ISDA PRESS REPORT - MAY 16, 2001

* IRS Should Implement Broad Risk Standard In Hedging Regulations,
Witnesses to Urge - BNA
* EMB-BIS data show OTC derivatives activity slowed in H2 - Reuters
* Federal Home Loan Bank of New York meets full FAS133 compliance with
Principia Partners solution - M2 Presswire
* Cost Of Single-Stk Futures A Drawback, Says Ex-CFTC Head - Dow Jones
* CME, CBOE create joint venture on single-stock futures - M2
Presswire
* FASB offers options respite - Risk
* The FSA's hardliner - Risk
* Building society use of credit derivatives approved - IFR
* Default swap collapse opens arbitrage window - IFR
* Lightrade expands pooling points network - IFR
* ISDA Finalizes Credit Derivatives Restructuring Document - Dow Jones

IRS Should Implement Broad Risk Standard In Hedging Regulations, Witnesses
to Urge
BNA - May 16, 2001
By Alison Bennett

Proposed rules (REG-107047-00) on hedging transactions do not go far enough
in implementing a new risk management standard enacted by Congress, several
witnesses are expected to tell the Internal Revenue Service May 16.

Issued in January, the rules are intended to reflect changes under the
Ticket to Work and Work Incentives Improvement Act of 1999 (Pub. L. No.
106-170) for businesses entering hedging transactions (12 DTR G-10, L-25,
1/18/01).

That law changed the standard for qualifying hedging transactions from one
focusing on risk reduction transactions to one centered around risk
management transactions.

Several witnesses are expected to tell IRS officials at a hearing that the
proposed rules fall short of what Congress intended in implementing the new,
broader standard.

Broad Standard Favored

Andrea Kramer, McDermott, Will & Emery, Chicago, is expected to testify that
while the government did try to incorporate the new risk management standard
into the rules, its efforts did not go far enough.

"While the proposed regulations generally define a hedging transaction in
terms of the required risk management standard, many of the operative
provisions revert back to the risk reduction standard of the current
regulations," Kramer said in written comments to IRS.

Kramer said she objected to statements in the rules that "a transaction that
is not entered into to reduce a taxpayer's risk does not manage risk," and
others that she said "would, if adopted as final regulations, effectively
negate the statutory changes Congress thought it was making."

The McDermott, Will & Emery practitioner is expected to contend the final
regulations must be conformed throughout to replace the concept of risk
reduction with that of risk management. In addition, she will urge IRS to
provide examples of modern risk management activities that would constitute
qualifying hedging transactions.

Commodities Rule Requested

Earl Goldhammer, representing America's Energy Partner, is expected to make
similar points at the hearing.

In an outline submitted to IRS, Goldhammer said the final rules should allow
hedging treatment for certain commodities derivatives transactions entered
into in the normal course of business by commodities dealers.

According to the outline, qualifying transactions should:

* relate to a derivative valued in reference to a commodity also
handled by the dealer;
* fall within pre-approved controls on speculation set out in formally
adopted risk management policies; and
* not be identified by the commodities dealer as having been entered
into in its dealer capacity.

This proposal "recognizes the existence of appropriate and inevitable
differences between each dealer in commodities as to its risk tolerances and
risk management techniques," he said.

Weather, Energy Derivatives

Salomon Smith Barney Tax Director Mark Perwien, representing the
International Swaps and Derivatives Association Inc., New York, also is
likely to criticize the references to risk reduction found under the
proposed rules.

To properly implement congressional intent, Perwien said in an outline of
his testimony, the proposed rules should "extend hedging transaction status
to all transactions undertaken in the ordinary course of business that alter
the taxpayer's exposure to one or more of the risks inherent in the
taxpayer's core economic activities."

Perwien also is expected to urge IRS to provide hedge transaction status to
weather and energy supply derivatives. Likewise, he said in the outline,
"the service should permit hedges of dividend streams, overall
profitability, and other business risks that do not relate directly to
interest rate or price changes or currency fluctuations."

Insurance Concerns

Mark Canter, representing the American Council of Life Insurers, Washington,
D.C., will bring specific industry concerns to the hearing.

Canter is likely to assert that life insurer's utilization of gap hedging
transactions should be allowed hedging treatment because they are entered
into in the normal course of business to manage risk with respect to
interest rate changes.

Without a change to the proposed rules, "gap hedges of life insurers may be
inappropriately denied hedging treatment ... solely because of an unworkable
test in the preamble that requires them to be more closely associated with
liabilities than assets," Canter said in an outline of his oral comments.

The fifth and final witness, Linda Carlisle of White & Case LLP, Washington,
D.C., is expected to ask IRS to extend hedging treatment to risk management
transactions for services income derived from converting one commodity into
another.

Testifying on behalf of the Interstate Natural Gas Association, Carlisle
also will urge the agency to clarify that weather derivatives may hedge
price risks.

EMB-BIS data show OTC derivatives activity slowed in H2.
Reuters - May 15, 2001

BASEL, Switzerland, May 15 (Reuters) - Growth in the huge market for
over-the-counter derivatives slowed in the second half of 2000, with volume
of outstanding contracts rising just one percent from the end of June 2000,
the Bank for International Settlements (BIS) said on Tuesday.

Growth in the first half had been nearly seven percent.

The BIS bases its estimates on the "notional" amount of outstanding OTC
contracts, which totaled $95.2 trillion at the end of December.

Notional value reflects the size of the underlying transactions on which the
derivatives instruments are based.

The interest rate derivatives segment, the single largest in terms of OTC
traded instruments, had a notional value of $64.7 trillion at end-2000, 68
percent of the total market.

Swaps are the single largest category in the interest rate category,
amounting to $48.8 trillion at the end of December.

"In the specific case of the interest rate swap market, the deceleration in
growth was in sharp contrast to the very rapid pace of business seen since
the end of 1998," the BIS said.

Euro-denominated contracts accounted for $21.3 trillion or nearly one-third
of the total volume of interest rate derivatives outstanding at the end of
2000.

A seven percent drop in euro-denominated interest rate contracts was a major
factor behind slower growth in the second half, the BIS said.

The BIS cited financial sector consolidation, reduced issuance of some types
of domestic securities - including German Pfandbriefe, which are often
hedged with swaps - and "belated efforts by banks to clean up their pre-euro
legacy currency portfolios" as likely factors behind the drop.

Counterparties most affected by this were inter-dealer brokers, the BIS
added.

Meanwhile volume in dollar-denominated interest rate swaps remained buoyant.
That market, second behind euro-denominated swaps, accounted for $13.0
trillion in notional value at the end of 2000, up around 10 percent from
end-June.

GROWTH IN OTC STARTS TO LOOK LIKE EXCHANGE-TRADED BUSINESS

The BIS data show the pace of growth in the OTC market, which once
outstripped that seen for exchange-traded instruments, slowed after rapid
expansion in the past decade.

OTC derivatives volume based on notional value rose by 7.9 percent for all
of 2000, compared with growth in exchange-traded contracts of 5.9 percent.

The BIS gave no indication whether it thought the OTC market would pick up
again in the first half of 2001.

Its statistics also omit data on the fast-growing market for credit
derivatives .

While growth in notional value slowed in the second half, so-called gross
market values, which reflect the cost of replacing a derivatives contract,
rose by 24 percent in the same period to $3.2 trillion from $2.6 trillion at
end-June 2000.

"Estimated gross market values experienced the most pronounced increase
since the BIS began collecting data on the OTC market...," the BIS said.

The BIS, which serves as a bank to and forum for the world's central banks,
began collecting the data in 1998.

It gave no reasons for the discrepancy for the relatively rapid growth in
OTC gross market value.

The largest absolute increase here was seen in foreign exchange contracts,
which rose by $271 billion in the final six months of 2000. The BIS gave no
reason for the large increase in the gross market value relative to notional
amounts, which rose to $15.7 trillion for currency instruments, also up one
percent.

Currency activity picked up in the latter part of 2000, however, while a
drop in short-term interest rates relative to long rates could have raised
the value of interest rate swaps.

Federal Home Loan Bank of New York meets full FAS133 compliance with
Principia Partners solution
M2 Presswire - May 15, 2001

Jersey City, New Jersey -- Principia Partners LLC, a leading provider of
full front-to-back office systems for global capital markets, today
announced that the Federal Home Loan Bank of New York (FHLB New York) has
successfully implemented FAS 133 for the first quarter of 2001, using the
Principia Analytic System (PAS).

The Principia system enables FHLB New York to produce internal and external
derivatives reporting in compliance with the new accounting standards. PAS
is used to analyze potential transactions, value derivatives and related
cash items, summarize the accounting entries and assess the effectiveness of
the hedging relationships. The derivatives standards were established by the
Financial Accounting Standards Board (FASB) and effective as of the first
quarter of 2001. PAS also allows the bank's treasury and risk managers to
identify and hedge potential risk.

Patrick Morgan, controller, FHLB New York, states: "Our goal was to comply
with the FAS 133 regulations. In order to do this we had to find a vendor
that clearly understood our business and could integrate its solution with
our existing accounting infrastructure. The PAS product is well designed and
has met all our requirements. Our focus has always been to employ a
sophisticated, quick-to-implement and easy-to-use system. We truly believe
that we have chosen the best system and a vendor that can meet our present
and future needs." Theresa Adams, one of Principia's founding partners,
states: "Very early on we realized the importance of this major regulation
and released our FAS133 compliant version of PAS in the first quarter of
1999. We have created a system that seamlessly brings together both
accounting and pricing capabilities for assets, liabilities and derivative
instruments. We are delighted to provide such a successful and prestigious
organization as FHLB New York with full FAS133 compliance." FHLB New York
uses the PAS sub-ledger facility to mark derivatives and cash items to
market, link specific assets and liabilities with specific hedge
instruments, document hedge relationships and demonstrate the effectiveness
of hedging policies.

Adams concludes: " Derivatives end-users, such as corporations, insurance
companies and government entities need a thorough, well thought-out approach
to compliance that can be fully customized to reflect each client's unique
and changing FAS 133 interpretation. In addition to being ranked fully
compliant by FAS133.com and International Treasurer, we were also awarded
the highest ranking for system functionality. During the development process
we collated valuable advice from our end-user community about their needs
and concerns. This helped us design and implement what we believe is a
complete solution. Our aim is to continue providing a highly flexible
accounting function that gives our clients the ability to comply with the
new standard." END About Federal Home Loan Bank of New York The Federal Home
Loan Bank of New York is a AAA rated, congressionally chartered, wholesale
bank. It is part of the Federal Home Loan Bank System, a national wholesale
banking network of 12 regional, stockholder-owned banks. The Federal Home
Loan Bank of New York serves 300 community lenders in New Jersey, New York,
Puerto Rico and the U.S. Virgin Islands. The mission of the Home Loan Bank
is to advance housing opportunity and local community-based member-lenders
to serve their markets.

About Principia Partners

Founded by a group of finance and technology professionals, Principia
Partners offers a fully integrated front to back office solution for
management of financial assets, liabilities and derivatives . The Principia
Analytic System covers fixed-income (including ABS/MBS), FX and equity index
products. The sub-ledger facilitates full compliance with both FAS 133 and
IAS 39 accounting regulations. Principia's target market is composed of
end-users, dealers, fund managers and other entities that require
sophisticated processing capability without the desire or resources to
develop internal systems. For more information about Principia, see
www.principiapartners.com.

