or
obligations hereunder may not be assigned by Purchaser or Agent to other
parties without the prior written consent of Seller which shall not be
unreasonably withheld, conditioned or delayed.  Seller agrees to respond to
any request for consent within thirty (30) Days following its receipt of such
request.  Any failure to respond within the foregoing time period shall be
deemed to be a grant by Seller of its consent to the proposed assignment.  In
determining whether Purchaser or Agent shall be permitted to assign this
Agreement, Seller shall only be deemed to be reasonable in withholding its
consent if the proposed assignee does not have substantially the same or
better credit quality than Agent unless (a) the proposed assignee provides
appropriate guaranties, letters of credit or other assurances of payment
issued by an entity or person with substantially the same or better credit
quality than Agent, or (b) the assignor agrees to remain liable for all
future liability under this Agreement.  Purchaser or Agent shall have the
right to assign or pledge, from time to time, all or any portion of its
right, title and interest in, to and under the Agreement as collateral for
financing of any Facility without Seller,s consent.

When duly assigned in accordance with the foregoing (including, following any
collateral assignment, upon foreclosure by any collateral assignee) (i) this
Agreement shall be binding upon and shall inure to the benefit of the
assignee (and all rights hereunder, including, without limitation, any and
all warranty rights, shall be assigned to the assignee as if such assignee
were an original party hereto), and (ii) the assignor shall be irrevocably
relieved and forever discharged of all liability under this Agreement so long
as the assignee executes an assumption of such liabilities.  Any other
assignment by Purchaser or Agent other than as permitted hereunder shall be
void and without force or effect.

Notwithstanding the generality of the foregoing, in connection with any
assignment permitted under this Section 22.2 to any assignee, the Purchaser
shall have the right, from time to time by Notice to Seller and without
Seller,s consent, to (i) designate such assignee to be the successor of
Purchaser hereunder, (ii) designate such assignee to be the successor of
&Agent8 hereunder, (iii) designate such assignee as a sub-agent of the Agent
hereunder, and (iv) designate that such assignee has succeeded to all of the
rights and obligations of both Purchaser and Agent, whereupon
(notwithstanding the first WHEREAS clause hereof, but subject to any
subsequent appointment of an &Agent8 hereunder) each reference to &Purchaser8
hereunder shall be deemed a reference to such assignee acting in its
individual capacity and each reference to an &Agent8 herein shall be deemed
deleted.

Upon any permitted assignment of the rights under this Agreement to acquire a
Unit or Units, and the assumption (in accordance with the terms hereof) of
the obligations related thereto, Seller shall enter into a separate purchase
agreement with the permitted assignee (each, a &Facility Agreement8).  The
terms of each Facility Agreement will be in strict conformity with the terms
and conditions of this Agreement, except for site specific changes as agreed
by the Seller and such assignee.  In no way shall the Facility Agreement
increase the liability or responsibility of Seller, Purchaser, or Agent under
this Agreement.

The parties further agree that the provisions of this Agreement relating to
assignment will only control the assignment of Purchaser,s or Agent,s rights
and obligations under this agreement prior to payment of the Purchase Amount
(except for the Retention Amount) of the Unit to be assigned. Following
payment of the Purchase Amount (except for the Retention Amount), Purchaser
or Agent shall be permitted, without Seller,s consent, to: (i) assign all or
part of its rights or obligations under this Agreement, (ii) convey any
ownership interest that it may have in the Facility and/or (iii) convey any
ownership interest that it may have in the entity which may own the Facility.

22.3   Agreement with Lender.  Seller agrees that if requested by Purchaser,
Seller shall enter into a direct agreement with Lender under which Lender is
permitted to "step into" this Agreement.


Here's a suggestion for the equipment question:

ENA and its affiliates have contractual rights to numerous turbines, several
of which can satisfy the technical and scheduling requirements of this
project, and some of which are already manufactured.  In the case of turbines
still in the manufacturing process, ENA has firm commitments for delivery,
backed by liquidated damages clauses and other financial incentives.

"Duncan, Allyson" <aduncan@kilstock.com> on 08/25/2000 07:40:52 AM
To: "Fine, Jonathan" <JFine@kilstock.com>, "'Reagan'" <Rorschak@enron.com>,
"'John Moore'" <John.Moore@enron.com>, "'Heather Kroll'"
<Heather.Kroll@enron.com>, "'Kay Mann'" <Kay.Mann@enron.com>, "'Ozzie Pagan'"
<Ozzie.Pagan@enron.com>, "'Tom Chapman'" <Tom.Chapman@enron.com>, "'Jeffrey
Keenan'" <Jeffrey.Keenan@enron.com>, "'Reagan.Rorschach@enron.com'"
<Reagan.Rorschach@enron.com>
cc: "Grigg, Mary" <mgrigg@kilstock.com>

Subject: RE: Response to Public Staff Data Request

I have received material from Reagan in response to Question No. 5--thanks.
Reagan, do you have problems providing the total project cost under seal?
We can file as is, but I expect the public Staff will want to follow up.
Also, we do have the cost data, and are filing that under seal.  I have
indicated that we will file the supporting documentation next Tuesday.   The
only thing we are awaiting to day is the paragraph explaining that turbines
are indeed available.

