-----Original Message-----
From: Edward Cazalet [mailto:ed@apx.com]
Sent: Friday, August 25, 2000 9:12 AM
To: dhunter@smithandkempton.com
Cc: Robert Berry (E-mail); Edward G. Cazalet
Subject: APX Comments on Letter to the Governor.

Would you please distribute the attached APX comments on the letter to the
Governor to the AB1890 list?  The comments are attached both as a Word file
and below in the body of this e-mail.

A core purpose of restructuring through AB1890 was to decrease reliance on
regulation and increase reliance on the market to allocate resources in the
California electric power market.  However, as it is now written, the letter
to the Governor does not include any direct reference to the way forward
markets can address the problem of high and volatile prices.

Several reports have expressed serious reservations about the CalPX and
CAISO use of "call auctions".  An example of a call auction is the CalPX's
daily auction that sets a single price for electricity in each hour of the
next day.  The CAISO uses several call auctions for real-time energy and
ancillary service procurement.

A call auction provides no opportunity for market participants to react to
each other's bids.  A call auction lacks the feedback from offer to
counter-offer which is the source of efficiency in forward markets.  Because
a call auction lacks feedback and clears at a single price, it is more
likely that attempts to manipulate the single price will be more successful
and will have a greater impact because all transactions are at the same
price.

Instead, all other commodity markets rely on continuously traded forward
markets, which allow participants to use price feedback and gradually
develop their contract positions.

APX recommends that the Letter include the following:

The CAISO has recently announced its intent to acquire up to 3000 MW of
ancillary services through forward contracts of at least a year.   The CPUC
has recently granted both PGE and SCE the opportunity to make contracts
through 2005 to serve their load.  These policies represent a wise shift
from the almost exclusive reliance on short-term (day-head and hourly)
markets by both the CAISO and the UDCs.  However, adoption of such policies
will tend to create a bifurcated market with very short-term markets and
long-term contracts.

In most commodity markets, participants can trade a variety of contracts of
different duration.  Contracts are standardized so that the published prices
of these traded contracts are meaningful.  Trade occurs continuously, which
allows continuous price discovery.  The efficiency of the power market
improves considerably when such continuous forward trading occurs and the
opportunities for price manipulation are less.  And the existence of such
forward markets provide the basis to establish the prudence of both forward
and spot purchases of power by the UDCs.

As an example, encouraging loads to participate in continuous forward
markets will dampen price volatility because as the forward price rises load
will begin to reduce its demand by not contracting or by selling back
previously contracted positions.  Generators can use forward markets to
support decisions to invest in new power plants and properly time
maintenance decisions to reduce the impacts on prices.  Open, continuous
forward markets with published prices will allow all West Coast buyers and
sellers to contribute to market stability and lower prices in California.

The CAISO does not need to provide such continuous forward markets but can
encourage their development and use by encouraging inter-SC trades and
self-provision of ancillary services.

==============================
Edward G. Cazalet, Ph.D.
Chairman
Automated Power Exchange, Inc.
TechMart Building, Suite 522
5201 Great America Parkway
Santa Clara, CA 95054
Company Voice : (408) 517-2100
Voice :(408) 517-2102
Fax: :(408) 517- 2985
E-mail : ed@apx.com
Web Page: www.apx.com

 - Forward Markets.doc


Hi Eric,
?
Sorry I had to cut our conversation short.? I  have not had a good morning.?
I started the day off by taking a hard fall  on the driveway and then our
flight from Phoenix to Houston was cancelled and I  was trying to work that
out.?
?
I'm glad you got back safely.? Did you have a  good time?? Did Shanna have a
nice holiday?? Speaking of Shanna, will  you call me about her Christmas
present?? I wanted to run something by  you.?
?
Have a good day.?  LU-M


Carol:  Below is the list of items I'll be handling.  You can send to me.

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 Sara Shackleton/HOU/ECT on 04/26/2001 09:04 AM -----

	Sara Shackleton
	04/25/2001 06:26 PM

		 To: Mary Cook/HOU/ECT, Cheryl Nelson/NA/Enron
		 cc:
		 Subject: Reassignment of ISDA Master Agreements

Mary/Cheryl:

Carol has seven (7) master swap agreements to be reassigned.  Cheryl and I
will work on these together.  All appear on the legal/credit list.

(1)  Cross Timbers Oil Company
(2)  Camden Property Trust
(3)  Clorox Company (The)
(4)  Montana Power Comopany (The)
(5)  Ocean Energy, Inc.
(6)  Quebecor World USA, Inc.
(7)  Russel Metals Inc.

Mary:  Would you please reassign paralegals to Cross Timbers and Quebecor?
These were handled by Samantha.  Maybe Marie could assist; these don't appear
to be urgent.

Thanks.

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


Tana, the information we have is that they are headquartered in SugarLand,
TX.

 -----Original Message-----
From:  Jones, Tana
Sent: Friday, March 02, 2001 6:45 PM
To: Moran, Tom; Guidroz, Walter
Subject: Coast Energy Canada, Inc.

Are we sure that the above counterparty is US and not Canadian?


Here's what I know about this deal so far.

---------------------- Forwarded by Kay Mann/Corp/Enron on 09/11/2000 02:49
PM ---------------------------

	Enron North America Corp.

	From:  Kay Mann                           09/08/2000 07:45 AM

To: Laura Luce/Corp/Enron@Enron
cc:

Subject: Manlove monetization

Laura,

Here's the revised version:

Here's a compared version so you will know what I did:

I'll work on the transfer price agreement today or this weekend so we will
have something to discuss.