Principia Partners is headquartered at the Harborside Financial Center,
Jersey City, New Jersey, USA.

Cost Of Single-Stk Futures A Drawback, Says Ex-CFTC Head
Dow Jones Commodities Service - May 15, 2001
By Nicholas Elliott

NEW YORK -(Dow Jones)- Single-stock futures have drawbacks that may limit
their use, according to Philip McBride-Johnson, head of exchange-traded
derivatives at law firm Skadden, Arps, Slate, Meagher & Flom and a former
chairman of the Commodity Futures Trading Commission.

McBride-Johnson was speaking at the Third Annual Derivatives Expo Tuesday.

He pointed out that because single-stock futures, which were legalized under
the Commodity Futures Modernization Act passed last December, will be
regulated by both the CFTC and the Securities and Exchange Commission, the
costs of regulation will be higher than for other futures, or for options on
stocks.

For current users of options on stocks, McBride-Johnson noted that futures
on stocks entail a higher cost in margin payments, plus a standard fee paid
by options users to the SEC.

McBride-Johnson added that of the international exchanges that list futures
on stocks and options on stocks, the volume of options traded is 50 times
larger than on the futures.

He pointed out that the new law prohibits options on single-stock futures
for at least three years, another limit on the appeal of such futures.

McBride-Johnson stressed that he wasn't predicting failure for single-stock
futures, but outlining a possible limitation on their uptake.

On Monday, the Chicago Board Options Exchange and the Chicago Mercantile
Exchange announced a joint venture to list single-stock futures, which will
trade electronically.

CME, CBOE create joint venture on single-stock futures
M2 Presswire - May 15, 2001

CHICAGO -- The world's largest options exchange and the largest futures
exchange in the U.S. are teaming up to introduce a highly anticipated new
product single-stock futures contracts. The Chicago Board Options Exchange
(CBOE) and Chicago Mercantile Exchange Inc. (CME) today signed a letter of
intent to create a joint venture to introduce single-stock futures,
following approval by the boards of directors of both exchanges.

The Chicago Board of Trade (CBOT) has also agreed to participate in the
joint venture with a limited stake.

Legislation signed into law in December will allow the introduction of
single-stock futures by U.S. financial exchanges later this year, after an
18-year prohibition on the products.

"Today's announcement highlights the innovation and entrepreneurial spirit
among Chicago's exchanges," said CBOE Chairman and Chief Executive Officer
William Brodsky. "This exciting new initiative combines the best of
securities and futures trading. Our willingness to work together on this
venture will ensure that Chicago remains the worlds center in derivatives
trading and risk management."

"The creation of this joint venture recognizes the tremendous synergies of
CME and CBOE, making us a formidable competitor in the global marketplace
for single-stock futures," said CME Chairman Scott Gordon. "Our
complementary customer bases of retail and institutional investors will
benefit from the efforts of all three Chicago exchanges to establish deep
pools of liquidity in these products."

"I am enthused that Chicago's exchanges have worked so well together to
understand and address our customers needs and our members concerns," said
CBOE Vice Chairman Mark Duffy. "We have designed a product that, I believe,
will appeal to our customers, and a business structure that will provide
great benefit to our members."

"Our largest customers have emphasized the importance of collaboration
between the CBOE and CME to combine the capabilities, distribution and
connectivity of the futures and securities worlds," said CME President and
Chief Executive Officer Jim McNulty. "This alliance should also provide the
highest level of capital efficiency for our customers who trade in both
futures and options."

"The CBOT is pleased to work with the leadership of CBOE and CME in this
initiative to bring this exciting new product to our markets," said Nicholas
Neubauer Chairman of the Chicago Board of Trade. "The involvement of our
members and the access to our customers will make important contributions to
the success of this venture."

The joint venture will be a for-profit company, will have its own management
and board, and will be separately organized as a regulated exchange.

Single-stock futures will be traded electronically, and orders may be
entered through both the new CBOEdirect electronic platform and CMEs GLOBEX2
electronic trading system.

CME and CBOE officials said they are engaged in negotiations with the
Options Clearing Corporation (OCC), which clears all CBOE transactions, to
clear the new products. McNulty said the negotiations contemplate CME
becoming a special clearing member of OCC to provide access for CME clearing
members who are not members of the OCC.

The exchanges anticipate contracting with Designated Primary Market-Makers
(DPMs) in these products and expect that the board appointed to govern the
joint venture will determine the eligibility criteria, selection process,
rights, privileges and duration of such arrangements.

Single-stock futures are expected to bring new efficiencies to securities
trading, securities lending and corporate hedging activities. CME and CBOE
officials said they also expect to develop rules that would accommodate
block trading and exchange-for-physicals (EFPs).

The Chicago Board Options Exchange created and launched the first listed
options on stocks in 1973 and the first index options in 1982. Today, CBOE
lists options on more than 1,500 stocks and on over 40 indexes, such as the
S&P 500, the Dow Jones Industrial Average, the Russell 2000, the Nasdaq-100,
and the S&P 100. It remains the worlds largest and most successful options
marketplace.

Chicago Mercantile Exchange Inc. launched the first successful stock index
futures contracts on the S&P 500 in 1982. Today, CME trades futures and
futures options on indexes including the S&P 500, Nasdaq-100, S&P MidCap
400, Russell 2000, FORTUNE e-50' , S&P/BARRA Growth and Value Indexes, and
Nikkei 225, as well as its electronically traded E-mini S&P 500 and E-mini
Nasdaq-100 contracts the fastest growing products in the exchanges history.
CME also trades interest rate, foreign currency and agricultural commodity
products. On November 13, 2000, CME demutualized and became a for-profit,
shareholder-owned corporation.

CBOE is regulated by the Securities and Exchange Commission (SEC). CME is
regulated by the Commodity Futures Trading Commission (CFTC). Additional
information about the CBOE and CME can be found at their respective Web
sites: www.cboe.com and www.cme.com.
Except for the reported historical information, matters discussed in this
release are forward-looking statements that are subject to risks and
uncertainties. The factors that could cause actual results to differ
materially are discussed in CMEs filings with the SEC. Readers are cautioned
not to place undue reliance on these forward-looking statements, which speak
only as of the date of this release. CME undertakes no obligation to
publicly release any revision to these forward-looking statements to reflect
events or circumstances after the date of this release.

&P, S&P 500, S&P/BARRA Growth, S&P/BARRA Value, S&P MidCap 400, Nasdaq-100,
Russell 2000 and other trade names, service marks, trademarks and registered
trademarks that are not proprietary to Chicago Mercantile Exchange Inc. or
Chicago Board Options Exchange are the property of their respective owners,
and are used herein under license. The FORTUNE e-50 Index (the "Index") is a
trademark of FORTUNE, a division of Time Inc., which is licensed for use by
the Chicago Mercantile Exchange Inc. in connection with futures and options
on futures (the "Products"). The Products have not been passed on by FORTUNE
for suitability for a particular use. The Products are not sponsored,
endorsed, sold or promoted by FORTUNE.

FORTUNE makes no warranty and bears no liability with respect to such
Products. FORTUNE makes no warranty as to the accuracy and/or completeness
of the Index or the data included therein or the results to be obtained by
any person from the use of the Index or the data included.

FASB offers options respite
Risk Magazine - May 5, 2001
By Dwight Cass

The options market got a partial reprieve last month from an onerous
provision in the US Financial Accounting Standards Board's (FASB) new
derivatives accounting standard. FAS 133 requires companies to report option
premium volatility due to time value changes (theta) in their earnings.
End-users say this causes earnings volatility that many of them cannot
tolerate and which, they argue, makes no sense to report if they plan to
hold the hedge to maturity.

End-users are currently scaling back their use of complex options and
swaptions in favour of simpler hedging tools that qualify for FAS 133's
hedge accounting - which allows end-users to avoid reporting the effective
portion of a hedge's fair value fluctuations in earnings. Indeed, 21% of
end-users in a recent survey of about 1,300 US corporations and asset
mangers by Greenwich Associates, a Greenwich, Connecticut-based research
firm, said FAS 133 would cause them to reduce their use of interest rate
options, with 14% saying it would force a "significant reduction".

A handful of high-profile US derivatives end-users, led by home mortgage
securitisation giant Fannie Mae, lobbied unsuccessfully for a change in the
option provision last year. The group proposed that the time-value component
of an option's premium be amortised into earnings over its life.

Rejection
The FASB rejected this approach during its comment period for FAS 133 and
again last autumn, when the group pressed once more for an amendment (Risk
October 2000, page 14). After the years of controversy leading up to FAS
133's passage, the board is loath to reopen the standard for amendments.
Rather, the FASB's derivatives implementation group (DIG), a task force of
accountants and derivatives industry members that churns out advice on how
to implement FAS 133, has devised a guideline that skirts the need for an
amendment. "We are not amortising time value, as was proposed last year in
one of the amendments," says Timothy Lucas, director of research and
technical activities at FASB and chairman of the DIG. "There will definitely
be no amendment," he says.

The implementation guideline is no panacea. Essentially the DIG has proposed
that all changes in an options fair value be recorded under other
comprehensive income (OCI), a part of a company's equity account, until the
date that the hedged transaction affects earnings. Then the fair value of
the hedge should offset the fair value of the exposure. But the option must
match the underlying exactly - it must pass all FAS 133's effectiveness test
requirements. It must match the timing of the underlying cashflow and there
must be no basis risk.

FASB put the proposal out for a five-week comment period on April 16. Fannie
Mae and other end-users say they are scrutinising it and expect to submit
comments this month.

The FSA's hardliner
Risk - May 5, 2001
By Matthew Crabbe

Is there a schism between the New York Federal Reserve Bank and the UK's
Financial Services Authority (FSA)?

A speech delivered by William McDonough, president of the New York Fed and
chairman of the Basel Committee on Banking Supervision, to the annual
meeting of the International Swaps and Derivatives Association in Washington
last month, seemed to offer the prospect of a cut in the w charge - a 15%
capital floor on credit derivative positions - or even its full removal.

The Basel Committee may have confused legal risk with op risk in its
conception of the charge, McDonough said.  It seemed for a while as if the
derivatives business might have persuaded the Basel Committee to make an
historic U-turn on a charge that ISDA says will damage the credit
derivatives business.

If the w charge is anyone's idea, it is Oliver Page's. Page joined the Bank
of England in 1968 from Cambridge, and worked his way through the statistics
division, the forex division, the international division and then markets
supervision.

He moved with other supervisors to the new FSA in 1998, where he became
director of financial supervision for complex international groups - the
largest UK banks. Last month, that responsibility was expanded to include
major insurance companies and the division was renamed the major financial
groups division.

In recent speeches, FSA chairman Howard Davies has been hammering home the
message that insurance companies should be subject to the same prudential
standards of the Basel Accord as banks.

Page is also chairman of the Basel Committee's capital group, and one of
that group's sub-groups covers credit risk mitigation. This is the source of
the detail of the w charge (the w stands for "weight" - it was Page's idea
to label it so).

David Clementi, deputy governor of the Bank of England, has also been making
hawkish noises about the hidden dangers of the credit derivatives business.

Page says too much has been read into McDonough's speech. "This is a
consultative paper we are talking about," he says. "The operational risk
charge is a concept that still has to be fleshed out. Even the internal
ratings-based approach to credit calculations still has to be fleshed out.
And banks are only just waking up to the message that by October these
proposals will be decided."