I did want to call your attention to the fact that I took a sentence out of
the response to No. 17 regarding Enron's intent to operate the plant as a
merchant facility after the expiration of the PPA.  You have been very
straightforward about that and it is clear from the rest of the answer.
However, given the Commission's skittishness about merchant facilities, I
would rather not highlight it.

We would like to file the responses by the end of the day, with the
exception of the supporting documentation on the cost data.

-----Original Message-----
From: Fine, Jonathan
Sent: Thursday, August 24, 2000 4:18 PM
To: 'Reagan Rorschach'; John Moore; Heather Kroll; Kay Mann; Ozzie
Pagan; Tom Chapman; Jeffrey Keenan
Cc: Duncan, Allyson; Grigg, Mary
Subject: Response to Public Staff Data Request

Attached is the latest draft of our responses to the Public Staff's data
requests.  Please let us know of any suggested revisions or other comments
you may have.  Once cost data (Request No. 1), other facility data (Request
No. 5) and some more information regarding the turbine purchase source
(Request No. 11) is received, we will file the responses shortly thereafter.
Intervention deadline is Sept. 8.

We did just a few minor edits of what John and Heather e-mailed to us --
nothing substantive.

Question:  Do you need us to set up "Edgecombe Development Co., LLC" here as
a NC LLC?  Just let me know.  We have some folks that can do that for you
quite efficiently.

Look forward to your comments.  Thank you.

Jonathan M. Fine
Kilpatrick Stockton, LLP
3737 Glenwood Ave., Ste. 400
Raleigh, NC 27612
TEL: (919) 420-1700
FAX: (919) 420-1800
http://www.kilstock.com


Ram?n Gonz?lez signed and returned the spot sale contract.  They are making their co-ordination to start to pick up.

Saludos


FYI, executed master distribution list.
----- Forwarded by Tana Jones/HOU/ECT on 08/15/2000 04:42 PM -----

	Yolanda Cordova-Gilbert
	08/15/2000 04:38 PM

		 To: Tana Jones/HOU/ECT@ECT
		 cc:
		 Subject: Re: J. Aron & Company

Please take me off this list. I no longer need to be on it!


We will be releasing new version of the Stack Manager and the EnronOnline
website tonight . The following are the changes

1. Changes to Stack Manager:

1.1 Changes to toolbar icons:
To facilitate further development of the system, it has been found necessary
to change the toolbar icons at the top of the Stack  Manager. The attached
file shows the old icon and its new replacement. Next to each image below is
the description of the function that is executed as well as the short cut key
that is mapped to the same function:

1.2 New Functionality - Auto Suspend
The Auto Suspend function allows traders to set an absolute price change from
a price level at which you would like the system to automatically suspend a
specific product. This function is useful if your products use automatic
price resets.

To activate this feature:
1. Select a product and click on Product Properties
2. Check the Enable box
3. Enter the Price Check and Suspend at +/- values
4. Click Update
Example: a trader Enables Auto Suspend and selects a $35.00 Price Check and a
suspension level of +/- $5.00: The system will suspend the product when the
mid price is above  $40.00 or below $30.00

You will need to enter a new Price Check or disable the Auto Suspend function
to reactivate this Product if the Auto Suspend is triggered.
Please note the system checks for any products that need to be suspended once
a minute.

2. Changes to EnronOnline Website
 (These changes will be rolled out in phases over the next week and will be
available to all customers only by Friday 5/4/01)

The following enhancements have been made to the EnronOnline Website:

2.1 Today,s Transactions

Float Window:  In order to float the window, right click on the Today,s
Transactions section, click on the Float Window option.

Sort Ordering: Click on the column heading to change the sort order.

Linked Transactions: You can display the linked Transactions in an expanded
or collapsed view. To do so, right click in the Transaction display area and
select full Expand or Full Collapse.

2.2 Submission Box

The submission box has been modified in order to show a space between each
set of &zeros8 for the volume the customer wants to sell/buy.

Savita


This email will confirm that I left voice mail for you today at 3:20
confirming your meeting with Michael Alcantar tomorrow at 9:00 a.m. here in
our San Francisco office.  If you have any questions please don't hesitate
to contact me.  Thank you.

Very truly yours,

Amie C. King
Alcantar & Kahl
415-421-4143


I will have a minute in about an hour.

	From:  Kathleen Carnahan                           02/06/2001 03:05 PM

To: Kay Mann/Corp/Enron@Enron
cc:

Subject: Do you have a minute?