I'm planning on being in Chicago on Thursday if you would like to discuss any
of these matters.

Kay


Anne:

This is an e-mail I forwarded to Kevin Freeman on Monday sending the form of master netting agreement.  He left me a voice mail this morning and said that they wanted to get a mna in place ASAP.  Mary has assigned this counterparty to you.  Kevin's phone number is (785) 575-8128.  Will you call him to discuss?

Thanks!

Marie

 -----Original Message-----
From: 	Heard, Marie
Sent:	Monday, November 12, 2001 1:36 PM
To:	'Kevin_Freeman@wr.com'
Cc:	Williams, Jason R (Credit)
Subject:	Master Netting Agreement

Pursuant to your request, attached is our form master netting agreement.


Welcome to The EnronOnline Games!

This message contains information about your registration; please keep it
handy in the event that you forget some of the relevant information.

  First Name: Eric
  Last Name: Bass
  Username: Dominator128
  Password Hint: Favorite Movie
  Email Address: ebass@enron.com
  Mailing Address:
      2302 Travis St. #8225
      Houston, TX 77006
      Usa

To return to the contest:
  http://app.sportsrocket.com/enron/highfive00/

Enjoy the game!

-- The EnronOnline Games Commissioner


-----Original Message-----
From: 	CustomerNotices, WGPHOU [mailto:WGPHOU.CustomerNotices@Williams.com]
Sent:	Friday, February 22, 2002 3:12 PM
Subject:	Market Area IT Availability - February 26, 2002

February 22, 2002

To:	Transcontinental Gas Pipe Line Corporation Customers
	and Shippers

Re:	Market Area IT Availability - February 26, 2002

The available interruptible transportation service (IT and
secondary FT) on Transco for pipeline day Tuesday, February
26, 2002 and continuing until further notice is summarized
as follows:

Tier I and Tier II (only Sta. 90 through
Sta. 180 affected)					0	MDt/day

South Virginia Lateral Compressor
Station 167						144 	MDt/day

Tier III (Station 180 through East)				0   	MDt/day

Leidy at Centerville Regulator Station
(Only deliveries downstream of
Centerville regulator affected)				OPEN 	MDt/day

Leidy at Station 520 (Only deliveries
Downstream (east) of Station 520
affected)						0	MDt/day

Linden Regulator Station
(Located in Union County, New Jersey)			0 	MDt/day

Mobile Bay Lateral			   		162 	MDt/day

The above available interruptible transportation service
refers to deliveries into the affected area that have
receipts upstream of the bottleneck or affected area.

If you have any questions, please call John McGrath at (713)
215-2514 or Donna L. Cooper at (713) 215-4061.

J. E. McGrath
Manager
Operations Planning


Excellent - please circulate for signing

From: Zhiyong Wei/ENRON@enronXgate on 03/19/2001 04:16 PM
To: Louise Kitchen/HOU/ECT@ECT
cc: Stephen Stock/ENRON@enronXgate, Geoff Storey/HOU/ECT@ECT, Colleen
Sullivan/HOU/ECT@ECT, Beth Perlman/ENRON@enronXgate, Philippe A
Bibi/ENRON@enronXgate

Subject: RE: GTV II

Please see the attached file for the revised inception document. I would
appreciate any comments. We will be working on the specification of phase 2
once this document is signed off.

Thanks

Zhiyong

 -----Original Message-----
From:  Kitchen, Louise
Sent: Monday, March 19, 2001 11:15 AM
To: Wei, Zhiyong
Cc: Stock, Stephen; Storey, Geoff; Sullivan, Colleen; Perlman, Beth; Bibi,
Philippe A.
Subject: RE: GTV II

Comments:

Zhiyong Wei to be added to signature lists.
Timeline to include production dates - ie include UAT and production roll-out
dates.
Dependencies - where there are dependencies on other groups (any interaction
required with any group outside of Zheiyong's), these need to be highlighted
and a representative from that group needs to sign off on that portion of the
timeline ( a representative can not be below Director level in the
organiztion).

There are clearly many people rolling off early in this project who can be
utilized for Phase II - I would suggest the specfication for Phase II is
completed in the very near future as the majority of the work in this is done
in the very short term by the developers and it moves to the test team.

Please re-issue today.

Louise

From: Zhiyong Wei/ENRON@enronXgate on 03/16/2001 12:34 PM
To: Louise Kitchen/HOU/ECT@ECT
cc: Stephen Stock/ENRON@enronXgate, Geoff Storey/HOU/ECT@ECT, Colleen
Sullivan/HOU/ECT@ECT, Beth Perlman/ENRON@enronXgate, Philippe A
Bibi/ENRON@enronXgate

Subject: RE: GTV II

Louise,

Attached please find the inception document requested. I would greatly
appreciated your comments. I will be consulting Colleen and Geoff for any
necessary revision. I will be requesting signatures on Wednesday afternoon,
March 21.

Thanks

Zhiyong

 << File: inception_GTV II.doc >>

 -----Original Message-----
From:  Schoppe, Tammie   On Behalf Of Kitchen, Louise
Sent: Tuesday, March 13, 2001 4:24 PM
To: Wei, Zhiyong
Cc: Stock, Stephen; Storey, Geoff; Sullivan, Colleen; Perlman, Beth; Bibi,
Philippe A.
Subject: GTV II

I understand we have now finalized 90% requirements on the GTV II.