But while everything is open to discussion, Page insists: "The w charge is
not a mistake. We [the Basel Committee] decided last year that if we could
locate capital charges closer to the risks then those charges would be more
accurate."

Speaking at an FSA-organised conference in London the following week,
McDonough failed to repeat the suggestion that the w charge could be about
to go. "I still think people are reading too much into what they think was
said in Washington about the w charge. There are some material risks there
and this is the solution that people on the Committee signed up for."

Page says the w charge is not just a knee-jerk response to last September's
loan restructuring by Conseco, the US insurer - a restructuring that
triggered default clauses under ISDA's standard documentation for credit
derivatives.

Even if it were specifically a charge for the legal risk involved in writing
credit protection, that doesn't mean it should not be charged separately,
but wrapped up in Basel's sweeping charge for operational risks, says Page.
And anyway, this is not a pure legal risk charge. "ISDA tried to get the
documentation for credit derivatives right twice, and now they are changing
it again. That's not about legal risk; it's about the risk that credit
derivatives do not pay out when people expect them to. It's about the
instability of the documentation."

As for the op risk charge, Page rejects the idea that banks should be able
to take out insurance instead. "Just because it's been laid off, the risk is
not zero," he says. "What is the evidence that insurance companies can lay
off the risk somewhere else?"

So, there may be differences in opinion among the Basel Committee's members
- but a deal was done. And if there are going to be any changes to the
proposals for a new Accord, they must be decided quickly, because the
proposals are going to be set in six months time.

This is a sensitive stage in the global regulatory process, the FSA
believes. The Basel Committee's January 1, 2004 deadline for the
implementation of the new Accord was seen as a concession to European banks
and their supervisors by the Fed. The FSA has told the EU it must move fast
if it wants its Capital Adequacy Directive, which parallels Basel's New
Accord, to be ready at the same time.

The FSA is not just worried that there will be an uneven regulatory playing
field for banks, with US banks being forced by the supervisors into their
own capital-efficient super-league while flabby European banks fall behind.

It also wants to stamp its authority as the all-embracing single regulator
for UK financial markets, responsible for consumer protection and the safety
of the financial system. The "nod and a wink" style of market supervision
that the Bank of England perfected over the years has gone, replaced by the
kind of bold statement favoured by US government agencies such as the
Securities and Exchange Commission.

Building society use of credit derivatives approved
IFR - May 12, 2001

The UK Treasury last week proposed legislation that would allow building
societies to use credit derivatives for risk management purposes UK building
societies are already active users of interest rate and currency derivatives
and wilt be able to hedge against borrower default if the legislation is
passed. The UK parliament has Just broken up ahead of the June 7 general
election, but a change in the law to extend the use of credit derivatives
could still K enacted later this year.

The most active debt issuers and hedgers among building societies have
converted from mutual status in recent years. With Halifax and Alliance &
Leicester among those following Abbey National in turning themselves into
listed banks. There are still 67 building societies in the UK, with total
assets of more than olb160bn, however, and credit derivatives dealers in
London can be exported to start pitching credit protection products to the
societies in advance of any actual change in the law

Nationwide is the biggest remaining building society in asset terms followed
by Britannia and Yorkshire.

Even assuming that legislation allowing credit derivatives use is passed,
building societies will not be able to use default swaps to take speculative
positions. The Building Societies Act of 1986 restricts derivatives use to
risk management purposes and sets out a list of risk factors where
derivatives use is permissible.

Default swap collapse opens arbitrage window
IFR - May 12, 2001
By Jon Macaskill

At least E5bn, and possibly as much as E15bn, equivalent of credit-linked
note issuance has been seen in the last month. The resulting offsetting of
short credit default swap positions has caused a sharp widening in the
negative basis between default swaps and the asset swap value of the
underlying debt in the secondary bond market.

Dealers with access to corporate bonds have been able to buy default swaps
at levels as much as 20bp under the asset swap value of the debt, and to
create synthetic packages for their clients where in effect the only risk is
to the counterparty on the swap. Credit derivatives dealers who chanced to
be flat have been turning huge profits by proprietary dealing - and from
sales of these packages to their favoured insurance company customers.

Deutsche Bank, Merrill Lynch, Bear Stearns and Citigroup have been among the
most aggressive sellers of default swaps in recent weeks, according to
dealers at rival houses, and their crossing of bid/offer spreads has driven
the negative default swap basis to bonds ever wider.

A E2.25bn credit-linked note issued by Deutsche Bank is typical of the deals
that have been fuelling this movement. The deal, Deutsche Bank Repon
2001-2014, offered exposure to 150 separate corporate credits, 51% from the
US and 49% from Europe.  Because Deutsche Bank had the deal rated, the terms
of the issue spread across trading desks in London and New York, and rival
dealers pulled hack their bids on default swaps in the relevant corporates.

Other banks were selling similar unrated (and therefore private) credit
linked notes at the same times, which led to a scramble to offset swap
positions.  Faced with a shortage of bonds in the secondary market, and repo
rates at 0% for some corporate issues forced to hit whatever bid was
available in the default swap market, pushing the negative basis for many
investment grade five-year default swaps from an 8bp-16bp negative basis to
a 12bp - 20bp basis last week.

This produced wild diversity between default swaps for corporates that had
seen their debt used for credit-linked notes, and similar companies that had
not. Lufthansa five-year default swaps were offered at 29bp late last week,
while British Airways offers in the same maturity were no lower than 50bp,
for example.

Many default swaps were also very low on an absolute basis. Single A rated
French pharmaceuticals company Aventis was quoted at 16bp/20bp for a
five-year default swap at the close of dealing on Friday, for example. Other
corporate default swaps were also at extremely tight levels, with
Rolls-Royce offered as low as 27bp in the five-year, Volkswagen at 26bp, BMW
offered at least as low as 26bp and Unilever at 21bp.

Run for the door

The movement was not limited to European credits. Offsetting of default
swaps led to the sale of negative basis packages in US names including
Sears, Bank of America and Philip Morris, with Bank of America trading at
levels below 40bp in the five-year, or less than half its trade point when
fears about US bank credit quality were at their height earlier this year.

General market sentiment that the worst of the current downturn in credit
quality has passed has amplified the effect of the default swap selling.
Investors are happy to hold corporate bonds, which has left dealers
struggling to buy paper to cover their positions as tentative to selling
default swaps.

"Everyone tried to run for the door at the same time," said one head dealer,
describing trading in recent weeks.  He predicted that the wide negative
basis between swaps and bonds will be a trading feature for some time.
Dealers worry that the banks which are selling default swaps most
aggressively are more synthetic credit linked notes. As long as they can
maintain a margin between the notes and the level at which they can offset
their exposure, they will keep hitting swap bids.

This collision of default swap offset needs, a bond shortage and improved
credit sentiment is working in favour of corporate treasurers. WorldCom
managed to sell the biggest deal yet from a US corporate last week, and saw
spread talk on what proved to be an US$11.83bn equivalent deal tighten ahead
of pricing.

An issue of this size would normally prompt a sharp widening in default
swaps on the relevant corporate, but WorldCom saw its five-year mid quotes
fall from 150bp two weeks ago to below l4Obp last week.

The decline in default swap quotes, and widening basis to asset swap levels
for bonds, has been restricted to Europe and the US so far. If sentiment
about the credit quality of Asian corporates improves there could be note
issuance and spread movement. The dealers who have been struggling to cover
their positions in the supposedly liquid US and European bond and swap
markets may be reluctant to try the same approach in Asia, however.

With the prospect of more issuance of credit-linked notes on US and European
corporates, and maintenance of the wide negative swap to bond basis, dealers
who are allowed to run proprietary positions - and their insurance company
clients - should reap further windfall arbitrage profits. The traders forced
to offset deals issued by their structured note departments face further
weeks of anxious hedging, however.

Lightrade expands pooling points network
IFR - May 12, 2001

The time it takes to deliver bandwidth between New York and Los Angeles will
soon get a little shorter. Lightrade, the neutral pooling point operator, is
expanding its network of pooling points, (the high capacity switches that
deliver bandwidth between buyers) from New York to Los Angeles.

The pooling centre is under construction at present, but plans are under way
to complete the connection by the end of June, according to Doug Minster,
vice-president of corporate development at Lightrade.

Lightrade, formed in November 1999, began establishing pooling points or
carrier hotels in most major US metropolitan cities to shorten the time it
takes to deliver bandwidth and provide the quality of service measurements
needed to efficiently connect all parties. Beginning with Seattle, Lightrade
operates its pooling points in cities including Philadelphia, Washington,
Atlanta, Miami, Chicago, Dallas and San Jose.

The pooling point operator is focusing on deploying seven or eight more
pooling point centres throughout the US with San Francisco-Denver and
Houston-Boston in progress. The company is also investigating opportunities
in Europe.

Energy companies are excited about the prospect of more pooling point
expansion, as that is one of the catalysts they believe will accelerate
bandwidth trading and derivatives use. "A carrier could bring in a large
pipe and split off and give smaller pipes to multiple, different entities,"
Minster said.

As much as 75% of the trading that is occurring now in the bandwidth market
is via Lightrade pooling points, according to an energy trader. The
Lightrade active switch equipment that can be controlled from a personal
computer is favoured by energy traders over alternative passive cross
connect panels that may be cheaper, noted another energy trader.

Mike Pardun, vice-president, marketing and development, at Colo.com, a
neutral co-location provider that offers facilities and power to carriers
and service providers including Lightrade, agreed that telecoms traders have
a particular need for multiple pooling point operators. "The Holy Grail of
bandwidth trading only becomes a reality when true multi-carrier bandwidth
on demand is enabled by seamlessly traversing multiple pooling points," said
Pardun.

As a neutral operator, Lightrade does not own any fibre, just the switches
that facilitate the faster buying and selling of bandwidth. It does not get
involved in any actual trading, but charges a port fee to connect to its
equipment and a delivery fee. Though Enron, El Paso and Williams
Communications all operate pooling points of their own, Lightrade is not in
direct competition with them. There is a natural disinclination for other
energy companies to want to do business with them since they are not a
neutral body. Some companies like Enron also use Lightrade pooling points.

Other carriers, however, do not have a compelling incentive to interconnect
with Lightrade, as they often prefer to avoid the pooling point middleman
and swap bandwidth among themselves. Some opposition to Lightrade also stems
from Lightrade's favouring of the trading community over the carriers, notes
Cob's Pardun.

He adds that Lightrade and bandwidth traders in general have not yet
convinced the carriers that matter that there is revenue to be had that tips
the balance away from the perceived threat of the commoditisation of
bandwidth.

Companies that have attempted to have neutral bandwidth trading platforms as
well as operate neutral pooling points have had conflicts arise.
RateXchange, the online trading exchange for bandwidth and futures products,
shut down its 12 neutral pooling points that were deployed globally for that
very reason.

The trading platform is often viewed as competing with online brokers and
conflicts existed in cultivating their business through the neutral pooling
point, according to Nick Coil, senior vice-president of trading operations
at RateXchange.

"It was not as much with the energy trading groups, but it was still an
issue," he adds. RateXchange has three pooling points in Europe that were
shut down last year and still have to be uninstalled.

