How are you?  Ok I'm beginning to think that I am going to have to ask you out on a date in order to get my necklace back. (which by the way I've never done)  What do you have going on this week?  Do you want to get together?   I have band practice tonight and that's about it for the week.  Let me know.

Kim


Angelika.

Yes.

Vince

Angelika Staude <AStaude@iirltd.co.uk> on 04/12/2001 03:01:25 AM
To:	"'Vince.J.Kaminski@enron.com'" <Vince.J.Kaminski@enron.com>
cc:
Subject:	RE: PoweRisk 2001 - Your Invitation

Vince,

Brilliant, thanks. Same sub points, same bio?

Best regards,

Angelika Staude
Director Gas & PoweRisk 2001

Tel: 0044 207 915 5675
Fax: 0044 207 915 5101
www.icbi-uk.com/powerisk

-----Original Message-----
From: Vince.J.Kaminski@enron.com [mailto:Vince.J.Kaminski@enron.com]
Sent: Wednesday, April 11, 2001 6:59 PM
To: AStaude@iirltd.co.uk
Cc: Vince.J.Kaminski@enron.com
Subject: Re: PoweRisk 2001 - Your Invitation

Angelika,

Thanks for the invitation.
Yes, I shall be glad to attend and repeat the same presentation.

Vince

Angelika Staude <AStaude@iirltd.co.uk> on 04/09/2001 04:19:08 AM

To:   "'vince.j.kaminski@enron.com'" <vince.j.kaminski@enron.com>
cc:
Subject:  PoweRisk 2001 - Your Invitation

                               PoweRisk 2001

       The Global Premier ForumforEnergy Trading & Risk  Management

                      6th - 9th November  2001, Paris

Dear Mr Kaminski,

I am responsible for the programme of this year's  PoweRisk conference in
Paris. Helyette Geman has informed me that she has  contacted you
concerning the workshop and that you are happy to do it with her  again
this year - brilliant!

I would like to know if you are also interested in  delivering a paper
again. The audience in previous years greatly appreciated  your
contribution, and I would me more than happy if you could join us again.

To give you an idea of the programme so far, these are  the ("technical")
topics that are already covered:

Chris  Strickland: Forward Curve Models with Jumps for the Pricing of
Exotic Energy  Contracts

   multi-factor forward  curve models for the valuation of energy contracts
   adding jumps
   applying the models to  exotic energy options
   extensions to multiple  energy contracts

Les  Clewlow: Valuation and Risk Management of Virtual Power Stations and
Gas  Supply Agreements

   Structures of  Gas Supply Agreements (GSA)
   Relationships  between Physical and Virtual Power Stations (PPS/VPS)
   Valuation  methods for GSA's and VPS's
   Risk Analysis of GSA's  and VPS's

Derek Bunn, Professor of Decision  Sciences, LONDON BUSINESS SCHOOL:
Analysing The Impact Of NETA On  Market Efficiency & Volatility In The UK
Energy  Market

Chris Harris,  Director of Market Development.Operations and Engineering,
INNOGY: Applying  Cutting-Edge Portfolio Management Theory In Order To
Optimise Your Risk Exposure

   Establishing  and valuing the key factors using a bottom up approach
   Looking at  the interconnection between key factors
   The treatment of the risk  of infrequent but high impact events

Peter  Nance, Principal, TEKNECON: Combining Power  Systems And Monte Carlo
Simulations For Effective  Pricing

Dan  Mansfeld, Head of Risk  Control,  VATTENFALL:  Assessing The Benefits
And Risks Of Using  Derivatives As Part Of Your Risk Management Strategy

Spyros  Maragos: Analysing New Approaches To Building Forward Curves From
Available  Market Data

Tamara  Weinert, Credit and Contracts  Manager, MIRANT  ENERGY:
Successfully Measuring & Managing Credit  Risk

   What is  Credit Risk?
   Major changes  in the industry and their impact on Credit Risk
   Effects of  new risk profiles on credit appetite: Credit analysis; Limit
   Setting; Risk  Reducing Structures
   Importance of Credit in  the Organizational Structure: Reporting;
   Dependence; Structure of Credit  Department

Brett  Humphreys: Examining Cutting-Edge Credit Exposure Mitigation Tools:
Combining  Counterparty and Portfolio Credit VaR Techniques

Helyette Geman: Pricing of exotic energy derivatives and structured
contracts

Please let me know if you are interested  in joining the PoweRisk 2001
speaker panel, and which topic you would like to  cover. I think that
something along the lines of last year's talk (State-of-the-Art Volatility
And Correlation Estimation  Techniques For Multiple Energy Portfolios)
would be brilliant again, but please  feel free to chose something else
that has not been covered  yet.

I look forward to hearing  from you,

Kind Regards,
Angelika  Staude

Director PoweRisk  2001

Tel: 0044 207 915  5675
Fax: 0044 207 915  5101

PS: For your information, please find enclosed a list  of confirmed
speakers for PoweRisk 2001.
(See attached file: Confirmed Speakers.doc)


Attached is revised draft of Enron comments on the NERC bill.  The helpful editorial revisions came from Charles and Sarah.


The end is in sight!

The break out contracts for the TurboPark LM's need to be finished up (not
news to anyone).  Each of these agreements will be between GE and E-Next
Generation LLC (DevCo) and GE, unless the project company is already owned by
DevCo.  I suggest that each agreement reference be the same as the original,
with an adder which makes it clear which project it belongs to (LVCG, FV,
CISO1 and CISO2, for example).

Al, your contract needs to be fixed up.  Please contact Pete Thompson at AK
in DC to get it rolling, if you haven't all ready. 212 662 2780

Pete, the CA Development agreements should now be in the name of E-Next
Generation LLC.  For indentification purposes we can call the contracts CISO1
and CISO2.

Thanks,

Kay


The Transportation Desk recently issued receipts for January's Parking and
Mass Transit expenses deducted from employee paychecks.   The form needed for
reimbursement under the Transportation Spending Account program is available
at the Enron Building Transportation Desk (3rd floor) and Corporate Benefits
(16th floor).  The form will also be available on the Benefits web site
shortly.

Your reimbursement request should be sent to:
     Aon Consulting
     Flex Administration #00741-83
     P.O. Box 2845
     Winston, Salem, NC  27102-2845


USA: Enron seen facing long road to restore confidence.
Reuters English News Service, 10/17/01
USA: UPDATE 1-RTO seen key to boosting New England power supply.
 Reuters English News Service, 10/17/01

Enron Seeks Replacement For AGA's Gas Storage Report
Dow Jones Energy Service, 10/17/01

Financial Post: News
Earnings: A Few Bright Spots in the Shadows Yesterday's earnings
National Post, 10/17/01

Bush to Nominate Kelliher to Open FERC Seat, White House Says
Bloomberg, 10/17/01

Energy Regulators May Loosen Price Caps on Western Power Sales
Bloomberg, 10/17/01

Enron Faces Questions Over Limited Partnerships, WSJ Reports
Bloomberg, 10/17/01

USA: Enron seen facing long road to restore confidence.
By Andrew Kelly

10/17/2001
Reuters English News Service
(C) Reuters Limited 2001.
HOUSTON, Oct 17 (Reuters) - Enron Corp. moved in the right direction by releasing more detailed financial data and tackling problems at peripheral businesses, but the energy giant still has a way to go to make Wall Street happy, analysts said Wednesday.
Enron, North America's biggest buyer and seller of natural gas and electricity, reported its first quarterly loss in more than four years on Tuesday. The company took $1.01 billion in charges and writedowns on ill-fated investments, measures Enron executives said credit rating agencies were comfortable with.
UBS Warburg analyst Ronald Barone said on Wednesday he was "not thrilled" by the announcement during a conference call to discuss third-quarter earnings. And for good reason.
Moody's Investors Service subsequently issued a statement saying it had placed all of Enron's long-term debt obligations on review for a possible downgrade.
"There appears to be much more work ahead before the lingering credibility issues that have vexed this company in the past are fully resolved," Barone said.
The writedowns on poorly performing assets and a more detailed breakdown of the company's operations went some way to appeasing Wall Street after a tumultuous year in which Enron's stock lost about two-thirds of its value, but analysts said they were not about to let Enron off the hook just yet.
Bear Stearns analyst Robert Winters said he remained concerned about Enron's quality of earnings and cash flow.
Winters said he believed Enron would have liked to take even bigger charges and writedowns, but was unable to do so without putting its credit ratings at risk, which could adversely affect some of the company's financing arrangements.
"Problem assets and overvalued assets on the balance sheet remain, particularly overseas," he said.
One such asset is Enron's 65 percent stake, valued at $1 billion, in the Dabhol power plant project in India, which has been stalled because of a long-running payments dispute with its only customer, a local utility company.
Enron's stock closed down $1.64, or 4.85 percent, at $32.20 on Wednesday.
For the year to date the stock is down about 61 percent, underperforming the Standard & Poor's utilities index , which has fallen some 24 percent over the same period.
Enron was a Wall Street favorite last year when its stock posted a gain of 87 percent, driven by enthusiasm for the company's broadband plans and the success of its EnronOnline Internet energy and commodity trading platform.
But the stock has fallen sharply this year as sentiment toward broadband soured, new chief executive Jeff Skilling resigned after just six months in the job and wrangling continued over the Dabhol power plant project.

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.

