Here's the suit filed against the generators.  Reporter says our suit will
look the same.

Mark
----- Forwarded by Mark Palmer/Corp/Enron on 11/29/2000 10:53 AM -----

	"Leopold, Jason" <Jason.Leopold@dowjones.com>
	11/29/2000 10:47 AM

		 To: "'Mark.Palmer@enron.com'" <Mark.Palmer@enron.com>
		 cc:
		 Subject: RE: FW: ANNOUNCEMENT: Notice of Press Conference today

James C. Krause, Esq., SBN 066478
Ralph B. Kalfayan, Esq., SBN 133464
Patrick N. Keegan, Esq., SBN 167698
Stephen W. Poirier, Esq. SBN 200868
KRAUSE & KALFAYAN
1010 Second Avenue, Suite 1750
San Diego, CA 92101
Tel: (619) 232-0331
Fax: (619) 232-4019

Attorneys for Plaintiff
(Additional Counsel on Signature Page)

 SUPERIOR COURT OF THE STATE OF CALIFORNIA

 FOR THE COUNTY OF SAN DIEGO

PAMELA R. GORDON, on behalf of ) Case No.
herself and all others similarly situated, )
       ) CLASS ACTION
COMPLAINT FOR
) VIOLATIONS OF CALIFORNIA
Plaintiff,  ) BUSINESS AND PROFESSIONS CODE
) oo16720, ET SEQ. AND oo17200 ET SEQ.
vs.     ) ANTITRUST and UNFAIR
BUSINESS
) PRACTICES
RELIANT ENERGY, INC.; SOUTHERN )
COMPANY; NRG ENERGY; DYNEGY,  )
INC.; AES CORPORATION; WILLIAMS )
ENERGY; DUKE ENERGY NORTH )
AMERICA; and  DOES 1 through 100,  )
Inclusive     )
)
Defendants.  )
___________________________________  )

  TABLE OF CONTENTS

I. NATURE OF THE CASE 1

II. VENUE 2

III. PARTIES 2

IV. CLASS ACTION ALLEGATIONS 5

V. COMMON ALLEGATIONS OF FACT 6

A. The California Wholesale Electricity Markets 6

B. Defendants' Improper Acts 8

C. Results of Defendants' Activities 13

FIRST CAUSE OF ACTION 15
Violation of Sections 16720 and 16726 of the California Business and
Professions
Code Trust In Restraint of Trade or Commerce in Violation of the Antitrust
Act
SECOND CAUSE OF ACTION 18
For Violations of the Unfair Trade Practices Act Based Upon Violations of
the
Antitrust Act

THIRD CAUSE OF ACTION 19
For Violations of the Unfair Trade Practices Act Based Upon Defendants'
Unfair Business Acts and Practices

FOURTH CAUSE OF ACTION 20
Violations of the Consumers Legal Remedies Act

VI. PRAYER FOR RELIEF 21

 Plaintiff hereby alleges on information and belief based upon the
investigation made by and through her attorneys, as follows:
 I.
 NATURE OF THE CASE

1. This is a class action seeking redress under the law of California
for defendants' conduct in the market for wholesale electricity.  During the
spring and summer of 2000, a group of electricity generators and traders,
including defendants, exercising market power, unlawfully manipulated the
California wholesale electricity market, resulting in grossly inflated
wholesale electricity prices throughout the state and much of the Western
United States. Defendants accomplished this result by, inter alia,
improperly using confidential real time generator capacity, use, and
maintenance data, and transmission system flow data to "game" the wholesale
electricity market, by withholding electrical generating capacity from the
California Power Exchange's forward markets, by improperly parking power
with affiliates in other states which was later resold in California at
inflated rates, by scheduling previously unplanned plant outages to coincide
with other plants' planned maintenance shutdowns, and by scheduling
transmission flows to cause or exacerbate congestion.
2. The improper use of confidential real time data was in violation of
the California Tariff by which  defendants are authorized to sell wholesale
electricity within California.
3. By engaging in said unfair business practices, defendants have
directly and severely damaged purchasers of electricity supplied through the
California Power Exchange.  As noted in the August 30, 2000 San Diego Union
Tribune:  "The utility bills of all [electric] ratepayers in San Diego are
exorbitant. . . . Rates that were 3 cents per kilowatt hour have risen to 19
cents per kilowatt hour in just three months -- nothing short of
confiscatory rates."
 4. In its November 1, 2000 Order, the Federal Energy Regulatory
Commission ("FERC") expressly found that electricity prices in California
have been maintained at "unjust and unreasonable" levels during the relevant
period, though it determined that it did not have the authority to mandate
refunds or other retroactive relief with respect thereto.  In its November
22, 2000 response to the November 1st FERC order, the California Public
Utilities Commission (CPUC) concluded that due to market manipulation by
wholesale energy producers and traders, customers of electricity supplied
through the California Power Exchange had been overcharged more than $4
billion dollars during the summer of 2000.  In its November 22nd response to
the November 1st FERC order, even the California Independent System Operator
(CAISO) which manages California's transmission system infrastructure, known
as the "power grid", found that the summer 2000 prices resulted from the
exercise of intolerable levels of market power by generators and traders.
 II.
 VENUE

5. Venue is proper because defendants each transact business in the
State of California and because the damages caused by defendants' unlawful
manipulation of the price of wholesale electricity occurred in San Diego
County.
III.
 PARTIES

6. Plaintiff Pamela R. Gordon is an adult resident living in San Diego,
California.  Plaintiff Pamela R. Gordon is a retail electricity customer of
SDG&E, and has been forced to pay rates for electricity during the Class
Period (defined infra) that are unjust and unfair and that have been
artificially inflated by defendants' misconduct.  Moreover, plaintiff Pamela
R. Gordon was born with no lymph nodes in her legs which results in a lack
of circulation.  Exposure to high temperatures will cause plaintiff Pamela
R. Gordon's legs to swell, which can lead to possible severe health
consequences.  As a result of her condition, plaintiff Pamela R. Gordon must
maintain her home at temperatures of not more than 67 degrees at night and
71 degrees during the day.  Plaintiff Pamela R. Gordon is unable to
terminate her electricity service and has been forced to pay unjust and
unfair rates for electricity from SDG&E as a result of defendants'
misconduct.  Specifically, plaintiff Pamela R. Gordon was charged and/or
paid the following rates for electricity by SDG&E during the Class Period:
/ / /
/ / /
/ / /
/ / /

Dates
Total Electric Charges

5-26 to 6-27-00
$180.92

6-27 to 7-27-00
$226.67

7-28 to 8-28-00
$311.84

8-28 to 9-27-00
$143.48

9-27 to 10-26-00
$84.71

7. Plaintiff was charged less for electricity per kWh prior to the
Class Period and the inception of Defendants' wrongful conduct:

Dates
Total Electric Charges

3-29 to 4-27-00
$100.50

8. Defendant Reliant Energy (hereinafter "Reliant") is a Houston, Texas
based public corporation doing business in the state of California as
Reliant Energy Services.  It is a generator and trader of wholesale
electricity which is ultimately sold to California consumers, including
plaintiff and the class, and is a WSCC member.  Reliant operates five
electricity generating plants in California which supply wholesale
electricity to the California Power Exchange.
9. Defendant Southern Company (hereinafter "Southern") is an Atlanta,
Georgia based public corporation doing business in the state of California
as Southern Energy, Inc.  It is a generator and trader of wholesale
electricity which is ultimately sold to California consumers, including
plaintiff and the class, and is a WSCC member.  Southern Energy operates six
electricity generating plants in California which supply wholesale
electricity to the California Power Exchange.
10. Defendant Dynegy, Inc. (hereinafter "Dynegy") is a Houston, Texas
based public corporation doing business in the state of California as Dynegy
Marketing and Trade. It is a generator and trader of wholesale electricity
which is ultimately sold to California consumers, including plaintiff and
the class, and is a WSCC member.  Dynegy operates two electricity generating
power plants in California which supply wholesale electricity to the
California Power Exchange.
 11.  Defendant NRG Energy, Inc. (hereinafter "NRG") is a Minneapolis,
Minnesota based public corporation doing business in the state of California
as NRG, a generator and trader of wholesale electricity which is ultimately
sold to California consumers, including plaintiff and the class.  In
partnership with defendant Dynegy, NRG operates eight electricity generating
plants in California which supply wholesale electricity to the California
Power Exchange.
12. Defendant AES Corporation (hereinafter "AES") is an Arlington,
Virginia based public corporation doing business in the state of California
as AES Pacific Group, a generator and trader of wholesale electricity which
is ultimately sold to California consumers, including plaintiffs and the
class, and a WSCC member.  AES Pacific Group operates four electricity
generating plants in southern California which supply wholesale electricity
to the California Power Exchange.
13. Defendant Williams Energy is a Tulsa, Oklahoma based public
corporation doing business in the state of California as Williams Energy
Marketing and Trading Company, a generator and trader of wholesale
electricity which is ultimately sold to California consumers, including
plaintiffs and the class, and a WSCC member.  Williams Energy Marketing and
Trading Company operates three electricity generating plants in southern
California which supply wholesale electricity to the California Power
Exchange.
14. Defendant Duke Energy North America (hereinafter "Duke Energy") is a
Houston, Texas based public corporation doing business in the state of
California as Duke Energy Trading and Marketing, LLC, a generator and trader
of wholesale electricity which is ultimately sold to California consumers,
including plaintiffs and the class, and a WSCC member. Duke Energy operates
four electricity generating plants in California which supply wholesale
electricity to the California Power Exchange.
 15. Defendants DOES 1 through 100, inclusive, are sued herein under
fictitious names because their true names are unknown to the Plaintiff.
When their true names and capacities are ascertained, Plaintiff will amend
this complaint by substituting their true names and capacities herein.
Plaintiff is informed and believe, and based thereon alleges, that each of
the fictitiously named Defendants is responsible in some manner for the
occurrences herein alleged, and thereby proximately caused injuries and
damages to Plaintiff, as herein alleged.  Further, Plaintiff is informed and
believes, and upon such information and belief alleges, that each of the
Defendants designated by a fictitious name participated in and/or benefited
from the wrongful acts, conduct, and omissions described in this complaint,
and that said acts, conduct, and omissions directly and proximately caused
injury and damages to Plaintiff and the class as alleged below.
 IV.
 CLASS ACTION ALLEGATIONS

16. Plaintiff brings this action pursuant to Section 382 of the Code of
Civil Procedure as a class action on behalf of all electricity customers,
including the retail customers of San Diego Gas & Electric Company (SDG&E),
who purchased electricity supplied through the California Power Exchange
during the period from May 22, 2000 through and including the date of trial
(hereinafter the "Class Period").  All such persons and entities have paid
and/or have been charged prices for electricity that were "unjust and
unreasonable" and that were artificially inflated due to defendants'
exercise of market power, improper use of confidential information,
manipulations, and unlawful actions.  Members of the Class are extremely
numerous and their joinder would be impracticable.  Approximately 1.2
million SDG&E customers are within the class.
17. Common issues of fact and law predominate over individual issues,
including:
-whether defendants committed unfair business practices by sharing
confidential real time data in violation of ISO Tariffs and thereafter
"gamed" the market;

-whether defendants charged "unjust and unreasonable" prices for electricity
during the Class Period or otherwise benefited from said inflated price for
electricity;

-whether defendants exercised "market power" in the California electricity
market during the Class Period;

-whether defendants received improper and excess profits which should be
refunded and paid to members of the Class.