Competition could conic from "virtual pooling points", that perform a
similar role as the neutral pooling points, but use software instead of
deploying a large unit. Companies such as Telseon are already breaking
ground with the use of high-speed gigabit ethernet services.

Pooling Points Corporation is also entering this market with the use of a
Teletrade Intelligent Platform that uses real-time analysis, but it is not
expected to be ready until later this year.

ISDA Finalizes Credit Derivatives Restructuring Document
Dow Jones - May 11, 2001
By Joe Niedzielski

NEW YORK -(Dow Jones)- The International Swaps and Derivatives Association
said Friday that it has finalized and published the restructuring supplement
to its 1999 ISDA Credit Derivatives Definitions.

The supplement, which was previewed in early April at the trade group's
annual meeting in Washington D.C., includes changes to what kind of
underlying financial instruments can be delivered in the event of a
credit-restructuring event.

"The Supplement represents the consensus of a diverse range of constituents
in the credit derivatives markets, including portfolio managers, credit
protection sellers and dealers," Robert Pickel, ISDA's executive director
and CEO, said Friday in a press release.

Credit default swaps are over-the-counter derivatives contracts that let
investors transfer the default risk on loans or bonds by selling it to a
third party for a premium that is derived from the notional amount of the
contract.

The language of these contracts generally allows protection buyers to
collect on their default swaps if a debt instrument such as a loan is
restructured and the underlying instrument's coupon is reduced, or its
maturity is lengthened. Buyers can also usually collect if there is some
other type of credit event that would make the loan economically impaired.

But the restructuring of loans last year made to Conseco Inc. (CNC) created
some stir in the market. Market participants who had bought default swap
protection on the Conseco credit were able to deliver cheap cash bonds to
dealers and receive par in exchange. Some of the maturities on longer-dated
bonds that were delivered far outweighed the maturity of the loans.

Some dealers then decided to remove the restructuring language from the
contracts on newly written business. Those dealers and others noted that the
Conseco example amounted to a "cheapest to deliver" opportunity that wasn't
the initial intent of how these contracts should be settled.

The primary change that ISDA and its credit derivatives market practice
committee announced in April limits the maturity of physical securities that
can be delivered if a restructuring event is declared.

Under the new supplement, credit protection buyers would be limited to
delivering physical securities with a maturity of less than 30 months
following the restructuring date, or to the extended maturity of the
restructured loan.

Since the supplement was previewed in April, ISDA's credit derivatives
market practice committee have worked to finalize several details in the
proposal, ISDA said.

These include the definition of an eligible transferee for certain
deliverable obligations under a credit derivative transaction.

ISDA said the full test of the restructuring supplement is available on its
web site, http://www.isda.org.

**End of ISDA Press Report for May 16, 2001.**

THE ISDA PRESS REPORT IS PREPARED FOR THE LIMITED USE OF ISDA STAFF, ISDA'S
BOARD OF DIRECTORS AND SPECIFIED CONSULTANTS TO ISDA.  THIS PRESS REPORT IS
NOT FOR DISTRIBUTION (EITHER WITHIN OR WITHOUT AN ORGANIZATION), AND ISDA IS
NOT RESPONSIBLE FOR ANY USE TO WHICH THESE MATERIALS MAY BE PUT.


---------------------- Forwarded by Vince J Kaminski/HOU/ECT on 03/12/2001
08:16 AM ---------------------------

"Btu" <subs@Btu.net> on 03/09/2001 04:44:17 PM
To: "Btu's Weekly Power Report" <>
cc:
Subject: Btu's Weekly Power Report

Attached is the latest issue of Btu's Weekly Power Report

e-mail: info@Btu.net
phone: 732-758-8222
fax: 732-758-8286

 - wp031201.pdf


Toni,

We shall be meeting Rabi for lunch to discuss the offer and the details of his
job with him. Let's wait  for the outcome of this discussion.

Vince

	Enron North America Corp.

	From:  Toni Graham @ ENRON                           09/18/2000 07:43 PM

To: Grant Masson/HOU/ECT@ECT
cc: Norma Villarreal/HOU/ECT@ECT, Vince J Kaminski/HOU/ECT@ECT
Subject: Re: Rabi DE

FYI,  I do not send out a written offer package until the verbal offer issues
are resolved and a final offer is made.   So, I'd like to put the details
below in writing and send out to him  for Tuesday delivery.     I'm playing
phone tag with him regarding the other details and will follow up with him
again in the morning.

Thanks
Toni

	From:  Grant Masson @ ECT                           09/15/2000 11:24 AM

To: Toni Graham/Corp/Enron@Enron
cc: Norma Villarreal/HOU/ECT@ECT, Vince J Kaminski/HOU/ECT@ECT

Subject: Rabi DE

Toni:

We talked to Rabi. He's sitting on the fence for some good reasons, and he
has to weigh what is fairly comfy job situation for one that starts out at a
lower level but has more potential.   WRT the GREEN, Vince verbally offered
salary of $105k plus a guarantee that his bonus at year end would be a
minimum of $15k cash.  That's in addition to the $15k sign on bonus.  Vince
said that we would not bother working up a revised offer letter unless and
until Rabi came back with a verbal ok.  He will ponder the offer; probably
for a few more days and get back with us.  He may well call you to discuss
the exact details of the benefits.  ESOP, 401(k) contributions, etc.

Regards,
Grant.


Please set up a meeting with Christian Yoder ASAP re scheduling coordinator
agreements.  Issues to be discussed - his preferences for privity of contract
and credit.


deal has been changed

Kerri Thompson@ENRON
02/07/2001 11:07 AM
To: Kate Symes/PDX/ECT@ECT
cc:

Subject: Re: apb checkout

the deal that sean entered (516073), the term is incorrect.  the broker has
the 8th.

thanks

   Kate Symes @ ECT                02/07/2001 10:39 AM

To: Kerri Thompson/Corp/Enron@ENRON
cc:

Subject: Re: apb checkout

Checked with EES - Bob Badeer's deals are off peak. They've been changed.

515040 - changed last night to 275

Sean Crandall is entering the last deal right now. I'll let you know the deal
number in a minute.

Thanks,
Kate

Kerri Thompson@ENRON
02/07/2001 07:27 AM
To: Kate Symes/PDX/ECT@ECT
cc:

Subject: Re: apb checkout

do you know the status on the trades?  apb is calling.

Thanks

Kerri Thompson
02/06/2001 04:20 PM
To: Kate Symes/PDX/ECT@ECT
cc:

Subject: apb checkout

514918
514919
514920
514921

broker has all these deals as off peak

515040  broker has 275.00

missing deal for dianna

buy pudget
475.00
25 mw
8th
mid c
on peak

thanks


Send me your phone list as soon as you get a chance - my fax is 713-464-2391, phone 30685.
THanks,

Kim


Brandee,

For this meeting, I will need a laptop and a projector in the conference
room.  Can you take care of getting this for me?

D
---------------------- Forwarded by Daren J Farmer/HOU/ECT on 11/06/2000
11:25 AM ---------------------------

	Enron North America Corp.

	From:  Pat Clynes @ ENRON                           11/06/2000 10:28 AM

To: Aimee Lannou/HOU/ECT@ECT, Carlos J Rodriguez/HOU/ECT@ECT, Jackie
Young/HOU/ECT@ECT, Tom Acton/Corp/Enron@ENRON, Sabrae Zajac/HOU/ECT@ECT, Mark
McCoy/Corp/Enron@Enron, Clem Cernosek/HOU/ECT@ECT, Robert Cotten/HOU/ECT@ECT,
Eddie Janzen/NA/Enron@Enron, Mary Poorman/NA/Enron@Enron
cc: Brandee Jackson/NA/Enron@ENRON, Daren J Farmer/HOU/ECT@ECT, Gary A
Hanks/HOU/ECT@ECT, Lauri A Allen/HOU/ECT@ECT, Michael Olsen/NA/Enron@Enron,
Bob M Hall/NA/Enron@Enron
Subject: Thursday lunch training

Please mark your calendar for Thursday at 11:30am for lunch training.  It
will be in
EB 3270.  Lunch (unknown at this time) will be provided.  Any ideas for
lunch???
More details will follow.  Thanks,  Pat


now, now - you didn't look that great against UTEP.  we will see what happens
once we settle on a qb

Nick Hiemstra
09/18/2000 04:33 PM
To: Eric Bass/HOU/ECT@ECT
cc:
Subject: Re: GAME WEDNEDSDAY @ 7:00

The question is:  could you guys take San Jose State?  What happened to the
running game?


This request has been pending your approval for  82 days.  Please click http://itcapps.corp.enron.com/srrs/auth/emailLink.asp?ID=000000000058213&Page=Approval to review and act upon this request.

Request ID          : 000000000058213
Request Create Date : 9/5/01 1:07:01 PM
Requested For       : tammie.schoppe@enron.com
Resource Name       : Global Messaging North America Additional Mailbox Space (25 Meg Increase)
Resource Type       : Applications


Please be advised that Peter Makkai from your organization has applied for
a digital certificate.  As a security procedure for the NYISO and our
customers, we verify each applicant with our contact list.  Our contact
list for your organization does not include this applicant.  As MIS
Administrator for your organization, please confirm via email that this
applicant is eligible for the digital certificate applied for as soon as
possible.

We appreciate your assistance in this matter.

Regards,

Jennifer

Jennifer Davies
NYISO Customer Relations
Phone:  (518) 356-7536
Fax:        (518) 356-6146
E-mail:   jdavies@nyiso.com


Bob, I forwarded this to Chuck Cheek, Bob Williams, and Richard Sanders with the question of whether we should participate and if so who would write the brief.  Chuck is out until Tuesday, so I a also forwarding the message to you.  Jim

 -----Original Message-----
From: 	Fsmith008@aol.com@ENRON
Sent:	Saturday, October 20, 2001 8:22 PM
To:	peter.arbour@halliburton.com; tbattle@mitchellenergy.com; cbub@chevron.com; Derrick Jr., James; ted.m.frois@exxon.com; kerry.galvin@lyondell.com; david.garten@nli-usa.com; rick.a.harrington@usa.conoco.com; hughricekelly@reliantenergy.com; bob.kilpatrick@atofina.com; calamboley@shellus.com; lemmerw@coopercameron.com; lynchjl@bp.com; mcquemg@texaco.com; Rplaeger@br-inc.com; kera@dynegy.com; bobby.reeves@oceanenergy.com; wfschwind@marathonoil.com; dtomlin@bem.tmc.edu; Jvogel@coair.com; bobtwhilden@bmc.com; brittonw@epenergy.com; Fsmith008@aol.com
Subject:	Fwd: CEO apex depositions

I am forwarding an E-mail from former Supreme Court Justice Raul Gonzalez
which may be of interest to you. If so, his phone no. and those of his
colleagues are contained in the E-mail.
Freeman E. Smith

Return-Path: <RGonzalez@lockeliddell.com>
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Message-ID: <4166C31A2813D411A54C00508B8BEA9ED25E77@auex02.lockeliddell.com>
From: "Gonzalez, Raul A." <RGonzalez@lockeliddell.com>
To: "'Fsmith008@aol.com'" <Fsmith008@aol.com>
Cc: "Castaneda, Kirsten M." <kcastaneda@lockeliddell.com>,        "Powell, Gary R." <gpowell@lockeliddell.com>
Subject: CEO apex depositions
Date: Fri, 19 Oct 2001 18:10:53 -0500
MIME-Version: 1.0
X-Mailer: Internet Mail Service (5.5.2653.19)
Content-Type: multipart/alternative;	boundary="----_=_NextPart_001_01C158F3.4CBE1F30"