Please could we pull together the format inception document this week for
signature on your meeting next week with Geof and Colleen.

Document to include all requirements, dependencies and timelines.

I would suggest whoever is writing this spend some time with Geof this week.

Please circulate to draft all listed above including me.

Thanks,

Louise


Jean-Pierre,

Sorry. I have previous commitments on these days.

Vince

"Jean-Pierre Doggett" <jpdoggett@riskwaters.com> on 11/07/2000 10:14:05 AM
Please respond to "Jean-Pierre Doggett" <jpdoggett@riskwaters.com>
To: "Risk Conferences" <jpdoggett@risk.co.uk>
cc:
Subject: Invitation to present at Risk's advanced stress testing course

I would like to invite you to present a section on  Risk's course entitled,
"Practical application of advanced stress  testing" which will be held in
London (5 & 6 February 2001)  and New York (12 & 13 February 2001).
?
You have been recommended to me in the course of my  research as an authority
in this field so I would be delighted for you to  present any of the sections
that are still available on the attached  programme:

For London: sections 1, 2.1, 2.2, 3, 4 and
For New York: sections 1, 2.1, 2.2, 4 and 8

My market research indicates that advanced stress  testing is a highly
interesting theme for a wide range of senior quantitative  analysts and risk
managers. I anticipate the course to be technical and  practical in nature
and assume a high level of knowledge from the delegates. It  aims to extend
the scope of accepted practices into the new areas of liquidity  and credit
risk stress testing and complement VaR methods by introducing new  risk
measurement techniques that can be applied in an integrated  context.
?
Please contact me as soon as possible with an indication of which section  is
most suitable for your current interests. If you feel that you will not be
able to participate on this occasion, I would welcome any speaker
suggestions  you may have. Please call me if you have any questions.
?
Many thanks,
?
Jean-Pierre Doggett
RISK Conference Producer
RISK  Waters Group
Phone: + 44 (0) 20 7484 9813
Fax + 44 (0) 20 7484  9800
e-mail: jpdoggett@riskwaters.com
www.riskwaters.com
 - Stress testing draft.doc
 - Stress testing draft.txt


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 Sara Shackleton/HOU/ECT on 02/23/2001 04:04 PM -----

	William Stuart
	02/14/2001 05:17 PM

		 To: Sara Shackleton/HOU/ECT@ECT, Tana Jones/HOU/ECT@ECT, Tom
Moran/HOU/ECT@ECT, David Forster/Corp/Enron@Enron, Carlos
Alatorre/NA/Enron@Enron, Justin Rostant/HOU/ECT@ECT
		 cc:
		 Subject: Counterparty List & ISDA Agreements

I'm forwarding ECT Canada's top 15 counterparties. We will use this list with
the exception of J. Aaron, BP Amoco, PG&E, Morgan Stanley and Bank of
Montreal as our target list for the USD/CAD products. Please ensure that a
GTC is drawn up to allow EOL trading of these currency products. I would like
to have the legal work done by March 6 in order to meet Gary's deadline.

David: I talked to Goldman today. They have developed a mechanism to feed
live rates from their website into Excel. They will be here in 2 weeks to do
a demo.

W.Stuart

---------------------- Forwarded by William Stuart/HOU/ECT on 02/14/2001
03:31 PM ---------------------------

Jason Garvey
02/13/2001 02:59 PM
To: William Stuart/HOU/ECT@ECT
cc: Jonathan McKay/CAL/ECT@ECT
Subject: ISDA Agreements


Further to our discussions, please find attached for your review drafts of
the following documents:

1.  ISDA schedule regarding the ISDA Master between ECC and Swapco
2.  ISDA schedule regarding the ISDA Master between ECC and RBC
3.  Enron Corp. guarantee regarding the ISDA Master between ECC and Swapco
4.  Enron Corp. in-house counsel opinion regarding due authorization and
execution re: above guarantee
5.  Enron Corp. guarantee regarding the ISDA Master between ECC and RBC
6.  Enron Corp. in-house counsel opinion regarding due authorization and
execution re: above guarantee

The three confirmations will follow shortly, as we are working out a few
minor commercial issues.  I will send them to you as soon as possible.

Please be advised that the form and content of the Enron in-house counsel
opinions enclosed are non-negotiable.  The opinions of Blake Cassels will be
provided to you directly by Warren Nishimura.  As well, the Enron Corp.
opinion to be provided by Vinson & Elkins will follow in due course.  We
confirm that Macleod Dixon will be providing an opinion regarding Swapco but
that Enron will not require an opinion from Macleod Dixon as to RBC.

My understanding of the currently outstanding issues relating to this
transaction are as follows:

1.  Increased cost/change in law indemnification
2.  Swapco using its best efforts to replace lendor in the event of
illegality (ie. no ECC obligation)
3.  Calculation of optional pre-payment amounts
4.  Incorporation of syndication language, including pricing changes
resulting from syndication, into the Schedule to the interest rate swap

We look forward to receiving your comments on these documents at your
earliest convenience.

Greg Johnston
Senior Counsel
Enron Canada Corp.