18. Plaintiff's interests are typical of, and not antagonistic to, the
interests of the class.
19. Plaintiff has retained competent counsel experienced in class action
and consumer fraud litigation and intends to vigorously prosecute this
action.
20. A class action is superior to all other methods for the fair and
efficient adjudication of this controversy.  The size of the individual
damages is small in comparison to the complexity and scope of the
defendants' operations and alleged misconduct.  A class action is the only
method whereby plaintiff and the class can efficiently seek redress and
obtain a uniform adjudication of their claims. Plaintiff does not anticipate
any difficulty with the management of this action.
/ / /
  V.
 COMMON ALLEGATIONS OF FACT

A. The California Wholesale Electricity Markets

21. In 1996 California deregulated its electricity industry and required
the State's privately owned utility companies to divest themselves of their
generating plants.  The purpose of deregulation was to introduce competition
into the electricity markets, with the intention of reducing rates for
electrical power.  In fact, however, certain participants in this recently
deregulated industry have, in violation of their operating Tariff, taken
advantage of structural flaws in the system and improperly obtained
confidential competitor information to artificially inflate prices for
electricity, yielding themselves billions of dollars in windfall profits at
the expense of California consumers.
22. As part of the deregulation, several new entities were created to
facilitate the workings of this new market.  California's investor owned
utilities, Pacific Gas & Electric (PG&E), Southern California Edison (SCE),
and San Diego Gas & Electric (SDG&E) (the"Utilities"), now purchase
electricity for their customers from independent generators and traders,
including defendants, through a market known as the California Power
Exchange (PX).  The PX maintains a market for the purchase and sale of
wholesale electricity through a variety of forward contracts and real time
markets.  Under the California deregulatory scheme, the Utilities were,
until just recently, required to purchase power through the PX and
prohibited from independently contracting for power outside this market.
23. The deregulated market also led to the creation of the California
Independent System Operator (CAISO).  The CAISO is an "independent"
non-profit corporation, though its managing board includes representatives
from among the generators and traders, that was created to manage the flow
of electricity and ensure reliability along the long distance, high-voltage
power lines that make up the bulk of California's transmission system.
Approximately 75% of California's electricity is distributed through the
CAISO managed  "power grid".  The CAISO monitors electrical loads (i.e.,
demand) on an on-going basis and ensures that there is an adequate supply of
power to meet that demand.
/ / /
 24. The CAISO accomplishes this by maintaining a Real Time Imbalance
Market (the "Real Time Market").  When the CAISO receives bids from
suppliers that are insufficient to meet the demand for power, it must accept
any bid, which then sets the market-clearing price for that hour. Under the
single price auction system used by the CAISO, all sellers of electricity in
the Real Time Market automatically receive the market clearing price, which
is the (second) highest price paid in the market, even if they were willing
to sell and had in fact bid to sell electricity at lower prices. This
mechanism allows sophisticated market participants, such as defendants, to
game the market by withholding bids in an effort to maximize the clearing
price.
25. The Real Time Market was not designed to handle large transactions,
but merely to provide a mechanism to correct short term imbalances in supply
and demand.  Defendants nonetheless pushed a substantial portion of the
daily wholesale electricity sales into this market by under bidding capacity
to the forward market leaving wholesale customers no alternative place to
obtain the power to satisfy their retail customers' demand.
26. The CAISO also manages the Replacement Reserve Market, which is used
to balance supply and demand of electricity.  Sellers in the Replacement
Reserve Market receive a fixed premium for having available capacity.  If
called upon by the ISO to deliver energy, sellers in the Replacement Reserve
Market also receive the Real Time Market price.  Thus, if generators know
that capacity is short, they have an incentive to withhold supplies from the
spot markets and push as much as possible into the Replacement Reserve
Market.  Access to real time generating information facilitates such
"gaming" of the markets by demonstrating, in real time, available competing
supply.
27. In times of high demand, the CAISO has the authority to purchase
energy from out-of-state sources, as to which there is no operative price
cap.  The CAISO was forced to do so during the Summer of 2000.  California
generators and marketers can export electricity to surrounding markets in
order to create artificial shortages and drive up prices in the California
markets.  They can then resell that electricity to the CAISO at inflated and
uncapped prices.  As the PX Compliance Committee noted in its November 1,
2000 Report ("the PX Compliance Report"):
/ / /
 "During periods of high Out-of-Market purchases, when prices are above the
Real-Time energy price cap, in-state generators have an incentive to export
energy out of California.  Surrounding control areas can effectively park
that energy for resale to the CAISO Out-of-Market calls and return it to the
state."

Id. at p. 44.
28. Notably, the summer of 2000 witnessed an approximately 370% increase
in exports from  the California energy market, despite the very high prices
and short supplies that existed in the State.
  "Market power" is defined by the CAISO as the ability to
significantly influence market prices and cause them to vary from
competitive levels for a material period of time.  Generators and suppliers
(including defendants) can exercise market power by physically or
economically withholding electricity from the market, moving electricity out
of the California markets, and by pricing and bidding their resources in
ways that impede the efficiency of the market.

29. Notably, the California energy market consists of a relatively small
number of firms, some of which control a substantial fraction of the total
generating capacity.  The small number of suppliers facilitates the exercise
of  market power during periods of high demand, even when there is not a
true scarcity of available generating capacity.  In addition, the relatively
inelastic demand for energy further facilitates the exercise of such market
power.
B. Defendants' Improper Acts
30. Prior to May 22, 2000, the CAISO began supplying the Western Systems
Coordinating Council ("WSCC"), an organization consisting of electric
industry participants, including defendants, with real time industry data as
to electricity generating levels, known as metering data, and transmission
system flow data, known as scheduling data, pertaining to individual market
participants. Through the WSCC Internet web site, wholesale electricity
market participants, including defendants herein, were thereby given access
to real time data as to their competitors' actions, although access to such
data was forbidden by the ISO Tariff.  When requested by various
governmental entities, including the California Public Utilities Commission
("CPUC") the WSCC refused access.
/ / /
/ / /
/ / /
 31. CAISO/FERC Tariff section 10.2.6 states in relevant part;
Meter Data supplied by an ISO  metered entity shall be made available by the
ISO to the scheduling coordinator representing such ISO metered entity and
other authorized users identified in its meter services agreement, but shall
not be disclosed to any third party except as otherwise may be required by
law, FERC any local regulatory authority or other provision of this ISO
Tariff.

32. CAISO/FERC Tariff section 20.3.1 states in relevant part:

The ISO shall maintain the confidentiality of all of the documents, data and
information provided to it by any Market Participant that are treated as
confidential or commercially sensitive under Section 20.3.2; provided,
however, that the ISO need not keep confidential: (1) information that is
explicitly subject to data exchange through WEnet pursuant to Section 6 of
this ISO Tariff; (2) information that the ISO or the Market Participant
providing the information is required to disclose pursuant to this ISO
Tariff, or applicable regulatory requirements (provided that the ISO shall
comply with any applicable limits on such disclosure); or (3) information
that becomes available to the public on a non-confidential basis (other than
as a result of the ISO's breach of this ISO Tariff).

33. CAISO/FERC Tariff section 20.3.2 states in relevant part:

The following information provided to the ISO by Scheduling Coordinators
shall be treated by the ISO as confidential:

(a) individual bids for Supplemental Energy;

(b) individual Adjustment Bids for Congestion Management which are not
designated by the scheduling coordinator as available;

(c) individual bids for Ancillary Services;

(d) transactions between Scheduling Coordinators;

(e) individual Generator Outage programs unless a Generator makes a
change to its Generator Outage program which causes Congestion in the short
term (i.e. one month or less), in which case, the ISO may publish the name
of that Generator.

34. CAISO/FERC Tariff section 20.3.2 states in relevant part:

No Market Participant shall have the right hereunder to receive from the ISO
or to review any documents, data or other information of another Market
Participant to the extent such documents, data or information is to be
treated as in accordance with Section 20.3.2; provided, however, a market
Participant may receive and review any composite documents, data, and other
information that may be developed based upon such confidential documents,
data, or information, if the composite document does not disclose such
confidential data or information relating to an individual Market
Participant and provided, however, that the ISO may disclose information as
provided for in its bylaws.

 35. Part of the CAISO Tariff is the ISO Market Monitoring & Information
Protocol (MMIP).  The objective of this Protocol (MMIP) is to set forth the
workplan and rules under which the ISO will monitor the ISO markets to
identify abuses of market power.  The MMIP part of the tariff applies to all
ISO Market Participants, including Defendants.
36. MMIP Section 2.1.1. states in relevant part:
Anomalous market behavior, which is defined as behavior that departs
significantly from the normal behavior in competitive markets that do not
require continuing regulation or as behavior leading to unusual or
unexplained market outcomes.  Evidence of such behavior may be derived from
a number of circumstances, including:

MMIP 2.1.1.1  withholding of generation capacity under circumstances in
which it would normally be offered in a competitive market;

MMIP 2.1.1.2  unexplained or unusual redeclarations of availability by
Generators;

MMIP 2.1.1.3  unusual trades or transactions;

MMIP 2.1.1.4  pricing and bidding patterns that are inconsistent with
prevailing supply and demand conditions, e.g., prices and bids that appear
consistently excessive for or otherwise inconsistent with such conditions;
and

MMIP 2.1.1.5  unusual activity or circumstances relating to imports from or
exports to other markets or exchanges.

The Market Surveillance Unit shall evaluate, on an ongoing basis, whether
the continued or persistent presence of such circumstances indicates the
presence of behavior that is designed to or has the potential to distort the
operation and efficient functioning of a competitive market, e.g., the
strategic withholding and redeclaring of capacity, and whether it indicates
the presence and exercise of market power or of other unacceptable
practices.

37. MMIP Section 2.1.3 states in relevant part:

"Gaming", or taking unfair advantage of the rules and procedures set forth
in the PX or ISO Tariffs, Protocols or Activity Rules, or of transmission
constraints in periods in which exist substantial Congestion, to the
detriment of the efficiency of, and of consumers in, the ISO Markets.
"Gaming" may also include taking undue advantage of other conditions that
may affect the availability of transmission and generation capacity, such as
loop flow, facility outages, level of hydropower output or seasonal limits
on energy imports from out-of-state, or actions or behaviors that may
otherwise render the system and the ISO markets vulnerable to price
manipulation to the detriment of their efficiency.

