Thursday, June 07, 2001, http://www.financialexpress.com/fe20010607/news1.html
Vajpayee says state, Enron should resolve Dabhol crisis themselves

Thursday, June 07, 2001, http://www.financialexpress.com/fe20010607/news4.html
...but Deshmukh insists Centre should help resolve the dispute

Similar articles as above also appeared in the following newspapers:

Thursday, June 07, 2001, http://www.economictimes.com/today/07infr01.htm
Enron dispute will be solved, says Vajpayee

THE ASIAN AGE, Thursday, June 07, 2001
'MSEB-DPC Crisis To be Resolved'

Thursday, June 07, 2001, http://www.timesofindia.com/today/07busi28.htm
Enron imbroglio will be solved: PM
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Thursday, June 07, 2001, http://www.economictimes.com/today/07infr02.htm
DPC lenders to continue talks on Thursday
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Thursday, June 07, 2001, http://www.financialexpress.com/fe20010607/top4.html
DPc foreign lenders to hold their horses , Sanjay Jog & Sitanshu Swain
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Thursday, June 07, 2001, http://www.indian-express.com/ie20010607/bus2.shtml
FIs buy more time in DPC lenders meet
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Thursday, June 07, 2001, http://www.economictimes.com/today/07edit01.htm
A step forward
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Thursday, June 07, 2001, http://www.business-standard.com/today/corp17.asp?Menu=2
Dabhol to challenge MERC order in high court, Arijit De & S Ravindran

The above article also appeared in the following newspaper:

Thursday, June 07, 2001, http://www.financialexpress.com/fe20010607/news5.html
DPC challenges MERC order in high court
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Thursday, June 07, 2001, http://www.business-standard.com/today/state1.asp?menu=32
DPC to continue billing MSEB for Phase II power, S Ravindran
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Thursday, June 07, 2001, http://www.financialexpress.com/fe20010607/news6.html
'Captive, decentralised power projects are the answer to power shortage problem', Rajeev Jayaswal
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THE FINANCIAL EXPRESS, Thursday, June 07, 2001
Vajpayee says state, Enron should resolve Dabhol crisis themselves
 PRIME Minister Atal Behari Vajpayee on Wednesday passed on the buck to the Maharashtra state government and Enron to find a way out to resolve the Dabhol impasse. Hoping that both the parties will solve the imbroglio mainly concerning the disposal of costly power, he said the steps initiated by the state government and the Dabhol Power Company (DPC) are in the right direction of resolving the issue.
Addressing a press conference immediately after his arrival at the Mumbai airport, Mr Vajpayee shared the state government's sentiments on the purchase of the "costly" Dabhol power. The prime minister admitted that there are difficulties in finding a solution to the Enron issue, but he was confident that it would ultimately be found. By putting the ball in the court of the state government and DPC, the prime minister has made it amply clear that the Centre would not like to associate itself directly to either purchase Dabhol power or its despatch to various states until tariff is reduced after renegotiation. Mr Vajpayee's remarks have come as a major setback to the state government as it has been appealing to him for the takeover of the Dabhol phase-II in view of its inability to bear the mounting burden.
Chief Minister Vilasrao Deshmukh, in his recent communication to Vajpayee on February 6, April 17 and May 10, repeatedly demanded that Dabhol's surplus power be disposed by national organisations such as the NTPC and the Power Trading Corporation in power deficit states. "The negotiations with DPC with a view to reducing the tariff hinge around the question whether the entire power from this project at 90 per cent PLF would be purchased. DPC may be willing to reduce tariff from the existing high levels, provided they get such an assurance from the government of India," Mr Deshmukh had said.
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THE FINANCIAL EXPRESS, Thursday, June 07, 2001
...but Deshmukh insists Centre should help resolve the dispute
 THE Maharashtra chief minister Vilasrao Deshmukh on Wednesday said that his government's stand that the state cannot afford to buy "costly" Dabhol power has ultimately been vindicated by Prime Minister Atal Behari Vajpayee. "We stick to our position that the Centre should step in to bail out the state as we cannot bear the additional burden. The purchase of additional 722 MW from block b of Dabhol phase-II is simply out of question as the state has not drawn more than 300 MW from the Dabhol phase-I of 740 MW," Mr Deshmukh said. Mr Deshmukh was reacting to the prime minister's statement that if Maharashtra cannot purchase such costly power who else would buy it.Mr Deshmukh told reporters after the weekly Cabinet meeting that something would emerge from the ongoing renegotiations between the Maharashtra State Electricity Board (MSEB) and the Dabhol Power Company. "However, DPC will have to sacrifice something and the MSEB will also have to do some balancing act for the resolution of the Dabhol issue," he added.
Mr Deshmukh admitted that the he has been consistent on his demand that the Centre should take over Dabhol phase-II which is the only way in which the complex problem of this project can be resolved. The chief minister said that his government will seek legal opinion on how to tackle the arbitration proceedings initiated against it by the DPC. He added that at present the MSEB has got stay from the Maharashtra Electricity Regulatory Commission on implementation of arbitration process by the DPC. "Let the DPC take action on this front against the state government, we will take the necessary steps after seeking legal advise," he added.
On making the Dabhol papers open for public, Mr Deshmukh said that his government will also seek legal advise in this regard and take necessary action thereafter. At present, DPC has declined to release certain documents on the grounds of "confidentiality." Mr Deshmukh ruled out any possibility of adverse impact on receiving foreign direct investment in the state in view of the ongoing Dabhol imbroglio. "The question does not arise, as according to the power purchase agreement between DPC and MSEB, the latter was entitled to purchase all power. In case of FDI, the state is not entitled to buy the products of the FDI investor," he added.
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THE ECONOMIC TIMES, Thursday, June 07, 2001,
DPC lenders to continue talks on Thursday

THE talks between Indian and foreign lenders of the Enron-promoted Dabhol Power Company will continue Thursday in Singapore. The DPC is reported to have made a presentation at the meeting Wednesday and explained its disputes with Maharashtra State Electricity Bord and the pending case in the state regulatory commission, financial institution sources said here.

Thursday's meeting is scheduled with foreign banks.

Earlier, in a desperate bid to convince foreign banks to not invoke guarantees issued by them, Indian lenders to the Dabhol Power Company assured intervention by the central government in salvaging the project. Institutional lenders run the risk of guarantees worth Rs 2,463 crore being invoked by foreign lenders, who are under pressure to prevent their loans from going bad. During the DPC lenders' meet in Singapore on Tuesday, Indian lenders asked foreign ones to not take "individual decisions" in respect of loans to the project. Instead, they should wait for the outcome of negotiations. The lenders meeting was also attended by senior DPC officials. Among foreign banks, senior officials from Citibank, ABN Amro, ANZ Grindleys, Bank of America and Opec were present.

The 2,184-MW power project, with an estimated cost of $2.9bn, stopped generation last week following MSEB's decision not to buy power from the DPC. This has aggravated the matter, making it difficult for the lenders to adopt a softer stand. Indian lenders have guaranteed loans by foreign banks and institutions to the extent of $524 million (Rs 2,463 crore). The guarantees given by lead institution IDBI alone is around Rs 1,528 crore while its total exposure to the project stands at Rs 2,158 crore. The other major Indian lenders include ICICI, State Bank of India and Canara Bank. Indian lenders are worried that foreign banks would invoke the guarantee if the current stalemate continues. "However, lenders have to depend on the central government, MSEB and the DPC to resolve the issue. Indian lenders can only mediate between the government and DPC and also plead with foreign lenders not to pull the plug," said an analyst. Officials who attended the meeting said,

"We hope to arrive at some decision by tomorrow." DPC is expected to make a presentation to the lenders on Wednesday while small foreign banks will be meeting on Thursday. Asking foreign banks not to take an individual decision is because of the fear that foreign lenders are considering invoking the guarantee. "Although Indian banks maintain that foreign banks are not considering invoking the guarantees, it definitely appears that they are considering such a move given the stringent accounting norms followed in the international market," an analyst pointed out. -
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THE FINANCIAL EXPRESS, Thursday, June 07, 2001
DPc foreign lenders to hold their horses , Sanjay Jog & Sitanshu Swain

 IN a significant turn of events, the foreign lenders to the Dabhol Power Company (DPC) have decided to adopt a wait-and-watch approach, rather than precipitate matters on the basis of the termination notices served by both parties - the power company and the Maharashtra State Electricity Board (MSEB) - on each other. This development comes even as the lenders' meeting rolled on to an unscheduled third day to iron out further issues among themselves.
This decision was taken after two days of hectic deliberations among the lenders where the Industrial Development Bank of India (IDBI)-led domestic lenders briefed their foreign counterparts about the positive signs relating to the continuance of the power project, top sources associated with the meeting told The Financial Express on Wednesday evening. The sources said this effectively means that the foreign lenders would not immediately insist on encashing the guarantees on their funds provided by the domestic lenders to the project. The Dabhol lenders' meeting will now continue for an "unscheduled" third day on Thursday.
The lawyers of offshore lenders White & Case have confirmed that the meeting will continue on Thursday.
However, the representative of Industrial Development Bank of India (IDBI) Mr RS Agarwal left Wednesday's meeting mid-way to catch the flight back to India. Sources said Enron India managing director K Wade Cline made a detailed presentation for over two-and-half hours before the lenders. Mr Cline is believed to have outlined the series of events that have brought Enron to the brink of quitting India.Mr Cline said after the presentation: "We have made a presentation. The presentation went well." Dabhol Power Company, on its part, has already made it known that it is willing to revise some of its earlier projections to suit the requirements of the state government.
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THE INDIAN EXPRESS, Thursday, June 07, 2001
FIs buy more time in DPC lenders meet

The two-day meeting between Indian and foreign lenders of the Enron-promoted, Dabhol Power Corp (DPC) remained inconclusive on Wednesday with foreign lenders deciding to give some more time to the Indian government to decide the fate of the project.While officials of Indian FIs (IFIs) decided to fly back on Wednesday, foreign lenders are expected to discuss among themselves on what action should be taken on the project on Thursday. IFIs have already sunk over Rs 5,000 crore on the project and if international lenders pull the plug on the project, it would be IFIs which will have to take another Rs 2,463 crore hit on their balance sheet as they have guaranteed all the international loans taken by DPC.