ISDA Schedules

Guarantees

In-House Opinions


---------------------- Forwarded by Andrea Ring/HOU/ECT on 02/28/2001 12:56
PM ---------------------------

	From:  Karen D McIlvoy                           02/27/2001 10:55 AM

To: ragan.bond@bhlp.com
cc:  (bcc: Andrea Ring/HOU/ECT)
Subject: Fwd: CLINTONS LEAVING

---------------------- Forwarded by Karen D McIlvoy/HOU/ECT on 02/27/2001
10:51 AM ---------------------------

HGHanley@aol.com on 02/22/2001 10:42:47 AM
To: lantee@lsuhsc.edu, barry.j.belcher@boeing.com, HardyCole@cs.com,
blyzese@heart.org, LCPFlyer72@aol.com, kalo@prodigy.net,
karen.d.mcilvoy@enron.com, mcilvoy@pendulumenergy.com, dmmiller@wkhs.com,
Jadd202@aol.com
cc:
Subject: Fwd: CLINTONS LEAVING

Return-path: <LHT@aol.com>
From: LHT@aol.com
Full-name: LHT
Message-ID: <31.10cd93ea.27c69829@aol.com>
Date: Thu, 22 Feb 2001 11:28:25 EST
Subject: CLINTONS LEAVING
To: LHT@aol.com
MIME-Version: 1.0
Content-Type: multipart/mixed; boundary="part2_71.af596aa.27c69829_boundary"
X-Mailer: 6.0 sub 10502

THE CLINTONS LEAVING THE WHITEHOUSE. PLEASE DOWNLOAD.


Can you unarchive the following post ids for me please:
684492
703886
725784

Thanks for you help
PL


Attached is the position statement that ECT sent to Mitsubishi today.  Matt,
if you haven't done so already, please consider giving Joe Hirl a call re
this and/or a copy of what we sent, assuming that neither you nor David see a
strategic downside to doing so.  Many thanks.(Deborah, please print out and
file.)

     Britt
----- Forwarded by Britt Davis/Corp/Enron on 08/07/2000 08:09 AM -----

	Eric Tan@ECT
	08/07/2000 03:43 AM

		 To: Matthias Lee/SIN/ECT@ECT
		 cc: "Clifford Bennett" <minton@singnet.com.sg>, Richard
Slovenski/SIN/ECT@ECT, Angeline Poon/SIN/ECT@ECT, Victor
Santos/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, John Chismar/SIN/ECT@ECT, Carol
Chew/SIN/ECT@ECT, ngregson@wfw.com, Michael J Gasper/HOU/ECT@ECT, John H
Harrison/HOU/ECT@ECT, James P Studdert/HOU/ECT@ECT, Alan
Aronowitz/HOU/ECT@ECT, Michael Philips/HOU/ECT@ECT, Michael A
Robison/HOU/ECT@ECT, Harry M Collins/HOU/ECT@ECT, Graham Cane/LON/ECT@ECT,
Wietze Dingeldein/LON/ECT@ECT, Britt Davis/Corp/Enron@ENRON,
David.best@clyde.co.uk, Paul Henking/HOU/ECT@ECT, Li Yin Lim/SIN/ECT@ECT
		 Subject: Pacific Virgo - Freight/Demurrage

For your info - the message been sent to the Owners via the shipbrokers.
Will be sending via fax as well.

---------------------- Forwarded by Eric Tan/SIN/ECT on 07/08/2000 16:42
---------------------------

Eric Tan
07/08/2000 16:40
To: tankers@ssysin.com.sg
cc:
Subject: Pacific Virgo - Freight/Demurrage

To:    SSY, Singapore
 Attn:  John Dwane / Chris Twiss / Leo / Helen Cheo

Please convey to Owners of Pacific Virgo as follows:

As owners are aware, Enron has suffered considerable loss and damage arising
from the contamination of condensate loaded in good order and condition but
delivered contaminated.

It is clear that Mitsubishi, as time chartered owners, would not be now
claiming
freight or demurrage but for the contamination. There can be no argument about
this.  Since Enron is holding Mitsubishi fully liable for the contamination
according to the terms and conditions of the relevant charterparty, Enron
takes
the view that it does not have a liability to pay either the freight or
demurrage.  Should Mitsubishi disagree, Enron suggests that all disputes are
referred to arbitration pursuant to the relevant clause of C/P.  Enron will
almost certainly be commencing arbitration once the joint analysis results are
known in order to recover their losses which have not yet been fully
quantified.
We respectfully suggest that Mitsubishi reviews its entitlement to freight and
demurrage after the joint testing.

Please acknowledge.

Enron, Singapore


It is a meeting on the swaps and assignments to do next week when the deal
closes in to the Brazos vehicle.  You are welcome to come 9:30 in 3872.

Cordially,
Mary Cook
Enron North America Corp.
1400 Smith, 38th Floor, Legal
Houston, Texas   77002-7361
(713) 345-7732 (phone)
(713) 646-3490 (fax)
mary.cook@enron.com

	Sara Shackleton
	05/30/2001 10:19 AM

		 To: Mary Cook/HOU/ECT@ECT
		 cc:
		 Subject: Re: KCS Swaps

What meeting?

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

	Mary Cook
	05/30/2001 08:25 AM

		 To: Marshall Eubank/Enron@EnronXGate, Sara Shackleton/HOU/ECT@ECT
		 cc:
		 Subject: KCS Swaps

Please provide me an executed copy of the two swaps--if possible before our
meeting Thursday morning.