Freeman, we represent Jani-King.  Their CEO was ordered to give a deposition in a case where he does not have unique or superior  knowledge of discoverable information. Our attempts to get it quash or obtain relief from the court of appeals and the Supreme Court have been unsuccessful.
This issue is of importance to the jurisprudence of the state because more and more CEO's are being requested to give depositions and there is confusion in the law as to what an apex deponent is required to state in the affidavit in order to trigger the apex deposition doctrine. Must the affidavit state that he/she does not have ANY knowledge of relevant facts, rather than saying that he/she does not have any UNIQUE OR SUPERIOR knowledge of relevant facts as the Supreme Court said in Alcatel USA ?
At this point, our best chance in getting the court's attention is for the court to be flooded with amicus briefs requesting that the court take this case to resolve the conflict that exists among various courts of appeal. If the Supreme Court does not resolve the confusion that exist is the law at this time, litigants will continue to waste of time and money in fighting apex depositions.
Can you please forward this email to your membership to see if anyone is interested enough to file a quick amicus brief?  If anyone is interested, they can contact me or Kirsten Castaneda (214-740-8533) or Gary Powell (214-740-8470) in our Dallas office.
Time is of the essence as the motion for rehearing is due next Friday.
If this is not the proper protocol, I would appreciate hearing from you.
Raul A. Gonzalez
Locke Liddell & Sapp LLP
(512) 305-4746
(512) 391-4746 fax
IMPORTANT/CONFIDENTIAL: This message from the law firm of Locke Liddell Sapp, LLP is intended only for the use of the addressees shown above. It contains information that may be privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended recipient of this message, you are hereby notified that the copying, use or distribution of any information or materials transmitted in or with this message is strictly prohibited. If you received this message by mistake, please immediately call us collect at (214) 740-8000 and destroy the original message. Thank you.


FYI

Vince

---------------------- Forwarded by Vince J Kaminski/HOU/ECT on 10/18/2000
03:21 PM ---------------------------

Shirley Crenshaw
10/18/2000 12:58 PM
To: Toni Graham/Corp/Enron@Enron, Stephanie Summers/NA/Enron@ENRON
cc: Vince J Kaminski/HOU/ECT@ECT
Subject: Interview for the Research Group

Hello everyone:

Vince would like to bring Jaesoo Lew in next week for an exploratory interview
with the Research Group.  The dates that would work best for us are:
Wednesday,
the 25th (AM), Thursday, 26th  (AM) and Friday, 27th (AM).  Please see if Mr.
Lew
is available for any of these times.

Thanks!

Shirley
3-5290

 - vitae2.doc

---------------------- Forwarded by Shirley Crenshaw/HOU/ECT on 10/18/2000
12:51 PM ---------------------------

Vince J Kaminski
10/18/2000 12:29 PM
To: Stinson Gibner/HOU/ECT@ECT, Shirley Crenshaw/HOU/ECT@ECT
cc: Vince J Kaminski/HOU/ECT@ECT
Subject: position

Shirley,

I would like to  invite him to an interview next week. We should use his home
phone
number and/or private E-mail address.

Vince

---------------------- Forwarded by Vince J Kaminski/HOU/ECT on 10/18/2000
12:33 PM ---------------------------

"Jaesoo Lew" <pontgyn@hotmail.com> on 10/17/2000 09:59:01 PM
To: vkamins@enron.com
cc:
Subject: position

Dear Dr. Kaminski

My name is Jaesoo Lew and I am referred by Dr. Wayne Lee.

Currently I've been working at Aquila Energy in Kansas City as an pricing
analyst since July 2000.  Since then, I have developed a natural gas storage
valuation model applying the swing options (forest method) pricing approach.
The price processes would be considered critical for the storage valuation
since a trinomial forest is required to value storage. Also the c++
programming using Excel DLL has been developed, too.

I attached my resume to this message for your consideration and am looking
forward to talking about an opportunity at Enron.

My home phone number is 913-649-0578, Dr. Kaminski, I will wait your call in
this week as Dr. Lee informed me.  If possible, please let me know your
expected calling day through the mail.  I appreciate your consideration.

Thank you very much.

Sincerely,

Jaesoo Lew
_________________________________________________________________________
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.

 - vitae2.doc


FYI
---------------------- Forwarded by Daren J Farmer/HOU/ECT on 03/15/2001 03:06 PM ---------------------------

Elsa Villarreal
03/15/2001 02:42 PM
To:	Amelia Alland/HOU/ECT@ECT, Cheryl Dudley/HOU/ECT@ECT
cc:	Daren J Farmer/HOU/ECT@ECT
Subject:	Exxon Company, USA Global # 96035668/Sitara # 212225

Please prepare and send a termination letter by tomorrow March 16, 2001 on the above referenced deal.  Houston Pipe Line Company has not renegotiated a price and have no interest in buying the gas on an evergreen basis.  It is my understanding that we need to notify them within 10 days of the end of the delivery period

.  If you need any additional information or have any questions, please contact me at 35656.  Thanks.  EMV


Attached, please find Governor Davis' letter to Spencer Abraham.

http://www.governor.ca.gov/state/govsite/gov_htmldisplay.jsp?BV_SessionID=@@@@
1334694208.0983391171@@@@&BV_EngineID=dalkffldejlbemfcfkmchcng.0&sCatTitle=Pre
ss+Release&sFilePath=/govsite/press_release/2001_02/20010228_abraham_letter_fr
om_GGD.html&sTitle=GOVERNOR+DAVIS+SENDS+LETTER+TO+SECRETARY+OF+ENERGY+ABRAHAM+
&iOID=13448


Start Date: 1/2/02; HourAhead hour: 1;  No ancillary schedules awarded.  No variances detected.

    LOG MESSAGES:

PARSING FILE -->> O:\Portland\WestDesk\California Scheduling\ISO Final Schedules\2002010201.txt
!!!General SQL error.
Couldn't update; currently locked by user 'admin' on machine 'ECTHOU-BPS4'.
Table
!!!A user transaction is already in progress.
!!!A user transaction is already in progress.
!!!A user transaction is already in progress.
!!!A user transaction is already in progress.
!!!A user transaction is already in progress.
!!!A user transaction is already in progress.
!!!A user transaction is already in progress.

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

  TRANS_TYPE: FINAL
  SC_ID: ECTstCA
  MKT_TYPE: 2
  TRANS_DATE: 1/2/02
  TIE_POINT: MALIN_5_RNDMTN
  INTERCHG_ID: ENRJ_CISO_3001
  ENGY_TYPE: FIRM
*** Final schedule not found for preferred schedule.
     Details:

  TRANS_TYPE: FINAL
  SC_ID: ECTstSW
  MKT_TYPE: 2
  TRANS_DATE: 1/2/02
  TIE_POINT: FCORNR_5_PSUEDO
  INTERCHG_ID: ENRJ_CISO_7000
  ENGY_TYPE: FIRM
*** Final schedule not found for preferred schedule.
     Details:

  TRANS_TYPE: FINAL
  SC_ID: ECTstSW
  MKT_TYPE: 2
  TRANS_DATE: 1/2/02
  TIE_POINT: MEAD_2_WALC
  INTERCHG_ID: ENRJ_CISO_8000
  ENGY_TYPE: FIRM

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

  TRANS_TYPE: FINAL
  LOAD_ID: PGE1
  MKT_TYPE: 2
  TRANS_DATE: 1/2/02
  SC_ID: ENRJ
*** Final schedule not found for preferred schedule.
     Details:

  TRANS_TYPE: FINAL
  LOAD_ID: PGE2
  MKT_TYPE: 2
  TRANS_DATE: 1/2/02
  SC_ID: ENRJ
*** Final schedule not found for preferred schedule.
     Details:

  TRANS_TYPE: FINAL
  LOAD_ID: PGE3
  MKT_TYPE: 2
  TRANS_DATE: 1/2/02
  SC_ID: ENRJ
*** Final schedule not found for preferred schedule.
     Details:

  TRANS_TYPE: FINAL
  LOAD_ID: SCE1
  MKT_TYPE: 2
  TRANS_DATE: 1/2/02
  SC_ID: ENRJ
*** Final schedule not found for preferred schedule.
     Details:

  TRANS_TYPE: FINAL
  LOAD_ID: SDG1
  MKT_TYPE: 2
  TRANS_DATE: 1/2/02
  SC_ID: ENRJ


---------------------- Forwarded by Vince J Kaminski/HOU/ECT on 03/23/2001
06:10 PM ---------------------------

ERisk <eRisks_news@email.eRisks.com> on 03/23/2001 11:36:33 AM
To: vkamins@enron.com
cc:
Subject: ERisk Essentials

?		www.erisk.com
		What's  New at ERisk.com - 23 March 2001

Weekly  Review	This week's economic, banking and P_insurance news, from  an
enterprise risk management perspective. Read it here...

Analysis
	In this week's Analysis:
	 Taking the long view on credit risk management
	 The risks of cracking down on insurance fraud and
	 Fannie Mae controversy puts debt benchmark in jeopardy

Feature	The treatment of operational risk is one of the more controversial,
and poorly understood, elements of Basle's proposed revisions to the Capital
Accord. In this exclusive  article, Penny Cagan of Zurich Financial Services
explains what  the Basle Accord proposals mean for most banks, where there's
room for improvement  and how to get started on building an operational risk
framework

iConference  Archive
	Couldn't make it to our iConference on Risk Transfer,  featuring Martin Nance
of AIG Structured Products and Barry Finkelstein,  Joe Parsons and Chris
Crevier of Merrill Lynch? Check out the iConference  Archive later this week
to find out what you missed. Still available:  The proceedings of our two
recent Basle  iConferences, featuring Bill Treacy of the Federal Reserve
Board,  Ashish Dev of Key Bank and Andy Hickman of ERisk

Events
Calendar 	Feeling the need to network? Check  out our comprehensive listing of
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Altra's Office
1211 Lamar Suite 950
Houston, TX  77002

Contact:  Tammie Schoppe
xt 3-4220


Over the weekend CPR and TAGG were moved to a different set of databases. Because of this move, you will now have different menu options. There are two ways to access these new menu options:

1) Log off and log back in
2) You can go to Start|Programs|System Utility Applications|Update Start Menu

The new menu options contain 'BL'. (i.e. CPR BL Apps and TAGG - BL)

If you experience any problems, please call the appropriate pager number and we will try to resolve the issue as soon as possible.

Contact Information:

Deal Clearing on-call pager: 713-285-8715
TAGG/ERMS on-call pager: 713-318-5679
Sitara on-call pager: 713-284-2824
CPR on-call pager: 713-288-3368
TDS on-call pager: 713-284-0538

Or you can contact me at (W) 713-853-4754 or (C) 713-907-5217.