I sold CES 1509/day starting the 14th - see deal 149770

-


Jeff

In the context of the SFA audit and also your request for info about this
some time ago (apologies for the delay), I've done some research into our
current practice and procedure on taping and the position is as follows:

The current policy is to destroy recordings after 6 months.
However, this policy is not being implemented by our Telecoms group at the
moment which is awaiting confirmation that the 6 month period is appropriate
(not clear why).
It appears that no recordings have been destroyed for at least 2 years.
A firm has been contracted to destroy recordings as soon as the go-ahead is
given.

Obviously we want to be consistent across jurisdictions and I wanted to check
with you that the retention period in Houston is still 6 months.  Please
confirm.

Also, John Sherriff is keen for traders to be given guidance on what not to
say on recorded lines, perhaps with some case studies to provide a salutary
lesson or two!  Have you guys done anything similar in the US?

I look forward to hearing form you.

Thanks and regards

Paul


Thought you might be interested in seeing this for fun.  Have a great day.  Lynn

 -----Original Message-----
From: 	Hagen, Bob
Sent:	Friday, August 03, 2001 9:47 AM
To:	'January, Steven'; Bellard, Dannis; Bryant, Mike; Ratliff, Dale; Corman, Shelley; Blair, Lynn; Hotte, Steve; Abshire, Scott; Rahn, Nick; Sawyer, Lisa; Sullivan, Michael; Gigliotti, Mark; McAuliffe, Bob; Hagen, Bob; Daze, Don; Vollmer, Mary; Lowry, Phil; Allen, Stephen
Subject:	Tropical Storm Barry

Tropical Storm Barry weakened overnight but still remains a tropical storm.  We have been coordinating with Gary Fitch of Enron Aviation and agree that the potential affect of this storm on the Houston area would not be until early next week.  I've again attached several images taken from the National Hurricane Center.  Jean McFarland and I will continue to monitor the storm throughout the weekend and will notify appropriate personel of any changes.
Thanks,
Bob and Jean

WTNT33 KNHC 030837
TCPAT3
BULLETIN
TROPICAL STORM BARRY ADVISORY NUMBER 4
NATIONAL WEATHER SERVICE MIAMI FL
4 AM CDT FRI AUG 03 2001

...BARRY POORLY ORGANIZED...

SMALL CRAFT SHOULD REMAIN IN PORT FROM THE ATCHAFALAYA RIVER
LOUISIANA TO DESTIN FLORIDA.  WATCHES OR WARNING MAY BE REQUIRED
FOR PORTIONS OF THE NORTHERN GULF COAST LATER TODAY.

AT 4 AM CDT...0900Z...THE CENTER OF POORLY ORGANIZED TROPICAL STORM
BARRY WAS LOCATED NEAR LATITUDE 26.8 NORTH...LONGITUDE 86.6 WEST OR
ABOUT 225 MILES...SOUTHEAST OF THE MOUTH OF THE MISSISSIPPI RIVER.

BARRY HAS BEEN MOVING WESTWARD DURING THE PAST FEW HOURS BUT IS
EXPECTED TO RESUME A WEST-NORTHWEST TRACK NEAR 7 MPH TODAY.

MAXIMUM SUSTAINED WINDS HAVE DECREASED TO NEAR 40 MPH WITH HIGHER
GUSTS.  ANOTHER RECONNAISSANCE PLANE WILL CHECK THE INTENSITY IN A
FEW HOURS.  LITTLE CHANGE IN STRENGTH IS FORECAST.

WINDS AND SEAS WILL GRADUALLY INCREASE TODAY ACROSS THE NORTH
CENTRAL GULF OF MEXICO AND SOME COASTAL FLOODING MAY OCCUR OVER
PORTIONS OF SOUTHEAST LOUISIANA.  SEE STATEMENTS FROM LOCAL NATIONAL
WEATHER SERVICE OFFICES FOR MORE INFORMATION.

TROPICAL STORM FORCE WINDS EXTEND OUTWARD UP TO 105 MILES TO THE
NORTHEAST OF THE CENTER.

ESTIMATED MINIMUM CENTRAL PRESSURE IS 1008 MB...29.77 INCHES.

LOCALLY HEAVY RAINFALL OF 3 TO 5 INCHES IS POSSIBLE OVER
PORTIONS OF CENTRAL AND SOUTH FLORIDA TODAY.

ISOLATED TORNADOES ARE POSSIBLE ALONG THE SOUTHWEST FLORIDA COAST
TODAY.

REPEATING THE 4 AM CDT POSITION...26.8 N... 86.6 W.  MOVEMENT
TOWARD...WEST NORTHWEST NEAR 7 MPH.  MAXIMUM SUSTAINED WINDS...
40 MPH.  MINIMUM CENTRAL PRESSURE...1008 MB.

THE NEXT ADVISORY WILL BE ISSUED BY THE NATIONAL HURRICANE CENTER AT
10 AM CDT.

FORECASTER AVILA


Is Global Finance Gary Hickerson's Group?  Credit is the only group besides
us that gets full access, anyone else gets more limited access.