USA: UPDATE 1-RTO seen key to boosting New England power supply.
By Scott DiSavino

10/17/2001
Reuters English News Service
(C) Reuters Limited 2001.
NEW YORK, Oct 17 (Reuters) - Energy companies said the future development of new power plants and transmission lines in the U.S. Northeast hinges, in part, on setting up a Northeast Regional Transmission Organization (RTO).
RTOs are predominantly for-profit groups established to bring all of a region's high-voltage transmission lines under central control while ensuring equal access to the lines to all power suppliers seeking to market their goods across the grid.
The Federal Energy Regulatory Commission (FERC), which oversees the interstate wholesale power market, believes RTOs will benefit consumers by enhancing competition among power providers, in turn improving service and driving down rates.
"If FERC can drive the Northeast RTO to closure in a reasonable period of time, it will accelerate the development of new transmission and generation," Enron Corp.'s managing director of global government affairs, Rick Shapiro, told Reuters.
Houston-based Enron is the nation's top energy marketer.
"How and when the RTO gets implemented will radically impact the market. It's crucial to the development of the market in New England," Mirant Corp. spokesman Ray Long told Reuters.
Energy provider Mirant, of Atlanta, has 1,400 megawatts (MW) of generation in New England. The company is currently adding another 700 MW to its Canal station in Massachusetts.
"Once we get the permits for Canal, we will reassess whether to proceed with the project. A big part of that assessment will depend on the RTO process," Long said.
THE NORTHEAST RTO
FERC wants to see four super-regional RTOs created in the U.S. - in the Northeast, Midwest, Southeast and West.
Several regions have taken long strides toward developing RTOs, including a not-for-profit model proposed in the Midwest and rival for-profit plans vying for FERC approval in the West.
FERC Chairman Patrick Wood, seeking to spur the development of RTOs, favors giving utilities until Dec. 15 to join one or forfeit their right to sell electricity in the wholesale market, though the commission has not voted on this plan.
The Northeast RTO will include New England, New York, the Pennsylvania-New Jersey-Maryland (PJM) region and possibly parts of eastern Canada.
FERC said it wants the Northeast RTO to be built on the PJM market platform and to include the best practices of the New England and New York markets.
PJM Interconnection, which operates the power grid in parts of Pennsylvania, New Jersey, Maryland, Delaware, Virginia and Washington, D.C., is the nation's only fully functioning RTO.
"The process FERC set in place to establish one RTO in PJM, New York and New England is going to get us where we need to be in terms of having a vibrant wholesale market," Long said.
Long said Mirant determined a single Northeast RTO would save more than $440 million annually by eliminating the "artificial borders that now exist between New York, New England and PJM."
An administrative law judge, acting as a mediator for FERC, considered three proposals for creating the Northeast RTO.
The three plans were proposed by interested parties, including Mirant and Enron, and the region's grid operators - the New York Independent System Operator (ISO) in New York, ISO New England in New England and PJM.
Last month, the judge asked the FERC to decide who will govern the Northeast RTO and what the timetable is to put the plan in place. The judge favored a plan put forward by the New York ISO and ISO New England.
"If FERC implements the RTO plan proposed by PJM in 2003, consumers could save $1.5 billion ... $440 million a year ... over the New York/New England plan, which would not be implemented until 2006," Long said.
Under the PJM plan, PJM would overlay its current market model across the entire region, while adopting some of the best practices of the other markets.
"Although nothing is perfect, PJM is widely accepted as the best market in the region. New York and New England, which are younger markets, are still works in progress with some bugs to work out," Enron's Shapiro said.

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.

Enron Seeks Replacement For AGA's Gas Storage Report

10/17/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)
HOUSTON -(Dow Jones)- Enron Corp. (ENE), the nation's largest natural gas trading company, isn't ready to let the regular report on U.S. natural gas storage inventory die, a company executive said Tuesday.
Because the American Gas Association has said it will discontinue its weekly gas storage report at the end of the year, Enron would like to see another organization take over the report, said John Lavorato, president and chief executive of the company's Americas Wholesale Services unit.
Speaking at a meeting with analysts, Lavorato said the storage report is important for the gas industry to keep track of industry fundamentals.
Without a regular report on storage gas inventory, the gas industry can expect less frequent but greater price changes than seen in the past, he said.
The Department of Energy's Energy Information Administration publishes monthly data on gas storage, but the information isn't as timely as data the AGA reports each Wednesday.
The EIA issued its latest gas storage report Oct. 9. It showed the amount of gas in storage at the end of July. The data comes from reports filed by operators of gas storage facilities.
It also showed estimates of the amount of gas in storage at the end of August and September. Those estimates are generated by a computer model.
Wednesday's weekly storage report from the AGA will show estimated inventory as of Oct. 12. The AGA estimate is based on reports from gas storage facilities. That data is then run through an AGA computer model to generate the report.
Lavorato said he would like to see the EIA, the Interstate Natural Gas Association of America or consultants like PIRA Energy Group, an international energy consulting firm, take over reports on storage inventory.
INGAA is an industry trade group representing gas pipeline companies in the U.S., Canada and Mexico. They manage many of the gas storage facilities.
Lavorato would like to see a new report based on data that could be audited, he said.
He said he thinks the AGA has found itself "in the middle of something it didn't want to be in." Originally intended for use within the gas industry, the weekly AGA report has become high-profile, and is even watched by equity markets, he said.
Some industry participants have criticized the AGA report, wondering whether it can be manipulated by companies that supply data to the AGA. Many of those companies also trade physical gas and gas futures.
When the AGA has revised storage figures from previous reports, gas prices have sometimes reacted wildly.

-By Michael Rieke, Dow Jones Newswires; 713-547-9207; michael.rieke@dowjones.com

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
Financial Post: News
Earnings: A Few Bright Spots in the Shadows
Yesterday's earnings
National Post

10/17/2001
National Post
National
FP2
(c) National Post 2001. All Rights Reserved.
Maytag Corp. reported a third-quarter net loss of US$29.7-million yesterday, but said sales of its Maytag and Amana home appliances exceeded forecasts. Net income excluding charges was US45 cents a share.
Delphi Automotive Systems Corp. said third-quarter profit fell 82%. Third-quarter profit was US$26-million, (US5 cents), a drop from US$148-million (US26 cents) in the third quarter of 2000. Revenue was US$6.23-billion, down 6%.
Enron Corp. posted a third-quarter net loss as it chopped away at a tangled balance sheet with US$1.01-billion in charges, offsetting strong returns from its core wholesale trading and marketing division. Before charges profit was up 35%. Enron reported a net loss of US$638-million (US84 cents), compared with year-earlier net income of US$271-million, (US34 cents).
Netgraphe Inc., a Montreal-based Internet company, reported higher revenue and a reduced operating loss for its first quarter. But its net loss, which included depreciation, unusual items and amortization of goodwill related to acquisitions, rose to $11.7-million, up from $10.97-million. Netgraphe is the online division of Quebecor Inc.
Tellabs Inc., a telecommunications equipment maker, reported a third-quarter plunge as revenue fell by half. The Illinois-based company's results, including charges of US$60-million, fell to a loss of US$49.47-million (US12 cents), compared with a profit of US$187.3-million (US45 cents) last year.
Cott Corp., the world's largest supplier of store-brand soft drinks, reported a 40% rise in third-quarter profit, as beverage volumes soared nearly 25%. For the quarter ended Sept. 29, Toronto-based Cott, with annual sales of nearly US$1-billion last year, said it made a profit of US$11.1-million (US16 cents) up from a profit of US$7.9-million (US12 cents) in the previous year's quarter. Sales during the quarter rose 15% to US$302.5-million from US$263.5-million in the year-ago period.
Kraft Foods Inc. saw earnings rise 24% in the third quarter, its second as a public company. It earned US$522-million (US30 cents), compared with US$420-million (US24 cents) on a pro-forma basis, a year ago. Revenue slipped to US$8.06-billion from US$8.11-billion a year earlier.

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.

Bush to Nominate Kelliher to Open FERC Seat, White House Says
2001-10-17 16:09 (New York)

Bush to Nominate Kelliher to Open FERC Seat, White House Says

     Washington, Oct. 17 (Bloomberg) -- President George W. Bush
will nominate Joseph Kelliher, a policy adviser to U.S. Energy
Secretary Spencer Abraham, to fill the open seat on the Federal
Energy Regulatory Commission, the White House said.

If the Senate approves Kelliher, a former Republican counsel
for the House Energy and Commerce Committee, the commission will
have its full five members for the first time since Pat Wood,
Bush's first FERC appointee, became chairman Sept. 1.

``I hope they speed him through the process,'' said
Commissioner Nora Brownell, a Republican who was appointed by Bush
earlier this year. ``He is a thoughtful person who knows how to
work through issues.''

Kelliher's nomination comes as the commission has pledged to
closely monitor and investigate abuses in the electricity and
natural gas markets and promote competition. In the next month or
so, it is due to choose which groups will run the electric power
grid around the country, an important step in deregulating the
nation's power markets.

A former power industry lobbyist, Kelliher would fill the
opening left by the departure of Curt Hebert, a Republican
appointed by President Bill Clinton and named chairman by Bush.
Hebert left the commission Aug. 31 to join Entergy Corp. after the
White House made it clear Bush planned to make Wood the chairman.
With Kelliher, FERC will have three Republicans and two Democrats.

``Kelliher will be a valuable final addition to the team now
working actively to finish the transition to truly competitive and
dynamic power markets,'' said the Electric Power Supply
Association, which represents competitive power sellers such as
Enron Corp.

The commission is responsible for ensuring fair wholesale
electricity and natural gas prices.

Energy Regulators May Loosen Price Caps on Western Power Sales
2001-10-17 14:59 (New York)

Energy Regulators May Loosen Price Caps on Western Power Sales

     Washington, Oct. 17 (Bloomberg) -- Federal regulators are
considering changes to wholesale price caps on electricity in
California and 10 Western states, which power producers hope will
allow them to charge more when supplies in the region are tight.

The Federal Energy Regulatory Commission plans a public
conference Oct. 29 to discuss altering the pricing formula. The
commission established caps in April and June, after skyrocketing
electricity costs led to insolvency for California's largest
utilities, units of PG&E Corp. and Edison International.

     ``We have heard and understand that people do think the
solution was very California-centric, and it was,'' FERC Chairman
Pat Wood said, indicating changes in the formula are likely. ``But
California's needs were very urgent at the time.''

     While commissioners declined to say what they would be
willing to change about the pricing formula, they want to fine-
tune the caps before the winter, which is the peak period of
demand and may yet cause another jump in prices, Wood said.
Changes could be made next month.

     The current pricing formula is based on the most-expensive
power generated in California. Enron Corp., Sierra Pacific
Resources and other sellers of power to California want the
formula to consider costs from all generators in the region.