IFIs, led by IDBI have already told the foreign lenders that they should not take any hasty decision as even the PM has intervened in the dispute. The foreign lenders include a consortium led by ABN-Amro, Citibank NA, Japan Exim bank and OPIC. With this, foreign lenders have now decided to adopt a wait-and-watch posture instead of fighting with Indian lenders.The IFIs had pressed for completion of the $3 billion project, as DPC has stopped commercial production and doubts are being expressed for commissioning of its 1,444 MW phase-II due on Thursday. The Indian team, led by IDBI executive director R S Agarwal, flew back to India alongwith representatives of SBI and ICICI. On Wednesday, DPC also made presentations to the lenders about the fate of the project. Analysts say that foreign lenders cannot give much time to the project as they have to follow stringent accounting norms followed in the international market.
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THE ECONOMIC TIMES, Thursday, June 07, 2001
A step forward
DABHOL Power Company is reportedly ready to extend the period for conciliation till August. This is a good idea. Nobody, least of all Enron, which owns the majority stake in DPC, gains from terminating a costly project suddenly. India is desperately short of electricity, whether or not Maharashtra claims that it can do without Dabhol power. The least that will be achieved by extending the conciliation period will be a more organised withdrawal of Enron from the $2 billion project.
However, if MSEB, the governments of Maharashtra and India act sensibly, then the project can be salvaged by some renegotiation. Enron, which reportedly plans to specialise in energy trading and pull out of power generation worldwide, might still pull out, but a renegotiated Dabhol will be a cheaper source of large volumes of electricity which India desperately needs. The Godbole committee reckons that by renegotiating DPC's PPA and its gas contracts, and by some financial re-engineering, the cost of DPC electricity can be nearly halved. That will mean very attractive prices for electricity from a new gas driven plant. It also means that domestic financial institutions and banks, who have a huge exposure to Dabhol, will not have to contend with the worrisome prospect of having to provide for loans that become non-performing.
Meanwhile the government in New Delhi has to stop waffling about the need for reforms and get some work done. The first thing to do is to issue an ordinance permitting all independent power producers to sell power to whoever is willing to pay for it. Private investment is already allowed in transmission and distribution. With generators free to sell to entities other than SEBs, India will move towards a more competitive market for power. Privatising power distribution has proved to be a mixed success - it has succeeded to some degree in states like Orissa and flopped in UP, mainly because nobody has faith in the government's ability to administer. Reforms of state owned distribution networks and SEBs are uncertain and will take a long time to succeed. In the meantime, it is a good idea to set up parallel, privately owned and operated systems for generation, transmission and distribution that will provide reliable, quality power to consumers who are willing to pay.
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BUSINESS STANDARD, Thursday, June 07, 2001
Dabhol to challenge MERC order in high court, Arijit De & S Ravindran
The legal battle between the Dabhol Power Company (DPC) and the Maharashtra State Electricity Board (MSEB) has taken a fresh turn with the former deciding to challenge, in the Mumbai High Court, the order of the Maharashtra Electricity Regulatory Commission (MERC) restraining it from seeking recourse to international arbitration till June 14. The case is slated to come up for hearing on June 11, three days before the next MERC hearing. DPC's contention, it is learnt, is that it is beyond MERC's jurisdiction to debar the company from proceeding with international arbitration. DPC has informed MERC about its decision in a communication dispatched this evening, MERC officials said.When contacted, the DPC spokesperson declined to comment on the issue. MSEB has slapped a claim of Rs 401 crore on DPC for non-supply of power at adequate levels on January 28.
In a submission before the commission, it also said that DPC has to pass on Rs 1,200 crore which had been paid as capacity charges. On May 29, MERC had passed an interim injunction restraining DPC from going in for arbitration on its payments dispute with MSEB till June 14. The commission had also taken the line that DPC could not activate the escrow account for the second phase of the project. The terms of the power purchase agreement inked between MSEB and DPC provide for international arbitration between the two sides if payments disputes arise. DPC lawyers had questioned MERC's authority to settle disputes with MSEB. They had argued that MERC, created in May 1999, did not have the jurisdiction to adjudicate on disputes between DPC and MSEB. The DPC argument was that since the amended PPA with MSEB had been inked in 1998, there was no question of MERC having any role to play. MERC sources concede that they cannot reopen the PPA. But they point to another amendment to the Electricity Regulatory Commissions Act on October 27, 2000, which empowered MERC to settle all disputes between power utilities. The commission's stand is that since both DPC and MSEB are power utilities, it has the right to adjudicate on all disputes between the two.
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BUSINESS STANDARD, Thursday, June 07, 2001
DPC to continue billing MSEB for Phase II power, S Ravindran
Dabhol Power Company (DPC) will continue billing the Maharashtra State Electricity Board (MSEB) for the power generated from its phase II, which was due to commence operations on Thursday. Sources close to DPC said: "If MSEB had fully cooperated with DPC, commercial production could have begun from tomorrow. Under the power purchase agreement (PPA) they would have been forced to buy this power.""While MSEB's contention is that they have rescinded the PPA, DPC's contention is that the PPA continues to be in force. Under these circumstances, DPC will definitely charge MSEB for the second phase power at some future date," the sources added.
MSEB has already stopped buying power from DPC. MSEB chairman Vinay Bansal could not be reached for comment. Meanwhile, lenders to the Enron-promoted Dabhol Power Company (DPC) are yet to arrive at a decision on the crucial issue of a transfer notice being served to the MSEB.DPC executives made a presentation to a consortium of domestic and foreign lenders in Singapore on Wednesday. "The lenders are yet to get back to DPC with their views on the subject," sources said. This was one among various suggestions put forth by DPC executives to the lenders.
The other issue that was discussed was the mothballing of the 1,444 mw second phase of the project.Further, DPC executives also spelt out the differences between the company and the Godbole committee to a consortium of Indian and foreign lenders."DPC representatives pointed out that there was a huge gulf between the members of the Godbole panel and the company. The bone of contention is the plant load factor (PLF) at which DPC will sell power to Maharashtra State Electricity Board (MSEB). Dabhol Power is keen on a PLF of 90 per cent which will bring down the tariff. The Godbole panel on the other hand wants a much lower offtake of power by MSEB," sources close to DPC told Business Standard from Singapore.
The meeting was attended by Enron India, managing director, Wade Cline; DPC president and CEO Neil McGregor and representatives of Indian financial institutions and banks like Industrial Development Bank of India, ICICI, State Bank of India. The foreign lenders were represented by the arrangers to the loan for DPC including to Credit Suisse First Boston. DPC also sketched out a number of possible scenarios to the lenders in the wake of the preliminary termination notice issued to MSEB. Sources however refused to elaborate further. DPC executives are scheduled to hold another round of discussions with the lenders to the project on Thursday.
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THE FINANCIAL EXPRESS, Thursday, June 07, 2001
'Captive, decentralised power projects are the answer to power shortage problem', Rajeev Jayaswal

THE failure of big power projects such as Dabhol proves that captive and decentralised power generation projects are the solution to the massive power shortage in India, according to global power major Wartsila Corporation's president and CEO Ole Johansson. "The future of small power projects or distributed generation in India is quite promising, compared to large power plants," he said citing the company's growth in India."Wartsila, India, is adding about 200 MW power generation plants every year in India for the last five year and the growth is likely to continue even in the future," he said. Wartsila, India, has commissioned a number of distributed generating stations in India in the last 15 years, which altogether crossed the installed capacity by 2,000 MW. The power generation plants have been installed for industries, utilities and independent power producers (IPPs).  "Out of the total 2,000 MW power projects installed, 50 per cent of the capacity was added in the last five years, showing the trend for small distributed generating stations located close to the load centres," he said.

Stating, there is a large demand and supply gap in India, Mr Johansson said: "India is currently short in peak demand by about 11 per cent. According to an estimate, about 1,00,000 MW will have to be added over the next 12 years to the existing generating capacity of about 1,00,000 MW, to support a GDP growth rate of 6 per cent per annum."Speaking about the Enron controversy, he said, "The company, the foreign lenders involved in the projects, and both the state and the Central governments can find an amicable solution."

He, however, added that the big plants are always difficult to finance, whereas there are little financial and completion risks involved in small power projects. The company claims to install a captive power plant of 150 MW in about 14 months which can run on both furnace oil, as well as natural gas.Stating that gas is the fuel of the future, Mr Johansson said that power generated by using gas fuel is cheaper than oil by about Rs 1, depending on the availability of gas and its market price. "The cost of power generation is under Rs 3 per unit in case of gas, whereas in case of oil it is about Rs 4 per unit," he said. The Finnish company, Wartsila


Just in case you've only received this 10 times today

May 7, 2001

Texas May Face a Glut of Electricity,
But It Won't Help in the Rest of U.S.
Pride and Policy Make State a Magnet
For Power Plants and an Island Unto Itself
By ALEXEI BARRIONUEVOand RUSSELL GOLD
Staff Reporters of THE WALL STREET JOURNAL
While California struggles to keep its lights on and New York City braces for
possible electricity shortages this summer, Texas utilities could soon face
the opposite problem: a power glut.