 38. Market participants used their trade organization, the WSCC, to
share access to and use real time information, notwithstanding the fact that
its publication and use violated the  ISO's operating procedures, as set
forth in tariffs and protocols that were filed with and approved by FERC,
and by adoption made part of the contracts by  which defendants were
authorized to sell electricity to the PX.  Those tariffs and protocols
required that such data be kept confidential to prevent gaming the market
and not be used by market participants to engage in anti-competitive
behavior.
39. It has been reported in the Dow Jones Work. Com Newswire on October
19, 2000, that:
"Electricity generators may have used real-time plant activity reports from
the state's grid operator to their advantage in California's wholesale
electricity market, according to an official with the Western Systems
Coordinating Council.

 * * * * * * *

"At issue is real-time information the California Independent System
Operator provided the Western systems Coordinating Council, a governmental
[sic] organization that monitors electricity reliability in the western
U.S., about power plant activity in the state.

"The real-time information allows market participants . . . to access data
via an internet site that shows how much capacity a plant with more than 200
megawatts has online at any given moment. . . . .

"The information was intended to be used to monitor electric reliability on
the grid . . . .

"Last month, however, the ISO's attorneys alerted the WSCC that the 'data is
being used against them and to game the market,' according to Bill Commish,
director of dispatch with the WSCC.

 * * * * * *

"Commish said generators could use the information to withhold supply and
drive up power prices or to identify transmission congestion in a particular
region and use that to gouge customers.

"However, the ISO, which controls about 75% of the state's power grid and
real-time market, may have violated a FERC rule because it is required to
keep such information confidential for 90 days, an ISO attorney told the
WSCC.

"Beginning Monday, the ISO will no longer provide such information  to the
WSCC or other market participants."

 40. Starting on or about May 22, 2000, Defendants used such real time
data to exercise market power by, among other things, reducing their output,
strategically under-bidding supply to the forward markets, and exporting
electricity from the State in order to drive up the Real Time Market price
and other market prices.  As a direct result of their improper access to and
use of this information, the price of wholesale electricity spiked sharply
upwards on May 22, 2000 and has remained at artificially inflated prices
ever since.  FERC, CPUC, and CAISO Dept. of Market Analysis, have all now
concluded that market participants should be excluded from the CAISO board.
41. As noted in the North County Times on October 19, 2000:
"A case study of San Diego County's two big power plants has concluded that
they held back from full production of electricity in June, even as prices
skyrocketed and California's power manager was scrambling for supplies to
prevent blackouts.

"To the study's author . . . the low production in San Diego county is clear
evidence that the companies that generate and trade electricity in CA were
creating an artificial shortage to drive up prices.

 * * * * * *

McCullough's hour-by-hour analysis of power output for June found that the
Encina plant in Carlsbad generated 44 percent of the megawatt hours that it
could have during periods when prices were higher than the plant's cost of
production.  The South Bay power plant in Chula Vista generated 61 percent
of what would be expected under traditional economic theory.

Economists estimate it costs $45-$55 per megawatt hour to generate
electricity at the plants. The wholesale price in June averaged $120 per
megawatt hour.

A separate analysis conducted by the North County Times revealed "mysterious
cutbacks in Carlsbad during a heady market of sky-high prices."

 * * ** *

"Investigators and market analysts have documented extensive evidence that
electricity traders have waited until prices rose on California's market
this summer before they would commit their power plants to production."

"'We did see evidence of withholding in the bidding,' according to Jim
Detmers, the ISO's operations chief."

 42. In addition, defendants used such real time information about their
competitors to improperly withhold electrical supplies from the forward
markets operated by the PX in order to take advantage of the ISO's need to
balance supply and demand in the spot market and thereby benefit from the
single price auction system by obtaining the highest price paid at any given
period.  In addition, certain defendants sold or parked electricity with
affiliates in other states in order to artificially drive up prices in the
California markets.  They then sold that electricity back into the
California markets at the artificially inflated prices they had created.
These tactics forced buyers in the California wholesale electricity market
to purchase more than 30% of their electricity needs in the inflated Spot
Market, rather than the less than 5% that should be sold in that market. The
Spot Market was solely intended to satisfy last minute fluctuations in the
demand for energy.
C. Results of Defendants' Activities
43. From late May 2000 through the present, defendants' activities have
raised wholesale electricity prices to record levels, well above the rates
that would prevail in a competitive marketplace and disproportionate to the
costs of generating that electricity.  Those prices have resulted in an
approximate tripling of electricity rates in areas served by SDG&E, where
retail rates have been deregulated and represent in large part a pass
through of SDG&E's costs for such power, which it purchases from the
defendant generators and traders through the California Power Exchange.
44. As the Market Surveillance Committee ("MSC") of the CAISO concluded
in its September 6, 2000 Report ("the MSC Report"), during the months of May
and June 2000 revenues from the sale of ISO loads in the California energy
market were 37% and 182%, respectively, above the revenues that would have
been generated under competitive pricing conditions.    MSC Report at p. 2.
The MSC Report unambiguously concluded that market participants exercised a
"significant amount of  market power" in the California energy markets,
beginning as early as October 1999 and increasing dramatically during the
Class Period.  Id. at pp. 4, 15, 17.
45. The average market clearing price in California's wholesale markets
during August of 2000 was $166.24/MWh under moderate load conditions,
compared with $32.31/MWh a year earlier.  While load demand conditions in
California during August 2000 were slightly higher than in August 1999, they
were similar to those during August 1998 when prices were much lower.  Peak
demand in August 2000 was lower than in August of either of the prior two
years, negating representations by industry leaders that excessive demand
caused these price increases.  Indeed, some California electricity producers
were only running at 60% of capacity during the so-called emergency periods.

 46. These price hikes have even been effect during the middle of the
night, when electricity is abundant and demand is low.  Further, prices in
November 2000, when demand for electricity is much lower than during the
summer months, continue to be substantially in excess of the prior years'
levels and in excess of the levels that should prevail in a competitive
marketplace.
47. As a result of defendants' exercise of market power, they
artificially increased prices to record levels and have obtained huge
windfall profits.  As reported in the October 17, 2000 San Diego Union
Tribune,  analyst Anatol Feygin of JP Morgan estimated that electricity
industry profits from California for the 3 months ended September 30, 2000
could reach $6 billion, even after taking into account cost increases.
Feygin stated, "'The industry was literally at eight times the profitability
of last year . . .. that is a fortune.'"
48. Defendant Reliant has reported that its third quarter earnings will
top last year's figure by about $110 million.  Similarly, defendant Dynegy
reported an 83 percent increase in its third quarter 2000 income, as
compared to its third quarter 1999 figures.   Profits from Defendant
Dynegy's wholesale energy generating and trading division quadrupled to
$141.9 million, which represented 80 percent of Dynegy's overall profits.
"This is the most successful quarter in Dynegy's history", reported chairman
and chief executive officer, Charles 'Chuck' Watson.  Other defendants also
obtained large windfall profits during this period.
49. Prior to deregulation, the historical cost to produce a megawatt
hour of electricity in San Diego County was approximately $23-45 per MWh.
During the Summer of 2000, defendants' conduct caused the Real Time Market
price of wholesale electricity to frequently reach $750 per MWh, resulting
in an approximate tripling of SDG&E customers' bills.
50. In its Order issued on November 1, 2000, FERC concluded that
wholesale prices of electricity in California had been at "unjust and
unreasonable" levels during the Summer of 2000. CAISO and CPUC responses to
the November 1st FERC order both concluded that wholesale prices during
Summer 2000 were due to a substantial exercise of market power by generators
and traders.
 51. Plaintiffs and the class were injured by the manipulated and
inflated prices paid for wholesale electricity, including retail customers
of SDG&E since costs were fully passed through to them.  The CPUC's November
22, 2000 report to FERC concluded that the exercise of market power by
wholesale producers resulted in a $4 billion dollar overcharge for the
delivery of electricity to California during the summer of 2000.  Due to the
unlawful conduct alleged above, plaintiffs and the class paid approximately
$4 billion dollars more for electricity than they otherwise would have,
causing great hardship to numerous individuals and businesses. As
Congressman Brian Bilbray stated: "Every day that goes by you've got small
businesses bleeding to death.  People are literally dying financially from
this situation."  Work.com Newswire (10/21/00).
52. The improper sharing and use of real time wholesale electricity
generation and transmission data by defendants to withhold generation by
unplanned outages and to maintain bidding strategies which led to contrived
and artificial shortages, and other manipulative conduct, had the effect of
artificially inflating and maintaining wholesale electricity prices above
competitive prices allowing defendants to reap illegal profits amounting to
billions of dollars, at the expense of plaintiffs and the class.
 FIRST CAUSE OF ACTION
 Violation of Sections 16720 and 16726
 of the California Business and Professions Code
 Trust In Restraint of Trade or Commerce in Violation of the
Antitrust Act
 (Against All Defendants)

53. Plaintiffs reallege and incorporate by reference each and every
allegation set forth above.
54. The Cartwright Act states, at o16726, that: "Except as provided in
this chapter, every trust is unlawful, against public policy and void."  A
trust is defined at o16720 as follows:
55. "A trust is a combination of capital, skill or acts by two or more
persons for any of the following purposes:
(a) To create or carry out restrictions in trade or commerce.

(b) To limit or reduce the production, or increase the price of
merchandise or of any commodity.

(c) To prevent competition in manufacturing, making, transportation,
sale or purchase of merchandise, produce or any commodity.

(d) To fix at any standard or figure, whereby its price to the public or
consumer shall be in any manner controlled or established, any article or
commodity of merchandise, produce or commerce intended for sale, barter, use
or consumption in this State.

(e) To make or enter into or execute or carry out any contracts,
obligations, or agreements of any kind or description, by which they do all
or any or any combination of the following:

 (1) Bind themselves not to sell, dispose of or transport any article or
any commodity or any article of trade, use, merchandise, commerce or
consumption below a common standard figure, or fixed value.

(2) Agree in any manner to keep the price of such article, commodity or
transportation at a fixed or graduated figure.

(3) Establish or settle the price of any article, commodity or
transportation between them or themselves and others, so as directly or
indirectly to preclude a free and unrestricted competition among themselves,
or any purchasers or consumers in the sale or transportation of any such
article or commodity.

(4) Agree to pool, combine or directly or indirectly unite any interests
that they may have connected with the sale or transportation of any such
article or commodity, that its price might in any manner be affected."

56. Plaintiffs and the Class are empowered by the Cartwright Act o16750
to commence a private action for up to three times their damages and
equitable relief due to the injuries they have suffered and continue to
suffer as a result of defendants' violations of the Antitrust Act.  The
Cartwright Act states:
Any person who is injured in his or her business or property by reason of
anything forbidden or declared unlawful by this chapter, may sue therefore
. . . and to recover three times the damages sustained by him or her,
interest . . . and preliminary or permanent injunctive relief . . . .