     Enron blamed the formula for a July 2 blackout in Nevada,
when sellers withheld supply because local prices were too low
based on the highest cost of supply then being offered in
California.

                         Lower Power Costs

     Though the cost of wholesale power in California has dropped
since the commission ordered the first emergency cap on April 25,
Wood said the Western states may face another shortage of power
and high prices this winter.

     The Pacific Northwest depends on hydropower for much of its
energy needs, and rainfall has been below normal this year. Part
of the shortfall in power last year and early this year was the
result of a drought that reduced power available from dams.

     ``I remain concerned about that part of the country,'' Wood
said. ``It has not been raining a whole lot out there.''

     The average price for a megawatt-hour at the California-
Oregon border in September was $24.91, down from $313.70 in April.
A megawatt-hour is enough electricity to power about 750 average
California homes for an hour.

     On the agenda for this month's conference is a proposal to
link the formula to the price of natural gas, a fuel used in many
generating plants.

     ``I'm not predisposed for or against specific changes,'' said
FERC Commissioner Nora Brownell. The Oct. 29 conference will help
the commission determine aspects of the price control that the
parties involved agree are working and those that are not, she
said.

                             Surcharge

     In a related matter, the commission also may halt the 10
percent surcharge it permits generators to charge in California to
cover the costs of collecting bad debt. The insolvent California
utilities now have plans to pay off their debts.

     For power sellers in the West, the current price caps often
require utilities to sell their excess power at a loss, Enron,
Sierra Pacific and other marketers said in statements to the
commission. They said the price they sometimes pay for power is
higher than the cost of supply from the most-expensive producer in
California.

     ``The determination of the proxy price should not be limited
to California generators,'' Enron said in a government filing. It
should be ``determined by the least-efficient generator in the
entire West.''

     Power marketers also should be allowed to recover
``justifiable costs above the proxy prices,'' Enron wrote.

     California officials had demanded the price controls after
PG&E's Pacific Gas & Electric and Edison's Southern California
Edison racked up more than $14 billion in power-buying losses.

     The caps were extended to other Western states -- Oregon,
Washington, Arizona, Nevada, Wyoming, New Mexico, Colorado,
Montana, Idaho and Utah -- in June because some said generators in
the West could simply get around the cap by selling outside
California when prices were higher elsewhere. The caps don't
expire until Sept. 30, 2002, though they can be changed.

     California said before the price cap was extended to other
states that it sometimes had to outbid buyers in neighboring
states at prices above the caps to buy enough electricity to avoid
blackouts.

     On July 2, Sierra Pacific cut supplies to 10,000 customers
for 45 minutes when temperatures soared and three power plants
were idled. It couldn't buy 50 megawatts of power in the spot
market, partly because of suppliers' concerns with the federal
cap, company spokesman Paul Heagan said at the time.

Enron Faces Questions Over Limited Partnerships, WSJ Reports
2001-10-17 10:11 (New York)

     Houston, Oct. 17 (Bloomberg) -- Enron Corp. is facing
questions over agreements with two limited partnerships run by its
chief financial officer, Andrew Fastow, the Wall Street Journal
reported.

     Fastow set up LJM Cayman LP and LJM2 Co-Investment LP with
the approval of Enron's board. The partnerships have engaged in
billions of dollars of complex hedging transactions with Enron
involving company assets and Enron stock, the paper said. It isn't
clear from U.S. Securities and Exchange Commission filings what
Enron received in return.

     Enron said about $35 million of its $1.01 billion charge
reported yesterday was connected with the partnerships and
involves the ``early termination ... of certain structured finance
arrangements,'' the paper said. Chief Executive Officer Kenneth
Lay said in an earlier interview that related transactions
involving top managers aren't unusual, the paper said.

     According to the arrangement, the general partner, made up of
Fastow and at least one other Enron employee, received a
management fee of as much as 2 percent annually of the total
amount invested, the paper said, citing the LJM2 offering
document. Fastow declined to comment, the paper said.


Kent,

This forms supposedly integrated the requested changes you saw previously.
Would love to have this by Friday.  I'll forward the opinion letter in just a
sec.

Thanks,

Kay
---------------------- Forwarded by Kay Mann/Corp/Enron on 04/25/2001 04:10
PM ---------------------------

"Staikos, John P." <johnstaikos@paulhastings.com> on 04/25/2001 11:42:49 AM
To: "'kay.mann@enron.com'" <kay.mann@enron.com>, "'Campbell, Carolyn'"
<CCampbell@KSLAW.com>
cc: "Lang, Gregory F." <gregorylang@paulhastings.com>, "Staikos, John P."
<johnstaikos@paulhastings.com>, "'VAN DUSEN, Nicholas'"
<nicholas.vandusen@freshfields.com>, "'O'BRIEN, Lisa'"
<lisa.obrien@freshfields.com>, "'PARKER, Isabel'"
<isabel.parker@freshfields.com>

Subject: GE Guarantee

"paulhastings.com" made the following annotations on 04/25/01 12:42:55
------------------------------------------------------------------------------
NEW E-MAIL ADDRESSES AT PAUL, HASTINGS, JANOFSKY & WALKER LLP

We have changed our e-mail address.  Our new domain name is
paulhastings.com.  In most cases, our address is composed of
conventional first name and last name plus @paulhastings.com.  Here are
two examples: janesmith@paulhastings.com and danjones@paulhastings.com.
If you have any questions, please contact us at noc@paulhastings.com.

==============================================================================
"The information transmitted is intended only for the person or entity
to which it is addressed and may contain confidential and/or privileged
material. Any review, retransmission, dissemination or other use of, or
taking of any action in reliance upon, this information by persons or
entities other than the intended recipient is prohibited. If you
received this in error, please contact the sender and delete the
material from all computers."

==============================================================================

Attached please find the GE Guarantee in  Word format.? Also, we have
attached a pdf black-line of the Guarantee vs  the form of guarantee in the
Turbine Contract.
?
Do not hesitate to call us with any  questions.
?
Best regards.
?
______________________
John  Staikos
Direct Dial:?  203.961.7523
Direct Fax:?  203.674.7723
E-mail:?  johnstaikos@paulhastings.com
?
 - 47K202!.DOC
 - GE Guarantee black-line against form of guarantee - distrbuted 4-25-01.pdf


Today at FERC, Enron filed a pleading requesting the complete elimination of "icap" as a product (including any "reserve type" products) based on the fact that the real time spot markets of the RTOS can effectively price this in the cost of energy.  The pleading also includes a proposed interim approach (with a two year sunset date).  This pleading was made in response to FERC's request for comments on "Ensuring Sufficient Capacity Reserves In Today's Energy Markets."

The pleading and affidavit of Larry Ruff, PhD are attached.


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October 2, 2001

Spain's Endesa Moves In for a U.S. Acquisition

By Will McNamara
Director, Electric Industry Analysis

  <http://secure.scientech.com/rci/wsimages/will100border_copy.jpg>

[News report from Power Finance & Risk] Endesa, Spain's largest utility, is setting up a business development unit in New York and will shortly transfer three executives from its Madrid headquarters to seek out investment opportunities in the United States. Virginia Sanz de Madrid, a Spanish utility analyst at Deutsche Bank in Madrid, says Endesa is probably looking to acquire existing generation or distribution companies rather than develop new assets from scratch. She adds that Endesa is looking to spend some $2 to $3 billion to enter the U.S. energy market.

Analysis: A common response to reports that Endesa is attempting to expand in the United States may be: Why has the company waited so long? Along with affording new opportunities for domestic companies, deregulation of the U.S. electric market has also enticed several large European power firms to expand their scales through a stateside acquisition. Thus, some financial analysts may wonder if Endesa is jumping on the U.S.-expansion bandwagon too late. The timing may still be right for Endesa, however, considering that falling wholesale electricity prices across the United States and the decreased value of generation assets over the last few months could actually make a U.S. generation purchase more lucrative today than in recent years. Consequently, Endesa's rumored expansion efforts in the United States, and continuing acquisitions across continental Europe, are part of the company's aggressive growth strategy.

Under the monopoly system in Spain, Endesa was clearly the country's largest power firm, owning about 22,576 MW of generating capacity and controlling 67 percent of Spain's electricity market. However, due to its own move toward privatization, the Spanish government has placed restrictions on the domestic growth of the country's largest electric companies, requiring Endesa to look abroad for growth opportunities. Thus, for some time there has been little question that Endesa would like to develop interests across continental Europe, and is not going to let any dust settle before it continues to expand. The fact that Endesa also plans to expand in the United States represents a new, but not necessarily surprising, direction for the company.

The impetus for Endesa moving into the United States, beyond the opportunities for growth that exist in this country, may be rooted in some setbacks that Endesa has experienced in Spain and minimal acquisition opportunities across continental Europe. In late 2000, Endesa made its first significant move outside of Spain when it purchased a 30-percent interest in the French electricity generator Societe Nationale d'Electricite et de Thermique (SNET). While a comparatively small company by American standards, SNET is the second-largest electricity company in France in terms of installed capacity, and third largest in terms of electricity generation. SNET owns five coal plants totaling 2,600 megawatts, which generate about 6,838 GWh annually. This is a very low output, and in fact SNET accounts for only 2.5 percent of the market share in France. However, given the fact that France's largest energy company, EDF, still has a hold on about 90 percent of the market in the country, the acquisition of the next-largest company was a major coup. The acquisition of SNET was also attractive to Endesa because of the company's experience in coal-based electricity-which still is the power source for roughly half of the electricity produced across the Continent-and its progressiveness in terms of technology.

Upon the acquisition of SNET, Endesa began friendly merger proceedings with Iberdrola, the second-largest power firm in Spain. Under the now-terminated deal, Endesa would have purchased Iberdrola for about $12.6 billion and created a new entity well prepared to expand across Europe and Latin America. Reportedly, the merger would have created the world's third-biggest electricity company, after Tokyo Electric Power and Enron, and without question would have marked Spain's largest industrial merger to date. For further perspective, the new company created by the merger between Endesa and Iberdrola would have had a combined market capitalization of approximately 36 billion euros (or $32 billion in U.S. terms). This would have surpassed Duke Energy's market capitalization of $30.3 billion and been roughly the size of American Electric Power, TXU, and Reliant put together (resulting in a $33.8 million market capitalization). Had it materialized, the merger also would have given a considerable jolt to Spain's fast-growing power market, and altered the current playing field among Europe's largest power companies.