Texas' wide-open spaces and relatively weak zoning and environmental rules
have helped make the Lone Star state a magnet for power-generation companies
as it prepares to deregulate its electricity market next year. The result:
Texas' electricity-production capacity this summer is expected to exceed its
peak power demand by 11,000 megawatts -- nearly enough to light up New York
City. By the summer of 2002, the excess may be closer to 15,000 megawatts,
enough to power 15 million homes. And with 27 new generating plants under
construction, more than any other state, some power producers fear that
overbuilding ultimately could send Texas' wholesale electricity prices into a
tailspin.
A Grid Apart
All this sounds like good news for the electricity-starved East and West
Coasts -- but it isn't. That's because the U.S. is divided into three major
power grids -- with the West on one, the East on another and most of Texas on
a third, with very few links to the rest of the country. In the world of
electricity, that makes Texas "an island with a couple of little footpaths
over to it," says Larry Makovich, senior director for electric power research
at Cambridge Energy Research Associates, a Cambridge, Mass., consulting firm.
Some Texas utility executives argue that their state's island status is
principally an accident of geography. But no one disputes the fact that good
old Texas pride -- and a deep-seated skepticism toward federal regulation --
also played a role in shaping the state's grid. So, too, did a renegade
utility's desperate 1976 bid to save itself from a corporate breakup and the
resulting four-year legal battle, which the industry later dubbed the "Texas
Range War."
Texas' isolation isn't expected to end anytime soon. If Texas became fully
interconnected, its big utilities say, the state could become more
susceptible to blackouts, if other regions drew off too much power. "From a
reliability standpoint, it would be a degradation to the Texas grid," says
Steve Schaeffer, a senior vice president at Reliant Energy Inc., the former
Houston Lighting & Power Co.
Competing Interests
Moreover, the utilities estimate that building the transmission lines needed
for a full connection to the nation's other grids would take at least three
years and cost Texas ratepayers about $600 million. They don't want to invest
that much money to sell power to California or New York to ease what they
view as temporary imbalances.
Some in the state also believe low rates and excess power could give it an
advantage in persuading businesses to locate there. "America will be shy
enough electricity that this will be one of our greatest inducements for
growing Texas," says Matthew Simmons, president of Houston investment bank
Simmons & Co.
Texas is an extreme example of the haphazard way electricity grids developed
in the U.S. Until the 1960s, most power plants were built near the customers
they served. Then, utilities began building larger, more-efficient coal and
nuclear plants, connecting them with their neighbors to ensure that if one of
these big plants went down, there would be a backup ready to keep the power
flowing.
'No Big Money'
But the old-line Texas utilities, which have long benefited from the state's
plentiful supplies of fuels such as natural gas and lignite coal, were
reluctant to join in this wave of interconnections. Back then, in the
mid-to-late 1970s, electricity outside Texas was generally more costly. And
surrounding states weren't planning big enough plants to back up the huge new
ones Texas was building to power its fast-growing cities and energy-thirsty
petrochemical industry. "There was no big money to be made by shipping power
one way or the other over the lines," says Reliant's Mr. Schaeffer.
By confining their grid to Texas, state utilities also avoided oversight by
the Federal Energy Regulatory Commission. Thus, FERC couldn't force Texas to
send power out of state in case of an emergency.
The state's dominant utilities -- Texas Utilities Inc., the Dallas-based
predecessor of what is now TXU Corp., and Houston Lighting -- went to great
lengths to ensure there were no interstate connections. The switches at a
hydroelectric plant on the Texas-Oklahoma border were wired to prevent power
from flowing between the states. Elsewhere along the border, a system of
relays was installed to prevent unauthorized interstate transmissions.
Only one big utility didn't like the setup: Central & South West Corp., a
Dallas holding company that owned power plants in both Texas and Oklahoma. In
1976, it faced a crisis. If it couldn't show that its plants in both states
were interconnected, it ran the risk of being broken up under a federal law.
The law, which barred holding companies from owning unconnected utilities in
separate states, was decades old. But, until then, it hadn't been strictly
enforced.
On May 4, 1976 -- eight days before the Securities and Exchange Commission
was set to consider the matter -- Central & South West took an extraordinary
step. At 5:30 a.m., it sent one of its line crews to secretly rewire a
substation in Vernon, Texas, near the Oklahoma border, allowing power to flow
freely between the two states. For a few hours, the grids were connected by a
minuscule thread. Later that morning, officials at Central & South West
phoned other Texas utilities to tell them the company was engaged in
interstate commerce.

Texas' other major utilities reacted angrily. "The sons of bitches are trying
to steal my lignite!" Texas Utilities Chairman Louis Austin bellowed,
according to former Texas Public Utility Commissioner George Cowden, who
recalls Mr. Austin making the remark during a private meeting between the two
men.
Around noon, Houston Lighting cut its system off from the rest of the state's
utilities. Texas Utilities followed suit hours later. By day's end, the
state's utilities had broken the grid into a half-dozen pieces.
That same day, one of Texas Utilities' chief lawyers, a 6-foot-6 former
college-football star named J.A. "Tiny" Gooch, dispatched one of his
company's crews to disconnect the link Central & South West had made between
Vernon and Altus, Okla. "They made it so it was physically impossible to
[connect] it again," says Mr. Gooch's son, Gordon, then a lawyer representing
Houston Lighting. The elder Mr. Gooch, who died in 1986, is considered the
patron saint of Texas' electrical independence.

At an emergency meeting of the utility commission three days later, Mr.
Austin of Texas Utilities expressed disgust at the prospect of having to burn
Texas lignite and natural gas to satisfy "Yankees," according to a
transcript. And, he added: "I don't like federal regulations." (Mr. Austin
died in 1997.)
A wire reputed to have formed part of Central & South West's brief
Texas-Oklahoma interconnection later was cut into pieces, encased in Lucite
and given out as paperweights by Dallas law firm Worsham, Forsythe &
Woolridge, which represented Texas Utilities.
Alan Erwin, a state utility commissioner in 1976 who still has the souvenir
on his desk, used the wiring episode as fodder for a 1979 novel, "The Power
Exchange," in which a winter storm cripples Northeast power production and
the nation turns to Texas for electricity. Texas refuses to ship the
electricity, fearful that other regions would drain it of "what little cheap
fuel was left." Ultimately, Texas becomes a scapegoat and ends up seceding
from the union.
Real-Life Compromise
In reality, the outcome was less dramatic. The grid conflict wound its way
through many courtrooms. Central & South West -- recently acquired by
American Electric Power Co. of Columbus, Ohio -- lost almost every round.
After about four years, the utilities hashed out a compromise, at the urging
of the federal government.
Rather than link the Texas grid to the East, so that electricity could flow
freely across state borders through alternating-current cables, they agreed
to build two direct-current lines. Operators could control the flow over
these bridges, which at peak capacity could carry a mere 820 megawatts. The
parties to the deal, which included the federal government, agreed these
links wouldn't bring the Texas grid under federal jurisdiction. Today, Texas
power continues to be regulated in Austin, not Washington.
"It's just a Texas thing," says Pat Wood III, chairman of the state utility
commission and a recent Bush administration nominee to FERC. "We want control
of our own destiny."
That independent attitude has extended in recent years to Texas'
business-friendly approach to deregulating its power industry. Unlike
California, with its stringent emissions and zoning rules, Texas has made it
quick and easy for power companies to locate their plants almost anywhere
they can find a place to hook up to the grid. Last year, Texas completed a
major upgrade to alleviate bottlenecks on the grid, and it has six similar
projects under way. Unlike most other states, it decided to charge grid users
a flat rate to move power anywhere in the state, so they could put plants in
low-cost rural areas, far from their customers.
Those policies, as well as projections that the state's electricity demand
would grow by a robust 3.5% a year, set off a flurry of power-plant
construction, beginning in 1998. Since then, $11 billion worth of power
plants have been completed or started in Texas, and more are on the drawing
board.
By contrast to California's approach to deregulation, which largely failed to
bring new plants online, Texas' strategy "encouraged an overbuild," says Mr.
Makovich, of Cambridge Energy Research Associates.
Consider tiny Seguin in south central Texas, where Constellation Energy Group
Inc. of Baltimore is building an 800-megawatt gas-powered plant in a former
cornfield. Fifteen miles to the west, Texas Independent Energy LP of Dallas
recently finished a 1,000-megawatt plant. About the same distance to the
north, American National Power, a Houston-based unit of Britain's
International Power PLC, is building a 1,100-megawatt plant.
If generators don't get cold feet, Texas is on track to have a capacity
surplus of 9% this summer and 11% by summer 2002, says Cambridge Energy
Research Associates. That's in addition to the 15% surplus that most experts
consider an adequate cushion. Some areas of the country, including parts of
the Southeast, Upper Midwest, New York City and the West, are struggling with
razor-thin capacity margins. After factoring in a similar 15% cushion, the
West has an 8% capacity deficit and the Upper Midwest has a 4% deficit.
As a result, while electricity futures prices for summer are running at as
much as $400 per megawatt hour in the Northwest and around $100 in the
Northeast, Texas futures prices are averaging only $72 to $74 per megawatt
hour.
Calpine Corp. of San Jose, Calif., is making the boldest wager that
overcapacity and a lack of export possibilities won't sink Texas's wholesale
electricity prices. The company has six plants under construction in the
state, two of which are expected to come on line next month. And it plans to
add an additional five plants over the next two years. Altogether, Calpine
plans to spend about $2.8 billion in the state, its largest investment
outside California.
"People from day one probably thought Calpine was crazy," says Darrell
Hayslip, a company vice president. "But so far, we are absolutely convinced
that this is the right bet." He says Calpine's newer gas-fired plants are 40%
more efficient than older plants in the state, a third of which are at least
30 years old. Calpine expects that edge to force rivals to retire older
plants, thus keeping electricity prices from sagging.
Duke's Doubts
Others aren't so sure. After initially planning new plants in Texas, Duke
Energy Corp. began to worry that the state was getting overbuilt. Last May,
Duke, of Charlotte, N.C., sold its 80% stake in a plant under construction in
south Texas to Calpine. "We sized up the market early, and then realized too
many followers were doing the same thing," says Jim Donnell, president and
CEO of Duke Energy North America.
If the electricity situation outside Texas grows too grim and too much supply
sinks prices in the state, there could be "renewed pressure" for Texas to
study interconnection options, says John Stauffacher, vice president for
regulatory affairs at Houston-based Dynegy Inc., which has 1,000 megawatts of
capacity in Texas.
Calpine, for one, wouldn't mind sharing Texas power with the East and West.
"I would love to be able to wheel power from Texas to California," says Mr.
Hayslip. But, so far, the Texas utilities haven't budged in their opposition
to exports.
A few generators are trying to find the best of both worlds. Tenaska Inc. of
Omaha, Neb., is building plants at the border between the Texas and eastern
grids. Though utilities aren't allowed to be connected to both grids at once,
the plants are designed to allow the company to switch between grids as
demand and prices warrant.
In rural Grimes County, about 90 miles outside Houston, Tenaska plant manager
Frank Carelli boasts that his 830-megawatt plant could disconnect from one
grid, connect to the other and be back at full power within an hour. A
similar Tenaska plant is slated to begin operations this month in Rusk
County, near the Louisiana border.


A few items to consider for the paralegals:

(1)  We need to organize the various country opinions (ISDA closeout netting,
ENA jurisdictional survey, others) so that they are accessible to the group.
We should also have a checkout process for the opinions.  We should have
access to the ECTRIC opinion database (which I believe is organized online).
I know that I can look in a particular file cabinet located near Susan for
the various volumes of opinions, but where can I find an updated listing of
all of the above?

(2)  Impress upon everyone the importance of entering information into Lotus
Notes (for ALL types of agreements).

(3) I believe that Sam is in charge of the unanimous consents (for all Enron
affiliates).  I for one would like an UPDATED book of the consents (kept
updated).  These consents must be maintained and kept current.  If Sam is out
of the office, we need access to the book.

(4)  We should create a "paralegal manual" as we go.  Each person could be
responsible for drafting sections (and you could review their drafting
skills!).  Given some time, I could probably help to identify relevant
sections.

(5)  Agreement checkout.  We need to create a "checkout card" for each file
so that when files are returned to the file cabinet, the checkout card is
retired and placed inside the file for the next checkout.  I will volunteer
my assistant to help out but I don't want to step out of turn here so I'll
wait to hear from you.

(6)  I have the sense from some of the legal-credit meetings that everyone
needs to be reminded to follow up on outstanding ISDA's (mainly the Top Ten
and high priority items).