57. Plaintiffs and the Class, are "persons" within the meaning of the
Antitrust Act as defined in o16702.
58. Beginning on or about May 22, 2000, the exact date being presently
unknown to Plaintiffs, Defendants embarked on a conspiracy to make available
and use confidential real time industry data as to electrical generating,
power plant capacity, utilization, and outages through the WSCC, an
organization consisting of Defendants, and others, to inflate the market
prices of wholesale electricity, in restraint of trade and commerce in
California. As a result of these efforts, Defendants engaged in acts and
entered into Agreements, which  were intended to and have in fact restrained
trade and commerce in the California Power Exchange and other electricity
markets, in violation of the Antitrust Act, which violations are continuing
to the present day.
 59. The aforesaid acts, contracts, agreements, combinations and
conspiracies in restraint of trade or commerce have consisted of continuing
agreements, undertakings and concert of action among Defendants, the
substantial terms of which were to artificially limit the supply of
electricity to the California markets.  Through these acts and Agreements,
Defendants acted to set, raise and maintain the prices of electricity on the
Real Time Imbalance Market and other markets to wholesale purchasers of
electricity, and, indirectly and ultimately, to California consumers, at
supra-competitive prices.
60. Defendants successfully set, raised and maintained supra-competitive
wholesale prices for electricity beginning on May 22, 2000, to the customers
of the California Power Exchange.
61. Such overcharges were paid by consumers of electricity, such as
Plaintiff and the Class she seeks to represent.
62. Defendants' acts, contracts, agreements, combinations and
conspiracies were intended to restrain and did, in fact, restrain trade and
commerce in California during the Class Period.
63. Defendants' unlawful restraints of trade have had and, unless
enjoined, threaten to continue to have the following anti-competitive
effects, among others:
(a) Prices charged by Defendants for electricity to wholesale
purchasers, and, ultimately, to the customers of SDG&E in California have
been and will continue to be set, raised and maintained at artificially high
and non-competitive levels;

(b) Fair and equitable price competition for the supply of electricity
and retail and wholesale price levels for electricity have been restrained
and adversely affected; and

(c) Plaintiff and other Class members have been deprived of the benefit
of free and open competition in the electricity market in California.

64. As a direct and proximate result of the violations alleged herein,
Plaintiff and members of the Class have been unable to and will continue to
be unable to purchase electricity at prices determined by free and open
competition, and Plaintiff and members of the Class have been damaged and
will continue to be damaged by their respective purchases and/or charges for
electricity at prices higher than they would have otherwise paid, absent
Defendants' unlawful conduct.
65. Plaintiff and the Class have no adequate remedy at law for their
irreparable injuries.
66. Defendants' acts, contracts, agreements, conspiracies, and
combinations in restraint of trade violate the Antitrust Act.  Accordingly,
Plaintiff and the Class seek three times their damages caused by Defendants'
violations of the Antitrust Act and a permanent injunction enjoining
Defendants' continuing violations of the Cartwright Act.
/ / /
 SECOND CAUSE OF ACTION
For Violations of the Unfair Trade Practices Act
Based Upon Violations of the Antitrust Act
(against all defendants)

67. Plaintiffs reallege and incorporate by reference each and every
allegation set forth above.
68. The Unfair Trade Practices Act prohibits all unfair competition,
which is defined as "any unlawful, unfair or fraudulent business act or
practice," and includes violations of the Cartwright Act,  oo16700 et seq.
of the B&P Code.
69. As alleged hereinabove, beginning as early as May, 2000, defendants
unlawfully conspired, agreed, arranged and combined to prevent and restrain
competition for the sale of electricity, in violation of oo 16700 et seq.
and oo 17200 et seq. of the B&P Code.
70. Pursuant to B&P Code oo 17200 et seq., Plaintiff brings this action
seeking injunctive relief to enjoin defendants' unfair trade practices and
requiring defendants' disgorgement of all monies obtained by virtue of their
violations of the Cartwright Act as described hereinabove.
71. As a direct and proximate result of the violations alleged herein,
Plaintiff and members of the Class have been unable to and will continue to
be unable to purchase electricity at prices determined by free and open
competition, and Plaintiff and members of the Class have been damaged and
will continue to be damaged by their respective purchases and/or charges for
electricity at prices higher than they would have otherwise paid, absent
defendants' unlawful conduct.
72. Plaintiff and the Class have no adequate remedy at law for their
irreparable injuries.
73. Defendants' acts, contracts, agreements, conspiracies, and
combinations in restraint of trade and free and open competition, alleged
herein, violate the Antitrust Act.  Accordingly, Plaintiff and the Class
seek restitution and disgorgement by defendants to the Class of all monies
obtained by defendants' acts of unfair competition with respect to the
contract, conspiracy, combination and trust, and a permanent injunction
enjoining defendants' continuing violations of the Cartwright Act.
/ / /
/ / /
 THIRD CAUSE OF ACTION
For Violations of the Unfair Trade Practices Act
Based Upon Defendants' Unfair Business Acts and Practices
In Charging Unjust and Unreasonable Rates
(against all defendants)

74. Plaintiffs reallege and incorporate by reference each and every
allegation set forth above.
75. Section 17200 et seq. of the California Business & Professions Code
prohibits acts of unfair competition, which include any "unlawful, unfair,
or fraudulent business act or practice and unfair, deceptive, untrue or
misleading advertising".
76. The Defendants consistently engaged in numerous acts of  "unfair
competition", as more fully described above, by inter alia, manipulating the
price of wholesale electricity in the California markets.
77. In addition, pursuant to the Federal Power Act:
"All rates and charges made, demanded, or received by any public utility for
or in connection with the transmission or sale of electric energy subject to
the jurisdiction of the Commission . . . shall be just and reasonable and
any such rate or charge that is not just and reasonable is hereby declared
to be unlawful."

16 U.S.C. Section 824d(a).

78. Defendants are public utilities within the term as used in the
foregoing statute.
79. The FERC has specifically found that the prices defendants charged
for the wholesale electricity they sold in the California markets during the
Class Period were in fact unjust and unreasonable.  The California Public
Utilities Commission has determined that said unjust and unreasonable prices
resulted from the exercise of market power by generators and traders in the
California wholesale electricity market.
80. As a result of the conduct described above, the  defendants
unlawfully acquired money and property from Plaintiff and the Class and have
been and will be unjustly enriched at the expense of Plaintiff and the
members of the Class.  Specifically, defendants have deprived Plaintiff and
the Class of billions of dollars in monies from the sale of electricity at
unjust, excessive, and manipulated prices.
/ / /
 81. Pursuant to Section 17203 of the California Business & Professions
Code, Plaintiff and the members of the class seek an order of this Court
restoring to them all money wrongfully taken from them and allowing them a
claim in the full amount of all of defendants' ill-gotten gains, so as to
restore any and all monies to Plaintiff and the members of the Class and the
general public, which were acquired and obtained by means of such unfair and
deceptive acts and practices.
82. Pursuant to Section 17203 of the California Business & Professions
Code, Plaintiff and the members of the class seek an order of this Court
providing appropriate equitable and/or injunctive relief restraining
defendants from charging unjust and unreasonable rates and from manipulating
the electricity markets.
 FOURTH CAUSE OF ACTION
 Violations of the Consumers Legal Remedies Act
 (Against All Defendants)

83. Plaintiffs reallege and incorporate by reference each and every
allegation set forth above.
84. Such acts and practices by defendants violate the Consumer Legal
Remedies Act, Civil Code Section 1750, et seq.  Defendants' acts warrant
appropriate injunctive and declaratory relief, including an injunction
restraining them from charging unjust and unfair rates or manipulating the
market for electricity.
FIFTH CAUSE OF ACTION
Unconscionability
(Against All Defendants)

85. Plaintiffs reallege and incorporate by reference each and every
allegation set forth above.
86. Defendants charged rates for wholesale electricity that were
unconscionable given their cost of production, the newly emergent markets
for that product, and the consumers' need for electrical power.
87. Defendants' rates were  inherently  excessive, invalid and
unconscionable, particularly in light of the deceptive and manipulative
practices they used to inflate the market prices and the vital need
consumers and businesses have for electrical power.
/ / /
 88. Defendants' unconscionable prices were passed through to Plaintiff
and the majority of the Class in the retail electricity rates charged by
SDG&E and thereby directly damaged Plaintiff and the Class.
 VI.
 PRAYER FOR RELIEF

WHEREFORE, Plaintiff and the Class pray for judgment against defendants as
follows:
(a) That the Court determine that this action may be maintained as a
class action and direct that reasonable  notice of this action be given to
the members of the Class;
(b) That the combination, contract, arrangement, agreement, conspiracy
and trust alleged herein be adjudged and decreed to be an unreasonable
restraint of trade in violation of Sections 16720 and 16726 of the
California Business and Professions Code;
(c) That damages be granted according to proof, and that Plaintiff and
the Class be awarded treble damages or statutory damages, where applicable,
attorneys' fees, costs and disbursements;
(d) That Plaintiff and the Class be awarded pre- and post-judgment
interest;
(e) That the Court enter appropriate injunctive and other equitable
relief, including the disgorgement of defendants' unlawful profits; and
(f) That Plaintiff and the Class have such other and further relief as
the Court may deem just and proper under the circumstances.
Dated: November 27,  2000     KRAUSE &
KALFAYAN

_______________________________
James C. Krause, Esq.
Ralph B. Kalfayan, Esq.
Patrick N. Keegan, Esq.
Stephen W. Poirier, Esq.
Attorneys for Plaintiff

OF COUNSEL:
David B. Zlotnick, Esq., SBN 195607
Attorney at Law
1010 Second Avenue, Suite 1750
San Diego, CA 92101
Tel: (619) 232-0331
Fax: (619) 2

-----Original Message-----
From: Mark.Palmer@enron.com [mailto:Mark.Palmer@enron.com]
Sent: Wednesday, November 29, 2000 8:44 AM
To: Leopold, Jason
Subject: Re: FW: ANNOUNCEMENT: Notice of Press Conference today

Got the announcement.  Can you forward the complaint (suit) as an
attachment?

Mark


---------------------- Forwarded by David W Delainey/HOU/ECT on 11/30/2000
03:54 PM ---------------------------

Joe Kishkill@ENRON
11/28/2000 01:25 PM
To: David W Delainey/HOU/ECT@ECT
cc:
Subject: Re: Cuiaba Review

Dave,

Here is the list of folks involved in Cuiaba.