Cordially,
Mary Cook
Enron North America Corp.
1400 Smith, 38th Floor, Legal
Houston, Texas   77002-7361
(713) 345-7732 (phone)
(713) 646-3490 (fax)
mary.cook@enron.com


Hi Everybody,
It is hard to believe but our 10 year reunion is fast approaching. I am
trying to organize everything I would like to get a good address on all of
you. The reunion will be September 23rd at the Clear Lake Hilton.  The first
mailout about the reunion is expected to go out in May. I am trying to verify
some address information before then.  If you could email me back with your
correct address, phone number and email address (I assume I have the right
one) that would help.  Next week we will be launching our Clear Lake High
School class of 1990 reunion web page.  You will be able to find out updates
on the reunion and see who is coming and get lots of additional information
on the website.  At least, that is the plan as of today.  If you can spread
the work about the website it would be appreciated.  The address will be
www.clhs90.com.

I will send out more information as I put it together.  If anyone needs to
get a hold of me you can reach me at this email address or my home number
(703) 532-8881.  I hope everyone is doing well and I look forward to seeing
everyone in September.  If you have additional addresses of fellow classmates
you can send me that would be very helpful.

Jennifer Kerber


I can't say it enough...you are the best!

	Peter Keohane
	Sent by: Sharon Crawford
	08/23/2000 12:07 PM

		 To: Tana Jones/HOU/ECT@ECT, Robert Bruce/NA/Enron@Enron
		 cc: Greg Johnston/CAL/ECT@ECT
		 Subject: Assignment, Subordination and Postponement of Claim

Please see the following:

"Any and all present and future debts, obligations and liabilities whatsoever
of [Counterparty] which are now or hereafter owing to [Guarantor] are hereby
assigned by [Guarantor] to [Enron entity].  Further, [Guarantor] acknowledges
and agrees that any and all such present and future debts, obligations and
liabilities of [Counterparty] which are now or hereafter owing to [Guarantor]
are absolutely and unconditionally subordinated and postponed to the payment
in full by [Counterparty] to [Enron entity] of all present and future debts,
obligations and liabilities of [Counterparty] which are now or hereafter
owing to [Enron entity], and [Guarantor] further acknowledges and agrees that
if [Guarantor] receives any monies or other amounts or consideration in
respect of any such debts, obligations and liabilities of [Counterparty]
owing to [Guarantor], [Guarantor] will receive same in trust for, and will
immediately pay same to, [Enron entity] unless and until all present and
future debts, obligations and liabilities of [Counterparty] which are now or
hereafter owing to [Enron entity] are paid in full and without limiting or
reducing [Guarantor's] obligation to pay pursuant to [Guarantee] in any
manner whatsoever."

Regards,
Peter


Attached is an "updated" Operations Integration Issues List for Houston/Portland and Calgary/Toronto as of Monday, February 4, 2002.

Christina Valdez Epperson
Enron Net Works LLC
Phone - 713.853-9106
Fax     - 713.345.8100
christina.valdez@enron.com


All OK>

"Leeder, Jann" <Jann.Leeder@nhmccd.edu> on 11/15/2000 09:35:04 AM
To: "'rod'" <rod.hayslett@enron.com>
cc:

Subject: personal info update

Hi, Rod.  Please review my records below and give me any additions or
corrections.  Thanks.

Hayslett, Rod (Mr.)

Office:
Enron Transportation Services Company
PO Box 1188
Houston TX  77251-1188
Exec. Asst: Kathy Campos
E-mail:  kcampos@enron.com
Phone: 713.853.6178
Fax: 713.646.3708
Mobile: 713.201.6135
E-mail:  rod.hayslett@enron.com

Home:
10714 Whisper Willow Place
The Woodlands TX  77380
Spouse: Kathy
Phone: 281.292.2467
E-mail:  hayslett@flash.net


---------------------- Forwarded by Yvonne Acosta/Corp/Enron on 02/29/2000
07:25 PM ---------------------------

Judy Hernandez @ ECT on 02/25/2000 03:36:26 PM
To: Yvonne Acosta/Corp/Enron@ENRON, Amber Limas/HOU/ECT@ECT, Leslie
Smith/HOU/ECT@ECT, Michelle Neville/HOU/ECT@ECT, Regina
Blackshear/Corp/Enron@ENRON, Amber Ebow/HOU/ECT@ECT, Shirlet
Williams/HOU/EES@EES, Angela Barnett/HOU/ECT@ECT, Lisa Shoemake/HOU/ECT@ECT,
Eve Puckett/Corp/Enron@ENRON, Albert Escamilla/HOU/ECT@ECT
cc:

Subject: FW: FW: I am not ashamed to pass this on...Are you?

---------------------- Forwarded by Judy Hernandez/HOU/ECT on 02/25/2000
03:14 PM ---------------------------

	From:  Elizabeth Soto                           02/25/2000 03:01 PM

To: Phenicia Olivier/HOU/ECT@ECT, Pamela Chambers/Enron Communications@Enron
Communications, Judy Hernandez/HOU/ECT@ECT, Melissa Rodriguez/HOU/ECT@ECT,
Chantelle Villanueva/HOU/ECT@ECT, Alicia Perkins/HOU/ECT@ECT, Yvette G
Connevey/Corp/Enron@ENRON, Laura Vargas/Corp/Enron@ENRON, Alisha
Guerrero/HOU/ECT@ECT, Shawna Johnson/Corp/Enron@ENRON, Melba
Lozano/HOU/ECT@ECT
cc:
Subject: FW: FW: I am not ashamed to pass this on...Are you?

