Christi L Nicolay@ECT
	11/10/2000 03:22 PM

		 To: Ginger Dernehl/NA/Enron@Enron
		 cc:
		 Subject: FERC Staff Investigations on Midwest and Southeast Bulk Power
Systems

Please forward this to Rick's group.  Thanks.

Please note that these FERC staff reports contain some potentially helpful
information that can be used at the state PUC level, including information on
the increase in generation in the Midwest that market participants attribute
to lack of price caps following the summer 1998 price spikes; better
preparation for summer 2000 through the use of forward contracts and
transmission problems that may have resulted in keeping cheaper power from
particular markets.

On 11/1/00, FERC Staff issued reports on its Investigation of Bulk Power
Markets in the Eastern Interconnection.  These reports were the result of a
Commission order earlier this summer.  Enron's Federal regulatory staff
(Christi, Charles Yeung, and Sarah Novosel) provided a great deal of
information for this investigation and Joe Hartsoe and Donna Fulton discussed
many of the problems with the grid with the new head of Staff, Scott Miller
(who recently joined FERC from PG&E Gen).    While the Commission is under no
obligation to take any of Staff's recommendations, the Commission typically
looks to Staff for guidance on transmission and market issues.  Importantly,
Staff concludes that the Commission should consider these options for the
Southeast and Midwest -- all of which Enron has been asking FERC to implement
for several years:

Reduce the advantages of network service over point to point service by
requiring that native load be served under the same tariff as other
transmission services to eliminate the current incentives that VIUs have to
favor their native load through the calculation of ATC and handling of
interconnection requests.

While the Staff Hotline is used productively, the Commission can direct Staff
to conduct formal investigations into entities that have a pattern of
complaints.

The Commission could require TPs to submit tariff provisions containing a pro
forma interconnection process specific to interconnection, rather than simply
relying on the Tennessee Power order that utilizes the OATT timelines and
procedures.

Require TPs to retain real-time transmission data on market functions
pertaining to daily load, internal generation to meet that load, and imports
and exports.

RTOs should submit the basis and methods for calculating ATC and TTC, as well
as standardized criteria for curtailment.  In addition, since even such
standardized criteria might not "get to the root of the problem" -- that
control area still control generation -- the Commission could require that
each RTO set a date certain by which it will create one control area.
Regardless of the implementation of these two options, the Commission could
standardize ATC and TTC methodology.

Staff finds that while electricity is a commodity with market characteristics
similar to many other commodities, it is still viewed as "different," with a
reaction of price caps.  Staff encourages that basic decisions about the
regulatory model be made in order to complete the transition from a
traditional cost-of-service model to a model that uses markets to price the
commodity and services.

DETAILS  (Also, the reports contain good summaries of the generation,
transmission, state retail, federal reg. and other issues for the region):

Midwest:  The Midwest is dominated by vertically integrated Transmission
Providers ("TPs") that control transmission, generation and load.  "As such,
they have weak economic incentives to provide access to transmission service
to third-parties and strong incentives to favor their own services."  Staff
received numerous complaints; however, due to the lack of information
available from TPs, Staff cannot conclude whether these are isolated
incidents or wide-spread.  At the very least, the complaints indicate a lack
of confidence in the bulk power market and the ability of market participants
to rely on transmission access, thus harming the liquidity of the market.

TLRs are the most important transmission issue in the Midwest, with an
"enormous" increase in 2000.  The region showed a decline in peak load from
1999 to 2000 and a growth in new generation since the 1998 price spikes.
Even though there was an increase in generation and mild weather with
virtually no price spikes, TLRs climbed to record numbers.  The TLRs were
highly concentrated:  only 5 flowgates account for 41% of ECAR TLRs and
another 5 flowgates in MAIN account for 42% in that region.  Notably, even
though the NERC procedures for Level 3 TLRs mandate transaction curtailment,
78 of the 191 TLRs in the Midwest do not show any curtailment amount.  The
total amount of relief that these curtailments are intended to produce are
not posted.  Staff notes that TLR rules are established by NERC, whose
procedures are voluntary and not enforced by penalties.  While the Commission
has required certain NERC standards and procedures to be placed in Open
Access Transmission Tariffs ("OATT") where the Commission has the power to
enforce provisions under the Federal Power Act, in practice the Commission
has generally deferred to NERC on transmission reliability questions,
including the propriety of TLRs.