	Sara Shackleton
	06/26/2000 01:32 PM

		 To: Tana Jones/HOU/ECT@ECT
		 cc:
		 Subject: Re: Lotus Notes Access

Global Finance

	Tana Jones
	06/26/2000 01:30 PM

		 To: Sara Shackleton/HOU/ECT@ECT
		 cc:
		 Subject: Re: Lotus Notes Access

What group are they in?

	Sara Shackleton
	06/26/2000 01:26 PM

		 To: Tana Jones/HOU/ECT@ECT
		 cc: Jeff Nogid/HOU/ECT@ECT, Clint Freeland/Corp/Enron@Enron
		 Subject: Lotus Notes Access

Tana:  Please see that Jeff Nogid and Clint Freeland are given access to our
Financial Trading Agreements database.  Thanks.  Sara


These articles appeared in the editorial section of the Sacramento Bee:

The inside story of why PG&E went bankrupt: Top officials of the huge utility
say they didn't think Sacramento could fix their problem.

(Published April 22, 2001)

On April 13, a week after Pacific Gas & Electric filed for Chapter 11
bankruptcy protection, Gordon R. Smith, president and chief executive officer
of the utility, and Dan Richard, vice president for public affairs, met with
The Bee's editorial board. What follows are edited excerpts from the
interview:
Bee: Why don't we start with a single-word question -- why?
Gordon Smith: Why did we file Chapter 11 [bankruptcy] a week ago today? In
all sincerity, it was the right venue for trying to resolve the financial
energy crisis facing our company. It's a means to get somewhere else from
where we were before or where we are now.
There have been a lot of statements over the last 10 months now that we've
been looking for a bailout. I think even the [Southern California] Edison
agreement reached with the governor has been viewed by some as a bailout. We
never viewed it as a bailout.
What we really wanted was the state Public Utilities Commission to follow the
law to determine the end of the rate freeze, to give a valuation of our hydro
[electric] facilities and after that, pass on the costs of wholesale power
costs to our customers. It's not our power costs. It's our customers' power
costs.
And, in fact, the PUC in the last several weeks and months has been issuing
destabilizing orders to us. You probably saw two and a half weeks ago that
they announced a 3-cent kilowatt-hour increase, which is described as
somewhere between a 40 and 47 percent rate increase. None of that money in
fact stopped with financially troubled PG&E. It went right onto the state.
In fact, as we read their orders, there was even more than that coming out of
our treasury to go to the state. That, along with a few other orders, just
said we needed to take a look at a different venue. Chapter 11 appeared to be
the best one.
Dan Richard: I think we really did lose faith that there was going to be a
solution coming out of the political process. And I have to tell you, people
in Sacramento were saying to me, "We don't believe there's the political will
to fix this problem." It was kind of startling. But there were a number of
leaders who were saying, "We don't think you're going to get there." And we
didn't think we were going to get there.
Bee: What is your evaluation of the Edison deal?
Smith: Well, I think our press release said we're delighted. We're happy to
see that they've reached a conclusion. We're still evaluating it to see what
is in it and what isn't in it, and whether or not it might be a framework for
a settlement.
Bee: The conventional wisdom I'm hearing is that Edison pretty much got
everything that it wanted. A lot of people were asking if that deal was on
the table a week before, why would PG&E not have taken it?
Smith: I don't think that deal -- and I'm speculating here so forgive me --
was on the table the week before for Edison.
Bee: How about for you?
Smith: I would speculate that our actions last Friday spurred people to work
around the clock over the weekend and for an announcement on Monday.
Richard: I think the governor actually said almost those very words.
Bee: You think he gave them a better deal to prevent them from going to
bankruptcy?
Smith: Absolutely. Yeah.
Bee: What's not to like about that proposal from a utility point of view?
Smith: We were prepared to accept many of the terms that the governor
outlined in his televised speech a week ago last night. There were things
that we wanted to have in that agreement that never appeared to show up in a
written agreement.
Bee: What was PG&E's comfort level with selling either its transmission or
its hydro to the state?
Smith: Well, it's a Sophie's choice for us. Part of the company was based on
our hydro system and our transmission system. In order to stem off where we
ended up, we were willing to put those on the table.
Bee: From your perspective, did it make more sense for the state to be in the
ownership business of the hydro or the transmission.
Smith: Not really.
Richard: Is there a third choice?
Smith: They give us a dollar, and we give them back their IOU, and not a hot
dog?
It was a currency that obviously the state is interested in, and Edison is
willing to agree to. As Dan indicated, we were willing to make a Sophie's
choice and put it on the table. But in return, we needed some things as well
to take the transaction forward that we didn't have, nor do I believe Edison
had a week ago today.
Bee: You mentioned the guarantee that wouldn't end up with another
under-collection was one of the things you wanted, and couldn't get. What
else?
Smith: You say guarantee. I guess it might be characterized like that in some
fronts. We have been forced by the state of California, either the Public
Utilities Commission or the Legislature, depending how you look at it, to be
out of the generation business. The public policy of the early or middle '90s
was to get the utilities out of the vertically integrated business.
All right. We sold power plants. The ones that we held had a reduced return
in equity on them. What we really want is some assurances for what we
purchase will be passed through. No business can stay in business if it can't
pass on the wholesale costs.
Bee: What else did you need?
Smith: For a deal with the state?
Bee: Yes.
Smith: I'm really not in a great position to speculate on all the gives and
gets on that. But we wanted, as Dan indicated, a transaction that would be
enduring. We wanted guidelines. We wanted assurances that when we gave up
billions of dollars, there would, in fact, be a transaction....
Bee: So is it possible that you could look at the Edison deal, decide that
it's wonderful and you wished they had offered it to you, and have it applied
through bankruptcy?
Richard: As part of our reorganization plan.
Bee: Meanwhile, the Legislature could reject it for Edison and you guys could
get it and they'd be out in the cold.
Smith: Write that down. (Laughter.)
Smith: It may very well be a solution. But as Dan indicated, our
reorganization plan, at the end of the day, has to have a comprehensive
solution for paying power costs going forward as well as recovering the power
costs in the past.
Bee: You've had a week now to pick it over. Have you seen anything in that
deal that is off-putting to you, a deal-breaker?