However, in a major setback for Endesa's growth, Spanish authorities required that the merged company sell off some generating capacity, arguing that Spain needed new players to increase competition. The government also ruled that the new entity would have to lower its market share of distribution, and authorities cut the amount of stranded costs that the new company would be able to recoup. Although analysts had expected the merger to proceed despite the government conditions, Endesa and Iberdrola said the imposed governmental conditions outweighed the benefits of the merger, which would create fewer synergies than initially proposed. Ironically, much of the funding for Endesa's purchases have come from the sales of its own non-strategic assets that took place in preparation for the Iberdrola acquisition.

Moreover, the inability to grow its scale through the purchase of Iberdrola has apparently prompted Endesa to concentrate on finding new acquisition opportunities. In addition to expansion into the United States, last month Endesa led a consortium that will acquire the generation assets of Enel, Italy's largest generating company, for 2.63 billion euros. The generating assets, which are housed under a subsidiary company known as Elettrogen, include an installed capacity of 5,700 MW that is ranked as the second-largest generating firm in Italy. Elettrogen is one of three companies in which Enel grouped its generation assets in order to comply with Italian regulatory mandates regarding divestiture. The purchase of Elettrogen marks the first significant expansion of Endesa beyond its home territory in Spain. In the purchase agreement, Endesa will have 45-percent ownership of Elettrogen, partnering with Banco Santander Central Hispano (40 percent), a Spanish bank, and Italian ASM Brescia (15 percent), a municipal utility that serves 400,000 customers in Italy.

The acquisition of Elettrogen is an important component of Endesa's expansion strategy across Europe and may be an indication of how the company intends to progress in the United States. Endesa has established a goal of accumulating 8,000 MW of generating capacity beyond its existing assets in Spain by 2005. Through the purchase of Elettrogen and the previous purchase of SNET, Endesa has already reached that goal four years ahead of schedule.

If Endesa does make a purchase of a U.S. company, it will most likely be an acquisition that involves substantial generating assets, as power generation has become Endesa's primary focus. To date, there have been a handful of instances in which an international power firm has bought a U.S. energy company since deregulation began four years ago. ScottishPower purchased PacifiCorp, National Grid purchased New England Electric System (NEES) and Eastern Utilities Associates (EUA), and Powergen bought LG&E. Note that all of these buying companies are based in the United Kingdom. Pending international deals include National Grid's purchase of Niagara Mohawk and the German company RWE's purchase of American Water Works, and EDF has made it clear that it also wants to expand in the United States. Generally speaking, international power firms have used the purchase of either vertically integrated utilities or unbundled businesses as a "testing ground" to learn the ins and outs of the U.S. energy market and plan subsequent specialization in a particular market niche. Further, although international companies such as National Grid are focused on the transmission side of the U.S. energy industry, the generation sector clearly offers solid opportunities for growth. In the spring of 2001, President Bush released an energy plan that calls for significant new energy production efforts, which opened up new windows of opportunity for international companies to further expand in the United States.

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Please locate Jody Pierce's fax number, and send it to Peter.

Thanks,

Kay
---------------------- Forwarded by Kay Mann/Corp/Enron on 01/10/2001 03:48
PM ---------------------------

"Thompson, Peter J." <peterthompson@akllp.com> on 01/10/2001 03:09:55 PM
To: <Kay.Mann@enron.com>
cc:

Subject: RE: invoice information/TurboPark

What is Jody's fax #?

-----Original Message-----
From: Kay.Mann@enron.com [mailto:Kay.Mann@enron.com]
Sent: Wednesday, January 10, 2001 3:29 PM
To: Thompson, Peter J.
Subject: RE: invoice information/TurboPark

---------------------- Forwarded by Kay Mann/Corp/Enron on 01/10/2001
02:29
PM ---------------------------

Kay Mann
01/10/2001 01:56 PM

To:   michael.barnas@ps.ge.com
cc:

Subject:  RE: invoice information/TurboPark

---------------------- Forwarded by Kay Mann/Corp/Enron on 01/10/2001
01:55
PM ---------------------------

Kay Mann
01/10/2001 01:51 PM

To:   stephen.swift@ps.ge.com, mike.barnas@ps.ge.com
cc:

Subject:  RE: invoice information/TurboPark

Viola!
---------------------- Forwarded by Kay Mann/Corp/Enron on 01/10/2001
01:50
PM ---------------------------

Kay Mann
01/03/2001 11:18 AM

To:   lee.johnson@ss.ps.ge.com
cc:

Subject:  RE: invoice information/TurboPark  (Document link: Kay Mann)

Lee,

The best way to go about it would be to send the invoice to Jody, but
copy
the Enron project folks you have been dealing with.

Are we ready to sign the Fountain Valley contract?  I would think that
we
could sign the change order at the same time, and payment terms can be
whatever the Enron project team has bought in to.  The banks won't care.

Have you seen sig pages for ESA yet?

Kay

lee.johnson@ss.ps.ge.com on 01/03/2001 09:00:30 AM

To:   Kay.Mann@enron.com
cc:

Subject:  RE: invoice information/TurboPark

Kay,

Please confirm that this will be the invoicing address for the 6 units
bound
for Fountain Valley Project and 4 units pegged to LV Cogen Expansion.
Also,
we've still got a change order needed for Fountain Valley for the 6
Power
System Stabilizers and 2 Exhaust Stacks.  LV is also saying they will
need
4
Power System Stabilizers, but haven't confirmed their order.

Thanks,

Lee

-----Original Message-----
From: Kay.Mann@enron.com [mailto:Kay.Mann@enron.com]
Sent: Tuesday, January 02, 2001 6:06 PM
To: lee.johnson@ss.ps.ge.com
Subject: invoice information/TurboPark

E-Next Generation LLC
Mr. Jody Pierce
1400 Smith, EB 2480
Houston, Tx 77002


We won't know until February.

Jane Allen
12/13/2000 08:12 AM
To: Louise Kitchen/HOU/ECT@ECT
cc: Jane Allen/HOU/ECT@ECT, Robert Jones/Corp/Enron@enron, Michelle
Cash/HOU/ECT@ECT

Subject: House Lease Termination

On the advise of Michelle Cash, we are sending out letters by Fed Ex today to
both the real estate agent (Greenwood King) and the landlord (Eileen Urban)
giving 30 days notice on termination.  If they come back to us wanting the
remainder of the rent through the lease date of July 14, 2001, we will
negotiate subletting.  Louise, do you still have someone in mind who may be
interested?

Jane J. Allen
Enron Corp
Global Employee Services
Phone - 713/345-5064
Fax - 713/646-9501


Ken -

Good morning.

As a follow up to the voice mail that I left for you, following are some
background and preparatory notes for a potential phone call today between
Chancellor Reed and yourself.  Communications and indications from the UC/CSU
team are that he may call you today as a follow up to your discussion with
him on February 2, 2001.  As I mentioned at the Executive Committee meeting
on Tuesday, 2/20/01, all things are moving along well in California with our
clients, PG&E and SCE.  The current exception to the "smooth sailing" is
UC/CSU.  Tom Riley, the account manager for UC/CSU, has prepared the
following outline of business concerns, sequence of events and suggested
talking points.

Ken, thank you for your assistance and continued participation with this
client.

Regards - Dan

******************************************************************************
*********************
Business Concerns

UC and CSU have business concerns regarding Enron's action to De-DASR their
accounts.  They have not communicated their concerns with enough detail that
would allow us to address them, but I have been able to surmise that they
consist of the following:

1.  UC/CSU is now a bundled access customer instead of a direct access
customer.  AB-1X, recently signed by Gov. Davis, has ban language preventing
large commercial/industrial customers from going Direct Access.  Per Jeff
Dasovich of Enron Gov. Affairs, it is not clear, but possible, that if we had
not De-DASRed the accounts, that UC/CSU might have been grandfathered as a
direct access customer.  Further, SB-27X (still pending), which is Senator
Bowen's attempt to reverse the ban language of AB-1X, may have a financial
ramification for customers switching to and from Direct Access status.
Dasovich is investigating further.

2.  UC and CSU bought approximately 130 meters from Enron as we implemented
the contract.  Our action is forcing the utility to remove these
University-owned meters, meaning that their meters will become useless.  We
are currently using those meters to provide daily 15 minute interval data as
required in our contract. (Our operations and billing group have come up with
a transition plan that SCE has agreed to. SCE would install dual-sockets
allowing for the installation of the SCE meter, while keeping our meter in
tact, mitigating their concern.  At this point, UC and CSU are not listening
to our business solutions so we have not received feedback from them on this
solution).

3.  We have a contractual obligation to be the Universities scheduling
coordinator (SC).  As a result of our action, we are no longer their SC.
They are concerned this may inhibit our ability to act as their SC for their
recent proposal to the ISO under the Demand Reduction Program.

Sequence of Events

February 1 - I informed the UC/CSU electricity oversight board leaders and
contract administrators of Enron's decision.  I walked through the power
point presentation.  They expressed no concerns at that point, and even
expressed appreciation we were standing by our contract.  I sent the UC and
CSU contract administrators the letter later that day advising them of our
decision.

February 2 - Ken Lay called Chancellor Reed assuring the Chancellor that we
will honor the contract.  I have since heard that this call was extremely
well received and that the CSU campus VPs have been advised of the call and
Ken's assurances that were communicated.  We offered the call to the UC
President as well, but were channeled to his SVP.  By the time I made contact
with the SVPs administrator, we had begun receiving letters (below), so I
backed off on arranging the call.

February 5 - UC and CSU contract administrators inform us they have been
speaking to their regulatory advisor and asked for some clarifications.
Maureen Palmer and I speak to the contract administrators and answer their
questions.

February 8/9 - UC and CSU send letters to their PG&E and SCE account managers
advising them they have concerns regarding Enron's decision, and that they
(PG&E and SCE) should only De-DASR on the Universities' request.