TLRs inhibit optimal functioning of the transmission system and market
because load is not served by the least cost supplier.  TLR procedure is an
inefficient instrument in mitigating constraints -- curtailment by fiat.  In
addition, the NERC IDC can result in inappropriate curtailments or increased
loading on the affected flowgate.  The impact could be mitigated by one
control area per RTO.

Staff notes that the Midwest state commissions did not petition FERC for
price caps following the 1998 price spikes.  Some market participants believe
that the absence of price spikes is the single reason that NUG construction
increased in the Midwest.

Market participants must keep track of, and follow, a plethora of information
in order to make energy deals, submit reservations and provide schedules for
service.  Staff received many complaints about barriers to transmission
access, including TLR curtailments and a lack of standardized information and
protocols, particularly for ATC and interconnection requests, and
discriminatory conduct.  Unbelievably, key data was unavailable to Staff,
such coincident peak load data, system-wide snap shots for days when TLRs
were called, and import/export data.  This lack of data creates a market
inefficiency, because neither market participants nor regulators can fully
analyze market conditions in real time.  As such, the market is risk adverse,
eschewing long-term deals for short-term transactions.  Staff also noted that
because the Security Coordinators often work for the IOU, there is a mixed
incentive to enforce reliability on the grid and maximize profit for the
IOU.  (Staff cites Richard Tabors' paper, "Transmission Markets, Stretching
the Rules for Fun and Profit.")

Staff cites the lack of information on OASIS or on the NERC web site,
particularly about real time TLRs and curtailments.  Examples were provided
to Staff of transmission refusals when there were no TLRs posted and improper
implementation of TLRs causing substantial financial loss.

The currently proposed Midwest RTOs may mitigate some problems; however, all
three retain existing control areas with the favortism for generation and
native load.  These incentives will continue to remain until the RTO
exercises complete autonomy over transmission control and security
coordinator functions.  Staff notes that the Midwest is a balkanized region
of 61 control areas with no uniform method for calculating ATC and CBM.  The
result is that ATCs can be different on 2 different sides of an interface.
Staff notes examples in inaccurate ATCs and states that Staff's own ATC audit
this summer was consistent with market participant complaints.  Staff is
weighing follow-up options.  The result of these problems is a lack of
liquidity.

Staff next noted the problems with unfiled "business practices," especially
on the next hour market.  Staff's audit of OASIS sites revealed several areas
of non-compliance.

Information transparency is necessary for a market to function efficiently,
with equal and timely access to data, including ATC, CBM, TRM, and load flow
input data.  TPs have incentives to resist efforts to make this information
transparent because of native load.  This incentive will still exist under
RTOs if utilities are allowed to calculate their own ATC.  ***  "As a
consequence, the Commission may wish to eliminate the native load exemption
and have all transactions under the same tariff."  ***  The Commission could
benefit by having access to existing transmission data and should require the
TPs to retain data, including current real-time network status.

Interconnection Issues:  IPPs need to be compensated for VAR support.  Also,
Staff cites a number of Hotline complaints about TPs seeking large deposits
or failing to complete System Impact Studies timely.  One solution is to have
the RTO handle this function to eliminate the disincentive the utilities have
against IPPs.  The current practice of requiring IPPs to deal with a wide
variety of procedures inhibits the free flow of transactions within the
region.

Network service has inherent advantages over point-to-point, citing the
Entergy source and sink order.  The Commission has relied on "passively"
receiving informal and formal complaints to determine if discriminatory
behavior has occurred rather than actively canvassing market participants.
While Staff cannot conclude that discriminatory practices are widespread,
there is evidence of discriminatory instances.

Southeast:  The traditional vertically integrated utility ("VIU") model has
largely persisted in the SE.  This continued control has vastly reduced the
economic incentives to facilitate IPP activities.  In many cases, the VIUs
have dampened IPP involvement without violating any Commission regulation due
to the inherent flexibility of the current rules.

Staff cites examples of delays in performing system impact studies,
transmission hoarding in the name of serving native load growth and
manipulation of ATC.  TPs have shown little inclination to improve the
transmission system and use many TLRs.

There is also a lack of market information that has stymied the development
of markets in the SE.  ATCs change constantly that leads to uncertainty and
there is no clearinghouse for electric power prices.