I'll send additional items as they occur to me.  Thanks.  Sara

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


---------------------- Forwarded by Kayne Coulter/HOU/ECT on 09/05/2000 01:24
PM ---------------------------

	From:  Mitch Robinson @ ENRON                           09/05/2000 01:04 PM

To: Kayne Coulter/HOU/ECT@ECT
cc:
Subject: FE's NEW trans subsidiary

fyi.
---------------------- Forwarded by Mitch Robinson/Corp/Enron on 09/05/2000
01:06 PM ---------------------------

Patrick Hanse@ECT
09/05/2000 12:58 PM
To: Oscar Dalton/HOU/ECT@ECT, Mitch Robinson/Corp/Enron@Enron, Corry
Bentley/HOU/ECT@ECT, James E Terrell/HOU/ECT@ECT, Alonzo
Williams/HOU/ECT@ECT, Larry Valderrama/HOU/ECT@ECT, Robert
Benson/Corp/Enron@ENRON
cc: Edward D Baughman/HOU/ECT@ECT, John Zufferli/HOU/ECT@ECT, Kevin M
Presto/HOU/ECT@ECT

Subject: FE's NEW trans subsidiary

FE transmission has  changed it's name to American Transmission Systems, Inc.
(ATSI) as a Transmission Provider.  See details in the letter below.  FE will
continue to be a Control Area. FOR TAG purposes beginning Nov. 1st, the TP
for all FE OASIS references will need to be ATSI.
---------------------- Forwarded by Patrick Hanse/HOU/ECT on 09/05/2000 12:31
PM ---------------------------

JohnO@ecar.org@ecar.org on 09/05/2000 08:25:51 AM
Sent by: CarolC@ecar.org
To: tahern@buckeyepower.com, andreej@dteenergy.com, drbarker@cinergy.com,
ssbayer@nipsco.com, rbednarz@spp.org, cbedwell@vectren.com,
cbradley@bigrivers.com, bob.crosier@lgeenergy.com, mike.falvo@iemo.com,
dgoodson@hepn.com, rgursky@spp.org, phanse@enron.com, fredh@soc-dlco.lm.com,
dbidzior@cmsenergy.com, pbjohnson@aep.com, ljk@maininc.org,
rmkovacs@firstenergycorp.com, fredk@wvpa.com, JeffM@ecar.org,
jnickel@mpower.org, Robert.O'Connell@Williams.com, JohnO@ecar.org,
screadinger@pplweb.com, kevin.sherd@dplinc.com, bsquibb@ovec.com,
mtaylor@ipalco.com, juhrin@alleghenypower.com, jason@ekpc.com
cc:
Subject: More about ATSI

TO THE ECAR ATC PANEL AND LIAISONS:

I am sending this to you for your information.

Carol J. Cooper
E C A R
Direct Line: 330/580-8000
Phone:  330-456-2488
Fax:  330-456-3648
e-mail: carolc@ecar.org

-----Original Message-----
From: rmkovacs@firstenergycorp.com [mailto:rmkovacs@firstenergycorp.com]
Sent: Friday, September 01, 2000 10:52 AM
To: johno@ecar.org
Subject: More about ATSI

John,

At the ATC Panel meeting in South Bend, I provided some information about
FirstEnergy's new  transmission subsidiary, American Transmission Systems,
Inc. (ATSI).  I have some updated information.

ATSI went commercial today, September 1. ATSI is a wholly owned subsidiary
of FirstEnergy Corp. and owns and operates all of FirstEnergy's transmission
facilities at voltages of 69 kV and above. ATSI is the transmission provider
and performs the control area operator function for the FE control area. You
may want to visit ATSI's OASIS home page, which can be accessed the same way
as its predecessor FE OASIS home page. The organization charts, tariff,
provider information, etc., have been updated to ATSI. ATSI's public web
site is located at "http://www.atsi-transmission.com."

A change has been made in the timing for the recognition of "ATSI" as the
transmission provider mnemonic . NERC has informed us that upon reflection
it would be easier for them to accommodate the mnemonic change from "FE" to
"ATSI" at midnight on November 1 rather than 8:00 a.m. EST. So currently the
changeover is set for 0001 hours, EST (midnight) on November 1.

The control area designation remains "FE."  As you know, path POR/PODs are
based on the control areas. Thus, beginning November 1, the path name for
transfers to AEP, for example, will change from "E/FE/FE-AEP//" to
"E/ATSI/FE-AEP//." Note that the abbreviated path names, as used in the ECAR
ATC Coordination System, will not change (e.g., "FE-AEP"). Beginning
November 1, the Transmission Provider (TP) column on E-tags must show "ATSI"
not "FE" or they will be refused by ATSI's automatic tagging validation
software.

I hope this clarifies, rather than confuses. Please share this information
with the ATC Panel contacts.

Thank you,
Dick


I don't have copies of the assignment docs in my files. Can you see if somebody in Legal or Global Contracts could forward me a copy?

Thanks,
Darren

 -----Original Message-----
From: 	Schwieger, Jim
Sent:	Tuesday, September 18, 2001 12:43 PM
To:	Vanek, Darren
Cc:	Schwieger, Jim
Subject:	RE:

Darren:
Cannon and Kinder Morgan are both in agreement to the assignment.  Do you have a recommendation of what Credit would like the assignment to look like?  Is the one that was used on the first deal OK?  Please let me know so that we can get this going again.

	Thanks,
	Jim

 -----Original Message-----
From: 	Vanek, Darren
Sent:	Sunday, September 09, 2001 4:06 PM
To:	Schwieger, Jim
Subject:	RE:

Jim,
We need to get Cannon and Kinder to agree to the assignment, so the transactions can happen simultaneously. Credit is not comfortable wearing the risk with Cannon for any length of time.

 -----Original Message-----
From: 	Schwieger, Jim
Sent:	Friday, September 07, 2001 11:02 AM
To:	Vanek, Darren
Subject:	RE:

The Kinder Morgan assignment could also be put in place with this deal.  Kinder Morgan & Cannon Interest have there own deal and Kinder Morgan has been pretty flexible in the past, so I do not think it would be a problem.  I would like to go forward with this deal quickly to avoid having the Market move against this transaction.  Please get back with as soon as you can.
	Jim

 -----Original Message-----
From: 	Vanek, Darren
Sent:	Thursday, September 06, 2001 6:57 PM
To:	Schwieger, Jim
Cc:	Rohauer, Tanya
Subject:

Jim,
Sorry about the delay in correspondence, but we have been reviewing the history of the previous transactions. It appears that the deal was eventually assigneed to Kinder Morgan.  We should pursue the deal with Kinder. We would greatly appreciate any information that you might have about the Kinder assignment as well as your thoughts about pursuing the deal directly with Kinder.

-Darren

From: 	Vanek, Darren
Sent:	Wednesday, September 05, 2001 7:39 AM
To:	Rohauer, Tanya; Williams, Jason R (Credit)
Subject:	Cannon Interest Houston Synthetic Storage Transaction
Importance:	High

Tanya,
Quick background: Jim Schwieger brought me this deal last week at the request of Tom Martin. It appears as though HPL did 2 similar transactions similar to this in past.  The information that we have on Cannon contains the following additonal information inCAS:
	Cannon Interests Houston is a dba for Patrick Locke (a person). No financial trading.  All financial trading 	should be allocated to an affiliate, Westpark 	Resources, Inc. executed ISDA.

	We are holding $900,000. as prepayment of the $.21/mmbtu premium due to amortize 11/00 - 2/01.  Amount 	will be applied to third party sales account 	(4830-999) and allowed to flow through profit/loss.  Remaining 	portion will settle normally 11/00 - 2/00 without the $.21 premium.  Movement of the the $900,00 will take 	place during 4/00 accounting.

I believe that these comments are in relation to the HPL deals and are outdated. In addition, I believe that ENA recently purchased capacity from Cannon, which is reflected in a current annuity due to Cannon. According to notes in TAGG, Barry Tycholiz was the commercial person involved in the capacity transaction.

The new transaction mirrors the old one with a change of time period and pricing:
ENA takes delivery of 2.5bcf/per month @ Houston Ship Channel Index
June 2005 -Oct 2005
June 2006- Oct 2006
June 2007- Oct 2007
June 2008- Oct 2008
Cannon takes delivery of the same quantity @ Houston Ship Channel Index weighted average price for the volume + $0.30
November 2005- Feb 2006
November 2006- Feb 2007
November 2007- Feb 2008
November 2008- Feb 2009

Points of note:
 Original transaction began with HPL taking delivery in June 2000 going through Feb 2003 and later extended through  Feb 2005.
Cannon was required to pay $900,000 March 2000 (storage fee?) and to post a $4.2MM Letter of Credit for the term of the deal.
In addition, Cannon was required to post subsequent Letters of Credit "in the amount of 5,083,333 times the weighted average price determined....."
The quantities are the same as the original transaction, but I do not think that there will be an upfront payment for storage services.

-Darren


enjoy!
---------------------- Forwarded by Steven J Kean/NA/Enron on 05/24/2001
05:18 PM ---------------------------

	Enron Capital & Trade Resources Corp.

	From:  Rebecca W Cantrell @ ECT                           05/24/2001 05:11 PM

To: James D Steffes/NA/Enron@Enron, Richard Shapiro/NA/Enron@Enron, Steven J
Kean/NA/Enron@Enron
cc: Leslie Lawner/NA/Enron@Enron

Subject: Fwd: The Answer!

I just had to share this with you.  I hope you haven't seen it already.
---------------------- Forwarded by Rebecca W Cantrell/HOU/ECT on 05/24/2001
05:09 PM ---------------------------

"Randall Rich" <rrich@bracepatt.com> on 05/24/2001 05:10:19 PM
To: <llawner@enron.com>, <rebecca.w.cantrell@enron.com>
cc:
Subject: Fwd: The Answer!

Thought you'd enjoy this.
Received: from mcafee.bracepatt.com by mail.bracepatt.com; Thu, 24 May 2001
00:49:13 -0500
Received: FROM hountnmail1.ngccorp.com BY mcafee.bracepatt.com ; Thu May 24
00:59:27 2001 -0500
X-Proxy: keymaster.bracepatt.com protected
From: Betsy.Carr@dynegy.com
Subject: The Answer!
To: tbradley@bracepatt.com, asettanni@bracepatt.com
Sender: Betsy.Carr@dynegy.com
Date: Wed, 23 May 2001 23:11:59 -0500
Message-ID: <OF120FB6CE.1A60FE9A-ON86256A56.0016ECD1@ngccorp.com>
X-MIMETrack: Serialize by Router on HOUNTNMAIL1/HOUSRV/Dynegy(Release 5.0.5
|September 22, 2000) at 05/24/2001 12:44:04 AM
MIME-Version: 1.0
Content-type: multipart/mixed ;
Boundary="0__=86256A560016ECD18f9e8a93df938690918c86256A560016ECD1"
Content-Disposition: inline

finally.......