February 12 - I received a letter from the UC/CSU contract administers asking
for clarifications regarding our action, and requesting we re-DASR their
accounts.

February 14 - I responded with a letter providing them with responses to
their clarification questions, but did not offer to re-DASR their accounts as
they had requested.

February 16 - UC informed me they were unhappy we did not comply with their
request to re-DASR and indicated they would be sending another letter.  I
suspect this letter will express potential legal recourses.

February 20 - CSU and UC informed they would hold off on the letter pending
outcome of a call between Chancellor Reed and Ken Lay.

Throughout the entire process, I have been asking that the business
administrators meet with us so Enron can hear their concerns.  I gather CSU
would like to do this, however, UC is more inclined to write letters and seek
legal remedies.

Suggested Talking Points for Call and Desired Outcome

1.  We were faced with a difficult business decision, and made our California
decision with our customers in mind.  We have kept our contracts in tact.
Other energy service providers have left the market and their customers.

2.  We are an energy outsourcing company.  We should source supply from the
"best available" source in the marketplace. We feel we have a contractual
right to have made the decision.

3.  Desired outcome is that we want to sit down with the University business
administrators to listen to and address their concerns.  We have not been
afforded this opportunity to date though we have offered.  However, the
Chancellor needs to understand we are not willing to re-DASR their accounts
in the meantime.

I will be available for the debrief with Ken if desired.  I can be reached at
925-543-3703 (office), or 925-548-0326 (mobile) if you have any questions.

Regards, Tom
******************************************************************************
*********************


Attached is a NON BINDING letter of interest to Questar for their Southern Trail Pipeline - west leg.  This is their crude pipeline that was purchased with the intention of converting it to a natural gas line but apparently, their interests have changed.  The west leg runs from near the California border to Long Beach.

The importance of this non binding bid is to get us into the data room so that we can really take a close look and gather information to see how interested we really are in this pipe.

Please let me know if you have any comments.  This letter has gone through legal and will be faxed to Questar today.

Thanks,

Mark

Mark McConnell
Transwestern Pipeline Company
713-345-7896   office
713-822-4862   cell
713-646-2551   fax
mark.mcconnell@enron.com


Dave,

Here it is the revised Master for Clark.  Let me know if you have any
questions.  FYI,  revisions were made to Sections 4.2 /  Material Adverse
Change in the Appendix.

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


Start Date: 3/4/01; HourAhead hour: 14;  No ancillary schedules awarded.
Variances detected.
Variances detected in Energy Import/Export schedule.

    LOG MESSAGES:

PARSING FILE -->> O:\Portland\WestDesk\California Scheduling\ISO Final
Schedules\2001030414.txt

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

  TRANS_TYPE: FINAL
  SC_ID: ECTRT
  MKT_TYPE: 2
  TRANS_DATE: 3/4/01
  TIE_POINT: PVERDE_5_DEVERS
  INTERCHG_ID: EPMI_CISO_SCOUT
  ENGY_TYPE: WHEEL
*** Final schedule not found for preferred schedule.
     Details:

  TRANS_TYPE: FINAL
  SC_ID: ECTRT
  MKT_TYPE: 2
  TRANS_DATE: 3/4/01
  TIE_POINT: SYLMAR_2_NOB
  INTERCHG_ID: EPMI_CISO_SCOUT
  ENGY_TYPE: WHEEL
$$$ Variance found in table tblINTCHG_IMPEXP.
     Details: (Hour: 14 / Preferred:   0.00 / Final:   0.00)
  TRANS_TYPE: FINAL
  SC_ID: ECTRT
  MKT_TYPE: 2
  TRANS_DATE: 3/4/01
  TIE_POINT: PVERDE_5_DEVERS
  INTERCHG_ID: EPMI_CISO_MAR4
  ENGY_TYPE: FIRM


Good Morning,

Any GCP Adjustments will be highlighted in blue.  Please feel free to give me a call, if you have any questions.

Amber N Ebow x5-8331
Global Counterparty_Enron Net Works

 -----Original Message-----
From: 	Lebrocq, Wendi
Sent:	Tuesday, November 06, 2001 5:13 PM
To:	Bradford, William S.; Lees, Lisa; Fayett, Juana; Le, Trang; Maley, Paul; O'day, Karen; Rohauer, Tanya; Lombardi, Kelly; Lindsay, Brian; EOL Call Center; Hare, Bill D.; Heffernan, Amy; Lafuze, Molly; Clark, Danny; Panus, Stephanie; Mandola, Teresa; Ebow, Amber; Coleman, Tandra; Campbell, Lesli; Lebrocq, Wendi; Taylor, Mark E (Legal); Lauer, Kara; Banner, Kimberly; Mcquade, Jennifer; George, Fraisy; Guillory, Michael; Rajaram, Aparna; Monterrey, Maribel; Lebeau, Maria; Escamilla, Albert; Lebrocq, Wendi; Global Emerging Businesses; Lambert, Karen; Jones, Tana; Schott, Samuel; Brackett, Debbie R.; Clark, Cynthia; Enron Europe Global CounterParty,; Sever, Stephanie; Moran, Tom; Clark, Claudia; Curry, Ken
Subject:	EOL and Clickpaper Approvals for 11-06-01

Please see attached.

 << File: EOL 11-06-01.xls >>
Regards,

Wendi Lebrocq
3-3835 << File: EOL 11-06-01.xls >>


The information contained herein is based on sources that we believe to be
reliable, but we do not represent that it is accurate or complete.  Nothing
contained herein should be considered as an offer to sell or a solicitation
of an offer to buy any financial instruments discussed herein.  Any
opinions expressed herein are solely those of the author.  As such, they
may differ in material respects from those of, or expressed or published by
on behalf of Carr Futures or its officers, directors, employees or
affiliates.  ? 2001 Carr Futures

The charts are now available on the web by clicking on the hot link(s)
contained in this email. If for any reason you are unable to receive the
charts via the web, please contact me via email and I will email the charts
to you as attachments.

Distillate     http://www.carrfut.com/research/Energy1/hoil57.pdf
Unleaded     http://www.carrfut.com/research/Energy1/unlded57.pdf


I typed these notes out for my group if you all are interested.


Dad,
I just wanted to let you know that I love you and I am
here if you need ANYTHING!
I am in Boston until late Wednesday (I am visiting
Christina, Tad, and baby Jack). They all send their
love and support to you as well.
Jack is adorable!
We are all praying for you and all the people at
Enron.
I love you!
Elizabeth

__________________________________________________
Do You Yahoo!?
Find a job, post your resume.
http://careers.yahoo.com


Attached is a draft DASH with signficant changes from Friday afternoon.  Please provide thoughts and comments back to me over the weekend or by Monday a.m. in order to facilitate potential circulation of a final DASH by Monday p.m.

Also attached is the most current Legal Risk Memorandum and RAC Due Diligence Report & Assessment Summary.

Given that I will be accessing e-mail over the weekend, responses by e-mail are preferred.  Thanks.

Regards,

Chip Schneider
713-853-1789
3AC 1418


-----Original Message-----
From: 	"iris mack" <irismmack@hotmail.com>@ENRON
Sent:	Tuesday, January 29, 2002 10:55 AM
To:	Black, Tamara Jae
Cc:	Burnett, Lisa
Subject:	Return to Harvard

Hi TJ and Lisa,
     Happy 2002!!  I hope this email finds you well.
     This brief note is to inform you that I will be returning to Harvard - where I received my doctorate in Applied Mathematics.
     I have accepted a job offer from the Harvard Management Company - which manages Harvard's endowment of $20 billion (and still counting).
     If you are ever in the Boston area, please do look me up.
     Also, will you please forward this email onto the power group so that some of my other friends will know how to get in touch with me in the future.
Best regards to you and yours in 2002,
Iris Marie Mack, MBA/PhD

P.S.:  During my first couple of months in Boston I will be staying in corporate housing.  Therefore the best way to reach me is via email:  irismmack@hotmail.com .  Thanks!!!

Join the world's largest e-mail service with MSN Hotmail. Click Here


$2 bid for Marcus Pollard


Thanks man!

Fletch


8/24 - left msg for Pam to reset to Wed or Thurs


Lauri,
 I have talked with Gerald and have no information that he is not aware of.
Sorry that my memory isn't better about the intent of the language relating
to state facilities.

	Lauri A Allen
	12/19/2000 10:57 AM

		 To: Dan J Hyvl/HOU/ECT@ECT, Gerald Nemec/HOU/ECT@ECT
		 cc:
		 Subject: Texas General Land Office IT Transport

I haven't heard anything back from you guys on this.  Any insight?  I know
Linda Roberts is also working a deal with TGLO to convert bbls to mmbtus
which could mean incremental volumes that TGLO would be trying to get into
Midcon.
---------------------- Forwarded by Lauri A Allen/HOU/ECT on 12/19/2000 09:37
AM ---------------------------
From: Gerald Nemec on 12/05/2000 04:12 PM
To: Dan J Hyvl/HOU/ECT@ECT
cc: Lauri A Allen/HOU/ECT@ECT
Subject: Texas General Land Office IT Transport

Dan,  Any input you have on this contract would be appreciated.

----- Forwarded by Gerald Nemec/HOU/ECT on 12/05/2000 04:11 PM -----

	Lauri A Allen
	12/05/2000 02:53 PM

		 To: Gerald Nemec/HOU/ECT@ECT, Eric Gillaspie/HOU/ECT@ECT
		 cc: Daren J Farmer/HOU/ECT@ECT, Edward.D.Gottlob@enron.com
		 Subject: Texas General Land Office IT Transport

Gerald/Eric-

I have a couple of questions regarding TGLO transport contract
012-88494-202.  We are currently delivering a volume of 28.000mm into various
Midcon interconnects on this contract that are designated to go to
Reliant/Entex for the purpose of heating HISD schools.  The transport
contract stipulates different rates for this delivery depending on whether
the gas is intended for state facilities or not.  My first question, then,
is:  are HISD schools considered state facilities?  And, if HISD schools are
considered state facilities, does the fact that this gas is being delivered
to them via Reliant/Entex utilizing Midcon's pipe make any difference?