Thank You,

Terry


> DELL & ENRON ClickAtHome ORDER CONFIRMATION
>
> Thank you for your Enron ClickAtHome order!  Please read and retain this
> e-mail for your records.  It contains important information relating to
> your order that should be used in any future communications with Dell.
>
> Your Dell customer number is:  12831655
>
> Your order number is:  509701959
>
> Your total "Out of Pocket" amount:  $ 0.00
> The total "Out of Pocket" amount includes upgrade costs, shipping and
> taxes.
>
>
> Your Online Sales Point of Contact:
> We are here to assist you with your order if needed. Our office hours are
> Monday- Friday, 8am-7pm Central Standard Time.  You can reach our office
> by calling 1-866-220-3355 or through e-mail at:
> US_EPP_Clickathome@dell.com <mailto:US_EPP_Clickathome@dell.com> .
>
> Estimated Ship Date:
> We estimate that your order should be shipped on or before 02/01/01.
> Although we do not anticipate a delay in your order, we cannot guarantee
> the shipping date as we occasionally run into unexpected delays in
> manufacturing.  Your order is being shipped to you under Dell's terms and
> conditions of sale found at: www.dell.com <http://www.dell.com>.
>
> Total Satisfaction Policy:
> If you wish to cancel your order for any reason within 30 days, we'll
> refund amounts paid by you, minus shipping costs, no questions asked.  You
> are responsible for the cost of shipping your system back to us.
> EPP Customer Care contact options: 1-866-220-3355,  option 4 or use the
> e-mail box  US Relationship EPP@dell.com .
>
> How to Check Order Status:
> If you would like to check the status of your order, please call Dell's
> automated order status inquiry system at:  1-800-433-9014, or visit Dell's
> Order Status Page at: <http://wwwapp.us.dell.com/us/en/ordstat/index.asp>.
>
>
> You can also register to have Dell e-mail you when your order is shipped,
> by going to:
> <http://wwwapp.us.dell.com/us/en/ordstat/watchreg.asp?ordnum>.
>
> How to reach a Technical Support Representative:
> Once you have received your equipment, if you need to contact a Dell
> technical support representative, please call 1-866-220-3355, option 3.
> You will be asked to give your "Service Tag Number".  The "Service Tag
> Number" is a five digit alphanumeric number written on the white bar code
> label on the back of the system.  Please have this number ready before you
> contact the technical support representative.
>
>
> Thank you for participating in the Dell/ Enron ClickAtHome program.  It is
> my pleasure to work with you.
>
> Sincerely,
>
> Robb Wheeler
> Dell Computer Corporation
> Online Order
> Relationship Employee Purchase Program
> Robert_Wheeler@dell.com <mailto:Robert_Wheeler@dell.com>
>
>
>
>
>


Fred

Can you please take care of this.

John
---------------------- Forwarded by John J Lavorato/Corp/Enron on 12/02/2000
09:55 AM ---------------------------

Eric Thode
12/01/2000 02:11 PM
To: John J Lavorato/Corp/Enron@Enron
cc:

Subject: Futures / Options / Swaps / Financial Risk Managment Measures

Attached is an e-mail we received via the Enron web site.  Would you or
someone from the gas trading group contact this gentleman?  If you would
prefer not to respond, please refer it back to me for handling.  Thanks.

Eric

----- Forwarded by Cindy Derecskey/Corp/Enron on 12/01/2000 08:57 AM -----

	"Michael Fuss" <mfuss@puc.state.id.us>
	11/30/2000 09:13 AM

		 To: <public-relations@enron.com>
		 cc:
		 Subject: Futures / Options / Swaps / Financial Risk Managment Measures

I am with the Idaho Public Utilities Commission and am trying to find out
more information on market and financial risk management devices.  Enron
appears to have one of the largest varieties of measures and is extremely
well respected in this field.

Can you provide some information about the Market & Financial Risk Management
products that you provide for the US Natural Gas Industry.  I am looking for
pricing information  as well as availability.  Information pertaining to the
Northwest would be greatly appreciated.  For example cost of a natural gas
future (range of premiums)  Cost of weather insurance based on what measure?

If you do not have that kind of information but can point me in the right
direction it would be greatly appreciated.

Thank you in advance for your assistance,

Michael Fuss


I think the deferred taxes are gone for ratemaking purposes, too.  I'm checking with Patty to see how they are handling with MGT and whether we can identify some specific pipeline names from the IRS letter rulings that Dave Borcyk and Robert Guthrie have provided.   The elimination of the deferred tax liabilities ought to result in a larger rate base calculation, but resulting higher rates would certainly be subject to competitive forces.

 -----Original Message-----
From: 	Hayslett, Rod
Sent:	Tuesday, February 12, 2002 2:01 PM
To:	Howard, Kevin A.; Chandler, Bob; Geaccone, Tracy; Saunders, James; Corman, Shelley
Cc:	Desai, Jayshree; Walters Jr., Harry; Guthrie, Robert
Subject:	RE: NNG 10 year valuation model

Have to be careful that you don't lose historical data for rate purposes.
Rod Hayslett
Office  713-853-6178
Cell     713-201-6135
--------------------------
Sent from my BlackBerry Wireless Handheld (www.BlackBerry.net)

-----Original Message-----
From: Howard, Kevin A. <Kevin.Howard@ENRON.com>
To: Chandler, Bob <Bob.Chandler@ENRON.com>; Hayslett, Rod <Rod.Hayslett@ENRON.com>; Geaccone, Tracy <Tracy.Geaccone@ENRON.com>; Saunders, James <James.Saunders@ENRON.com>; Corman, Shelley <Shelley.Corman@ENRON.com>
CC: Desai, Jayshree <Jayshree.Desai@ENRON.com>; Walters Jr., Harry <Harry.Walters@ENRON.com>; Guthrie, Robert <Robert.Guthrie@ENRON.com>
Sent: Tue Feb 12 13:57:58 2002
Subject: RE: NNG 10 year valuation model

Tax gave us the same feedback. Davis had not yet updated the model for this.
Thanks.
--------------------------
Sent from my BlackBerry Wireless Handheld (www.BlackBerry.net)

-----Original Message-----
From: Chandler, Bob <Bob.Chandler@ENRON.com>
To: Howard, Kevin A. <Kevin.Howard@ENRON.com>; Hayslett, Rod <Rod.Hayslett@ENRON.com>; Geaccone, Tracy <Tracy.Geaccone@ENRON.com>; Saunders, James <James.Saunders@ENRON.com>; Corman, Shelley <Shelley.Corman@ENRON.com>
CC: Desai, Jayshree <Jayshree.Desai@ENRON.com>; Walters Jr., Harry <Harry.Walters@ENRON.com>; Guthrie, Robert <Robert.Guthrie@ENRON.com>
Sent: Tue Feb 12 13:54:03 2002
Subject: RE: NNG 10 year valuation model

Maybe I'm not looking at this appropriately, but why didn't the deferred taxes on the balance sheet disappear as of the date of sale to Dynegy?  My understanding is that the Option provided for a Section 338h10 basis step-up.  That would result in NNG's paying off its deferred taxes as of the transfer date.  I'm particularly interested in knowing how NNG will pay those taxes given that the note with Corporate can only be reduced to $240MM plus accrued dividends.  That tax election complicates the accounting significantly.

		 -----Original Message-----
		From: 	Howard, Kevin A.
		Sent:	Tuesday, February 12, 2002 10:35 AM
		To:	Hayslett, Rod; Geaccone, Tracy; Chandler, Bob; Saunders, James; Corman, Shelley
		Cc:	Desai, Jayshree
		Subject:	NNG 10 year valuation model

		I met with Jayshree Desai this morning to discuss the recommended changes to the NNG valuation model.  She will make these and circulate the model later today.  I few items worth mentioning -

		1) Capex assumptions still seem too high for 2002-2004.  However, the 2002 number is some $30 million below the "Dynegy transition" capex amount shown in the 2002 Capex schedule.  Can we just assume non-discretionary only with the Base Gas repurchase in 2002/2003? Any discretionary would be commercially-driven.
		2) Keep O&M flat to 2001 numbers?
		3) Tracy / Shelley - Any thoughts on how to incorporate the contract info to better analyze the "contract roll off" scenarios? We have just assumed the 2002 Plan with 1-2% growth rate going forward with a new rate case in effect in 2005. Rod, not sure how you want to look at rate case assumptions or expansion opportunities but we can discuss tomorrow.  Recognizing the volume of NNG contract info and the time constraint we are under, there may or may not be any better alternative.
		4) Rod - we have assumed an equity infusion of $175 million to re-capitalized NNG to more "reasonable" levels.  I can reduce the amount to $112,500,000 which is the Citibank prepay amount allocated to NNG if that sounds reasonable.
		5) We will show a reduction in A/R of $1.807 billion and a corresponding reduction in equity due to the MCTJ loan.

		Any thoughts you have on the above items would be very helpful.  We are trying to send out the info memo by the end of the week.  This model will be the basis for the NNG valuation.

		Thanks,
		Kevin


Mike,

I have the following outstanding issue with TXU:

May 01- Contract 1856

A path is needed on Delivery 17054701 for 19087mmbtus with the Receipt point 175054701.

Thanks!


NNG Gomez Plant, Site Cleanup has been completed.  All activities associated
with the items identified during the sale of the facility have been
corrected.
Becuse ET&S  owns and WGR operates, there is a concern that WGR may not
adhear to compliance and housekeeping  at the facility.  This has been the
case in the past.  Discussions will be held with Enron Legal to address these
concerns.

 TW Bell Lake Gas Plant, Ground Water Remediation.  A revised Water
Development Easement from the State Land Office was received. This will allow
TW access to install one additional downgradient groundwater monitor well.
The tentative schedule to install the well will be the week of September 13th.

A construction permit application for installation of an SVE remediation
system for the North Crawar C/S was mailed to the TNRCC.

The State of New Mexico conducted an air quality inspection of the Atoka No.
2 C/S.  No items or deficiencies were identified by the agency.

The Title V air permit application for the Atoka No. 3 C/S was mailed to the
State of New Mexico, Air Qualtiy Bureau.

The Notice of Intent air permit application for the Crawford C/S was mailed
to the State of New Mexico, Air Quality Bureau.

Annual blanket request letters were submitted to the USFWS in New Mexico and
Texas for renewal.

A meeting was held in Houston with John Woodyard of Roy F. Weston and ET&S
mgt. addressing PCB activity in natural gas pipelines as related to the
PG&E PCB Topock Lateral issue.


I hate it when I'm right, Kitna will be benched before week 2.  Garcia is
still available, but I will need a starting RB - imight be able to swing
another RB in the deal like Fred Beasley- Or you can start Ryan Leaf

What do you think?


Here is the summary for UAE transaction.  Thanks
Ben


Dear PIRA Retainer Client:

The following Current News & Analysis article has been published on PIRA's
website:

The World Oil Market Is Tightening

Please go to http://www.pira.com

This article can be found in the Client section of PIRA's website.  You will
need a PIRA Online account in order to gain access.  For account information
please contact jgraziano@pira.com

Best Regards,

PIRA Energy Group


pedagogue (PED-a-gog) noun, also pedagog

   1. A schoolteacher; an educator.

   2. One who instructs in a pedantic or dogmatic manner.

[Middle English pedagoge, from Old French, from Latin paedagogus, slave who
supervised children, including taking them to and from school, from Greek
paidagogos : paido-, boy + agogos, leader (from agein, to lead).]

   "They also taught that `persistent perversity provokes the patient
   pedagogue to produce particularly painful punishment.'"
   Roger Kimball, Anything Goes, Nothing Matters, Forbes, Oct 4, 99.

This week's theme: words from the world of learning and the learned.