(See attached file: windmilldavis.gif)

 - windmilldavis.gif


Attached are the recipes for the Church Gourmet Dinner.  I've got you down
tor the pork chops (Alicia says  to make it a mix of pork and chicken).  All
the recipes looked really good, so I thought you might want to look at them
anyway.

The directions to my house are as follows:

1.  Take 59 and exit Greenbriar like you are going to Church
2.  First light is Bissonnet, make a left on Bissonnet.
3.  Stay on Bissonnet for about 1/2 mile.  On the right you will see a gray
apartment complex called "Maryland Manor".  The street right there is
"Ashby", make a right on Ashby.
4.  The first left is Wroxton Court.  I am in the upstairs of the duplex at
1714 Wroxton Court, but you probably will just want to walk around to the
back yard.

My phone no. is case there are any problems is (713) 529-1038.  I look
forward to seeing you there!

 - Black Bean Dip.doc
 - RoastRdPepperDip.doc
 - Cheesy Herb and Garlic Bread.doc
 - ShrimpGazpacho.doc
 - PorkChopsMangoBasilSauce.doc
 - ScallopedPotatoes.doc
 - DeathbyChocolate.doc


Get me a ticket and I'll see what I can do...I call later.

	Enron Capital & Trade Resources Corp.

	From:  "Emily Hillegeist" <ehillegeist@hotmail.com>
11/09/2000 03:58 PM

To: sscott5@enron.com
cc:
Subject: hurry!

hey- just checked- JJW playing at gruene hall fri dec 15th- his sat show is
sold out.  any interest or poss. that you could leave work around 3-4 and
go?  just emailed katy about going up earlier and shopping which i know you
prob couldn't do, but could be a fun girls' nite out in NB.  kind of have to
jump on this asap b/c tix are going to sell out soon!  if you can email me
back in next 5 mins, do so, if not try to give me a quick call later- am
jogging home from the internet store, so should be home in about 45 mins!
hope all is well- and hope SINCERELY that the f*%o'n morons in florida get
swallowed up by a giant tidal wave.  IF YOU CAN'T READ A DAMN BALLOT, DON'T
VOTE!  and you DEFINITELY shouldn't be able to vote if you're shameless
enough to speak out PUBLICALLY and admit you CAN'T read a ballot....!
aughhhhhhh!  just one more bit of evidence that supports my theory that all
voters should take an IQ test, and then have their vote weighed
appropriately......
e
_________________________________________________________________________
Get Your Private, Free E-mail from MSN Hotmail at http://www.hotmail.com.

Share information about yourself, create your own public profile at
http://profiles.msn.com.


I would like to take Friday, Dec. 8 as a vacation day.  Please advise of any
conflicts.  Sara


Le invitamos a visitar nuestra p?gina

<http://www.artbronzecasting.com/sacro>

I am inviting you to visit our web page <http://www.artbronzecasting.com/sacro>

Nous vous invitons a visiter notre page

<http://www.artbronzecasting.com/sacro>

Wir laden Sie ein, unsere Homepage  <http://www.artbronzecasting.com/sacro>

?E?F?u?E?y?[?W???????????????B?A?h???X??

<http://www.artbronzecasting.com/sacro>

Benigno Quezada Morales

To stop additional follow up messages

cancel@artbronzecasting.com <mailto:cancel@artbronzecasting.com>

  _____

Descargue GRATUITAMENTE MSN Explorer en http://explorer.msn.com <http://go.msn.com/bql/hmtag_itl_ES.asp>


A recall has been added/changed for Offer No.  33941.  The Recall Method
associated with the Offer is YR - PERMANENT RECALL, NO REPUT
The Service Requester for releasing contract 67811 OPT
is 006824 CALP                                    .
The Service Requester for assignment contract 71451 OPT
is 001100 Enron North America Corp.               .
The recall is for the time period 2002-03-20 through 2002-03-31.
The Recall Type is PTOT - PERMANENT TOTAL RECALL

The following Location Information reflects the recall:

          Location       Loc Type       Recall Qty-Loc MDQ

          833469            D                   0000040000
          801               R                   0000040000

This document was created by TCO0401  in the DB2P subsystem in TRANS ID SMI0, program ATD4004


Shut down for power. They are not FERC suthorized nor are they a current CP.

I am overriding Credit!

	Tana Jones
	03/09/2001 11:14 AM

		 To: Shari Stack/HOU/ECT@ECT
		 cc:
		 Subject: Emerson Electric Co.

The referenced counterparty is on the 3/1/01 list.  You've got them shut down
for power, but Credit's notes are specifically opening them for power.
Should I open or shut down?


With regard to Lisa's comments, consider the following:

What is the per UNIT turbine purchase amount? - the Unit Liability
Amount

in the 2nd para. of 5.4 Cancellation and in 6.1.3 Retention Letter(s) of
Credit for example,
each UNIT is discussed. - This is the way each breakout agreement was
set up.  Cancellation is to be on a Unit basis, which is why Exhibit I
refers to percentages of the Unit Liability Amount. Retention was also
to be 5% of the purchase amount of each Unit - $788,500.   This should
probably be $788,486.25, so that 4 Units multiplied by 788,486.25 =
$3,153,945 (the final payment amount) I had just rounded up.

Also, how does anyone know for 6.1.3 when the last $788,500
per Turbine is supposed to be paid so we can retain it? -Section 6.1.2
states that the final payment is subject to Section 6.1.3.  The final
payment is due January 21, 2002.

As to why we don't define "Purchase Amount" as the total actual amount
expended, I leave that for you to explain to Lisa.

As for the need to change the dates in 6.1.2 and Exhibit I, that is up
to the business folks.

Call me if you want to discuss.

-----Original Message-----
From: Bills, Lisa [mailto:Lisa.Bills@enron.com]
Sent: Wednesday, May 02, 2001 4:20 PM
To: Williams, Bill; Thome, Stephen; Gilbert, Jim; Thompson, Peter J.;
Rasmussen, Dale; Clark, Ed
Cc: Engeldorf, Roseann; Tweed, Sheila; Clark, Catherine; Kerrigan,
Brian; Mann, Kay
Subject: LV Cogen Turbine Contract

Rose and I have reviewed the contract Peter sent to us yesterday - the
draft distributed on April 24.  Rose has already provided our comments
to Peter on the Override Letter which accompanies the contract.  I have
one big issue which the lawyers can't answer as it is a business
decision.  No one seems sure if Bill is the acting originator for this
contract or not.  I leave it up to the LV Cogen Origination team to
decide.  However, until I receive word back from the appropriate person
and see my changes reflected in the turbine contract, Finance has not
signed off on this agreement so it cannot be executed on E-Next's
behalf.

What is the per UNIT turbine purchase amount?  The Purchase Amount is a
remaining total balance outstanding.  In 6.1.2 Payment Schedule, the
payment amount is a lump sum.  However, in the 2nd para. of 5.4
Cancellation and in 6.1.3 Retention Letter(s) of Credit for example,
each UNIT is discussed.  There needs to be an allocation of the Purchase
Amount and Payment Amount on a per turbine basis so Finance can track
these costs as such in case a change order is made to only one turbine
or if a turbine is removed from E-Next prior to all turbines being
removed.  Also, how does anyone know for 6.1.3 when the last $788,500
per Turbine is supposed to be paid so we can retain it?

Also, I would appreciate receiving a clarification of why we don't
define the Purchase Amount as the total and not just the balance
remaining.  It could create discrepancies in the document and for
anybody reading the document trying to understand how much each turbine
costs.  E-Next has already made the approx $10mm payments made to-date.
However, if someone were to pick up the document to find out how much
they could buy the turbines for, it would appear to be $53.6mm not the
Maximum Liability Amount of $63.1mm.  2nd para of 5.4 refers to the
portion of the Purchase Amount to be adjusted upon cancellation.
However, Exhibit I Cancellation refers to the Unit Liability Amount as
the basis for calculation - this seems inconsistent to me.

Now for the general comments:

Section 1.69 and 1.70 need to change places to be alphabetically
correct.

6.1.2 calls for a payment to be made on April 21, 2001.  Exhibit I
Cancellation also has a line for cancellation between March 21 and April
20, 2001.  This will need to be amended as this payment wasn't made
given no contract execution yet.  As everyone knows also, E-Next must be
the party to make this payment to insure the correct accounting
treatment.

6.5 is another place where a per Unit price is discussed for increases
or decreases.  How is this possible with an aggregate Purchase Amount?

In all Notice sections please delete "c/o Las Vegas Cogeneration II,
L.L.C."  This project is not associated with the E-Next financing.

10.2.3.1 Please underline "Optional Delivery Point"

10.12.2  Please delete the " ' " in "it's" after the proviso.

10.15  The timing of 120 days for delivery of serial numbers herein is
inconsistent with the bracketed 5 months in 10.2.1 and Exhibit P.
Please conform all to the same time frame.

Has David Marshall reviewed all the insurance provisions of this
document.  While a standard turbine contract, there have been some
recent modifications/views from our insurance providers.

I look forward to hearing back from the deal team and reviewing the next
round of documents.


Start Date: 4/26/01; HourAhead hour: 24;  No ancillary schedules awarded.
Variances detected.
Variances detected in SC Trades schedule.

    LOG MESSAGES:

PARSING FILE -->> O:\Portland\WestDesk\California Scheduling\ISO Final
Schedules\2001042624.txt

---- Energy Import/Export Schedule ----
*** Final schedule not found for preferred schedule.
     Details:

  TRANS_TYPE: FINAL
  SC_ID: ECTRT
  MKT_TYPE: 2
  TRANS_DATE: 4/26/01
  TIE_POINT: PVERDE_5_DEVERS
  INTERCHG_ID: CISO_EPMI_DESERT
  ENGY_TYPE: NFRM

---- SC Trades Schedule ----
$$$ Variance found in table tblInt_Interchange.
     Details: (Hour: 24 / Preferred:  27.00 / Final:  26.97)
  TRANS_TYPE: FINAL
  SC_ID: EPMI
  MKT_TYPE: 2
  TRANS_DATE: 4/26/01
  TRADING_SC: PWRX
  PNT_OF_INTRC: NP15
  SCHED_TYPE: ENGY
  PURCH_SALE: 2
  DEAL_NO: 1


Are these physical transactions?