Laine Powell and his team - Project execution team for Cuiaba, located in
Cuiaba
Jose Anson - Develpment -  Engineering/Permitting
Joan Carlos Albuquerque - FURNAS/Eletrobra relationship
Valeria Lima - ANP relationship
Daine Duarte - Local in Cuiaba.  Sounds like formally part of Lammers' team,
but practically part of Laine's team
Jose Lucio dos Reis Neto - Agencies involved in electric system operation.
Recovery oil fuel oil costs (complicated story/very important task)
Jose Bestard - Project continuity.  Original PPA negotiations
John Novak - Lawyer...key to financing
Rob Gay - Financing lead...key to financing
Rick Lammers - Commercial project lead

I sent this on top of Pete Weidler's e-mail and summarized a good part of it
above.  Only Lammers and Gay were not mentioned in Pete's e-mail.

Another thought...pull people in from EE&CC as part of the "new team".  No
basis in fact here, but I suspect there are too many contractor/owner games
going on.  Probably need the EE&CC key people list as well.  Do you want me
to shake it loose, do you want to work it with Leff, or bad idea?

Let me know if you have any additional questions.

Thanks,

KIsh

---------------------- Forwarded by Joe Kishkill/SA/Enron on 11/28/2000 04:13
PM ---------------------------

Peter E Weidler
11/27/2000 08:17 PM
To: Joe Kishkill/SA/Enron@Enron
cc:

Subject: Re: Cuiaba Review

Joe - this is the list I asked Laine to put together. - I asked him not to
list all the folks under Laine - as I assume they stay with the project no
matter where it goes.

Jose Anson - he is the coordinator of permitting at IBAMA and ANP for the
pipeline.  He is also involved with working on the FUNAI issues a result of
his efforts on the IBAMA license.  Key person.

Joao Carlos A. - although he is working on the project on an ad hoc basis he
is key in terms of the FURNAS/Eletrobras relationship.  Not only does he know
folks but he also gets things done within the system.

Valeria Lema - She is the relationship manager with ANP.

Daiane Duarte - Daiane Duarte is on the PanEng payroll until the end of the
year after which she has been dialed out.  Have asked Rick several times
about her future with his group.  She is critical locally in Cuiaba due to
relations with FEMA and other agencies for obtaining the state permits that
are still outstanding as well as working with Anson et al.

Lucio Reis - he is very active in working with ANEEL/ONS/MAE and others.  He
has been a key to our success on the CCC account.  He is a must to making the
project successful.  Knows the contacts and basically understands the project
from the regulatory and CCC account point-of-view.

Two other people that are not involved in "our side" of fence on a daily
basis but are valuable are Jose Bestard and John Novak.  Jose knows the
history and John is the counsel with the longest tenure on the project.

Pete

Joe Kishkill
11/27/2000 06:16 AM
To: Peter E Weidler/NA/Enron@Enron
cc:

Subject: Re: Cuiaba Review

Pete,

But you (or does anyone) have a definitive team list for Cuiaba?  Need this
for transition planning purposes.  I agree with your sentiment that some
folks may be pulling double duty while we button up Cuiaba.   Just need to
know "how many" and "who".

Thanks,

Kish

Peter E Weidler
11/26/2000 09:07 PM
To: Laine A Powell/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Joe
Kishkill/SA/Enron@Enron, Richard A Lammers/SA/Enron@Enron, Brett R
Wiggs/SA/Enron@Enron, John Novak/SA/Enron@Enron, Rob G Gay/NA/Enron@Enron,
Jose Bestard/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc:

Subject: Cuiaba Review

we can do this by phone.

Pete
---------------------- Forwarded by Peter E Weidler/NA/Enron on 11/26/2000
06:06 PM ---------------------------

Peter E Weidler
11/26/2000 05:59 PM
To: Laine A Powell/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Joe
Kishkill/SA/Enron@Enron, Richard A Lammers/SA/Enron@Enron, Brett R
Wiggs/SA/Enron@Enron, John Novak/SA/Enron@Enron, Rob G Gay/NA/Enron@Enron,
Jose Bestard/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc:

Subject: Cuiaba Review

Rebecca has asked for a review of the Cuiaba project.   Her current thinking
is that it should be under one shop - not split responsibility.   Which shop
is not clear to me - I presume this will be decided pretty soon.

The review will take place the week of Dec 4th.   She wants a straight
forward  decription of what is left to be done and what the issues are.  I am
thinking the presenters are Laine, Rick, Jose.  In attendance are Rob and
John.     Can divide the presentation up into -

getting the construction finished/cost issues/EECC - subcontractor issues. -
Laine
Furnas/Electrobras issues - Rick
YPF - gas supply - Mark to market position - opportunities - Rick
MAE/ONS issues - current thinking.  - Jose
Current economics. - Rick

Everyone should have a page prepared ahead of time with the discussion topics
on it - she doesn't want a detailed presentation - just the facts.   Can we
send the page per topic around by this friday.

I will ask Rebecca for two hours the week of the 4th and let you know.

Joe - we should talk about where the project should best end up - I think
Rebecca is flexible -   don't really know what Dave is thinking.

Pete


Set up with Patti x-39106 & Brenda x-31914


Start Date: 4/6/01; HourAhead hour: 19;  No ancillary schedules awarded.
Variances detected.
Variances detected in Energy Import/Export schedule.
Variances detected in SC Trades schedule.
Variances detected in Load schedule.

    LOG MESSAGES:

PARSING FILE -->> O:\Portland\WestDesk\California Scheduling\ISO Final
Schedules\2001040619.txt

---- Energy Import/Export Schedule ----
$$$ Variance found in table tblINTCHG_IMPEXP.
     Details: (Hour: 19 / Preferred:  12.00 / Final:  11.98)
  TRANS_TYPE: FINAL
  SC_ID: ECTRT
  MKT_TYPE: 2
  TRANS_DATE: 4/6/01
  TIE_POINT: PVERDE_5_DEVERS
  INTERCHG_ID: EPMI_CISO_SCOUT
  ENGY_TYPE: WHEEL

---- SC Trades Schedule ----
$$$ Variance found in table tblInt_Interchange.
     Details: (Hour: 19 / Preferred: 871.00 / Final: 850.00)
  TRANS_TYPE: FINAL
  SC_ID: EPMI
  MKT_TYPE: 2
  TRANS_DATE: 4/6/01
  TRADING_SC: APX1
  PNT_OF_INTRC: NP15
  SCHED_TYPE: ENGY
  PURCH_SALE: 2
  DEAL_NO: 1
*** Final schedule not found for preferred schedule.
     Details:

  TRANS_TYPE: FINAL
  SC_ID: EPMI
  MKT_TYPE: 2
  TRANS_DATE: 4/6/01
  TRADING_SC: PGAE
  PNT_OF_INTRC: NP15
  SCHED_TYPE: ENGY
  PURCH_SALE: 2
  DEAL_NO: 1
*** Final schedule not found for preferred schedule.
     Details:

  TRANS_TYPE: FINAL
  SC_ID: EPMI
  MKT_TYPE: 2
  TRANS_DATE: 4/6/01
  TRADING_SC: PGAE
  PNT_OF_INTRC: ZP26
  SCHED_TYPE: ENGY
  PURCH_SALE: 2
  DEAL_NO: 1

---- Load Schedule ----
$$$ Variance found in table tblLoads.
     Details: (Hour: 19 / Preferred:   9.99 / Final:   9.77)
  TRANS_TYPE: FINAL
  LOAD_ID: SCE1
  MKT_TYPE: 2
  TRANS_DATE: 4/6/01
  SC_ID: EPMI


Heather,

Doesn't look like this will apply to you.  The person we need to include in
our discussion is out of town.

Talk to you soon,

Kay

---------------------- Forwarded by Kay Mann/Corp/Enron on 10/13/2000 11:32
AM ---------------------------

Gregg Penman
10/13/2000 09:09 AM
To: Kay Mann/Corp/Enron@Enron
cc:

Subject: Re: Conference Call - eNovate Legal Templates Masters, LC and
Guarantees

I don't think we need Heather for this conversation.  The goal is to finish
the necessary templates, namely ISDA and guarantees, and determine a process
for negotiating with third parties going forward.  What do you think?

Gregg

	From:  Kay Mann                           10/12/2000 05:23 PM

To: Gregg Penman/Corp/Enron@Enron
cc:
Subject: Conference Call - eNovate Legal Templates Masters, LC and Guarantees

Is this something I should have Heather Brown participate in?

Kay
---------------------- Forwarded by Kay Mann/Corp/Enron on 10/12/2000 05:22
PM ---------------------------

Dorothy Youngblood@ECT
10/12/2000 05:21 PM
To: Molly Harris/HOU/ECT@ECT, Gregg.Penman@enron.com, Jeffrey T
Hodge/HOU/ECT@ECT, Sara Shackleton/HOU/ECT@ECT, Kay Mann/Corp/Enron@Enron
cc: Suzanne Adams/HOU/ECT@ECT, Kaye Ellis/HOU/ECT@ECT,
Lynn.pikofsky@enron.com

Subject: Conference Call - eNovate Legal Templates Masters, LC and Guarantees

This memo will confirm the above referenced Conference Call has been arranged
for the date/time listed below:

 DATE:   Monday, 10/16/2000

 TIME:   2:00  P.M.- 3:00 P.M.

 DIAL-IN NUMBER: 1-888-422-7109

 HOST CODE:  409-555

 PARTICIPANTS
  CODE:  381-755

Please let us know if there are any questions.

Thanks you.

Dorothy

713-853-6114

Participants:

  Molly Harris - Host of Conference Call
  Gregg Penman
  Jeff Hodge
  Sara Shackelton
  Kay Mann


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fyi

 -----Original Message-----
From: 	Shankman, Jeffrey A.
Sent:	Tuesday, November 20, 2001 1:01 PM
To:	Joyce, Mary; Fallon, Jim
Cc:	Oxley, David; Whalley, Greg
Subject:

As you guys go through working up a severance program, I started thinking about some equity issues.  If the average tenure of an employee at Enron is about 3 years, why not come up with 2 plans--1 for long serving employees who have been long dedicated to the company, and a second one for the more recently hired?  It doesnt' make sense to me that someone who has been here under a year at $100,000 base should be entitled to 11 weeks even before they sign the waiver.  I would also not change the program in whatever form you ultimately settle on for the longer serving employees, rather just scale back the program for the newer employees.

Regards,

Jeff


Once again, it's time to find out what you think about your work experience
at Enron and what can be done to make it better.  That's why Enron wants to
check your pulse.  In fact, we've changed the name of last year's "Excellence
Through Communication" employee survey to The Pulse.  This new name more
accurately captures the purpose of the survey.  Your diagnosis helps us
correct problem areas so we can continue to make Enron a great place to work.

Starting Monday, October 16, you will be asked to provide input into Enron
and your work environment.  We would like to have 100% participation across
Enron, because the only way to make things better is to know where we need to
make improvements.