Richard: You'll have to excuse us if we decline to comment on that. If we did
comment on that, it would look like we were either trying to push it through
or push against it in some way. The governor and Edison are going to present
that deal to the Legislature, and the Legislature is going to view it and I
think what we're trying to say is we're not closing doors to anything. We're
just in this venue and this venue doesn't foreclose any possibilities.
Smith: Chapter 11 is not an end to itself. We would like to get out of it as
soon as practical.
Bee: Can I ask about the gas side? When you hear from people they talk about
"energy" prices. They don't mean electricity. They mean the gas bill. Why did
gas prices run up so much higher in California than they did elsewhere? What
if anything do we need to do to keep that from happening again?
Richard: I think we have two answers to that. One, there is more gas demand
for the obvious reasons. People are converting power plants to gas or are
building gas-fired plants only because it is the fuel of choice from an
air-quality standpoint. The increased demand for gas by electric generation
is something like 700 million cubic feet a day, and this is out of 5 billion
cubic feet of day that we use. There's been a huge run-up in the pull on the
natural gas system.
We have infrastructure needs on natural gas. Just like we need to build new
power plants in the state, we need to have new interstate gas transportation
lines built.
Smith: There's a restriction on both the capacity of the pipe and the
commodity itself that has led to the increase.
Richard: But nationwide, there is not a natural gas shortage. But it is just
more in demand. So prices have come up.
Now having said all of that, that there are some fundamentals that would
drive the price of gas up, we don't believe that those explain how high the
price of gas has gone. And there, when you can buy price at the Henry Hub, at
the Texas/Louisiana border for $5, and it costs $1 to transport it to the
California border, why is it selling at the City Gate (L.A.) for $20?
Smith: And Southern California Gas Company pays right now, I believe, about
50 percent more for natural gas than we do, because we have Canadian gas
sources. So there's something going on in the transportation capacity of the
Southwest. There's just now question about it.
Richard: And the FERC is looking at this, and we've joined with others in
saying there may be some, something wrong in the marketplace that needs to be
examined there.
Bee: Whose job is it to solve this transportation problem out of the
Southwest?
Smith: Federal Energy Regulatory Commission. The complaints are before them.
Bee: Could I ask a question about the rolling blackouts that we'll likely
have, and whose lights should go off? The city of Los Angeles, as we know,
has its own public power agency, and it's also in its own control area. They
most likely will have enough power to survive every summer day and likely the
lights will never go off in the city of Los Angeles this summer.
Sacramento has its own public power agency, and most likely SMUD has bought
enough power to survive every summer day.
Richard: But they're part of a -
Bee: But they're part of PG&E.
Smith: They're part of a control area.
Bee: And PG&E likely does not have enough power to survive every summer day
because the state, most likely, will not be able to find enough power on the
open market. PG&E wants to turn around and shut off the lights in Sacramento
and have Sacramento share in these rolling blackouts. Why should Sacramento
share in these rolling blackouts when we've bought enough power to survive
these days?
Smith: Because SMUD has a contract with PG&E that provides for that to occur
in return for lower transmission rates.
Bee: But weren't these interconnection agreements essentially designed to
deal with malfunctions and acts of God as opposed to acts of politics?
Smith: It was designed to occur when there was not enough power. Period.
Richard: I don't think that PG&E wants to pursue a beggar-thy-neighbor
strategy. We're subject to ISO rules and the existing rules and arrangements
and contracts in place. It's not quite PG&E saying we've decided that SMUD
should suffer. This is sort of similar to the other problem.
We've got a set of contracts and agreements in place. People don't like the
outcome and they want to change it. I'm not saying they're wrong to want to
do that. Those were the institutional arrangements that were put in place.
Bee: But you're saying that SMUD cannot make the policy choice to say that
we're going to have reliable power this summer and we're willing to increase
our rates to do it. And then they can't get the power delivered because PG&E
is not essentially in the same situation. You're not allowing SMUD to make
that choice.
Richard: Well, I think that's probably a little more personal than I'm
comfortable with. I don't think Gordon and I made that choice. Or PG&E made
that choice. And I don't know enough about the contract.
Bee: But didn't SMUD make the choice to buy enough power for this summer?
Smith: I assume so. I met with Jan Schori [SMUD general manager] yesterday.
And she assured me that she had enough power for the summer.
Bee: So why shouldn't we -
Smith: Let me get back down to it. We have a contract with SMUD that in
return for lower tariff transmission rates, because they're part of a control
area, when there is a shortage of supply in the control area they're
dispatched off and share in the outages that the other 14 million
Californians will be sharing in.
Bee: To get back to the Edison MOU [memorandum of understanding] and your
bankruptcy for a minute. As you read that MOU and you look at the start of
your bankruptcy proceeding, what do you see in bankruptcy that is better for
you than what is in that MOU?
Richard: Again, that causes us to speculate on the MOU. But we went through
the door because we needed to and we chose to. And we're now there. And as
Gordon said, our goal now is to move through Chapter 11 as quickly and as
efficiently as possible. If there are elements of the Edison MOU that are
appropriate for a reorganization plan, then that gives us a head start.
Now that we are in bankruptcy, there are other parties that are at the table
also. The creditors are there. And that includes some of the out-of-state
generators and the QFs [alternative energy providers] and so forth. All of
those people. It is actually probably a broader process. At the end of the
day, it may turn out to be a more open process, in terms of forging a
reorganization plan.
So fundamentally, I don't think what happened is bad. If our bankruptcy
triggered a breakthrough on an Edison agreement, which in turn can roll into
a reorganization plan that we come up with, then maybe we'll all end up at
the finish line faster than we would have gotten there, if, in fact, we would
have gotten there at all.
Bee: We all certainly would like to get to the finish line. We certainly
appreciate your helping us understand the problem.