	Kimberly Hundl@ENRON
	03/20/2001 04:12 PM

		 To: Tana Jones/HOU/ECT@ECT
		 cc: Melissa Ann Murphy/HOU/ECT@ECT
		 Subject: Coral Energy Holding Deals #550402 & 550229

Hi Tana,
These are the EOL deals that were erroneously entered under Coral Power LLC,
they were actually done with Coral Energy Holding LP
550402:
Buyer:  Coral Energy Holding LP
Seller:  Enron North America
Delivery Point:  NYISO Zone G (HUD VL)
Term:  3/19/01 - 3/23/01, M-F EPT, HE 8-23
Volume:  50
Fixed Price: $54.50
Index:  Hudson Valley NY Zone G

550229:
Buyer:  Coral Energy Holding LP
Seller:  Enron North America
Delivery Point:  NYISO Zone A (West)
Term:  3/16/01 - 3/16/01, Fri., EPT, HE 8-23
Volume:  50
Fixed Price: $37.75
Index:  NY Zone A (West)

Please let me know if you need additional information.
Thank you for your help!
Kimberly Hundl
Power Documentation x31647


I will be there.  And I'll be bringing a guest.


The Insurance Luncheon/Presentation  is TODAY.  Lunch will be served at
11:30, with the presentation beginning around noon.  We have reserved The
Houston Room at 601 Jefferson (The Kellogg Building), Level A.

Walking Directions:  Exit the Enron Building, go to the right to Pease (1-1/2
blocks) and turn left.  The Kellogg Building is directly across from the YMCA
on Pease.  Go down the escalator one level to Level A and the Houston Room
will be directly in front of you.

You can also reach The Kellogg Building through the tunnel and skywalks.
Take the tunnel to the Continental Building and then the skywalks will take
you the rest of the way.

Shuttle Riders:  The Enron Shuttle will be leaving at approximately 11:15.
The Shuttle will hold a maximum of 30 people, so hopefully the weather will
clear up and some of you will want to walk the 1-1/2 blocks.  If more than 30
people want to take the Shuttle, he will be making a second trip at about
11:30-11:35.

SEE YOU THERE!


this is just one of the many emails that my friends
and i have been passing on  throughout the last couple
of weeks.  just to get you in the mood.
--- Luis Mena <luismena@yahoo.com> wrote:
> Date: Mon, 19 Nov 2001 13:27:30 -0800 (PST)
> From: Luis Mena <luismena@yahoo.com>
> Subject: RE: Beat the hell outta texas
> To: "Graf, Dustin KWP" <dgraf@KennedyWilson.com>,
>     Michael Vetter <vetter1975@yahoo.com>,
> HEINE23@aol.com,
>     a.turner@alumni.utexas.net
> CC: a.turner@alumni.utexas.net, jbutler@pankow.com
>
> aggies,
>
> could you please extend a warm welcome to Derrick
> Johnson next week.  after all, he will be the most
> talented LB to ever play on Kyle Field.
>
> i wonder who the best rb ever to play on kyle field
> is? ricky or earl?  that is such a hard question
> that
> its giving me a headache trying to figure it out.
>
> i must say that the horns do not have the best
> punter
> to ever play on kyle field.  i watched the oakland
> game and that shane lechler is a mighty fine punter.
>
>
>
> --- "Graf, Dustin KWP" <dgraf@KennedyWilson.com>
> wrote:
> > Luis you are right as always.  Can anyone tell me
> > the last time this
> > "rivalry" game had a line that suggests a blowout.
>
> > Think about if it wasn't
> > a rivalry and wasn't at the overrated "Kylie
> Field".
> >  The line would be at
> > about 18 at best.  You Ags should feel lucky that
> > Vegas takes that into
> > consideration.  Unfortunately, the Texas Longhorns
> > do not.  We will treat
> > just the same as we did Colorado, which beat you,
> > Tech, which also beat you,
> > etc., and we will beat you by 30.  It is just like
> > the Bammel vs. Wells
> > rivalry.  Sure it was a rivalry, but it was never
> > close in any sport because
> > of talent.  Well had heart but that can only take
> > you so far.  Eventually,
> > the talent starts to dominate until it has
> overcome
> > your heart and taken all
> > of your pride.  This is exactly what Texas will do
> > to their red-headed
> > stepchild.
> >
> > 	I don't know why the line is so low.  I guess
> that
> > they think that
> > your little stadium is going to scare us so bad
> that
> > we will forget how to
> > defend the reverse and the double reverse.  We
> have
> > sent our players to
> > local high school games to simulate the
> environment
> > and the offense you will
> > run against us.  I will take every part of that
> line
> > for whatever price you
> > want Ags.  It will go up to at least 14 by game
> > time.  Mark my words.
> >
> > 	Lastly, I hope that we take it easy on Marky F.
> I
> > would spell his
> > last name, but I don't know the spelling since I
> > have never seen it in
> > print.  I have heard, from Heineman, that he has a
> > child.  I would really
> > bother me for a young child to lose his father at
> > such a young age and to
> > see it in person.  Unfortunately for you Ags, it
> > will be hard to avoid.  You
> > have no running game to speak of and that means
> that
> > we will be blitzing
> > Marky all day.  I think that a good day for you
> > would be 150 yards of total
> > offense.  I would have said less but it is a
> > "rivalry".
> >
> > Texas - 62   Texas A&M - 3  (Your welcome for the
> > three that will come with
> > our head trainer at QB)
> >
> > Dustin Graf
> > KENNEDY-WILSON INTERNATIONAL
> > 5929 Balcones Drive, Suite 100
> > Austin, TX 78731
> > 512.483.9477 (tel)
> > 512.459.9617 (fax)
> > dgraf@kennedywilson.com
> >
> >
> >
> > -----Original Message-----
> > From: Luis Mena [mailto:luismena@yahoo.com]
> > Sent: Monday, November 19, 2001 12:03 PM
> > To: Michael Vetter; HEINE23@aol.com;
> > a.turner@alumni.utexas.net;
> > dgraf@kennedywilson.com
> > Cc: a.turner@alumni.utexas.net; jbutler@pankow.com
> > Subject: Re: Beat the hell outta texas
> >
> >
> > it is officially a great day when the ags are
> happy
> > that the line came in below the all-great Dustin
> > standards.  I would be proud too.
> >
> > are we all going to downtown wed night?
> >
> > --- Michael Vetter <vetter1975@yahoo.com> wrote:
> > > I didn't think any self respecting aggie would
> > take
> > > points from Texas.  I guess covering the spread
> is
> > a
> > > worthly goal.
> > >
> > >
> > >
> > > --- HEINE23@aol.com wrote:
> > > > I am already 1-1 on my bets this week.  The
> line
> > > for
> > > > the game is listed at 12.5, 2.5 points below
> > > > Dustin's prediction.
> > > >
> > > > The line will shrink to 10,
> > > > JH
> > >
> > >
> > >
> __________________________________________________
> > > Do You Yahoo!?
> > > Find the one for you at Yahoo! Personals
> > > http://personals.yahoo.com
> >
> >
> > __________________________________________________
> > Do You Yahoo!?
> > Find the one for you at Yahoo! Personals
> > http://personals.yahoo.com
> >
>
>
> __________________________________________________
> Do You Yahoo!?
> Find the one for you at Yahoo! Personals
> http://personals.yahoo.com
>

__________________________________________________
Do You Yahoo!?
Find the one for you at Yahoo! Personals
http://personals.yahoo.com


Hello Vince and Mike

I want to keep you informed.

This year all baskets will be done in a timely manner.
On last year we were going through a major move therefore
many people played key roles in keeping us together.
This year however , is a little different , as it is always nice
to give unfortunately we can not give to everyone.
I am sending a lists of who we have so far.

There are a few names on the list that  I feel we should do something else
for this year .
under Shirley's list of names.

(not so expensive)

They are : Move Team                                who?
                     Mail Room                                    who?
                     Facilities Help Desk                  who?

There are other tokens of appreciation that we can get for them.

Please note that you two are the only ones that have seen this e-mail so far
I will need your approval for all baskets, however your input on the matter
will be
greatly appreciated.The list is not completed I am still waiting for
additions.

                                              Thanks
                                                          Kevin Moore


I'd like to thank everyone involved in the efforts since Friday night! I know a number of you stayed through the night to get us in good shape for this morning. Well done especially to those people. Great teamwork.

Its outstanding how much effort everyone has put into this, and I look forward to seeing the completion of the testing tomorrow.

See you there!

best regards

Steve

-----Original Message-----
From: Henry, Jane Hilburn
Sent: Sat 1/12/2002 3:23 PM
To: Stock, Steve; Johnson, Jeff; Schomer, Chris; Smith, Regan M.; Ballmer, Charles; Larkin, Brian; Newland, William; Patel, Piyush; Ward, Bob; Brewer, Charles; Tang, Mable; Charbonnet, Clement; Matson, Randy; Nat, Steve; Nommensen, Dave; Merrell, Brad; Ogden, Arlene; Chitradurga, Sundar; Jia, Winston; Luu, Duong; Poston, David; Powell, John D.; Ramesh, Ganapathy; Rao, Ramesh; Warner, John; Wei, Zhiyong; Dolan, Michael; Barber, Michael; Gubser, Marlin; Dziadek, Keith; Sanborn, Brandee; Sanvido, Terry; Constantine, Chris; Pua, Cornelio; Wang, N. Jessie; Simpson, Stephen; Hall, Rich; Cheng, John; Shishido, Scott; Saleem, Aftab; Krishnaswamy, Jayant; Brennan, Ryan; Pullicino, Marcus; Schmidt, Mark; Renaud, Todd; McNair, Darren; Qavi, Faheem; Deleon, Roberto; Beyer, Troy; James, Matthew; Martinez, Bob; Yanowski, Tommy J.; Conley, Tom; Cinelli, Steve; McKeel, Richard; Harmon, Kenneth M.; Stevens, Wilford; Smith, Bruce; Fortney, Bill; Wong, Jeremy; Lim, Francis S.; Yang, Sean; Dronet, David; Bharathi, Jaikishore; Ray, Edward
Cc:
Subject: Saturday Update

We have completed the Estate migration.  There are a few outstanding issues with EnPower that Dave Poston's team will resolve, but I have been told that they are minor.

We will still have the 4:00 PM today and 12:00 PM tomorrow checkpoints on the Bridgeline for informational purposes.

Please feel free to call my cell with any additional concerns: 713-515-1601.

-Jane


Hi Rosalee:
Steve asked that I forward this to you.  I believe that Steve left you a
voicemail describing the nature of the email.