Will be available:  Monday, October 16 - Friday, Oct. 27
Will be located at: survey.enron.com

There are a few things you should remember about The Pulse:

1. Your survey responses will be confidential.  You can complete your survey
at your desk via the intranet at survey.enron.com.  If you prefer, special
computer kiosks will be available in some of our larger offices and group
computer terminals will be available in smaller field offices.  We want to
provide you with the most comfortable environment possible, as your
participation is of vital importance to Enron.
2. We will respond actively to your comments.  We are going to do our best to
cure some of the current problems that exist and put into action preventative
processes that will help identify smaller problems before they become major
ones.  We may ask for your help in resolving some of the issues that are
collected in the survey -- your active role will help us identify the best
solutions.

In last year's survey, employees identified several problem areas regarding
internal communications and we've already acted on many of your
recommendations.  These are a few of the things we've accomplished or are
working on in direct response to your input:

* Educational/informational meetings, like Brown Bag Lunches and Executive
Floor Meetings
* Flex schedules
* Improved PRC process
* Various employee newsletters, like Enside and eBiz

So take a few minutes to check your pulse and tell us what you think and how
you feel about your job and about Enron.

We look forward to hearing from you.

Mark


Attached please find a revised First Amendments Agreement.  The only change
since yesterday's draft was to Exhibit A to include ECHO's notice address
before August 1, 2000 and on and after August  1, 2000.

 Are we now ready to begin execution?

Regards, NJD


FYI...

I just wanted to let you know that I have been working with the settlements
group in order to put approx. $800,000.00 into the Central and East desk
books for Devon penalties that have been incurred over the last year.
Settlements should be talking with the Risk group in order to get this done
soon.   We are also working to determine the Pipeline cash out as a result of
Panaco's imbalance over the last year.  After talking with legal it appears
that we do have remedy to recoup cash out from Panaco. I'll keep you informed
when I have more information.  If you have any questions please let me know.

Mark


SK - I forwarded this to the group too.  mm

The Southeast RTO orders are out and have followed through with what we
expected from the discussion at the FERC meeting.

The SPP and Entergy RTO proposals have been rejected because they fail to
satisfy the scope and configuration requirements of Order No. 2000.  The
Commission  notes that the required discussions between SPP and Entergy and
its neighboring RTO/TOs has led to no increase in the original scope and
configuration.  The filings by SPP and Entergy were brief, indicating only a
lack of interest by other RTOs or utilities in joining to enlarge scope; they
failed to specify any details of the talks, what changes could be made or
what could be fixed to accomodate combination with other RTOs.  The order
states that the Commission favors the development of large, regional
transmission organizations reflecting natural markets.  The Commission
indicates that they favor four RTOs - NE, SE, MW and West.  Therefore the
order requires the participants in SPP and Entergy to participate in
settlement discussions as set out in the mediation order.  Note that these
meetings will start next Tuesday, July 17 before a FERC ALJ.

The Southern Company RTO is also found by the FERC to fail the scope
characteristics of Order No. 2000.  The order finds that Southern's approach
to focus on MOUs and seams issues with its neighbors is inadequate.  The
order states, "We reiterate: the Commission's goal is to have a single RTO in
the Southeast, and to have that single RTO operational as soon as possible."
The Commission recognizes that start-up costs in forming a larger RTO may be
more, but that over the longer term, large RTOs will foster market
development, will provide increased reliability and will result in lower
wholesale electricity prices.  The order therefore directs the parties to the
mediation as stated above.

The Grid South participants are also directed to the mediation which is
starting on next Tuesday.  It is a lengthier order with more details on other
aspects of RTOs, including Independent Board requirement, congestion
managment, interconnection procedures, planning process and CBM.  Therefore,
I am attaching a summary of the order.  One of the important findings of the
order is that GridSouth is not sufficiently independent; the Applicant TOs
are making policy decisions that should be made by an independent board.
Therefore, the order requires GridSouth to install an independent board and
file a compliance filing within 90 days.

If anyone wants copies of the orders, let me know.


Today we announced the appointment of Jeff McMahon as Enron's chief financial officer.  In my continued discussions with the financial community yesterday and today, it became clear that this move was required to restore investor confidence.  Jeff has unparalleled qualifications and a deep and thorough understanding of Enron.  He is already on the job and hard at work on the issues before us.  Andy Fastow will be on a leave of absence from the company.

Jeff had been serving as chairman and CEO of Enron Industrial Markets. He joined Enron in 1994 and spent three years in the London office as chief financial officer for Enron's European operations.  Upon returning to the U.S., Jeff was executive vice president of finance and treasurer for Enron Corp.  In 2000, he was named president and chief operating officer of Enron Net Works.

I know all of you are concerned about the continuing decline in our share price.  I am too, and we are working very hard to turn it around.  Appointing Jeff as CFO is one important step in that process.  But most of the solution involves just continuing to do our jobs with excellence.  The fundamentals of our business are strong, and I think the market will begin to see that as we continue to perform.

Please join me in giving Jeff your full support, and thank you for all of your continued hard work.


Attached is a copy of Ormet's mark-up to the Firm Purchase/Sale Agreement
post V.P. of Finance review.  The changes are primarily to Exhibit D.
Additionally, there is one chage under Suspension of Performance on Appendix
1 page "1"-3.  Finally, we need to address the collateral
requirment/termination payment threshhold in section 4.3.
Thanks,
Mike


I would propose to use only the Mainline West sheet.


---------------------- Forwarded by Mark - ECT Legal Taylor/HOU/ECT on
01/27/99 04:20 PM ---------------------------

	Enron Capital & Trade Resources Corp.

	From:  xtrials@optioninvestor.com (Option Investor Newsletter     Trials)
                       01/26/99 09:50 PM

Please respond to xtrials@optioninvestor.com
To: Option Investor Newsletter Trials <xtrials@optioninvestor.com>
cc:  (bcc: Mark - ECT Legal Taylor/HOU/ECT)
Subject: Tuesday Option Investor Newsletter 2 of 2

The Option Investor Newsletter         Tuesday  1-26-99
Copyright 1998, All rights reserved.
Redistribution in any form strictly prohibited.

PICK NEWS - CALLS (continued)
*******************************************************

MSFT $171.56 +9.69 (+15.31)  Wow!!  It doesn't
get much better than this.  MSFT announced their 2:1 stock
split (effective 3/26) prior to yesterday's market open and
immediately gapped-up at the opening.  Those of you still
in the play going into last weekend were richly rewarded
Monday Morning.  Everyone wants to own MSFT and nobody
wants to sell.  This sentiment on 2 times normal volume
produced a textbook run-up -- as if "astrodollar" earnings
aren't enough.  Price targets are now at $200.  Of note,
MSFT announced they would phase in Alta-Vista, Compaq's to-
be-spun-off-in-an-IPO search engine, and ease out Inktomi.
Use stops to protect your profits.  With so much money on
the table, we suggest waiting for a pullback before
starting a new play.  As always, confirm market direction
first.

DH $60.88 +0.63 (+0.94)  As we said Sunday,
not a fast mover, but a steady gainer. 1189 institutions
own 89.5% of the 395 million shares in float leaving about
40 million shares in daily float to trade.  On average
volume of 2 million shares, DH traded within $1.50 range
both days this week, sheltering investors from a tumultuous
market. Look for the rise to continue, market permitting.
Slow news week so far; nothing to move the price.  Just
hare-speed momentum.  Dayton Hudson is the parent company
of Target Stores

VIA.B $81.88 -1.13 (-0.68)  Profit taking has caused a slight
dip in Viacom.  But, it has been so small that it actually can
be interpreted as a positive sign for the stock.  VIA.B seems
to undergo an occasional consolidation.  Then it goes on its
merry way.  As always, wait for the signal to turn green
before hitting the gas.  Blockbuster Inc., a subsidiary of
Viacom, teamed up with Warner Home Video in a revenue sharing
agreement.   As a result, Blockbuster will be able to rent
more new releases and other videos to its customers.  Chyron
Corporation will deliver Liberty NT software to an affiliate
of Paramount which is partially owned by Viacom.  The new
system will allow access to paint and animation capabilities
on the Windows NT platform.

WAG $59.50 +1.13 (+1.06)  On Tuesday, Walgreen's flexed its
muscles in a display strength and closed at it's high for the
day.  Its only resistance is at it's all time high set back in
December at $60.44.  With its 2:1 stock split scheduled for
Feb. 12th, it appears WAG is getting in shape to make a nice
run.

LXK $108.00 +3.88 (+8.75) Well, we have good news and bad news
on LXK this week.  Let's start with the bad news.  LXK did
not announce a stock split with earnings.  Their annual
shareholder meeting isn't until April, so a stock split
announcement would have to come on an arbitrary day.  We
noticed that companies, like Microsoft, have held off a few
days before announcing their splits.  This might be a ploy
to take the price high on the earnings announcement and then
take it higher with the split announcement.  The good news
is that LXK announced earnings of $1.16 a share.  This was
$.05 above consensus estimates.  The company also stated
there is a high demand for printer components.  LXK is in
blue-sky territory as it has broken through any prior
resistance.

VOD $193.50 +2.88 (+5.12) VOD has come back to life the last
two trading days with gains of $2.88 and $2.24.  There isn't
any recent news on VOD, but there is one very positive
technical aspect.  The last three trading days have seen
VOD close right at the high of the day.  This shows a very
bullish tendency as the bulls seem to be winning the battle
on a daily basis.

XIRC $42.31 +.38 (+.31) XIRC seems to have entered a
consolidation phase.  The volatility was pretty high before
earnings, but the daily range has decreased substantially
the last three trading days.  We still feel this stock is a
good purchase.  Watch for a strong up-move on good volume.
XIRC's 52-week high is at $44.50.  A move through this level
should provide a nice rally.  XIRC did announce today that
they will provide wireless data support for Siemans handsets.

SNC $39.50 +.56 (+1.75) SNC continued to rise today, albeit
at a smaller pace.  No news on SNC, but earnings are around
the 10th of February and SNC has historically had nice
earnings surprises.  There isn't much of a chance of an
upgrade for this stock, being that the five analysts that
follow it all rank it a strong buy.  We guess there could be
a new analyst recommendation.  We could see a continued run
into earnings.  SNC's 52-week high is $54.18.

XLNX $82.56 +5.44 (+4.37) XLNX did the job on Tuesday with
over a 6% gain.  XLNX has done what a lot of stocks do after
announcing great earnings and a stock split and that is to
consolidate briefly and then continue up.  XLNX dropped on
Monday, but came back with a vengeance on Tuesday. XLNX's
resistance is at its 52-week high of $87.63.  Pullbacks
would be good buying opportunities.