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

Dueling energy realities: PG&E,  consumers differ on financial risk

(Published April 22,  2001)

Pacific Gas and Electric is in bankruptcy court, as two top  executives
explain in today's Forum section (Page L-1), because the company  concluded
that the judicial system can resolve what the political system cannot.  The
company's explanation is articulate, revealing and self-serving. It is also
not bought by regulators, consumers and in the end, we must all hope, by the
courts.

At its very core, this impasse between PG&E and the state's elected
officials and regulators came down to two fundamental questions of risk and
regulation about the past and present.

First, the past. Over the last year of record-high wholesale electricity
prices, whose wallet was at risk? Was it the shareholders of PG&E, the
paying public or perhaps both?

PG&E's answer is singular. The consumers must pay for this mess, not the
company's shareholders.

These past three years were supposed to have been a period of transition as
the regulated PG&E prepared for competition from low-priced private
generators and energy service providers. The utility's initial fear was that
the  generating plants it had built under regulation would become white
elephants in  a world of competition.

So the Legislature via AB 1890, the 1996 "deregulation" bill, gave PG&E  the
chance to accelerate the mortgage payments on these investments during this
transition. These accelerated payments were to come from the difference
between  what it cost PG&E to buy power on the (everyone thought) low-price
wholesale  market, and the high consumer electric rate frozen into law from
1998 to 2002.

In fact, this is what happened for the first two years, but not the third.
PG&E wants to keep all the proceeds from when times were good, and stick
consumers for the tab when the market went haywire.

The second question concerns the present. Can the state still regulate the
price of power from PG&E's nuclear and hydroelectric plants?

No, says the utility. Now that ratepayers have retired the mortgage on these
plants, the utility contends it can charge market prices for the electricity
they produce. By PG&E's own estimate, the utility could extract perhaps $5
billion in new profits from this source over the next 10 years.

Yet remember: The reason that ratepayers paid off this mortgage is because
these plants were supposedly going to be "stranded" if they had to compete.
Did  we accelerate these mortgage payments only to have to pay for these
facilities  again?

The political system failed to answer these questions to PG&E's  satisfaction
because the utility's interpretation of what it's due defies common  sense,
fairness and sound public policy. This harmed, not helped, any political
effort to reach a compromise. PG&E says that it is still hoping for a
settlement rather than a court-ordered resolution. That can only happen when
the  utility's perspective on what's fair begins to converge with that of the
paying,  and voting, public.


---------------------- Forwarded by Mike Carson/Corp/Enron on 08/15/2000
11:06 AM ---------------------------

"Carson, Kenneth, Col, AF/CVAS" <Kenneth.Carson@pentagon.af.mil> on
08/07/2000 07:31:38 AM
To: "'mike.carson@enron.com'" <mike.carson@enron.com>
cc:

Subject: Are you there today?