I am asking these questions not only to assure that we are recouping the
correct transport rate, but also to determine what the consequences might be
if I interrupt this delivery.  We are having difficulty getting enough gas
into Midcon to cover our Entex noms and I am just exploring my options.  I
would also expect that this volume should decrease when HISD closes for the
Christmas holidays- does the fact that this is an IT agreement give me enough
leverage to cut this nom if TGLO does not do so voluntarily?

Thanks for your help.


Please call me when you arrive.  Thanks

 -----Original Message-----
From: 	Perlingiere, Debra
Sent:	Friday, October 19, 2001 5:11 PM
To:	Mims, Patrice L.
Subject:	Central Illinois Confirm

 I would like to use the following for the Flexible Pricing.   The last sentence  regarding the keep whole verbiage I think you will want to delete this as it does not allow for Force Majeure.

 FLEXIBLE PRICING: During the Period of Delivery for a Transaction, Customer may request a price other than the original Contract Price, being a Fixed Price or (each below defined) by contacting Company during Pricing Hours requesting any such price for a specified quantity of Gas to be Scheduled during selected Months within the Period of Delivery; provided, such request must be made prior to 12:00 noon C.T. of the last Business Day prior to the last trading Day of the NYMEX Gas futures contract for the selected Month.  A Confirmation may be sent by Company to Customer confirming the Flexible Pricing agreement in accordance with Exhibit "A" "Fixed Price" means a fixed dollar amount agreed to by the Parties.  The price for all Gas for which a Flexible Price has not been agreed by the Parties shall be the original Contract Price applicable to the Transaction.  "Notwithstanding anything to the contrary contained in this Confirmation or the GTC, upon Customer's acceptance of Fixed Price, Customer shall keep whole and hold Company harmless for all cost and expenses incurred by Company with respect to the quantity of Gas that is converted into a Fixed Price, in the event that such quantity of Gas is not Scheduled by Customer for any reasons, including without limitation events of Force Majeure.

For the Section "Daily Pricing for Physical for Physical Call Option"

Daily Pricing means the "Daily Midpoint" price set forth in Gas Daily
 Platts, a division of The McGraw-Hill Companies, or successor publication, in the column "Daily Price Survey" under the listing applicable to the geographic location closest in proximity to the Delivery Point(s) for the relevant gas day.  If there is no single "Daily Midpoint" price published for that particular Gas Day, but there is published a "Common" range of prices under the above column and listing, then the Spot Price shall be the average of such "Common" high and low prices.  In the event that no 'Daily Midpoint" price or "Common" range of prices is published for that particular Gas Day, then the Spot Price shall be the average of the following: the price (determined as stated above) for each of the first Gas Day immediately preceding and following the Gas Day in which the default occurred for which a Spot Price can be determined.

Let  me know what you think.

dp

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


BLOOMBERG

Jeff Richter
deal 580280
Bloomberg does not recognize

Chris Mallory
I am missing the following deal  per Bloomberg:
Enron buys from El Paso 25 mw Q3'01 SP light at $228

deal 580168
Bloomberg shows fee of $.005

Mike Swerzbin
deal 580159
Bloomberg shows fee of $.005

PREBON
All deal are o.k.

Amerex West
All deals are o.k.


Attached is an inactivation of Kinder Morgan Texas Pipeline, L.P., CP ID
93330 and an overlay of Kinder Morgan Texas Pipeline, Inc., CP ID 54292.
Per the March 2001 report, this entity converted to a limited liability
company.    We did not receive any documentation at that time.  Ten days
later, it converted again to a limited partnership.  Per our normal
procedures, a new record was created for the limited partnership.  The "Inc"
record was to be inactivated on 04/02/01.  In the meantime, a legal opinion
was issued to state that this should be treated as a name change and that an
overlay should be done.  I have overlayed the "Inc" record with "LP", and the
newly created LP record, CP ID 93330 will be inactivated.

Cheryl x33103


i will drive if it doesn't rain.  my windshield wipers don't work.


In preparation for our conference call on Monday, attached are two memos
prepared by Sam Behrends regarding possible timing of the merger.  We asked
Sam to prepare these memos to help Paul in his negotiations with TANC and
SMUD.

We'll talk to everyone on Monday.  If you need to reach me this weekend, my
number is (301) 320-5721.

Sarah


---------------------- Forwarded by Jim Schwieger/HOU/ECT on 03/22/2001 03:08
PM ---------------------------

Jim Schwieger
10/05/2000 05:12 PM
To: Brian Redmond/HOU/ECT@ECT
cc:
Subject: Storage

Brian:
Attached is the Storage Term Sheet.

 Jim


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December 17, 2001

Competition Approved for California's Intrastate Natural-Gas Pipelines

By Will McNamara
Director, Electric Industry Analysis

[News item from Associated Press] California state power regulators voted Dec. 11 to deregulate further the transmission of natural gas within Southern California, a decision hailed by the industry and derided by consumer advocates. The California Public Utilities Commission (CPUC) voted 3-2 to approve a proposal that allows Southern California Gas Co., the nation's largest gas utility, and San Diego Gas & Electric Co. (SDG&E) to sell space on their "backbone" transmission pipelines. These pipelines carry natural gas from out of state to a smaller distribution system in California that then transports it to homes, businesses, factories, and power plants.

Analysis: This controversial vote by the CPUC took place last week, but has not received a great amount of industry analysis. This is rather surprising because the vote carries enormous potential impact for the way in which natural-gas capacity is bought and sold along pipelines owned by Southern California Gas Co. and SDG&E in the southern part of the state. Considering the fiasco that opening the state's electric market became over the last year, it is a risky move for California's regulators to open a competitive market for the right to transport gas along these pipelines at this time, even though the issue has been under debate at the commission for years. However, the rationale for the decision is that the new system will allow customers to better control the point from which their natural-gas supply originates, which theoretically should lower costs and preserve space along the pipelines that the customers don't need. Critics of the plan, especially The Utility Reform Network (TURN), say that allowing competition along the natural-gas pipelines in California could allow fewer companies to control most of the pipeline space, which could in fact cause the opposite of the intended effect and drive up energy costs. A case that has been used by both sides of the debate is that of El Paso Corp., which found itself in a lengthy lawsuit this year when it was charged with giving preferential access to its pipeline to one of its affiliates, which allegedly played a role in driving up energy costs in the state.

Before analyzing the potential impact of the CPUC's ruling, let's first establish specifically what the ruling entails and some background of the companies involved. Put into a nutshell, the ruling creates a competitive market for the right to transport and store natural gas along the pipelines owned by Southern California Gas and SDG&E, which are both subsidiaries of San Diego-based Sempra Energy (NYSE: SRE). As noted, Southern California Gas is ranked as the largest natural-gas distribution utility in the country and serves a territory of 23,000-square-miles that ranges from central California to the Mexican border.

Following a standard that is already in place among interstate pipelines, including the ones that transport power into California, both of these companies will now be allowed to sell large industrial customers space on their intrastate "backbone" pipelines, giving customers firm transportation rights on the pipelines. The pipelines are referred to as "backbone" because they are part of the smaller distribution system that transports power to factories and power plants (along with homes and businesses). It is important to note that the CPUC's ruling impacts only large consumers of natural gas in California, which includes electric generating plants. Residential and small business consumers that use natural gas will continue to have regulated gas-transmission costs.

Under the new auction system, power producers and industrial natural-gas customers of the two companies will bid to buy pipeline space, with preference being given to those bidders that intend to reserve space for the longest period of time. According to the CPUC, the ruling creates three "tiers" of accessibility to the capacity on the pipelines. The first tier includes residential and small business customers, who are not included in the new competition and will automatically have about 1,044 million cubic feet per day of capacity on the pipelines reserved for their use. The second tier includes industrial customers who will now be able to participate in the competition, and will be allowed to bid on half of the remaining capacity. The third tier includes all other market participants, including natural-gas marketers, which will be allowed to bid on whatever capacity is left. Both Southern California Gas and SDG&E reportedly intend to phase in auctions by the end of 2002 for their largest customers to transport natural gas. The auctions will be for transmission rights that can be traded to other parties.

The CPUC also established two different levels of payment options for the bidding process. As one option, bidders can pay a fixed price of 7.2 cents per million British thermal units (MMBtu) that would cover all of the capacity on the pipeline that they have reserved, regardless if it is ultimately used or not. As a second option, bidders can pay for only 50 percent of the reserved capacity at the fixed price of 7.2 cents per MMBtu, and 50 percent at a higher price that only applies to the capacity that they ultimately use. In addition, the ruling allows for the trading of capacity space, an important point that critics claim could allow buyers to gain more control over the pipeline than allotted in the ruling.

As noted, the measure passed the CPUC in a 3-2 vote. The ruling will remain in place until 2006, at which time the commission can decide to renew it. The three commissioners that supported the measure were Richard Bilas, Henry Duque and Geoffrey Brown. Loretta Lynch, president of the CPUC, and Carl Wood voted against the measure. Wood said he opposed the measure because it was based on data accumulated before natural-gas prices dramatically increased during the winter of 2000-2001.

Another reason why the three commissioners voted to approve this measure was a belief that deregulating gas transmission in the state would help to keep large customers from leaving intrastate pipelines in favor of using interstate pipelines, which are not regulated by the CPUC. An exodus among industrial users from intrastate pipelines, according to the three commissioners, could leave residential and small business consumers with higher costs associated with maintaining the pipelines. However, regulators were quick to qualify their vote by saying the decision to allow competition for the cost of transporting natural gas for industrial users did not represent total deregulation. Instead, the commissioners said that the ruling simply amounts to "less regulation."