MU $71.88 +2.88 (+1.38) Micron showed some weakness on Monday
in a mixed semi-conductor market. It was off $1.50 even as a
few of the other chip stocks moved up in sympathy with LSI
Logic.  LSI had received an upgrade from hold to strong buy.
Today, however, MU was up $2.88 in a generally strong semi-
conductor sector. Any upgrades and strong earnings from other
stocks in the sector, as well as from the hardware stocks,
should help MU.  Like Dell, it reports later in the earnings
season, so an earnings run would start a little later.
Earnings in February.

NOKA $145.38 +1.38 (+.82) After hitting $155.38 on Wednesday,
Jan. 20th, Nokia has gapped down at the open each of the last
four trading days. It has also CLOSED well above its opening
price the last few days, and today it managed to close $1.38
above yesterday's close. This company is located in Finland
and trades in Europe while we sleep. The Europeans seem to be
sending the stock lower while the Americans are sending it
back up each day on the NYSE. Only two days left for an
earnings run--earnings are due out before the bell on Friday.
We believe that there is a good possibility of a split
announcement with earnings. If you don't want to risk holding
over earnings, be sure to sell your options before the close
on Thursday.  You can pick them up again if a split is announced.
That is the conservative way to make this play. If you hold over,
you risk a loss of capital, should Nokia disappoint. For those
of you with high risk tolerance, please note that Nokia jumped
$9 the day it announced it's last split.  It then ran up another
$34 before the split.

PICK NEWS - PUTS
*******************************************************

AMR - $55.88 .25 (.63)  Stock up fractionally after selling
off nore than $15 since the first of the year.  Airlines
still under pressure.

AVP - $36.44 1.13 (-1.12)  Stock sold off $1.13 on a day the
broader market gained over 120 points.  Stock trading under
50-day moving average and soon to re-test key $35 support.

AVT - $44.94 1.38 (.62) Stock recovering some after $15
sell-off since the first of the year.  Stock still trading
below declining 50-day moving average. Tighten protective stop
loss - $48.

BAC - $64.94 .25 (.12) The financial sector still under pressure
because of Brazil.  Stock still off -.12 despite strong broad
market rally Monday and Tuesday (1/25 & 1/26). Recommend staying
with position while BAC stays below $65.

BDX - $36.25 .56 (2.50) Stock recovered nearly $3.00 since
Friday's (1/22) precipitous sell-off.  Stock still trading
below 50-day moving average.  Tighten protective stop
loss - $38.

BKB - $36.75 -.38 (-.88)  Stock leaking below its declining
50-day moving average despite Tuesdays (1/26) broad market
rally.

CPB - $44.13 1.44 (-.18)  Stock gave up $1.44 on a day the DOW
gain more than 120 points on Tuesday (1/26).  Stock still
under pressure with considerable overhead at $49 and now
trading under $45.

DD - $53.88 .88 (.43)  Stock gave up what it gain on Monday
(1/25).  Stock still below declining moving averages and
trading just below near-term support level of $54.  Tighten
protective sell stop to $56.25.

HSY - $61.50 .00 (1.50)  Profit taking Monday (1/25) but
still trading under declining 50-day moving average. Tighten
protective stop to $62.25

MRK - $144.00 6.50 (5.00) Drug sector up strong following
favorable earnings reports and Warner-Lamberts announcement
of its acquisition of Agouron (AGPH).  Stock now trading at
its 50-day moving average.  Tighten protective sell stop at
$145.25.

PG - $85.56 1.94 (.25)  Stock recovered nearly $2.00 but still
trading below  50-day moving average.

PHSYB - $69.31 -.56 (1.19)  Stock recovered nearly $2.00 on
Monday (1/25) but sold off fractionally during Tuesdays
broad market rally. Still trading below 50-day moving average.

WLA - $69.13 1.63 (1.19).  Stock moved higher from Friday's
close (1/22) Drug sector up strong following favorable
earnings reports and Warner-Lamberts announcement of its
acquisition of Agouron (AGPH).  Recommend still holding while
WLA trades below $70.  Tighten protective stop to $72.25.

******************
NEW CALL PLAYS
******************

ANF - Abercrombie & Fitch $73.94 +2.06 (+4.19 for the week)

Abercrombie & Fitch sells men's and women's casual clothes
and accessories in over 170 stores across America.  Their
comfortable styles of jeans and crews are especially popular
with teens and college students.  Check out this Volkswagen
hip-hop retailer the next time you are strolling through
the mall.

Abercrombie has established a nice upward trend since its
lows in October.  It has been virtually unstoppable with
only two minor bouts of profit taking along the way.  In
intraday trading on Tuesday, ANF set another all-time high
at the $75 level.  Look for ANF to continue its steady trend
into blue skies.  There hasn't been a lot of news as of late
for Abercrombie.  But, back on Jan 8th, an article in Reuters
commented that since American Eagle Outfitters had posted
nice sales figures, it was safe to assume that Abercrombie
could do the same.

BUY CALL FEB-70*ANF-BN OI=177 at $6.75 SL=5.25
BUY CALL FEB-75 ANF-BO OI=151 at $3.63 SL=1.75
BUY CALL MAR-70 ANF-CN OI= 71 at $8.50 SL=6.50
No volume in MAR-75s.

Picked on January 26th at $73.94      PE= 49
Change since picked      +$ 0.00      52 week low =$28.87
Analysts Ratings      10-3-1-0-0      52 week high=$75.00
Last earnings 00/00 est n/a   actual n/a
Next earnings 02/17 est 0.92  versus n/a
Chart = http://quote.yahoo.com/q?s=anf&d=3m

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

SEPR - Sepracor Inc. $104.25 +2.50 (+4.75 for the week)

Sepracor Inc. is a company that researches, develops, and
sells chemicals that are new, patented forms of existing
pharmaceutical and biopharmaceutical compounds.  These
products are made to reduce the side effects and increase
the safety of drugs already on the market today.  They are
used to treat several conditions that include asthma,
allergies, pain, and insomnia.  As an example, SEPR
developed Allegra as an alternative to Seldane which lost
FDA approval in 1997.

Sepracor Inc. has a stellar graph.  The company has been on
an uptrend since it was at the $40 level back in June and
in intraday trading Tuesday, SEPR set another all time high
at $105.50.  Last Friday, Jan. 22nd, BancBoston Robertson
Stephens initiated coverage of this steady stock with a
"long-term attractive rating."  They projected a 12-month
price target of $112.  They seem to favor this company which
has two approved drugs and six drugs in late phase clinical
development.  Look for SEPR to continue its upward trek if
current market conditions remain steady.

No new news.

BUY CALL FEB-100*ERQ-BT OI=347 at $ 8.50 SL= 6.50
BUY CALL FEB-105 ERQ-BA OI= 66 at $ 5.25 SL= 3.75
BUY CALL APR-100 ERQ-DT OI=128 at $13.63 SL=11.25

Picked on January 26th at $104.25      PE= n/a
Change since picked       +$ 0.00      52 week low =$ 33.00
Analysts Ratings        5-2-2-0-0      52 week high=$105.50
Last earnings 00/00 est n/a   actual n/a
Next earnings 02/19 est 1.25  versus n/a
Chart = http://quote.yahoo.com/q?s=sepr&d=3m

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

WMT - Wal-Mart $83.56 +1.56 (+1.56)

The king of retailers is back! Wal-Mart is the leading
discount retailer in the world, with a presence in all 50
states, as well as Canada, Mexico, Asia, Latin America, and
Europe. In addition to discount department stores, it
operates the #2 grocery chain, behind Kroger's, and Sam's
clubs, which is the #2 warehouse chain. This retail giant's
market capitalization is $182.3 billion.

We covered Wal-Mart recently, but dropped it when the stock
began pulling back. It appears to be moving out of a
consolidation phase and has been trending up for a week, with
only one slightly down day in that period. Wal-Mart had a
strong holiday season. It continues to grow at home and also
abroad, partly through acquisitions. It is now growing its
profits faster than its sales once again.

As an option play, WMT is a steady mover. While it lacks the
fast moves of the technology and Internet stocks, it is a
safer play, and has the added advantage of being a split
candidate. The stock last split in February 1993. Its last
three splits occurred when WMT traded in the mid-60s.
Earnings are due out in February.

BUY CALL FEB-80*WMT-BP OI=1871 at $5.63 SL=3.75
BUY CALL FEB-85 WMT-BQ OI=3953 at $2.81 SL=1.25
BUY CALL MAR-80 WMT-CP OI=2638 at $7.25 SL=5.50
BUY CALL MAR-85 WMT-CQ OI=3343 at $4.50 SL=2.75
BUY CALL JUN 85 WMT-FQ OI=1268 at $7.75 SL=6.00

Picked on Jan 17th at  $83.56         P/E=44
Change since picked:    $0.00         52 week low= 38.13
Analysts' ratings  7-11-4-0-0         53 week high=85.06
Last earnings 10/98 est n/a   actual .45 surprise +5%
Next earnings 02-24 est .66   versus n/a
Chart = http://quote.yahoo.com/q?s=WMT&d=3m

******************
NEW PUT PLAYS
******************

No new PUT plays today.

*****************************************************
COMBINATION PLAYS   - Split-O-Rama
*****************************************************

Monday, January 25

U.S. blue-chip stocks ended higher Monday after a volatile day of
trading amid a slew of mixed earnings results from multi-national
companies. The DJIA closed unofficially up 82 points at 9203.32.
The Dow shed 57 points early in the day but recovered as several
big-name companies including AT&T and 3M reported earnings. The
high-flying Nasdaq Index gained 30 points to 2369.11 primarily on
the shoulders of Microsoft shares after the company declared a 2:1
stock split. A report that analysts expect IBM to announce a stock
split after its board meets Tuesday helped Big-Blue reverse a $6
loss from early in the day and close slightly higher at $180.93.
Despite big gains in the Dow and the Nasdaq Composite, breadth on
both the New York Stock Exchange and the Nasdaq was negative as
decliners outpaced advancers on both exchanges.

Most of the Sunday plays were available near the recommended entry
points. MRK opened the day around $137 and traded slightly higher
just before 10 AM. The first prices listed for the FEB160C/155C
bear-call spread were around $0.75 credit. EMC was also slow to
start trading and opened slightly higher near $100. Our put-credit
spread; FEB75P/80P did not have any volume but the bid/ask quotes
were within $0.12 of our target entry of $0.50. SKYT was a pair of
plays; the calendar spread, JUN25C/FEB25C was easily opened for
$2.38 debit. The best we saw on the ITM debit spread, FEB22C/25C
was $2.00 (higher than our target) and that was a little slim on
the ROI potential so we decided to pass. PLCM fell hard in a post
earnings dip but that just brought the sold position nearer to ATM
and a higher time component. We decided to take advantage of the
lower entry price; $0.87 for the MAR25C/FEB25C time spread, and
hope the stock finishes around $25 in four weeks. NRC was very
interesting as the option quotes opened near the previous closing
prices but soon moved apart in the spread (MAR50C/FEB50C) even
though the stock price remained quiet and the volume was fairly
docile. Our initial price was $1.12. CNTO, the butterfly spread,
moved lower most of the day reducing our initial entry to $0.87
for the FEB35C/40C/45C position. Remember, there is a method of
legging out of a butterfly spread that is acceptable. If the
stock price moves significantly, early in the life of the
spread, the BULL spread portion or the BEAR spread portion can
be closed-out near their maximum profit potentials. The spreader
may want to take advantage of this situation in order to profit
more if the stock reverses direction and comes back into the
profit range. By increasing his risk slightly, he may be able to
improve his position significantly by converting the butterfly
spread to a vertical spread. Although the chances of such a trend
reversal cannot be considered great, it does not cost the trader
much to restructure himself into a position with a much broader
maximum profit. That's our plan, we'll see what happens...