Mike
Are you there today??? I need to close the loop with you on directions to
the Pentagon City -- repeat "Pentagon City" Metro station / shopping mall...
Chuck and I agree, this is the best place to head to and park the car (6
story parking garage -- about 1/2 mile from pentagon).   From there -- take
the metro over to the "Pentagon Station" which is the pentagon....

Ken


Sally,

Thanks for taking the time to meet with me today and telling me about the
exciting opportunities you have at North America.  I reviewed the
presentation that you  gave me and found myself already thinking about how to
make it happen.  I would very much like to work with you to make this a
reality.  Attached is a copy of my resume.  I look forward to continuing our
discussions next week.

Gay

Gay Mayeux
Vice President, Enron Broadband Services
Physical Location:  1400 Smith Street EB4620
                                      Houston, TX 77002
Email:  gay_mayeux@enron.net
Office: (713) 853-9905
Cell:     (713) 416-8821
Fax:     (713) 646-5737


Don't you love Calpine?

Sue Mara
Enron Corp.
Tel: (415) 782-7802
Fax:(415) 782-7854
----- Forwarded by Susan J Mara/NA/Enron on 07/17/2001 02:01 PM -----

	Gary Ackerman <foothillservices@mindspring.com>
	07/17/2001 02:04 PM
	Please respond to foothillservices

		 To: Bill Ross <billr@calpine.com>, Bob Anderson <Robert_Anderson@apses.com>,
Carolyn Baker <cabaker@duke-energy.com>, CHARLES A MIESSNER
<camiessn@newwestenergy.com>, curt hatton <curt.hatton@neg.pge.com>, Curtis
Kebler <Curtis_L_Kebler@reliantenergy.com>, Greg Blue <gtbl@dynegy.com>, Jack
Pigott <jackp@calpine.com>, Nam Nguyen <Nam.Nguyen@powersrc.com>, Randy
Hickok <rjhickok@duke-energy.com>, Rob Nichol <rsnichol@newwestenergy.com>,
Roger Pelote <roger.pelote@williams.com>, Sue Mara <smara@enron.com>, George
Vaughn <gavaughn@duke-energy.com>, Max Bulk <mbulk@apx.com>, "Huhman, Steve"
<steve.huhman@mirant.com>, Steve Schleimer <sschleimer@calpine.com>, Janie
Mollon <jsmollon@newwestenergy.com>
		 cc:
		 Subject: Motion on PRI Study passes

We have eight  YES votes (Enron, Mirant, Dynegy, APS Energy Services, New
West Energy, Constellation, Williams, and PG&E National Energy Group), and
one NO vote (Calpine).
"That WPTF participate as a funding member in the Pacific Research Institute
study  called "The Economics and Politics of Electricity Deregulation," by
Dr. Ben Zycher, subject to the terms and conditions agreed to by PRI
President Ms. Sally Pipes in her e-mail to Gary Ackerman dated July 11,
2001."
I will now move on to the funding phase.  Some of you have already indicated
an interest in funding.  I want to get 10 funders, if possible.  I will
contact each of you.
gba


Call me when you can make room for me in your schedule.


Do you have  a mtg this afternoon?


Apache
Vernon Tiger
phone:   713-296-6617
fax:   713-296-6319

2000 Post Oak Blvd. #100
Houston, TX  77056-4400

Lone Star Pipeline
Lisa McAuliff (Contracts)  Wilma Easter (Scheduling)
phone:  214-875-5224  phone: 214-875-3296
fax: 214-875-5134  fax: 214-875-3810

301 S. Harwood #801N
Dallas, TX 75201

Williams Energy
Jeff Goforth
phone: 918-573-8125
fax: 918-573-1530

PO Box 2848
Tulsa, OK 74101

Cinergy Marketing & Trading (Agent for Apache)
Lisa Hughes
phone: 281-583-6279
fax: 281-583-4353

616 FM 1960 W #800
Houston, TX 77090

(Note:  Cinergy will be moving downtown next month)

White Pine Energy, LLC
Michael Mazowita-Director of Asset Mgmt
phone:  248-442-4823
fax: 248-477-5729
cell: 248-345-4002

19436 Auburndale Street
Livonia, MI 48152

Cleburne Plant
Mike Gough-Plant Manager Ken Riesz-Operations Supervisor
phone: 817-641-5041  phone: same
fax: 817-641-5042

Tenaska IV Texas Partners
831 Sparks Drive
Cleburne, TX 76031


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BW2036  NOV 27,2001       2:00 PACIFIC      05:00 EASTERN

( BW)(TX-INDUSTRIAL-INFO-RES) Fate of Enron's Forest Products Group Up
in the Air, in an Advisory by Industrialinfo.com