TVA, despite having taken steps to participate in reformed markets, has acted
as a bulwark against the development of competitive energy markets in the
SE.  This is significant because of TVA's size and location.  IPPs have
reported TVA's discouragement of siting in TVA through excessive time to
perform studies, excessive fees, and rejection of requests to perform
interconnection studies.

In addition, Staff cites the Florida Sup. Ct. decision against merchant
plants as significantly impeding the competitive market in Florida.

Staff discusses the significant flow of power from the Midwest to the SE this
summer.  Much of this resulted from the import of cheaper coal power, than
the use of gas fired peakers due to higher gas prices.  Peak prices were
radically lower this summer because utilities appear to have been better
prepared for peak events through the use of forward contracts, increased
generation capacity on line and reduced number of forced outages.

SE utilities reported that they have not used market-based rates to
extensively increase sales.  (Less used than in the midwest.)

The SE region lacks information, which has retarded the Staff's efforts to
discern the truth about the numerous complaints about transmission in the SE
(including ATC and TLRs).  Market participants seem to have less confidence
in the SE market than in any other market region.  This appears to be
justified based on Staff's investigations.  This lack of confidence
discourages investment and participation in the markets.  Staff concludes
that the Commission may need to be more prescriptive in terms of how
transmission is allocated in the SE RTOs, since there are market concerns
that the incumbents will continue to dominate operations.  The investigation
found numerous problems in bad ATCs and TTCs and poor OASIS postings.  In
addition, several OASIS audit logs actually erased historical data.  Staff
thinks that additional affiliate transaction information should be posted.
Staff could not obtain summer demand data and the Commission's lack of
jurisdiction over TVA made it difficult to obtain transmission access
information.

The Staff investigation revealed unclear interconnection procedures and lack
of adherence to schedules and arbitrary cost estimates and deposits.  In
addition, the TPs have reserved a huge amount of network transmission
capacity, much of it reserved shortly after the IPP approached the TP to
interconnect.  Staff cites the recent Skygen order in which Southern denied
Skygen's request for transmission stating that the only option was the
construction of an 80 mile 500 kv line that would take 8 years to complete.
Staff solutions include allowing network requests by IPPs and limiting
self-build capacity in the incumbent's territory.

ATC variations are a big problem in the SE.  SERC coordination of a
standardized ATC is a long process and may not be resolved soon without
direction from the Commission.  An improved method and improved communication
are needed.

The SE experienced a 354% increase in TLRs this summer.  This increase raises
the issue of whether curtailment has become an impediment to the competitive
operation of the market in the SE.  Staff cites information provided by
Charles Y. that an Ameren TLR was not implemented according to NERC
criteria.  Staff also wonders if transmission is being oversold since TPs do
not generally refund transmission revenues when TLRs are implemented.  RTOs
must have a broad geographic area to internalize much of the constraints.  In
addition, RTOs will adopt pricing mechanisms that obviate recourse to TLRs.
However, if control areas are retained, VIUs will retain mixed incentives.

*** As noted in the Midwest report, the manner in which load is calculated
weighs heavily on the value of this information.  This is an issue that the
formation of RTOs may not resolve.  Eliminating native load exceptions -- ie,
treating all load equally -- and placing all transactions under the same
tariff may be an option that provides the right incentives for the provision
of transparent and standardized information.

Finally, Staff describes specific problems with TVA and FP&L, TVA is a
"problem area" for the Eastern Interconnect grid.  TVA is a transmission
bottleneck due to the many TLRs called this summer.  The current federal law
and lack of Commission jurisdiction are impediments to the development of
deep and robust power markets in this area.  TVA simply has no strong
incentive to provide effective and efficient transmission service.  In
addition, the Commission does not have full information on TVA.  Staff lists
a number of complaints against TVA, including unjustifiably increasing the
tag deadline and allowing TVA Marketing, but not others, to sink and park
power.  Staff concludes that recent proposals by TVA to enhance the
development of markets and its system do not appear to have great potential.

A Staff audit of FP&L revealed violations of standards of conduct, including
confidential information on FP&L's transmission system (including interchange
information for other entities) posted on EMS systems that were available to
FPL's merchant function.  Staff's report found that FP&L does not have an
established procedure for review of EMS to ensure that information is not
displayed in error.  It is "up to individual Managers discretion."  ((FRCC
web site report dated 9/8/00)).  Violations such as these undermine
competition.