All the best,
Jeff
----- Forwarded by Jeff Dasovich/NA/Enron on 02/15/2001 06:51 PM -----

	Jeff Dasovich
	Sent by: Jeff Dasovich
	02/15/2001 06:11 PM

		 To: jdasovic@enron.com, skean@enron.com, Richard Shapiro/NA/Enron@Enron,
James D Steffes/NA/Enron@Enron
		 cc:
		 Subject:

----- Forwarded by Jeff Dasovich/NA/Enron on 02/15/2001 05:57 PM -----

	Jeff Dasovich
	Sent by: Jeff Dasovich
	02/15/2001 05:56 PM

		 To: jdasovic@enron.com
		 cc:
		 Subject:

Jim:
It was a pleasure speaking with you on Wednesday.  Based on our conversation,
this email includes the following:

An Enron contact to discuss developing small-scale generation on Tribal lands.

Our views on the impediments to distributed generation and suggestions on how
to remove those impediments.

A description of the credit issues that continue to impede DWR,s ability to
sign contracts with power suppliers, and options to resolve them. Two
possible options for addressing the credit issue are 1) a California PUC
order clarifying that DWR will recover its power purchase costs through
rates, and 2) an amendment to AB1X designed to accomplish the same goal.  I
have attached talking points regarding the California PUC order and proposed
amendments to AB1X.  We believe that an amendment to AB1X is the preferable
option.

Our assessment of the supply/demand picture in California.

Our suggestions for a legislative package designed to solve both the near-
and long-term electricity crisis in California.  We will deliver to your
office tomorrow detailed legislative language.  In those materials we will
also identify existing bills that we believe can easily accommodate our
proposed language.

I hope that the information is useful.  Please do not hesitate to contact me
if you would like to discuss these materials further, or if there is anything
else that I can do to assist you.

Regards,
Ken

Contact Information to Discuss Interest Expressed by Native American Tribes
in Installing Small-scale Generation on Tribal Lands

David Parquet, Vice-President
Enron North America
101 California Street, Suite 1950
San Francisco, CA 94111
Phone: 415.782.7820
Fax: 415.782.7851

2. Key Barriers to Distributed Generation

Excessive and Unnecessary Utility Stand-by Charges

Solution: The executive orders issued by the Governor on February 14th took a
step in the right direction.  Utility stand-by charges have always been
designed by the utilities to protect their monopoly position, extract
monopoly prices from customers, or both.  But there is no reason to limit the
elimination of these charges to generation facilities that are less than
1MW.  These limits will only lengthen unnecessarily the time it takes for
California to close the significant gap between supply and demand and reduce
the risk of black outs this summer.  We would propose lifting the cap by
offering amendments to SB27X, which is designed to facilitate development of
distributed generation.

Excessive delays and costs related to interconnecting facilities with
investor-owned and municipal utilities

Solution:   The Governor,s executive order regarding interconnection is a
step in the right direction*D-D-26-01 requires utilities to complete
interconnection studies within 7 days.  California should ensure that this
requirement applies to all generation facilities, including distributed
generation.  In addition, the financial conflicts the utilities face when
interconnecting generation facilities are simply too powerful to overcome
through executive orders or other regulations.  To the greatest extent
possible, California should shift control over interconnection away from the
utility and place that control with the California ISO.  This could be
accomplished through amendments to SB 27X.

Permitting and Air Quality Issues
Developers of distributed (i.e., &on-site8) generation that is 50 MWs or
greater must receive certification from the California Energy Commission and
therefore face all of the impediments to development that large-scale
generation faces.

Solution: California should ensure that the executive orders (D-22-01 thru
D-26-01) issued by the Governor to expedite plant siting and maximize plant
output apply equally to smaller scale, &distributed generation8 facilities.
In addition, distributed generation that is less than 50 MWs continues to
face local opposition.  The State should ensure that local, parochial
interests cannot block otherwise beneficial distributed generation projects.
These objectives could be accomplished through amendments to SB27X.

3. Credit Concerns Regarding Authority Granted to DWR in AB1X to Purchase
Electricity on Behalf of the Utilities

Enron responded to the RFP issued by DWR to enter into power contracts with
suppliers.
Enron is in active discussions with DWR to establish contract terms with the
goal of entering into a power purchase agreement as soon as possible.
However, ambiguities contained in AB1X have created significant credit risk
concerns that need to be resolved in order to finalize contract terms.
We understand that the lion,s share of counterparties share Enron,s credit
risk concerns.
Enron has proposed several options for resolving the credit risk issues and
is working with DWR to arrive at a solution that is mutually agreeable to
both sides and that might serve as a template for power purchase agreements
going forward.

Summary of the Source of the Credit Risk Issue

Ambiguous Ratemaking Authority
The language in AB1X is ambiguous as to whether DWR has any authority to
charge California ratepayers for the costs of purchasing power.  From our
analysis of the bill, the language in AB1X appears to leave intact the
California PUC,s exclusive jurisdiction over ratemaking in California.  As
such, suppliers have no assurance that the PUC will agree to include in rates
adequate charges to cover DWR,s costs of power purchases.

Ambiguous Regulatory Authority Regarding Contract &Prudence8
The language in AB1X leaves open the possibility that the California Public
Utilities Commission could determine that power purchases made by DWR are
&imprudent.8  On the basis of such a finding, the CPUC could then refuse to
allow DWR to collect from ratepayers the costs associated with its power
purchases.  Consequently, suppliers have no assurance that the PUC will agree
to include in rates the charges to cover the costs of power contracts that
DWR has entered into with suppliers.

Ambiguous Language Regarding the Ratemaking Mechanism that Will Be Used to
Recover DWR,s Costs of Power Purchases
In addition to the ambiguity regarding ratemaking and regulatory authority
noted above, the language in the bill is equally ambiguous with respect to
the specific ratemaking &mechanics8 that AB1X directs the PUC to employ to
permit DWR to recover its power purchase costs. Based on our analysis, it is
extremely difficult to determine how the PUC would design the rates to ensure
DWR recovers its power purchase costs.  Moreover, as currently drafted, it is
difficult to determine whether AB1X would even permit the PUC to include in
rates all of the charges necessary to fully recover DWR,s power purchase
costs.  Again, this ambiguity raises significant credit risk concerns since
suppliers have little assurance that DWR will have the ability to recover
from ratepayers the costs of purchasing power.

Options to Resolve Concerns Regarding Credit Risk

We have been working diligently with DWR officials to resolve the credit risk
issues.  We have identified three options:

Amend AB1X
The amendments, which are attached to this email, would clarify that a) the
PUC would accept as &prudent and reasonable8 all purchase costs incurred by
DWR, and b) the PUC is obligated to include in rates the charges necessary to
ensure that DWR fully recovers its costs of power purchases.  This is the
preferred option, though we understand that the there may be some political
challenges standing in the way of amending AB1X.  (See attached file
entitled, &AmendAB1X.doc8.)

Clarify the Ambiguities in AB1X through an Order Issued by the PUC, and
through Contract Language
This is the option that we are currently working with DWR officials to
implement.  However, it is more complicated and could take significantly more
time to implement than the "legislative" fix.  We have attached electronic
copies of the talking points related to the order that the California PUC
would need to issue under this option.  (See attached file entitled,
&cpuctalkingpoints.doc.8)

Make Use of Other Instruments Designed to Address Credit Risk
As indicated in our letter responding to DWR,s RFP, we are willing to accept
other forms of credit from DWR.  Those options include a letter of credit,
cash prepayment, or an acceptable form of collateral.  DWR officials have
indicated to us that DWR prefers to pursue the second options. That is, DWR
prefers to clarify the ambiguities in AB1X through a PUC order and through
contract amendments.

4. California,s Supply-demand Picture Heading into Summer 2001

Both the California Energy Commission and Cambridge Energy Research
Associates (CERA), a private sector energy think tank, have issued reports
showing that California faces a severe supply-demand imbalance.  They differ
only on how much and how soon additional supply will be made available.  All
credible sources agree that supply will be very tight throughout the Summer
of 2001 and that unless a solution is found immediately, blackouts are
likely.

CEC and CERA both forecast that California will be short of supply this
summer by approximately 5,000 MW.   These numbers are in line with our
estimates.  California,s supply base currently has a 6% capacity margin, well
below the average 15-20%, which is recommended for reliable system operation
in the West.  Since the West relies more heavily upon hydroelectric power
than other regions, reserves are particularly important, owing to the
unpredictability of the weather and the dry year the West has experienced to
date. In the event of a low rain and snow period, the system must possess the
flexibility to respond to the reduced availability of power supply.
California,s very low reserve margin makes it especially susceptible to this
requirement.

Other reasons for reduced supply for the Summer of 2001 include the early
draw-down of reservoirs in the continual effort to manage California's severe
supply-demand gap; emissions restrictions on existing plants; and a reduced
number of customers who can be curtailed under their contracts with the
utilities.  Cambridge Energy Research Associates asserts that at the current
pace of siting, permitting and construction, adequate supplies will not be
added to correct the market imbalance until 2003 at the earliest.

CERA predicts that California is likely to face approximately 20 hours of
rolling black outs this summer.  The CEC paints a considerably more
optimistic scenario, betting that California will bring an additional 5,000
MWs on line to meet peaking summer demand.  It is our view that California
should view the CEC's "rosy scenario" with considerable skepticism.

5. Suggested Package of Legislative Proposals Designed to Solve California,s
Electricity Crisis

This email offers an overview of our proposed legislative solution.  We will
deliver to your office tomorrow specific legislative language and existing
bills that we believe can accommodate our proposals.

As we have suggested throughout the crisis, any solution to California's
crisis must focus on four issues:

Increase supply
Decrease demand
Establish a truly competitive retail electricity market
Return California,s Investor-owned utilities to solvency

Increase supply--Legislative vehicle: SB28X (Sher)
To site and construct a power plant in Texas takes approximately 2 years.
Enron and others have completed the entire process in other states in less
than a year.  In California, it takes about six years, or longer.

The Governor,s executive orders and Senator Sher,s siting reform legislation
are steps in the right direction.  Our suggested amendments can improve those
efforts by further addressing the difficulties that project developers face
in securing air emission reduction credits to meet the air permit
requirements included in the CEC's certification requirements.  Enron,s
proposal seeks to streamline the process for 1) obtaining credits and 2)
transfering credits between air districts.  In addition, it creates an
innovative emissions reduction bank to allow project sponsors to fund
emissions in advance of obtaining certification, and permits the affected air
districts to use those funds to finance projects that will produce the
required reductions in pollution emissions.