    Business Editors

	   HOUSTON--(BUSINESS WIRE)--Nov. 27, 2001--The following is an
advisory by Industrialinfo.com (Industrial Information Resources Inc;
Houston) Energy giant Enron Corporation (NYSE:ENE) (Houston), also the
seventh largest newsprint producer in North America, recently agreed
to be taken over by energy rival Dynegy Incorporated (NYSE:DYN)
(Houston). Dynegy has given the forest products group, which falls
under Enron's Wholesale Services business segment, an "under review"
status in determining which businesses are core or non-core. Whether
Dynegy sheds or retains its papermaking assets may not be known before
the summer of 2002, when the transaction is expected to close. The
forest products group consists of a mill on the east coast and two in
eastern Canada, which will require an infusion of capital for
improvements.
	   Last year, Enron Industrial Markets purchased Garden State Paper
from Media General, a communications company, for roughly $72 million.
Located in Garfield, N.J., the mill employs 290 people and has a
capacity of 240,000 short tons a year of newsprint.
	   Earlier this year, Enron acquired Daishowa Forest Products Limited
to gain ownership of its newsprint mill and related assets in Quebec
City, Quebec. The former Daishowa Forest mill, now called Papiers
Stadacona is integrated with a Thermo-Mechanical Pulp (TMP) mill that
feeds four paper machines and employs over 1,000 employees. The mill
has studied the addition of a new de-inking plant, a bio-mass boiler,
and modernizations to the four paper machines.
	   NLK Consultants and Enron share ownership in the Papier Masson
mill in Masson-Angers, Quebec. The single machine mill employs over
300 workers and produces approximately 600 metric tons a day of
recycled content newsprint.
	   Upon completion of the merger, the new Dynegy is expected to have
revenues exceeding $200 billion and $90 billion in assets.
	   Dynegy is one of the world's premier energy merchants. Through its
global energy delivery network and marketing, trading and risk
management capabilities, Dynegy provides innovative solutions to
customers in North America and the United Kingdom and Continental
Europe.
	   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 in the pulp, paper and wood industry as well
as other industrial sectors send inquiries to
pulpandpapergroup@industrialinfo.com or visit us at
www.industrialinfo.com.

    --30--AA/ho*

    CONTACT: Industrialinfo.com, Houston
             Randy Godet, 713/783-5147

    KEYWORD: TEXAS NEW JERSEY INTERNATIONAL CANADA
    INDUSTRY KEYWORD: ENERGY FOREST PRODUCTS
    SOURCE: Industrialinfo.com

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permission.


Hi guys,
I spoke with the attorney for DRI, a producer on TCO.  He said that he
would convince his client not to file a motion in the bankruptcy court
for amounts owed for post petition production volumes delivered to
ENA,IF ENA sends him a letter by next Friday, 6/28/02, stating
definitively that ENA will pay DRI for such volumes and a date certain
by which the payment will be made to DRI.
Shemin


Deal #'s: Q08784 legs 1&2; Q08787 legs1&2

Thanks,

Errol McLaughlin X5-8274


Hi Kathleen,

Let's discuss this sometime this am.

Kay
---------------------- Forwarded by Kay Mann/Corp/Enron on 01/02/2001 08:28
AM ---------------------------

"Campbell, Carolyn" <CCampbell@KSLAW.com> on 12/29/2000 03:33:18 PM
To: "'kay.mann@enron.com'" <kay.mann@enron.com>
cc: "'Fred.Mitro@enron.com'" <Fred.Mitro@enron.com>, "Keffer, John"
<JKeffer@KSLAW.com>

Subject: FW: Incumbency certificate

Kay:

Per the prior e-mail, I am forwarding the InterGen draft of an ENA
incumbency certificate for your reference.  (Ben also received it directly
from Lari Paradee).

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

-----Original Message-----
From: Paradee, Lari [mailto:Lparade@INTERGEN.com]
Sent: Friday, December 29, 2000 12:36 PM
To: 'Ben.F.Jacoby@enron.com'; Campbell, Carolyn
Subject: Incumbency certificate

Citibank has advised me that we need Enron to provide an incumbency
certificate.  I've attached a blank one for you to fill in the appropriate
people.  They need this as soon as possible.  They also need us to insert
wiring instructions into each of the Escrow agreements - I am in the process
of inserting our instructions - please provide your wiring instructions as
soon as possible.

<<Enron Certificate.doc>>

Thanks,

Lari Paradee
InterGen North America
Two Houston Center
909 Fannin, Suite 2222
Houston, Texas 77010
713-374-3928 phone
713-374-3927 fax
lparadee@intergen.com

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I plan to work toMorrow some on the data and can hopefully get you something for friday.   I have some more data coming.
--------------------------
Sent from my BlackBerry Wireless Handheld (www.BlackBerry.net)


i don't think you are really good.  i think a little luck fell into your
lap.  any time you want a shot at the title let me know.  i will leave work
right now to go kick your ass at that game.


Rosalee,
?
The Chronicle wants to set up editorial board  meeting with Ken and Jordan
and Ric Campo re arena endorsement. You can call  James Gibbons for the
appointment at 713-220-7171. I'll be there at whatever  time you set and send
a briefing over before hand.Ric needs to be there to  answer the hard
questions.
?
---Dave