The reports are attached below.

 - southeast.pdf
 - midwest.pdf


Here's what I sent - and it went to the wrong Mark Palmer.  Stephanie says
correct address is Mark S. Palmer.
----- Forwarded by Kay Young/HOU/ECT on 04/19/2001 09:45 AM -----

	Kay Young
	04/17/2001 02:08 PM

		 To: Tana Jones/HOU/ECT@ECT
		 cc: Travis McCullough/HOU/ECT@ECT, Stephanie Segura/Enron@EnronXGate, Mark
Palmer/Corp/Enron@ENRON
		 Subject: Offline Agreements

Tana et al:  This list indicates the agreements that I have as relating to
the Offline Project.

 I thought we had come to an agreement with Sun Microsystems, Inc.
(separately from iPlanet)  Let me know if anyone has an executed version.

I'm not sure AfricaOne and Ejasent are Offline agreements.  Stephanie and
Mark , let me know.

Kay C. Young
Legal Specialist
Enron North America Corp.
713-853-6794 Phone
713-646-3393 Fax
kay.young@enron.com


Mark and Taffy:
I went ahead and registered for this and another class (ENA Orientation) to
save a spot for Samantha.  We have until June 8th to cancel.
Carol
----- Forwarded by Carol St Clair/HOU/ECT on 05/16/2000 12:10 PM -----

	Ernie
	Sent by: Carol St Clair
	05/16/2000 12:09 PM

		 To: Carol St Clair/HOU/ECT@ECT
		 cc:
		 Subject: Class Confirmation - Wellhead to Burner Tip

You are enrolled in the following class:

Wellhead to Burner Tip

Class Days and Times:
  06/13/2000  08:00:00 AM - 05:00:00 PM
  06/14/2000  08:00:00 AM - 12:00:00 PM
Room # & Location: EB552,  Houston
Last Day to Cancel: 06/08/2000
Participant Fee: $600.00
Note:

Please review any prerequisite material to validate your eligibility in this
class.
Your Company and RC will be charged $600.00

If you have any questions, please call the Development Center Team at
713-853-0357.

Thank you.


Congratulations on your new adventure.

I'll miss having you as a neighbor and a colleague.

Kay

   Enron Americas - Office of the Chairman
From: Enron Americas - Office of the Chairman on 04/18/2001 11:00 PM
Sent by: Enron Announcements
To: ENA Employees
cc:
Subject: Asset Marketing

We are pleased to announce the creation of a new group - Asset Marketing -
within Enron Americas. The Asset Marketing group will have responsibility for
the asset divestment function within Enron Americas and work with Generation
Investments on selected portfolio acquisitions as well as managing power
origination funding requirements with Treasury.

Don Miller will head the Asset Marketing group and will report directly to
the Office of the Chair, Enron Americas. Joining Don's group will be Stuart
Zisman.  Stuart was formerly in ENA Legal, having most recently worked on the
sale of ENA's peaker plants with Don.

Please join us in congratulating Don and Stuart in their new roles.


Kevin, the fills are good.  The first 2,100 sold at the bid immediately 7
seconds
after being entered.  The bid then moved to 21.75 but you executed at
21.78 on the remaining shares 14 seconds later.  I will email you
time and sales if you would like.  Your trade is attached.

David

-----Original Message-----
From: Kevin.M.Presto@enron.com [mailto:Kevin.M.Presto@enron.com]
Sent: Monday, February 04, 2002 4:20 PM
To: Shine, David
Subject: RE: Disney Sell

These are not good fills.   When I gave the order DIS was trading at 21.87
(21.86 at 21.88).   I can understand 2-3 cents but not 9 cents.

    -----Original Message-----
   From:   "Shine, David" <david.shine@ubspw.com>@ENRON
   Sent:   Monday, February 04, 2002 2:26 PM
   To:     Kevin Presto (ENE) (E-mail); Kevin Presto (ENE) Home Email
             (E-mail)
   Subject:  Disney Sell

   sold 2,100 DIS @ 21.81
   sold 12,900 DIS @ 21.78

   ave price 21.7842

   EOG price in a second

   David L. Shine
   Vice President-Investments
   UBS PaineWebber
   1111 Bagby, Suite 5100
   Houston, Texas 77002