Decrease demand*Legislative Vehicle:   AB31X (Wright)
Because of the delay in getting a solution in place in California, closing
the supply-demand gap through energy conservation and efficiency offers the
best chance of avoiding blackouts this summer.  This can be accomplished most
effectively and quickly in two ways:

Buy-down demand
California is tapping into an enormous amount of money from the General Fund
to finance DWR,s power purchases.  California could likely reduce demand more
economically by running an auction to determine the payments businesses would
be willing to receive to reduce their demand for a sustained period (e.g.,
through the summer months).  DWR could easily run an on-line auction to
determine the price it could pay for these demand reductions.  To
participate, businesses would be required to have the metering equipment
necessary to monitor and verify that they are actually achieving the
reductions.  Enron has developed an on-line auction software package, &Deal
Bench,8 that it would be willing to contribute to the effort.

Use Price Signals to Incent Voluntary Curtailment
To be successful, customers need access to the following key elements:

An internet based hour-ahead price posting system to track the market price
for hour-ahead power in real time.
Real-time metering systems for baseline demand and voluntarily curtailment
verification.
Settlement process that allows for market clearing prices of energy to be
paid for load reduction (&Negawatts8).

The potential benefits of an effective demand response program would include:

&creation8 of additional summer peaking capacity in California, particularly
in the short term, without requiring construction of additional generation
resources.
reduction of  peak or super-peak load on the over-stressed California
electric system, thus potentially reducing the overall cost of electricity in
the state.
fostering of demand elasticity without subjecting customers to the full risk
of hourly market price volatility by passing market price signals to
customers and allowing them to voluntarily shed load and be compensated for
responding.

We estimate that we could generate a summer 2001 on-peak demand response in
excess of 400 MW during certain high cost hours, and a demand response for
summer 2002 on-peak hours that could exceed 1000 MW.  We further estimate
that the market response to this program from all ESPs could be 2 to 3 times
that amount.  We recommend that the State of California provide rebates
directly to customers to fund the installation of advanced metering and
control systems that would support load curtailment implementation.

Establish a truly competitive retail electricity market*Legislative vehicle:
SB27X
The only customers who were protected from price volatility in San Diego were
customers who chose Direct Access and signed fixed price deals with energy
service providers.  Ironically, AB1X takes that important option away from
customers and businesses.  It is critical that AB1X be amended to remove the
prohibition against Direct Access.

Enron's legislative proposal would give customers freedom to enter into a
direct access transaction, while simultaneously addressing the Department of
Water Resources' concerns about stranded power costs that might result from
customer migration.

In addition, California will only achieve a competitive retail market when
the utility is removed completely from the procurement function.  Procurement
is not a utility core competency, as evidenced by the dire financial
condition in which the utilities now find themselves.  California should
therefore begin immediately to phase the utility out of the procurement
function entirely, with the goal of having all customers served by a
non-utility provider within 36 months.  To execute the transition, California
should hold a series of competitive solicitations over the 36-month period in
which competing service providers would bid for the right to serve segments
of utility load.

Return California,s Investor-owned utilities to solvency*Legislative vehicle:
AB18X
Utility bankruptcy will not increase supply and it will not decrease demand.
In short, bankruptcy does nothing to solve California,s supply-demand
imbalance.  In addition, bankruptcy increases the likelihood that consumers
and businesses will bear the significant financial risks of having California
State government assume the role of &electricity buyer8 for an extended
period of time.  Finally, bankruptcy will undermine both investor confidence
in California's energy markets and the private sector's willingness to
participate in that market.

California can return the utilities to financial solvency by implementing a
series of staged rate increases.  California should design those rate
increases with the dual goal of returning the utilities to solvency without
&shocking8 the economy or household budgets For example, California could
amortize the recovery of the utilities, past debt over a 5-10 year period.
In addition, the magnitude of the rate increase can be reduced in two ways:
First, the utilities could absorb some portion of their existing debt in
recognition of the risk they accepted when they agreed to the structure of AB
1890.  Second, California can &net8 the revenues the utilities have received
from selling electricity into the Power Exchange against the debts they have
accrued due to the retail price cap.


I am working on a financial contract audit and could not find any records in the Financial Lotus Notes Tracking system for the following counterparties.  I was able to pull and make copies of the executed agreements from your legal files last week and I am sending them to the file room to be scanned into Livelink and properly filed.

Since the Financial tracking system is one of our means of verifying information, would you please populate this information in it?  If any of these counterparties are not active, I will need to know that information also.

Counterparty Name

Enron Entity
Contract Date
CP ID No.
Global Contract No.
ECT Strategic Value Corp.
ECT (now ENA)
12/20/96
52121
96004598
Enron Finance Corp
Enron Corp
03/01/92
1315
96006318
Joint Energy Development Investments Limited Partnership

ERMS (now ENA)
09/01/93
11284
95000341
Joint Energy Development Investments II Limited Partnership

ECT (now ENA)
03/31/98
60568
96031272
Lomax Exploration Company
JEDI
09/21/01
11209
96010012
Louisiana Land and Exploration Company (The)

ERMS (now ENA)

09/30/94

130

96000113
Methanex Corporation
ECT Canada
06/04/98
6214
96019602
Wausau-Mosinee Paper Corporation
ECT (now ENA)
11/10/98
64195
96018552

Please call me at 5-4435 if you have any questions.
Thanks,
Georgi

Georgi Landau
Enron Net Works
(Ph) 713/345-4435
(Fx)  713/646-2495


"You cannot be dependent upon your eyes when your imagination is out of
focus.8 - Mark Twain

Watch the Enron Building lobby on Wednesday, April 25th, from 11:30am to
1:00pm for information on some of
Enron's new innovative businesses.  You'll have the opportunity to meet
various business representatives and discuss
their products and services from the creative minds of our employees.  Watch
for Vince Kaminski
who will be present during this exciting exchange of information.

Featuring:
Deal Bench, enron.credit.com, Weather Risk Management, Enron Trading Game and
Xcelerator

Word of the Day
cerebration \ser-uh-BRAY-shun\, noun:
The act or product of thinking; the use of the power of reason; mental
activity; thought.


Mark Lay:  I shared confidentially with Vince Kaminski my developing
concept of a highly inefficient not-for-profit enterprise with
dramatically increasing costs.  I believe that a for-profit economic
model is possible that should reverse these skyrocketing costs and
ultimately lower the commodity thereby having a national, if not, global
impact of health care costs.   Vince seems to also believe in the
concepts potential.  The CEO of one of the biggest U.S. blood banks has
already asked to become involved.   I would like involve more people
with vision, means and desire to help make this a reality.  I would look
forward to meeting with you to talk further.  Al Arfsten 713 965 2158


Please find attached the completed draft of the Consent and Amendment Agreement for Cook Inlet Energy Supply L.L.C.


Start Date: 4/10/01; HourAhead hour: 14;  No ancillary schedules awarded.
Variances detected.
Variances detected in Energy Import/Export schedule.

    LOG MESSAGES:

PARSING FILE -->> O:\Portland\WestDesk\California Scheduling\ISO Final
Schedules\2001041014.txt

---- Energy Import/Export Schedule ----
$$$ Variance found in table tblINTCHG_IMPEXP.
     Details: (Hour: 14 / Preferred:  24.00 / Final:  23.97)
  TRANS_TYPE: FINAL
  SC_ID: ECTRT
  MKT_TYPE: 2
  TRANS_DATE: 4/10/01
  TIE_POINT: PVERDE_5_DEVERS
  INTERCHG_ID: EPMI_CISO_DESERT
  ENGY_TYPE: FIRM

---- SC Trades Schedule ----
*** Final schedule not found for preferred schedule.
     Details:

  TRANS_TYPE: FINAL
  SC_ID: EPMI
  MKT_TYPE: 2
  TRANS_DATE: 4/10/01
  TRADING_SC: PGAE
  PNT_OF_INTRC: NP15
  SCHED_TYPE: ENGY
  PURCH_SALE: 2
  DEAL_NO: 1


Welcome to the June 2001 issue of e-Hong Kong, the electronic newsletter of the Hong Kong Economic and Trade Office in San Francisco. This issue includes some background on the new Chief Secretary for Administration and the Financial Secretary who just came on board, as well as Brand Hong Kong, a major new program to focus international attention on Hong Kong's drive to be Asia's world city. There is coverage of the Fortune Global Forum held in May, and much more.

We have also provided links to the most recent economic data from Hong Kong and updated forecasts as well.

Please click on the URL below to see the newsletter:

http://www.hongkong.org/ehongkong4/ehongkong.htm

Thank you for reading e-Hong Kong!

Jean Ip
Principal Information Officer
Hong Kong Economic and Trade Office
San Francisco
Tel: (415) 835-9333
Fax: (415) 421-0646
http://www.hongkong.org

16


Sorry to hear about your airport travels.  Has Alejandra found a place to
live yet?  When is she starting on the east desk...they need help!!  They
screwed their position up again today.

My weekend was really good.  Of course it could have been better without the
rain.  Saturday my friend and I sat around and gossiped most of the afternoon
and then went out to eat and to a movie.  Then Sunday we went to visit some
friends of ours in Sugarland that just had a baby.  So we spent most of
Sunday afternoon playing with the baby.  The dad is hilarious.  He's the type
that seems really quite but when he says something he just cracks you up.  He
was talking about the baby monitors they got.  He said he was going to put a
message on it that said, "Hi, Brianna.  This is your parents.  We aren't
available right now, but it you leave a message we'll get back to you."

Are we having Spanish class today?

Robin

PS My forearms are a little sore, but that's all.

Gabriel Monroy
11/06/2000 08:40 AM
To: Robin Rodrigue/HOU/ECT@ECT
cc:
Subject: Good Morning

  Rest of Saturday was good I went out with some friends to this place I
really like. However, Sunday was  not so good. I went to IAH (airport) twice.
So, that was almost like going to Austin, plus on the way back rain was very
very bad (The 10:30 pm. rain).  For the second time, Alejandra's plane was
delayed, but this time it was more than 5 hours delayed. She got stuck in
Dallas and of course I knew once I was already at IAH.  How about you?
Hey, My right shoulder is a little sore (Golf). Is your's sore? or am I just
a little rusty.

Gabriel


Kate and Felicia -- that org chart was from me.  I thought there was an
enclosure note.  Sorry!  Michelle

Kate Cole@ENRON
02/16/2000 09:06 AM
To: Felecia Acevedo/Corp/Enron@ENRON
cc: Michelle Cash/HOU/ECT@ECT
Subject: Org. chart from Francisco Estrada re employees

Felecia - Someone has sent me a copy of an org. chart showing employees for
the subs. of The Protane Corporation.  I will enter these into the database.
Please confirm that you have a copy or send your fax number to receive a
copy.  Thanks Kate