As I mentioned, the case against El Paso Corp. (NYSE: EPG) was used as an example to support both sides of the debate over allowing competition among the natural-gas intrastate pipelines. The case against El Paso Corp. is a very complicated one, but it essentially comes down to one core issue. The case revolves around allegations that during the period of May to November 2000, El Paso improperly shared market-sensitive information with one of its affiliates, which drove up natural-gas prices, pre-empted competition from non-affiliated companies and resulted in extra costs for fuel in the range of $3.7 billion for Californians. El Paso Corp. has consistently maintained that it engaged in no wrongdoing. According to a report issued by the state Assembly, natural-gas prices in California increased from $6.6 billion in 1999 to $12.3 billion in 2000 to $7.9 billion for only the first three months of 2001. In October, El Paso Corp. was absolved of the charges of manipulating natural-gas prices in California, but an investigation continues regarding any improper sharing of information between affiliates. The relevance of this case is that those opposed to opening up California's intrastate pipelines to capacity believe the new rules could allow for one company to step in and gain control over a portion of the pipeline and thereby be able to drive up price.

Those in favor of the CPUC's new ruling say the comparisons to the El Paso case are unfounded. For starters, the ruling restricts companies from owning more than 30 percent of the pipeline, which theoretically should prevent a company from gaining an ability to control prices. Critics, however, say that the ruling allows for the trading of capacity space, which could potentially provide a loophole that would give a company control over more than 30 percent of pipeline capacity.

The issue of potential price spikes associated with natural gas is one of the remaining questions that only time will be able to answer. Critics of the ruling such as TURN say allowing competition among the natural-gas pipelines creates the same market dynamics as deregulation of the state's electricity market, which some say opened the door to gaming and market manipulation. In other words, TURN argues, the CPUC ruling opens the door for one company to enter the market and buy up a significant amount of capacity along the intrastate gas pipelines, thereby giving that company the opportunity to control prices. As the new ruling won't take effect until another year when Southern California Gas and SDG&E begin receiving bids for capacity space on their pipelines, we won't know any time soon if prices will be impacted. However, critics claim that a sharp downturn in temperatures in California during the winter season that drives up demand could be the first indicator of whether or not the new ruling will lead to a sharp increase in energy prices.

Moreover, the opening of competition along capacity space on California's intrastate natural-gas pipelines is a surprising departure from the state's discontinuation of deregulation within the power sector. It is too early to tell how the new ruling will impact energy prices, and of course this question is the source of great debate (with one side saying that prices will drop and the other side saying that prices will increase). Perhaps the larger issue, however, is the control over the state's pipelines that could be impacted by this ruling. Even 30-percent capacity control, the amount that the CPUC is opening to competition, would be considered excessive by some other states. For instance, in Texas 20-percent control is considered a maximum standard. Again, whether or not the allowance of competition will spark the abuse of capacity control on the intrastate pipelines is something that remains to be seen. We do know that electric competition in California became a disastrous experiment, but even with this history the state is moving forward with bringing competition to its intrastate natural-gas pipelines.

An archive list of previous IssueAlert articles is available at
www.scientech.com <http://secure.scientech.com/issuealert/>

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Joe and Mike

Thank you both for your comments on the prior draft, I have attached the
revised reports for your review.
We would greatly appreciated receiving any comments by the end of the day on
Friday, March 3.

Regards
Kate Agnew


We have moved another change into production where any bid equal to over the
max rate will be valued using a 0% throughput commitment.  This way, any one
part and two part bid over max rate will be evaluated in the same manner.
This also means that when a user checks the max rate button, a 0% throughput
commitment will be assumed.


When: Tuesday, May 15, 2001 3:00 PM-4:00 PM (GMT-06:00) Central Time (US &
Canada).
Where: TBD

*~*~*~*~*~*~*~*~*~*


Here's the final draft that was sent out today.  Still waiting for credit
terms to be worked out, as far as I know at the moment.  Thanks very much for
your help today.  Made me feel better about this going out there for possible
execution.  And even if this deal doesn't go, we all learned a lot about
doing unit entitlement purchases -- which will come in handy if the National
Grid deal goes through.  That RFP response was sent in w/ indicative
pricing/terms, rather than a binding bid.
Got your voicemail about JEA.  I brought all that stuff w/ me and planned to
read it on the plane.  I'm sorry that I misunderstood  -- didn't realize that
you needed the followup today.
Regards,
Janice

EB3861
Assistant General Counsel, Enron North America Corp.
713-853-1794 (Fax:  713-646-4842)
----- Forwarded by Janice R Moore/HOU/ECT on 10/17/2000 08:02 PM -----

	Becky Spencer
	10/17/2000 05:11 PM

		 To: brodgers@greatbaypower.com
		 cc: Joe Gordon/Corp/Enron@Enron, Janice R Moore/HOU/ECT@ECT, George
Wood/Corp/Enron@Enron, Edward Sacks/Corp/Enron@Enron
		 Subject: Great Bay Confirmation

Please see the attached document.


Susan,
I am back in the office today, and would be happy to discuss any progress that has been made with Enron's review of the ISDA documentation. Please give me a call when you get a chance (441-294-3007). Thanks!
Laurie


Attached is a draft press release regarding the partnership between Enron and Applied Terravision.  The plan is to release this on Monday, March 19 or at the latest early on Tuesday, March 20.  If you have any comments, please forward them to me at your earliest convenience.  Thanks.

Eric


Comrades:

As a parting gift for Diane we thought (actually
Lesley Keffer thought, and I always obey her more
sensible commands) that we should take a group photo
at Thursday night's party, enlarge to a decent size,
frame and present to Diane for hanging on her new
office wall so she will be forced to remember us
forever more.

Therefore, I have engaged a photographer to be show up
in the Wells Fargo Room on Thursday at about 8.  I
expect there will be quite a few of us, so we will
arrange some chairs and stuff for tier seating, etc.
and hope for the best.  Bring your cheesiest grins.

See you there.

JT

p.s.  Diane, if you read this, you just ruined your
surprise.  In order not to make the situation worse,
don't let on that you know anything about this so we
can all continue in our ignorant bliss.

__________________________________________________
Do You Yahoo!?
Get email alerts & NEW webcam video instant messaging with Yahoo! Messenger. http://im.yahoo.com


I ordered 3 different things...I thought your "wine inventory listings are
updated DAILY" ???

sales@popswine.com (Pops wine Sales) on 03/05/2001 02:28:38 PM
To: <jarnold@enron.com>
cc:
Subject: RE: Pops Order Number 20267 John Arnold

Thank You for your on-line order!

The item(s) you ordered are currently out-of-stock. You will be
automatically notified when they become available.

Thanks!!

Pop's Wines & Spirits
256 Long Beach Road
Island Park, New York 11558

516.431.0025
516.432.2648, fax

sales@popswine.com
www.popswine.com


I need to know what group Nekesha is in.

 -----Original Message-----
From: 	Scully, Lisa
Sent:	Wednesday, November 07, 2001 5:32 PM
To:	Jones, Tana
Subject:	Financial Trading Agreements Database Access

Tana,

I got your name from Michael Neves who developed the Financial Trading Agreements database.  He said that you can approve access to this database.  If you are not the correct person, do you know who is?

Nekesha Clark has requested access.  Can you tell me what type of access she should have?  Listed below are the various types of access to this database:

Group					Access		Delete Rights		Role
ECT Credit - Core			Editor		No			CreditGroup
ECT Credit - Global			Editor		No			CreditGroup
ECT Legal - Swap - Mgrs		Editor		Yes			LegalGroup
ECT Legal - Swap - Readers		Reader		No			LegalGroup
ECT Legal - Swap - Users		Editor		No			LegalGroup
Legal-Interest Rate and Currency Desk	Reader		No			OtherAgreements

Thank You for Your Help,
Lisa Scully
Enron Messaging Security

---------------------- Forwarded by Enron Messaging Security/Corp/Enron on 11/07/2001 05:14 PM ---------------------------
From:	Michael Neves/ENRON@enronXgate on 11/07/2001 03:34 PM
To:	Enron Messaging Security/Corp/Enron@ENRON
cc:

Subject:	RE: Do you know?

Tana Jones - EWS Legal

 -----Original Message-----
From: 	Enron Messaging Security,
Sent:	Wednesday, November 07, 2001 2:42 PM
To:	Neves, Michael
Subject:	Do you know?

Hello Michael....

Do you know who can approve access to the Financial Trading Agreements database on ECTHOU_LN1/ECT\Legal\new_swp.nsf?   Nekesha Clark has requested access.

Many Thanks!
Lisa


Ben,
Following up with our conversation earlier in the week regarding changes to
the LM6000 model, I had tried speaking with Clement before he left for Asia
but nothing materialized.  George and myself would like to have the model in
suitable form with these chages (I have attached the file) in working shape
quickly, ideally no later than the end of next week.  I am more than willing
to help you with this in any way - especially explaining our proposed changes.

Why don't you review the changes and I'll drop by tomorrow to discuss a
timeline.

Elizabeth
x35277


Over the last several years, we've received numerous questions and candid
comments from many of you on a wide range of topics during our eSpeak
sessions and through the Office of the Chairman online mailbox and
voicemail.  While eSpeak is an open, informal chat between employees and
management, the Office of the Chairman online mailbox and voicemail box are
designed as confidential upward feedback tools for employees who choose
anonymity.  We are pleased that many of you have openly expressed your
thoughts and your identity, which made it possible for us to quickly respond
to your questions and concerns.  This is the kind of work environment we all
must strive for at Enron, and we encourage you to continue sending us
comments about the things that are important to you.

Many times, however, we wanted to respond to those of you who contacted us
anonymously with your good ideas, observations and questions.  We now have a
way to do this while maintaining your confidentiality.  In the future, when
we receive an anonymous question or comment from an employee, both the
question and our response will be posted on eMeet.  This will allow us to
answer all the questions that we receive, and it will give other employees an
opportunity to provide their insight, if they choose to do so, since eMeet is
an open discussion board.

Remember:  You can send your questions and comments to us in two ways:
 - email to Office of the Chairman, or
 - Office of the Chairman voicemail box at 713-853-7294, which is a
confidential call

Promoting open and honest communication is consistent with our Vision and
Values and absolutely vital to our continued success as a company.  So don't
be hesitant or afraid to speak your mind.  We want to hear from you.


I set up the following new TU deals for May 1

759849	St 30 to Z6 New York
759876	St 45 to Z6 New York
759877	St 65 to Z6 New York
760097 Ragley to Z6 New York

759992 St 45 to St 65


I would recommend selling Intel today. It is up with the market this morning
even after a bad announcement.  The fundamentals for anything PC related
going forward are the worse they have been in 5 years or more.