   (713) 654-0396  Direct
   (800) 553-3119  Toll Free
   (713) 654-4723  Fax

**********************************************************************
This e-mail is the property of Enron Corp. and/or its relevant affiliate and
may contain confidential and privileged material for the sole use of the
intended recipient (s). Any review, use, distribution or disclosure by
others is strictly prohibited. If you are not the intended recipient (or
authorized to receive for the recipient), please contact the sender or reply
to Enron Corp. at enron.messaging.administration@enron.com and delete all
copies of the message. This e-mail (and any attachments hereto) are not
intended to be an offer (or an acceptance) and do not create or evidence a
binding and enforceable contract between Enron Corp. (or any of its
affiliates) and the intended recipient or any other party, and may not be
relied on by anyone as the basis of a contract by estoppel or otherwise.
Thank you.
**********************************************************************

 - Presto Dis EXE.doc


The eThink Team

Do you know what's included in Enron's Code of Ethics?  Do you know what
policies affect corporate conduct?  Ask Sharon Butcher, Assistant General
Counsel of Corporate Legal, all your questions about our corporate policies
today (June 5) on eSpeak at 10 a.m. Houston time.
Can't make the live event?  No worries.  Go to eSpeak (
http://ethink.enron.com/eSpeak/exec/default.asp) now and submit your
question.  Sharon will try to answer it during her event and you can read the
transcript later.

Stop what you're doing!  Go to the Thinkbank (
http://nahou-lnapp01.corp.enron.com/eThink/Thinkbank.nsf/HomePage?OpenPage)
now!  Notice anything different?


Hot off the presses.  I'm looking at it now.
---------------------- Forwarded by Kay Mann/Corp/Enron on 02/16/2001 10:40
AM ---------------------------

"Thompson, Peter J." <pthompson@akllp.com> on 02/16/2001 10:14:39 AM
To: "Kay Mann (E-mail)" <kay.mann@enron.com>
cc: "Pipitone, Paul" <paulpipitone@akllp.com>, "Cobb, Chris"
<chriscobb@akllp.com>

Subject: GE Form Agreement

      Attached please find a draft of the  GE Form Agreement (the fourth
document below), as well as a blackline (third document below) showing
changes made from the Coyote Springs Agreement that was used a the basis
for the Agreement.  In addition, please find the exhibits to the Form
Agreement (first document below), as well as a blackline showing changes
to the Coyote Springs Exhibits (second document below).  If you have any
questions or comments, do not hesitate to contact me.
 <<Exhibits to Enron Turbine Form Agreement 2/16/01.DOC>>  <<CRO-
Exhibit to Enron Turbine Form Guaranty Versions 1 to 3.DOC>>  <<CRO- GE
Agreement Versions 1 to 3.DOC>>  <<GE Agreement.DOC>>
 - 01.DOC
 - CRO- Exhibit to Enron Turbine Form Guaranty Versions 1 to 3.DOC
 - CRO- GE Agreement Versions 1 to 3.DOC
 - GE Agreement.DOC


me too , arnold is out today so a little busy
i love you honey

 -----Original Message-----
From: 	Quigley, Kay
Sent:	Friday, August 17, 2001 9:42 AM
To:	Quigley, Dutch
Subject:	you

Good morning to my sweet honey..
Hope your day goes well...I really hope
that I did not come across as insensitive in our
discussion to try to get the townhouse back in the
event we get a contract on our lot, I just want what is best
given the levels of stress we deal with day in and day out
So- I would like to talk further about it- because if it makes sense
to try and keep going on that new construction then maybe we should- I guess we would
have "down time" while it was being built... just hope the lead on our
lot comes through.
love you
k-kay


Thanks for our new model.  Pls let me know how it is going.

Jim

 -----Original Message-----
From: 	Ibrahim, Amr
Sent:	Thursday, November 01, 2001 11:07 AM
To:	Steffes, James D.
Cc:	Gottfredson, Bryan
Subject:	FW: Gas/Power Prices

Jim:

Please advise if you prefer this format, or you think that percentage change in price is more meaningful.

Brgrds

AI
 -----Original Message-----
From: 	Gottfredson, Bryan
Sent:	Thursday, November 01, 2001 10:19 AM
To:	Ibrahim, Amr
Subject:	Gas/Power Prices

Amr - Here are the charts I have been working on for forward gas/power prices.  Please take a look at them and let me know your suggestions on any way we may improve upon them.  I have played with it a bit in power point, but excel really does work better for a number of reasons.