.............................................................................
No horse gets anywhere until he is harnessed. No stream or gas drives
anything until it is confined. No Niagara is ever turned into light and power
until it is tunneled. No life ever grows great until it is focused,
dedicated, disciplined. -Harry Emerson Fosdick

Looking for a word previously featured in AWAD? An alphabetical index is
available at http://wordsmith.org/awad/wordlist.html . For the chronological
archives, visit http://wordsmith.org/awad/archives.html.  Send mail to
wsmith@wordsmith.org to get archives by email.

Pronunciation:
http://wordsmith.org/words/pedagogue.wav
http://wordsmith.org/words/pedagogue.ram


Freeps are 2 points.

On Thu, 16 Aug 2001 11:04:51 EDT craigd9561@aol.comwrites:
Don of the Dels,
You had  better put on your fire resistant suit, Del, as I think it is still
on  fire!  I think one of the boys left a fat one smoking up there.   Maybe
Drow could drop trow over the burning roof and let go with a  flutter blast or
a three point freep and put out the blaze. Lord  Windasmere to the rescue!  Oh
he shits!  The champion is  disqualified!
See you in Norman on the 24th.  Tell Joe Don Looney  to be there, in drag or
normal clothes.  OU Sooners...13 in a row and  only 35 more to go to break the
record and give Dent a reason to write  another book!
C Di
To  unsubscribe from this group, send an email  to:
smu-betas-unsubscribe@egroups.com
Your use of  Yahoo! Groups is subject to the Yahoo! Terms of Service.

Yahoo! Groups Sponsor
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Your use of Yahoo! Groups is subject to the Yahoo! Terms of Service.

 - bll_lrec1.gif
 - rand=178641981


FYI.
Thanks.
Gary

 Sweetwater.PDF
 <<Sweetwater.PDF>>

=======================================================
This email message is for the sole use of the intended recipient(s) and may
contain confidential and privileged information. Any unauthorized review,
use, disclosure or distribution is prohibited. If you are not the intended
recipient, please contact the sender by reply email and destroy all copies of
the original message.

To reply to our email administrator directly, send an email to
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 - Sweetwater.PDF


Margaret Carson asked me to forward this presentation to you for review.

Katrina Burton


Etelvina,

You will need to get in touch with Nicole Clifford (x54621) in order to obtain this information.  Since you are part of Enron Global Markets, I'm unable to support you anymore.

Thanks,

Patti

From:	Etelvina Guerra/ENRON@enronXgate on 05/10/2001 05:05 PM
To:	Patti A McCall/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc:	Cindy Long/ENRON@enronXgate, Paul YBarbo/ENRON@enronXgate, Shilpa Kadakia/HOU/ECT@ECT

Subject:	Timesheets

Patti,

I need a favor to ask from you. Our accountant Shilpa Kadakia has asked for a printout of what projects has time been charged  to since January 1, 2001 til now.
I need it for the following people have charged there time to:

Wayne Perry
Tony Galt
Zdenek Gerych
VV Rao
Dan Masters
Rajesh Chettiar
Dustin Collins
Paul Y'Barbo
Todd Peterson
Larry Snyder


Start Date: 4/14/01; HourAhead hour: 13;  No ancillary schedules awarded.
Variances detected.
Variances detected in Energy Import/Export schedule.
Variances detected in SC Trades schedule.

    LOG MESSAGES:

PARSING FILE -->> O:\Portland\WestDesk\California Scheduling\ISO Final
Schedules\2001041413.txt

---- Energy Import/Export Schedule ----
$$$ Variance found in table tblINTCHG_IMPEXP.
     Details: (Hour: 13 / Preferred:   0.00 / Final:   0.00)
  TRANS_TYPE: FINAL
  SC_ID: ECTRT
  MKT_TYPE: 2
  TRANS_DATE: 4/14/01
  TIE_POINT: FCORNR_5_PSUEDO
  INTERCHG_ID: EPMI_CISO_TOBY
  ENGY_TYPE: FIRM
$$$ Variance found in table tblINTCHG_IMPEXP.
     Details: (Hour: 13 / Preferred:  12.00 / Final:  11.98)
  TRANS_TYPE: FINAL
  SC_ID: ECTRT
  MKT_TYPE: 2
  TRANS_DATE: 4/14/01
  TIE_POINT: PVERDE_5_DEVERS
  INTERCHG_ID: EPMI_CISO_SPP
  ENGY_TYPE: WHEEL

---- SC Trades Schedule ----
$$$ Variance found in table tblInt_Interchange.
     Details: (Hour: 13 / Preferred: -125.00 / Final: -124.97)
  TRANS_TYPE: FINAL
  SC_ID: EPMI
  MKT_TYPE: 2
  TRANS_DATE: 4/14/01
  TRADING_SC: SETC
  PNT_OF_INTRC: NP15
  SCHED_TYPE: ENGY
  PURCH_SALE: 1
  DEAL_NO: 1
$$$ Variance found in table tblInt_Interchange.
     Details: (Hour: 13 / Preferred:  25.00 / Final:  24.91)
  TRANS_TYPE: FINAL
  SC_ID: EPMI
  MKT_TYPE: 2
  TRANS_DATE: 4/14/01
  TRADING_SC: PGAE
  PNT_OF_INTRC: NP15
  SCHED_TYPE: ENGY
  PURCH_SALE: 2
  DEAL_NO: 1
$$$ Variance found in table tblInt_Interchange.
     Details: (Hour: 13 / Preferred: -60.00 / Final: -59.97)
  TRANS_TYPE: FINAL
  SC_ID: EPMI
  MKT_TYPE: 2
  TRANS_DATE: 4/14/01
  TRADING_SC: NCPA
  PNT_OF_INTRC: NP15
  SCHED_TYPE: ENGY
  PURCH_SALE: 1
  DEAL_NO: 1


PROMISSORY NOTE

$___________________________ ___, 2001

  For value received, [TURBINE LLC], a Delaware limited liability company (A
Borrower@), hereby unconditionally promises to pay, or cause to be paid, to
the order of NORTHWESTERN GENERATION I, LLC (ALender@), a wholly-owned and
indirect subsidiary of NorthWestern Corporation, the principal amount of
______________DOLLARS ($____________) (the APrincipal Amount@), in lawful
money of the United States of America and in immediately available funds.
Capitalized terms used but not defined herein shall have the meaning given to
such term in the Letter Agreement, dated April [_], 2001, between Enron North
America Corp. and Lender (the ALetter Agreement@).

     This promissory note (this ANote@) evidences the NorSub Purchase Price
Loan made by Lender to Borrower on the date hereof pursuant to Section 2(d)
of the Letter Agreement; and the proceeds of such Loan shall be applied by
Borrower on the date hereof as required by Section 2(e) of the Letter
Agreement.

  The Principal Amount shall be due and payable, in full, on written demand
of Lender.  No interest shall accrue on the Principal Amount.

  Borrower waives presentment, demand, protest, notice of protest, notice of
nonpayment or dishonor and all other demands and notices in connection with
the delivery, acceptance, performance, default or enforcement of this Note.

  This Note may not be changed or terminated orally, but only by an agreement
in writing signed by the party against whom enforcement or any waiver,
change, modification or discharge is sought.

  This Note shall bind Borrower and its successors and assigns, and the
benefits hereof shall inure to the benefit of  Lender and its successors and
assigns.

  THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAW OF THE STATE OF NEW YORK (DETERMINED WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAW).

[The balance of this page is intentionally left blank.]

  IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed and
delivered by its officer thereunto duly authorized as of the date hereof.

--

NY/333181.1      [TURBINE LLC]

      By: NorthWestern Generation I, LLC,
       its Manager

      By:  NorthWestern Growth Corporation,
       its Manager

      By: _______________________________
       Name:
       Title:


Neighbors - VH-1 are filming a television movie at Lovett and Stanford.  Lulu and I stopped in this morning and they were filming on the sidewalk.  It's interesting (for about 10 minutes) if you've never seen a movie set - lots of people, activity, etc.  We didn't see any stars, but you never know!

-Ben


This request has been pending your approval for  3 days.  Please click http://itcapps.corp.enron.com/srrs/auth/emailLink.asp?ID=000000000038420&Page=Approval to review and act upon this request.

Request ID          : 000000000038420
Request Create Date : 6/4/01 7:52:05 AM
Requested For       : gary.bryan@enron.com
Resource Name       : EOL US NatGas NatGas Book to Book (Trader Access - Website)
Resource Type       : Applications


Oh well.  I can't win for losing.  I wish I had Horn this week too.  This is
just a busted season and I can do nothing to make it better.

-----Original Message-----
From: Eric.Bass@enron.com [mailto:Eric.Bass@enron.com]
Sent: Monday, November 06, 2000 9:04 AM
To: Bass, Jason
Subject: RE:

bet you wish you had toomer now

"Bass, Jason" <Jason.Bass2@COMPAQ.com> on 11/03/2000 03:18:19 PM

To:   "'Eric.Bass@enron.com'" <Eric.Bass@enron.com>
cc:
Subject:  RE:

I don't need Mcnabb, So, that basically makes it Freeman and Toomer for
Bruce.  I don't think it is worth it.  Sorry.

-----Original Message-----
From: Eric.Bass@enron.com [mailto:Eric.Bass@enron.com]
Sent: Friday, November 03, 2000 1:24 PM
To: Bass, Jason
Subject:

Are you going to return my e-mail?
Toomer, Freeman, and Mcnabb for Bruce.

That is a great deal for you.


Can we meet Wednesday morning. I  am in Costa Mesa today and will be in San
Ramon area on Wednesday.

Chris


Start Date: 1/1/02; HourAhead hour: 10;  No ancillary schedules awarded.  No variances detected.

    LOG MESSAGES:

PARSING FILE -->> O:\Portland\WestDesk\California Scheduling\ISO Final Schedules\2002010110.txt
###Cannot locate a Preferred or Revised_Preferred Schedule that matches the FINAL Individual Interchange Schedule.  Unable to assign deal number.
!!!General SQL error.
Couldn't update; currently locked.
Table
!!!A user transaction is already in progress.
!!!A user transaction is already in progress.
!!!A user transaction is already in progress.
!!!A user transaction is already in progress.
!!!A user transaction is already in progress.
!!!A user transaction is already in progress.
!!!A user transaction is already in progress.