---------------------- Forwarded by Elizabeth Soto/HOU/ECT on 02/25/2000
02:58 PM ---------------------------

	Enron Global Finance

	From:  Phenicia Olivier                           02/25/2000 11:29 AM

To: Paula Pierre/HOU/ECT@ECT, Angie Collins/HOU/ECT@ECT, Irena D
Hogan/HOU/ECT@ECT, Laura Gutierrez/HOU/ECT@ECT, Maria Sandoval/HOU/ECT@ECT,
Jessie Bledsoe/HOU/EES@EES, Pamela Sonnier/HOU/ECT@ECT, Debora
Whitehead/HOU/EES@EES, Andrea R Guillen/HOU/ECT@ECT, Elizabeth
Soto/HOU/ECT@ECT, Brenda Barreda/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc:
Subject: FW: FW: I am not ashamed to pass this on...Are you?

---------------------- Forwarded by Phenicia Olivier/HOU/ECT on 02/25/2000
11:25 AM ---------------------------
To: Jackie Galloway/EPSC/HOU/ECT@ECT, Debora Whitehead/HOU/EES@EES, Keesha
Joubert/HOU/EES@EES, Phenicia Olivier/HOU/ECT@ECT, Darlene C
Forsyth/HOU/ECT@ECT, Kim Ladish/HOU/EES@EES
cc:
Subject: FW: FW: I am not ashamed to pass this on...Are you?

---------------------- Forwarded by Jessie Bledsoe/HOU/EES on 02/25/2000
11:19 AM ---------------------------

> I am not ashamed to pass this on...Are you?
> I am not ashamed to pass this on...Are you?
>
>
> Pass this on only if you mean it.
> Yes, I do Love God. He is my source of
> existence and Savior. He
> keeps me functioning each and
> everyday. Without
> Him, I will be nothing.
> Without him, I am nothing
> but with Him I
> can do all things
> through Christ that
> strengthens me. Phil 4:13
>
> This is the simplest test ...if you Love
> God, and are not
> ashamed of all the marvelous things
> he has done for you.
>
> Send this to ten
> people and the person who
> sent it to you!
>
>


Suzanne:
I will be there.  I'm assuming that spouses are not invited.
Carol

	Suzanne Adams
	05/23/2000 09:40 AM

		 To: Carol St Clair/HOU/ECT@ECT, Mark Taylor/HOU/ECT@ECT, Sara
Shackleton/HOU/ECT@ECT, Tana Jones/HOU/ECT@ECT, Susan Flynn/HOU/ECT@ECT,
Susan Bailey/HOU/ECT@ECT, Tanya Rohauer/HOU/ECT@ECT, William S
Bradford/HOU/ECT@ECT, Russell Diamond/HOU/ECT@ECT, Tracy Ngo/HOU/ECT@ECT,
Brant Reves/HOU/ECT@ECT, Rod Nelson/HOU/ECT@ECT, John Suttle/HOU/ECT@ECT,
Paul Radous/Corp/Enron@ENRON, Erica Braden/HOU/ECT@ECT, Taffy
Milligan/HOU/ECT@ECT, Kaye Ellis/HOU/ECT@ECT, Becky Tlucek/HOU/ECT@ECT, Yao
Apasu/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Brent
Hendry/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Jason Peters/Corp/Enron@Enron,
Shari Stack/HOU/ECT@ECT, Marie Heard/Enron Communications@Enron Communications
		 cc:
		 Subject: Marie Heard

You are Cordially Invited To Attend A Party Celebrating The Privilege You
Had  Of Working With Marie Heard At ENA

Date:  June 9, 2000
Dress: Casual
Time:  6:00 P.M. Until 8:00 P.M.
Location:  3915 Coleridge (West University)
  Houston, Texas
  (713) 664-3207)
  (Driving Instructions Will Be Available)

Please RSVP To Suzanne Adams @ 713-853-7340
By June 4, 2000


Based on our meeting last Friday and clarification with El Paso's attorneys regarding the data being requested, please find the attached documents in response to the above subpoena dated January 22, 2002.  If you have any questions, please let me know.  Bill Rapp will be putting together Transwestern's response along with the data provided below.

Thanks,
Elizabeth
x3-6928


any luck on getting me set up??

Pete


Sara -

Looking at the documents received from National Bank of Canada, there are
some other differences besides the one identified by Rodney below:

 They have added a branch in London (previously only had Montreal and New
York) and language regarding some under tax reps, and language regarding the
European Monetary Unit.

There is no language in their agreement regarding arbitration, as well as
some other items contained in our form.

There is also no language regarding letters of credit.

They have changed the threshold amount.

Their agreement also does not include the pulp & paper information that is in
the ENA/NBC agreement.

There are some other differences from our form which may or may not be
material.
---------------------- Forwarded by Stephanie Panus/NA/Enron on 09/27/2000
11:29 AM ---------------------------

	From:  Rodney Malcolm @ ECT                           09/27/2000 10:49 AM

To: Sara Shackleton/HOU/ECT@ECT, Stephanie Panus/NA/Enron@Enron
cc: Finley Biggerstaff/HOU/ECT@ECT

Subject: Garden State - ISDA documentation

Gang,

Apparently there has been some miscommunication from the folks at National
Bank of Canada.   My understanding had been that the Master ISDA between
Garden State and NBC would be exactly the same as the Master ISDA between ENA
and NBC except the $1mm threshold.  This is not the case.  The attached
documents are what they believe should be the draft documents which have the
$1mm threshold difference and an environmental reference that is different.
Can you please take a little time and quickly look through the document and
see what else might be different. I'd like to get a general feel for what is
different so that I can decide the best way to deal with this.