Good Morning,

Here are this week's stats:

AGA Last Year       +117
5 yr AVG                       +93
Lifetime High            +117 2001
Lifetime Low                        +78         2000
Gas in STGE EIA                 1796
5yr AVG             1306
+/- to 2001              +614
+/- to 5yr AVG           +490
Please have your estimates in by 2:00 (1:00 CST) Wednesday.  Thank you.

(Embedded image moved to file: pic18975.pcx)

This message and any attachments (the "message") is
intended solely for the addressees and is confidential.
If you receive this message in error, please delete it and
immediately notify the sender. Any use not in accord with
its purpose, any dissemination or disclosure, either whole
or partial, is prohibited except formal approval. The internet
can not guarantee the integrity of this message.
BNP PARIBAS (and its subsidiaries) shall (will) not
therefore be liable for the message if modified.

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

Ce message et toutes les pieces jointes (ci-apres le
"message") sont etablis a l'intention exclusive de ses
destinataires et sont confidentiels. Si vous recevez ce
message par erreur, merci de le detruire et d'en avertir
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ou toute publication, totale ou partielle, est interdite, sauf
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d'assurer l'integrite de ce message, BNP PARIBAS (et ses
filiales) decline(nt) toute responsabilite au titre de ce
message, dans l'hypothese ou il aurait ete modifie.


For those of you participating via conference call, please see details:  Call
in phone #: 800-711-3000; Passcode #: 86441


Jeff,

This is my first draft of a settlement summary document.  Let me know what
you think.

 <<April Briefing for CPUC.doc>>

Michael
--
Michael S. Alexander
Southern California Edison
Energy Supply and Marketing
626-302-2029

 - April Briefing for CPUC.doc


You have received this email because the requester specified you as their Manager. Please click http://itcapps.corp.enron.com/srrs/auth/emailLink.asp?ID=000000000081799&Page=Approval to review and act upon this request.

Request ID          : 000000000081799
Request Create Date : 1/29/02 9:18:19 AM
Requested For       : scott.neal@enron.com
Resource Name       : Market Data Kobra Crude
Resource Type       : Applications


As luck would have, I have to leave town this week. I need to cancel this
class.

Thanks,

Kay

Ernie
07/12/2000 09:23 AM
Sent by: Stacey Dempsey
To: Kay Mann/Corp/Enron@CORP
cc:

Subject: Development Center Class Reminder  - Fundamentals of Corporate
Finance

You are scheduled to attend:

Fundamentals of Corporate Finance
Class Days and Times:
  7/20/2000  08:00:00 AM - 05:00:00 PM
  7/21/2000  08:00:00 AM - 12:00:00 PM
Room # & Location: EB552,  Houston
Participant Fee: $ 700
Note: Please bring a laptop and a financial calculator with you to class.

If you are unable to attend this class, the registration must be canceled by
5:00 p.m. on  July 17, 2000 to prevent a charge of $ 700 to your RC number.

 We look forward to seeing you at 08:00:00 AM on July 20 - 21, 2000.  Please
call the Development Center Team at 713-853-0357 if you have any questions.

 Thank you.


Please refer to the attached credit worksheet for terms to be included within
the confirmation of trade q27454.  Let me know if I can be of any further
assistance.

thanks
brant


<<Draft dec statement ECS.doc>>

Here is a first cut at a revised draft based on the discussion this morning.
Clearly more work is needed on the reliability requirement angle.  We still
need the narrative information about the chronology of events/discussions
between ECS and WFEC.  We also need to follow Susan's suggestion with regard
to bullet points in the conclusion.  Finally, we will need the signature
block information from Bill Bryant.  Despite these deficiencies in the
attached draft, I thought it would be helpful to circulate this revised
draft.

Please copy both Tim Anthony and Russell Badders on your reply.

 - Draft dec statement ECS.doc


Several messages were kicked back, so here goes...
---------------------- Forwarded by Mona L Petrochko/SFO/EES on 09/26/2000
09:41 AM ---------------------------

Mona L Petrochko
09/25/2000 05:59 PM
To: Michael McDonald@ECT, Laird Dyer/SF/ECT@ECT, mday@gmssr.com, David
Parquet@ECT, Samuel Wehn@ECT, jbennett@gmssr.com
cc: West GA, James D Steffes/NA/Enron@Enron
Subject: ERC Auctions

The attached memo from Goodin McBride summarizes the regulatory treatment of
PG&E's emission credits to date.

It is an interesting animal.  Basically, PG&E has kept most of the credits,
therefore has not divested the credits with the generating assets.  However,
these assets have been acquired for nothing, therefore they have no
"regulatory value".  In other words, their costs are not part of PG&E's rate
base and are not being recovered from ratepayers.

PG&E has issued RFPs for sales (auction) of the credits in the past.  The
credits have been sold to Duke (Moss Landing) and to Southern and Calpine for
Morro Bay and Oakland facilities.  They were price-only bids.  The after-tax
proceeds went to benefit ratepayers through reducing the over-all CTC.

All of these sales necessitated an 851 application (transfer of utility
asset), but it appears these transfers went without a hitch.  ORA supported
the mechanism.  There was no CEQA requirement on the basis that the credits
were associated with an existing facility or that a new or modified facility
would acquire appropriate air emissions permits.

If PG&E were to keep the ERCs, it would need to file a 377 (utility
retention) and show that it is in the public interest for the utility to
retain.  Considering that the utility appears to have no real use for the
credits, it would be a difficult showing.  The credits do not appear to be
part of PG&E's settlement proposal to transfer the hydro assets to its
affiliate.

So, PG&E has sold the credits in the past.  They have been sold to new owners
of PG&E facilities.  The big questions is how can we encourage PG&E to
initiate another sale.  Their shareholders get no real benefit, as it appears
likely that PG&E can recover all of their CTCs, pending valuation of their
hydro facilities.

I would suggest that we approach PG&E on their willingness to auction a
portion of these credits on a comparable basis to its other auctions.  (I've
asked Mike to ascertain the amount of time involved with the previous
auctions.)

If this cooperative approach does not succeed, we can discuss the possibility
of applying some regulatory pressure to the valuation of the remaining
credits.  We may also want to look at other agencies that may be anxious for
the release of "hoarded" credits (like CEC), especially if such hoarding
prevents new generation developments from coming on line.

Mona
---------------------- Forwarded by Mona L Petrochko/SFO/EES on 09/25/2000
05:10 PM ---------------------------

AMO <aozols@GMSSR.com> on 09/25/2000 04:57:52 PM
To: "'mpetroch@enron.com'" <mpetroch@enron.com>
cc:
Subject: ERC Auctions

 - X16872.DOC

---------------------- Forwarded by Mona L Petrochko/SFO/EES on 09/26/2000
09:41 AM ---------------------------

Mona L Petrochko
09/25/2000 06:38 PM
To: David Kates/SF/ECT@ECT, David Parquet@ECT, mday@gmssr.com,
jbennett@gmssr.com
cc: Sandra McCubbin/SFO/EES@EES, jdasovic@.enron.com, Susan J
Mara/SFO/EES@EES
Subject: Humboldt-Attorney/Client Privilege

After a conversation today with Dave Kates, he asked me to outline some
process and regulatory avenues as it relates to Humboldt.

1.  It appears as though early conversations have the same problems that we
encountered with other projects.  There appears to be no internal
coordination on the project.  The estimates for the interconnection study are
outrageous.  There is no evidence of a commitment from PG&E to work with us
cooperatively.

Sandi and David Parquet had met several weeks ago with Dede Hapner about
various projects and the desire to work more cooperatively on interconnection
issues.  David indicated at that meeting that if PG&E is not willing to
cooperate, we will not abandon some of these projects.

After the last meeting, David Parquet contacted Jim Randolph, Sr. V.P. about
the possibility of an MOU between PG&E and Enron.  This would go toward the
intent to work with Enron on interconnection isues.  It appears as though
there has been a committee formed within PG&E, supposedly to provide internal
coordination.  However, it is still not clear whether that committee has been
given the internal direction to cooperate with us.

Obtaining agreement high within PG&E's senior management is key to the
success of this project.  I like the idea of an MOU.  We should ascertain
soon PG&E's willingness to pursue such an agreement.  Assuming we receive
some positive indication from high with PG&E's management, I believe we need
to drive the process and establish time lines by which we need information
with status check points along the way.  This will include points by which we
can rightfully stop negotiations if PG&E fails to deliver its obligations in
a meaningful way.  (Mike/Jeanne, any legal impediments to PG&E entering into
an MOU with us for purposes of negotiating an interconnection?)

2.  Are there regulatory pressures we can leverage?  We have not intervened
in the Humboldt application filed by PG&E.  I will find out what, if any,
protests have been filed and by whom.  My guess is that this will be a low
level proceeding in terms of interested parties, so leverage opportunities
are probably low.

PG&E has determined the value of its existing gas-fired facilities at around
$6 million.  Our project is reliant upon PG&E shutting down those
facilities.  If PG&E is unwilling to do so, that is essentially the end of
the story.  If however PG&E would accept a payment from Enron equal to its
remaining book value in exchange for shutting down its facilities, then our
project has a chance, pending the interconnection study.  As there is no
transfer of utility facility, I wouldn't think there would be a necessity for
additional filings (i.e. Section 851 or 377).  (Mike/Jeanne?)

PG&E and ratepayers should be neutral.  In fact, ratepayers may be better off
in the long-run because the new facilities would be much more efficient than
the existing facilities.  I would assume the new facilities' emissions would
be lower.  Currently, PG&E's facilities are probably worth more in today's
market, than their filing indicates.  However, raising the price would not
benefit PG&E's shareholders, as they are likely to recover all of their CTCs,
subject to hydro valuation.  Revenues in excess of net book would go to
ratepayers.

SUMMARY:

We need PG&E's cooperation.  I think regulatory leverage is probably low.
Will follow-up with any regulatory impediments that I receive from
Mike/Jeanne relative to PG&E shutting down its existing facilities.