In other portfolio activities; PCS just keeps climbing like there
is no gravity and we just wonder where it will end. If any of you
are exercised early on the short side of the spread, let us know.
SRCM is a source of pain as the stock price has fallen sharply
without any change in the buying pressure. We decided to pull the
plug and prevent any losses. The JAN17P was closed at $1.25 and
we would expect to sell the JAN15P at a minimum of $0.50 for a
break-even exit. The initial target will be $1.00 until the stock
reverses (upward) again.

Tuesday, January 26

On Tuesday, U.S. stocks rallied in afternoon trading to close near
session highs. Solid earnings reports, stock splits, and big tech
deals all boosted the market. The DJIA closed unofficially up 115
points at 9318.40. The Nasdaq index of technology issues finished
up almost 65 points at 2433.46, surpassing a record high close of
2415.49 set on January 20th. Big gains in shares of IBM, Xerox,
Microsoft and Yahoo accounted for much of the positive movement.

On Tuesday, our big movers were AOL, CPQ, LVLT and SUNW. AOL was
the only issue we acted on, closing half of our debit position at
$2.25 for a $0.75 profit. On the LVLT debit spread, we expect to
close at about a $6.50 credit for a $2.00 profit. SRCM continued
downward but did not reach our target exit for the FEB15P. Watch
for signs of a turn-around as the buying pressure is still very
healthy on this stock. PCS just keeps climbing, about 6 days in a
row. MRK had a surprise rebound today, climbing $6 on a positive
earnings announcement. More to discuss on Thursday...
******************************************************************
    - NEW PLAYS -

Today we will focus on some of the common stocks in the blue-chip
technology group. We rarely play these issues because the main
section of the newsletter covers these stocks in-depth and we like
to bring you a wide array of candidates. These companies are in
the news everyday and the earnings/split-mania is just too much to
pass up...Good Luck!
******************************************************************
MSFT - Microsoft  $171.56     *** Disparity? ***

Microsoft Corp. develops, manufactures, licenses and supports a
range of software products, including scalable operating systems,
server applications, business and productivity applications,
software development tools and Internet software and technologies.

Microsoft rules! With a market value that far outstrips its sales,
Microsoft is the world's #1 software company. Softwares include
Windows, Excel, MS Word, PowerPoint, and Encarta. The Microsoft
Network provides online content, and its Internet Explorer is
still battling Netscape Navigator for market share. With NBC, the
company operates cable news channel MSNBC. They also provide email
with "Hotmail" and many other services.

Everybody is making deals with MSFT. To make AltaVista a premier
destination site on the Web, Compaq announced a partnership with
Microsoft in which AltaVista will offer a e-mail service based on
Microsoft's Hotmail service. In addition, AltaVista and Microsoft
agreed to make AltaVista's Web search the primary search vehicle
for the Microsoft Network Internet site.

The big news (of course) was the blow-out earnings and the 2:1
stock-split. On Monday, Microsoft said its stock split would
increase its shares outstanding to 5 billion and make its stock
more affordable. The split will take effect on 3/12/98 if it is
approved by shareholders.

We expect MSFT will consolidate somewhat after the news wears off
but there is no doubt it will return to the headlines shortly
thereafter. Sell the time premium now before it evaporates in
this small disparity play.

PLAY (conservative):

BUY  PUT MAR-155 OI=686  A=$4.00
SELL PUT MAR-160 OI=3842 B=$5.38
NET CREDIT TARGET=$1.50 ROI=42% (2 months)

Chart = http://quote.yahoo.com/q?s=MSFT&d=3m
******************************************************************
DELL - Dell Computer  $88.50     *** Almost Free Money ***

Dell Computer is one of the world's top PC makers and the world's
#1 direct-sale computer vendor. The company sells hardware and
markets third-party software and peripherals. Products include
notebooks, PCs, and network servers. Dell also markets a variety
of peripherals and software for other manufacturers. More than 90%
of its systems are sold to businesses and government entities. The
company continues to expand services such as its Web site, which
is expected to process half of it's transactions by the year 2000.

Dell recently announced that they have secured a share of the #1
position in the worldwide personal workstation market. They also
continue as the number one vendor for customer satisfaction and
their scores are significantly higher than most competitors in
price/performance, overall reliability, repair and delivery time.

Dell will post earnings sometime in mid-February and we expect
the stock to make the traditional run to the actual announcement.
In addition to buying calls, you might elect to make this play
with current portfolio collateral. This is a low return spread
based on another small disparity but the worst that could happen
is you choose to own DELL at $69.19.

PLAY (very conservative):

BUY  PUT MAR-65 DLQ-OM OI=766  A=$1.19
SELL PUT MAR-70 DLQ-ON OI=2341 B=$1.81
NET CREDIT TARGET=$0.81 ROI=19%

Chart = http://quote.yahoo.com/q?s=DELL&d=3m
******************************************************************
XRX - Xerox Corp.  $116.31     *** Split Play ***

Xerox engages in worldwide development, marketing, manufacturing,
financing and servicing of document processing products.

This week, Xerox delivered another record quarter, reflecting
strong double-digit earnings growth consistent with company
objectives, even though pre-currency revenue growth was clearly
affected by some weaker economies. Their fourth quarter diluted
earnings per share increased 16% to $1.69 and income increased
17% to $615 million, primarily as a result of outstanding growth
in digital product revenues, improved operating margins and
ongoing benefits from the worldwide restructuring program. Xerox
also announced an 11% increase in the quarterly cash dividend on
the company's common stock and a two-for-one stock split.

The stock split will be effective for shareholders of record on
2/4/99 and distributed on 2/23/98. The quarterly dividend will
increase 11% to 20 cents on a post-split basis, payable on 4/1/98
to shareholders of record on March 5. Today's gap-up and the
split date make perfect timing for a one month spread. Plan to
close the play near the February strike date on the pre-split run.

BUY  CALL MAR-120 XRX-CD OI=40   A=$7.12
SELL CALL FEB-120 XRX-BD OI=1487 B=$3.75
NET DEBIT TARGET=$3.12 TARGET ROI=25%

Chart = http://quote.yahoo.com/q?s=XRX&d=3m
******************************************************************
IBM - Intl. Business Machines  $185.50     *** Split Play ***

International Business Machines is the world's top provider of
computer hardware and it is #2 in software. The company makes a
broad range of computers, including PCs, mainframes, and network
servers. The company also makes software and peripherals, and has
an ever-expanding service arm. IBM owns software pioneer Lotus
Development, maker of the Lotus Notes messaging system. Almost 60%
of the company's sales are to foreign customers and IBM continues
to revamp its image, with a focus on Internet business.

As expected, IBM declared a two-for-one stock split, just one day
after software rival Microsoft did the same. IBM posted fourth
quarter earnings last week that exceeded street expectations but
saw its shares fall after failing to announce a split. Today, the
stock rebounded on the renewed interest. The new shares should be
distributed on or about May 26 to shareholders of record on May 10.
The IBM board also set a regular quarterly dividend of $0.22 per
share, payable March 10 to stockholders of record on Feb. 10.

Although the current technical (and earnings) outlook is somewhat
lackluster, we believe Big-Blue will rise to the occasion and
easily hold $185 on the strike date in March.

PLAY (conservative/debit spread):

BUY  CALL MAR-175 IBM-CO OI=513 A=$19.25
SELL CALL MAR-185 IBM-CQ OI=649 B=$13.00
NET DEBIT TARGET=$6.00 ROI(max)=66% B/E=$181.00

Chart = http://quote.yahoo.com/q?s=IBM&d=3m
******************************************************************
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The Weekly FERC Report and State Government Reports are available by clicking
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Also, if you need any prior reports, click on either archives for Weekly
Report or State Reports and the prior reports are still accessible.


----- Forwarded by Richard B Sanders/HOU/ECT on 07/13/2000 12:39 PM -----

	Bob Hillier@ENRON
	05/25/2000 06:32 AM

		 To: Richard B Sanders/HOU/ECT@ECT
		 cc:
		 Subject: EE&CC Litigation Requirements

Richard, could you provide me with some information on where we are with the
retention policy?  My last understanding from you was you were going to work
on the wording a bit and then get back with me.  As you can see below we are
at risk from a legal perspective on these cases until we get this policy in
place.

bbh
----- Forwarded by Bob Hillier/NA/Enron on 05/25/2000 06:30 AM -----

	Chris Behney@ECT
	05/24/2000 02:56 PM

		 To: Bob Hillier/NA/Enron@Enron
		 cc:
		 Subject: EE&CC Litigation Requirements

Here is yet another request for e-mail from a long time ago.  Apparently EI
has these old tapes somewhere (at least Roberto and the users think they
do).  Any word from Richard Sanders?

CB

----- Forwarded by Chris Behney/HOU/ECT on 05/24/2000 02:33 PM -----

	Roberto Deleon@ENRON
	05/24/2000 01:55 PM

		 To: Chris Behney/HOU/ECT@ECT
		 cc: Henry Moreno/HOU/ECT@ECT, Gail
Brownfeld/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
		 Subject: EE&CC Litigation Requirements

Chris,

Gail Brownfeld (Senior Counsel) has required that all EE&CC back up mail
files be reviewed and any information pertaining to the following files be
reproduced for the upcoming EE&CC litigation efforts.

1.  Any messages TO or FROM the following people that have the "extension"
@bv.com for the time period 1992 to date.

 Jim Leblanc
 Karl Breckon
 Ricky Simon
 Frank Hosak
 Larry Snyder
 Ray McPhail
 Bill Fox
 John O'Hearn

2.  Also, the following people from Black & Veatch worked in the EECC Houston
office in 1995 and had Enron mail accounts.  Therefore we would need ANY
email to/from these accounts:

 Eric Odenhouse
 Gary Townsend
 Robert Wood
 Bruce Godsey
 John Kruse

Ms. Brownfeld indicated that the document review by Enron's outside counsel
has a six week window.  This is week two of those six week.  Therefore, it
has been requested that this task receive top priority.

Please let me know if you have any questions or require addtional information.

Regards
Roberto DeLeon