Thanks,
Rodney

---------------------- Forwarded by Rodney Malcolm/HOU/ECT on 09/27/2000
10:39 AM ---------------------------

"Pace, Teresa" <Teresa.Pace@tres.bnc.ca> on 09/26/2000 03:45:26 PM
To: rodney.malcolm@enron.com
cc:
Subject: ISDA documentation

Please find enclosed draft ISDA documentation for Garden State

 <<Guarantee in favor of nbc Enron.doc>>  <<CRSUPP Garden State.doc>>
<<Usacorpo Garden State.doc>>

Please forward all comments to the undersigned

Teresa Pace
Section Manager
Directrice de Section
Legal Documentation-Treasury
Documentation L,gale-Tr,sorerie
Tel: (514) 397-5850
Fax:(514) 394-6271

 - Guarantee in favor of nbc Enron.doc
 - CRSUPP Garden State.doc
 - Usacorpo Garden State.doc


Gentlemen:

I have spoken with CDWR several times since we submitted our proposal.  They
are immediately interested in a 5 year power sale and then want to discuss
Pastoria.  I updated a price for Freeman for 200MW Peak SP-15 5 Year
($124/MWh).  I also spoke with their lawyers a couple of times to start
trading comments.  I volunteered to send a team to LA today or tomorrow, but
so far they prefer to discuss by phone.   Their lawyers acknowledge that the
primary issue for suppliers is credit.  They are working on an agreement with
CPUC that would ensure that CDWR would have an adequate revenue stream to
support the contracts.  Their intent is to make the supply contracts have
priority over the bonds.  Until that happens, we maintain that we require a
cash prepayment or letter of credit to support any deal.  I expect to hear
from them again later today.  I will keep you posted.

Regards,

Chris


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Today I called spoke to the Jillian Segall National Commissioner of the
Australian Securities and Investments Commission (ASIC). In brief I have
arranged a meeting  with her and staff handling our application next
Wednesday afternoon. Paul I have foreshadowed that we would be willing
withdraw and resubmitt our application as they had indicated. Howver we would
like to meet them to explain directly to them what our position is


We have received the Mutual Non-Disclosure Agreement effective as of 11/1/00
by and among the referenced Counterparty and Enron Net Works LLC and
EnronOnline, LLC.  Copies will be distributed.


If its Stephanie you die!  I'm working on killing JD now.

Chad Gronvold
06/27/2000 03:29 PM
To: Chris Germany/HOU/ECT@ECT
cc:
Subject: Re:

Take a guess


We should probably start thinking about an agenda for this meeting if only so
that we can determine appropriate attendees and get it on their calendars.
Do you have anything in particular in mind?  Were you thinking
legal/regulatory/operations/business/marketing?

Hope you're having a fun weekend!


2 e-mails attached
---------------------- Forwarded by Richard Shapiro/NA/Enron on 07/06/2001
03:37 PM ---------------------------

Pat Shortridge
07/06/2001 01:18 PM
To: John Shelk/NA/Enron@Enron, Linda Robertson/NA/Enron@ENRON, Chris
Long/Corp/Enron@ENRON, Richard Shapiro/NA/Enron@Enron, Mark
Palmer/Corp/Enron@ENRON, Carolyn Cooney/Corp/Enron@ENRON
cc:

Subject: Davis & Company -- incompetence personified

You hate to say that someone can't do anything right, but THESE GUYS CAN'T DO
ANYTHING RIGHT.

California Power-Buying Data Disclosed in Misdirected E-Mail
By Daniel Taub
Sacramento, California, July 6 (Bloomberg) -- California Governor Gray
Davis's office released data on the state's purchases in the spot electricity
market -- information Davis has been trying to keep secret -- through a
misdirected e-mail.
The e-mail, containing data on California's power purchases yesterday, was
intended for members of the governor's staff, said Davis spokesman Steve
Maviglio. It was accidentally sent to some reporters on the office's press
list, he said.
Davis is fighting disclosure of state power purchases, saying it would
compromise negotiations for future contracts. This week, Davis appealed a
state judge's order to release spot-market invoices, purchase orders and
confirmation sheets for power contracts signed through June 27. The state is
buying electricity on behalf of utilities, which are burdened by debt.
``It's an internal document,'' Maviglio said of the e-mail. ``We have a
meeting every morning where we discuss issues of the day.'' The e-mail
contained minutes of today's meeting, he said.
According to the e-mail, the state bought 283,000 megawatt- hours of
electricity for $37.4 million yesterday. One megawatt- hour is enough
electricity to light 750 typical California homes for an hour. Prices ranged
from $25 to $149.99 a megawatt-hour. Maviglio said the information in the
e-mail is accurate.
Power for next-day delivery during peak-use hours averaged $79.67 a
megawatt-hour on the California-Oregon border yesterday, according to
Bloomberg Energy Service. California paid an average of $132 on the spot
market, according to the e-mail. Prices on the spot market tend to be higher
than on the day-ahead market.
The governor has proposed releasing data on spot-market purchases once a
quarter, arguing that the state uses power-buying strategies tailored to each
season. Lawyers for the media and Republican legislators say state law
requires disclosure of contracts within seven days after they are signed.