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

  TRANS_TYPE: FINAL
  SC_ID: ECTstSW
  MKT_TYPE: 2
  TRANS_DATE: 1/1/02
  TIE_POINT: PVERDE_5_NG-PLV
  INTERCHG_ID: EPMI_CISO_SW
  ENGY_TYPE: FIRM
*** Final schedule not found for preferred schedule.
     Details:

  TRANS_TYPE: FINAL
  SC_ID: ECTstSW
  MKT_TYPE: 2
  TRANS_DATE: 1/1/02
  TIE_POINT: MEAD_2_WALC
  INTERCHG_ID: ENRJ_CISO_8001
  ENGY_TYPE: FIRM

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

  TRANS_TYPE: FINAL
  LOAD_ID: SDG1
  MKT_TYPE: 2
  TRANS_DATE: 1/1/02
  SC_ID: ENRJ


As discussed.
---------------------- Forwarded by Steven J Kean/NA/Enron on 07/09/2001
06:27 PM ---------------------------

Steven J Kean
07/09/2001 03:54 PM
To: Linda Robertson/NA/Enron@ENRON
cc: James D Steffes/NA/Enron@Enron, Alan Comnes/Enron@EnronXGate, Carole
Hodge/ETOL/EU/Enron@ETOL, dwatkiss@bracepatt.com, Jeff
Dasovich/NA/Enron@ENRON, Richard B Sanders/Enron@EnronXGate, Richard
Shapiro/NA/Enron@ENRON, Robert Frank/NA/Enron@ENRON, Sarah
Novosel/Corp/Enron@ENRON, Susan J Mara/NA/Enron@ENRON

Subject: Re: NEW DRAFT OF ENRON STATEMENT

I know we are holding for a later filing, but I have attached further
comments anyway.  The document is still too rough to send out.  We need to
take the opportunity, as soon as possible, to get a hard hitting, thoroughly
researched and carefully written document in front of the Commissioners.
California's reaction to the Judge's recommendation is likely to give FERC
(especially the new commissioners) a feel for how irrational the California
politicians can be.  We will have a limited opportunity to take advantage of
that realization.  We need to hit it hard in the pleading, our conversations
at the Commission, the Hill and the media.

Linda Robertson
07/09/2001 09:58 AM
To: James D Steffes/NA/Enron@Enron
cc: Alan Comnes/Enron@EnronXGate, Carole Hodge/ETOL/EU/Enron@ETOL,
dwatkiss@bracepatt.com, Jeff Dasovich/NA/Enron@ENRON, Richard B
Sanders/Enron@EnronXGate, Richard Shapiro/NA/Enron@ENRON, Robert
Frank/NA/Enron@ENRON, Sarah Novosel/Corp/Enron@ENRON, Steven J
Kean/NA/Enron@ENRON, Susan J Mara/NA/Enron@ENRON

Subject: Re: NEW DRAFT OF ENRON STATEMENT

Let me emphasize that these comments are to be filed COB TODAY.

	James D Steffes
	07/09/2001 10:50 AM

		 To: Robert Frank/NA/Enron@Enron, Steven J Kean/NA/Enron@Enron, Richard
Shapiro/NA/Enron@Enron, Linda Robertson/NA/Enron@ENRON, Sarah
Novosel/Corp/Enron@ENRON, Carole Hodge/ETOL/EU/Enron@ETOL, Richard B
Sanders/Enron@EnronXGate, dwatkiss@bracepatt.com, Alan
Comnes/Enron@EnronXGate, Susan J Mara/NA/Enron, Jeff Dasovich/NA/Enron@Enron
		 cc:
		 Subject: NEW DRAFT OF ENRON STATEMENT

HERE IS THE MOST RECENT STATEMENT WITH STEVE'S COMMENTS.

Jim


I told Paul Radous, the Credit guy that you had already said that these guys
could not trade physical power because they do not have a power marketing
license.  It perhaps might be possible for them to purchase US power only.
If they want to enter into power transactions he is going to need to get you
a name and phone number of someone at Engage that you can talk to to get
evidence of their power marketing license.
----- Forwarded by Tana Jones/HOU/ECT on 05/30/2001 10:31 AM -----

	Tom Moran/ENRON@enronXgate
	05/30/2001 10:24 AM

		 To: Stephanie Sever/ENRON@enronXgate, Tana Jones/HOU/ECT@ECT
		 cc: Wendi Lebrocq/ENRON@enronXgate, Paul Radous/ENRON@enronXgate
		 Subject: Engage (2 Entities) Open for All US Phys Power

Stephanie/Tana,

Could you please expedite the following amendment the profiles of Engage
Energy America LLC and Engage Energy Canada L.P. as soon as possible this
morning.  Paul Radous is opening both of these entities up to trade all US
East and West Phys Power products and I have made the changes in Profile
Manager.

Thanks for your help !
tm

30-May	Paul Radous		94109	Engage Energy America LLC	US	Y	Amended	Amend profile to allow US
East and West Power Phys for 12 months
30-May	Paul Radous		53341	Engage Energy Canada L.P.	Canada	Y	Amended	Amend profile to allow US
East and West Power Phys for 12 months


Here it is. I figured Steve and Jeff had agreed this. Greg asked about it and
told him I knew nothing about it. He wasn't thrilled!

David
 -----Original Message-----
From:  Oxley, David
Sent: Tuesday, June 26, 2001 4:15 PM
To: Whalley, Greg
Subject: FW: MD PRC Committee

FYI
 -----Original Message-----
From:  Sera, Sherri
Sent: Tuesday, June 26, 2001 3:34 PM
To: Shankman, Jeffrey A.; Piper, Greg; McMahon, Jeffrey; Mcconnell, Mike;
McCarty, Danny; Leff, Dan; Lavorato, John; Kitchen, Louise; Fallon, Jim;
Dietrich, Janet; Cox, David; Buy, Rick; Brown, Michael - COO London; Bowen
Jr., Raymond
Cc: Kean, Steven; Oxley, David
Subject: MD PRC Committee

It has been decided to again expand the MD PRC committee beyond the Policy
committee members to include other MDs.  Each of you has been chosen to
participate in the mid-year MD PRC to take place on Tuesday, July 24.  David
Oxley and his team will provide you with pertinent details of the meeting.
Please let Jeff Skilling know if you have a conflict or any concerns
regarding your participation in this process.  SRS


Steve - per my voicemail, before we released this article that I prepared,
we wanted to run it by you to make sure that Enron is comfortable with it.
Thanks, Adam.
          ++++++CONFIDENTIALITY NOTICE+++++
The information in this email may be confidential and/or privileged.  This
email is intended to be reviewed by only the individual or organization
named above.  If you are not the intended recipient or an authorized
representative of the intended recipient, you are hereby notified that any
review, dissemination or copying of this email and its attachments, if any,
or the information contained herein is prohibited.  If you have received
this email in error, please immediately notify the sender by return email
and delete this email from your system.  Thank You
 <<143590_1.DOC>>

 - 143590_1.DOC


well?


I am very hungry can we go at 12:15?

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


will do.  thought that you were already on.


just come by - I'll contribute.

Liz M Taylor
07/17/2000 02:33 PM
To: John J Lavorato/Corp/Enron@Enron, Jeffrey A Shankman/HOU/ECT@ECT, Kevin M
Presto/HOU/ECT@ECT, Scott Neal/HOU/ECT@ECT, Gary Hickerson/HOU/ECT@ECT, John
Arnold/HOU/ECT@ECT, Stephen R Horn/HOU/ECT@ECT, Wes Colwell/HOU/ECT@ECT, Mark
E Haedicke/HOU/ECT@ECT, Paul Racicot/Enron Communications@Enron
Communications, Jean Mrha/NA/Enron@Enron
cc:
Subject: "Strike Out" ALS

Enron/MDA
Beach Bowl 2000
To Benefit ALS Research

I'm bowling to help "strike out" ALS (Lou Gehrig's disease).  If you have not
sponsored someone else, I would very much like for you to sponsor me.  The
event takes place on July 29.  I will need all donations by July 26.

Any donation is greatly appreciated and matched by Enron.

Many Thanks,

Liz


Stinson,

Thanks a lot for so much work you have done for the simulation model.
It seems that our work will make an impact on EOL trading, that is very
exciting.

Could you e-mail me the spreadsheet model so that I can catch up with
the changes you have made ?

I read a few books during this vocation. Especially a stochastic processes
book, I finished the entire book.  The queueing theory is very fascinating,
 and hopefully we can apply the theory to a real EBS project.

I will take my family out to see the Nature Bridge Caverns near San Antonio
tomorrow.

See you on Tuesday.

Happy New Year !

Zimin

Stinson Gibner
12/27/2000 08:09 PM
To: Greg Whalley/HOU/ECT@ECT, John J Lavorato/Corp/Enron@Enron
cc: Vince J Kaminski/HOU/ECT@ECT, Zimin Lu/HOU/ECT@ECT
Subject: EOL WTI Historical Trade Simulation

Greg,

Here are results corrected for spread profit per round-trip transaction.
Prior results incorrectly counted a spread profit per trade.

Stinson


Dear All,

David Minns has obtained local counsel (ISDA's counsel) on this issue (see
email below).  It appears that we can retain the additional wording without
affecting the effectiveness of the close-out netting under the ISDA Master.

Regards, Edmund

---------------------- Forwarded by Edmund Cooper/LON/ECT on 02/28/2001 02:20
PM ---------------------------

David Minns@ENRON_DEVELOPMENT
02/27/2001 11:57 PM
To: Edmund Cooper@ECT
cc: Alan Aronowitz/HOU/ECT@ECT

Subject: Re: Change to standard ISDA Schedule

Edmund let me compliment you on your thoroughness in picking up the issue
with the standard Clause 2(a)(iii) alteration and the Australian Payments
Systems and Netting Act.

The good news is that you may retain  your standard wording with Australian
counterparties and not sustain additional exposure.   I asked external
counsel to provide a second opinion  to confirm my analysis,  which I enclose
for your records.

Alan Aronowitz/HOU/ECT@ECT

Hope you find it of assistance.

David Minns
Senior Legal Counsel
Enron Australia
Phone 612 9229 2310

From: Alan Aronowitz@ECT on 21/02/2001 05:35 PM CDT
To: David Minns/ENRON_DEVELOPMENT@ENRON_DEVELOPMENt
cc:

Subject: Change to standard ISDA Schedule

FYI.
----- Forwarded by Alan Aronowitz/HOU/ECT on 02/21/2001 04:35 PM -----

	Edmund Cooper
	02/21/2001 12:23 PM

		 To: ECT London European Trading, T Paul Johnson/EU/Enron@Enron, Janet
Wood/EU/Enron@Enron, Matthew Dawson/LON/ECT@ECT, Michael Slade/LON/ECT@ECT,
Jonathan Marsh/EU/Enron@Enron, Mark Evans/Legal/LON/ECT@ECT
		 cc:
		 Subject: Change to standard ISDA Schedule

Dear All,

In the course of current ISDA Master Agreement negotiations with an
Australian counterparty it has come to my attention that the ISDA netting
opinion for Australia specifies that certain Sections of the ISDA Master
should not be altered; otherwise reliance on the opinion, and close-out
netting, could be jeopardised.  In particular the opinion specifies that
Section 2(a)(iii) should not be altered.

Enron has a standard alteration to Section 2(a)(iii) in Part 5 of its
standard form Schedule, viz.

"(a) Conditions Precedent.  The condition precedent set forth in clause (1)
of Section 2(a)(iii) shall not apply to payments owed by a party if the other
party shall have satisfied in full all its payment obligations under Section
2(a)(i) and shall at the relevant time have no future payment obligations
whether absolute or contingent, under Section 2(a)(i)."

Obviously, in the case of Australian counterparties this condition precedent
should not be included in our documentation.

In addition, there are a number of other countries (including Germany, Italy,
South Korea and Switzerland) where the effectiveness of the ISDA netting
opinion presupposes that certain Sections of the Master, including Section
2(a)(iii), are not altered in any material respect. To that end I would
suggest that our standard condition precedent does make a material alteration
and that it should not be included in ISDA Master Agreements with
counterparties trading from these jurisdictions.

Certainly from the London end, I think that when we start negotiations with a
new counterparty we should check the ISDA opinions to ensure that we don't
trip ourselves up.

Regards,

Edmund