---------------------- Forwarded by Richard Shapiro/NA/Enron on 07/06/2001
03:37 PM ---------------------------

Ban Sharma@ENRON_DEVELOPMENT
07/06/2001 01:27 PM
To: Mark Palmer@ENRON
cc: Richard Shapiro@Enron

Subject: DWR Contracts Summary Website

Mark,

Your site is finally activated. Real interesting. Worth a look

Link to the DWR Contracts.

http://www.sco.ca.gov/power_page/contract_info.htm

Ban

An interesting article too:

Connell: Power cost twice Davis' figure
July 6, 2001
By JOHN HOWARD
The Orange County Register
SACRAMENTO -- The average cost of electricity purchased under $43 billion of
worth of state contracts is actually more than double the amount reported by
Gov. Gray Davis' administration, state Controller Kathleen Connell said
Thursday.
Connell said her staff's analysis put the per-megawatt average at $170,
compared with $69 to $79 estimated by Davis.
Connell stopped short of suggesting that the higher cost could drive another
increase in rates, although consumer groups said the higher amount likely
would require some future increase.
The controller, who writes the state's checks, said her figures assume fixed
prices for natural gas over the duration of the contracts, which range from a
few months to 20 years.
The administration, noting that nearly half its contracts are pegged to the
fluctuating market price of natural gas, said costs on many of the contracts
would decline over time.
Consumer groups were skeptical of the administration's numbers.
"You could cut these numbers in various ways and make different averages,
long-range or short-range contracts, peak power or nonpeak, and probably
either average could be defended mathematically," said Nettie Hoge of The
Utility Reform Network. "We can't tell you whether it's $69 or $170 - the
contracts are very convoluted and complex."


To cut to the chase....would CB1 fault the turbine when the PMT breaker
tripped and if so then would the downtime or line out time availability hour
counter be incremented?    If the PMT breaker trip doesn't always cause a
given fault then is there any easy way (SCADA data or site crew experience)
for us to estimate what percentage of the trips did fault the turbine
offlline due to a downtime or line out fault?  Please answer these
questions;  we will then know what corrections, if any, we need to make to
availability.

Tim Mohammed
06/14/2002 07:52 AM
To: Joe Thorpe/EWC/Enron@Enron
cc: Kurt Anderson/EWC/Enron@ENRON, Kevin Cousineau/EWC/Enron@ENRON, Jeff
Maurer/EWC/Enron@ENRON, John Nemila/EWC/Enron@ENRON, Hollis
Kimbrough/EWC/Enron@ENRON, Mark Fisher/EWC/Enron@Enron, Mark V
Walker/EWC/Enron@ENRON, Tom Nemila/EWC/Enron@ENRON

Subject: Zilkha Availability

Joe,
Lets not forget that we had measure problems due to failing MS3 relay in the
SEG converter, which caused the crow bar to engage, which in turn forced CB1
to fault.

CB1 is designed to do both synchronization and was set to protect the turbine
and the converter in a fault condition. The original instantaneous settings
of 8000A was too high and allowed too much current through the system that
damaged the converter and caused IGBTs to blow before it tripped. The second
failure was due to a QA issue with failing CB1 to trip when it was commanded
to by the converter. In both events we had catastrophic failures and lost 2
converters due to CB1 failing to protect the system. To remedy this problem,
we installed the PMT for CB1 redundancy and decreased the instantaneous
setting from 8000A to 3000A and since then we didn't have any IGBT blow ups
or any catastrophic failures

Even though that I am still not clear about Gary's question at the end, I
hope that the above provide some help.

Thank you,

Tim M

Joe Thorpe
06/13/2002 04:48 PM
To: Kurt Anderson/EWC/Enron@ENRON, Kevin Cousineau/EWC/Enron@ENRON, Tim
Mohammed/EWC/Enron@Enron
cc: Jeff Maurer/EWC/Enron@ENRON, John Nemila/EWC/Enron@ENRON, Hollis
Kimbrough/EWC/Enron@ENRON, Mark Fisher/EWC/Enron@Enron, Mark V
Walker/EWC/Enron@ENRON

Subject: Zilkha Availability

Kurt,
 Per our phone conversation, Mark Fisher and myself have been discussing
availability with Gary from Zilkha. A question arose regarding the many
operations of our breaker in the pad mounted transformer that took place
December through March. Gary's thought is that when we recalculate the
availability, we need to count these times as down time and not Line Out
Hours as they have currently been counted. I suggested that according to
Exhibit GG in the TSIA, LOH is defined in short as any time the grid does not
meet "(i) the specifications required by the WTG as set forth in the
Technical Specifications", and Gary agrees with this. The problem is that an
engineering change on the breaker settings was implemented some time in March
to reduce the number of breaker operations on site. We are still seeing many
grid faults in the turbine but not in the PMT breaker. The question that Gary
brought up is were the original settings of the breaker set to the WTG
Technical Specifications and operating due to the on going grid conditions OR
were the settings improper to start with causing the breaker to operate while
the grid was within Technical Specifications.


Steve:
Here's a substantially more cleaned-version, with attachments.  There's a
hard copy on your chair.

Best,
Jeff
----- 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 yesterday.  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.


All,

When sending emails in regards to cuts or other things that occur in RT,
please send the emails to our entire group.

The address is:  Volume_Management_Portland

Thank you, it helps our process greatly.

Kourtney


I'm on the phone with Jim now.  If you want to contact him, I'd wait 5-10
minutes and give him a call on his cell phone.


Attached is the interest rate swap for those of you who did not receive it or
could not read it last night.

 <<interest rate confirm.doc>>

Tracy Ross, Counsel, Royal Bank of Canada
Phone: 416-974-5503; Fax: 416-974-2217
File -

This email may be privileged and confidential.?
Any dissemination or use of this information by a person other than the
intended recipient(s) is unauthorized.? If you receive this in error, please
advise me immediately.

 - interest rate confirm.doc