 << File: Electricity prices.xls >>
 << File: Gas Prices.xls >>
Bryan


Deal 220903, should be 0 now.  Thanks.

Marlene, we terminated Egan Hub contract ENA-0001 effective 8/31/2000.

Brenda H Fletcher
09/11/2000 04:33 PM
To: Chris Germany/HOU/ECT@ECT
cc:
Subject: Egan Hub

What happened to Egan Hub?  I don't  see it on the Sept. spreadsheet  but the
deal is still active in Sitara?

Brenda


How is this issue?

-----Original Message-----
From: Bike, Anne
Sent: Wednesday, September 19, 2001 7:15 PM
To: Grigsby, Mike
Subject: RE: Palo Alto historical loads

I will set up a meeting with settlements to make sure that everything looks good from their end, and to clarify the payments that are made.  I also need to meet with volume management to emphasize how the volumes should be allocated when the actuals arrive from the pipeline statements.  I think that Daniel has the scheduling issues under control.  Jason, Daniel, and I worked to get everything straight for September.  October will not be much different.  The only exception for October is that we do not have any third party gas coming from Enron, only BP.   This actually makes life easier. As soon as I meet with the 2 back offices groups, I will report what I learned.  Based on my meetings with settlements during July's process, I am confident that the deal is booked as well as the system can handle. However, checking and double checking the processes will not hurt.

I will schedule something with you and Kim after my other meetings.  Hopefully next week.

Imbalances for Rockies and Citizens -  I will let you know.

We just finished cleaning up the SOCAL imbalances.  We are clear through June as far as P/L is concerned.  I think Matt Smith was working on July.  We did have some old issues to clean up as the process was passed from Kim O. to Jane, but we have worked through the problems.

Thanks for the note on the group.  I am holding a learning lunch tomorrow.  I want to make sure that our processes are as tight as possible, especially since bid-week is coming up.  We have a good method for checking that all of the failed desk to desk deals are booked correctly, so it should go more smoothly.  It will still be slow.  Also, Randy Bhatia is working with EOL on resolving their logic issues.  We are working towards a solution that will get the deals booked automatically.   I will let you know the time line soon.

I have a question.  What does the "Wood" report mean ?

See you.

Anne

-----Original Message-----
From: Grigsby, Mike
Sent: Tuesday, September 18, 2001 8:51 PM
To: Bike, Anne
Subject: RE: Palo Alto historical loads

Disregard attachments.  How does the system know not to pay Palo for the gas daily deal at malin?  You did this because gas daily will not show up as risk and Kim puts together a manual invoice and will not pay them for the third party supply?  I want this deal to flow in the event Kim decides to travel the world.

Please set up another meeting to discuss this deal.  i will never understand.  is it just me?

Also, i still need to clean up imbalance deals from July with citizens and in the rockies.

By the way, you are doing a great job.  It seems like your group is getting their books run early.

Also, have you ever talked to your group about secrecy and the fact that we never tell anyone in the market about P&L and/or positions.  Just a reminder.  You may want to talk to them about confidentiality.  You never know who has a roommate from college at El Paso or Dynegy.  Right?

-----Original Message-----
From: Bike, Anne
Sent: Tue 9/18/2001 3:56 PM
To: Grigsby, Mike
Cc:
Subject: RE: Palo Alto historical loads

Mike:  Am I supposed to do something with the attachments ?  They did not transfer through on the e-mail you forwarded.  Kim has never given me any additional information regarding the loads.  All we did on this deal recently was book the newest fixed price deal at Malin, and book the BP volumes (3rd party deals) that have been projected at Malin.

On the BP gas: ..... We book a deal in which ENA purchases gas from Palo Alto at Gas Daily flat.  Daniel Schedules the gas on the transport directly from BP.  We enter the purchase in our system to show that you have 1,500 mmbtu/day at Malin that must be put on the transport to City Gate.

We have not rebooked the origination.  I am still using the estimated burns that were given to me at the inception of the deal.

Let me know if this clears everything up.

Thanks

Anne

 -----Original Message-----
From:   Grigsby, Mike
Sent:   Tuesday, September 18, 2001 2:52 PM
To:     Ward, Kim S (Houston); Bike, Anne
Subject:        RE: Palo Alto historical loads

Will show me how this deal and the orig was rebooked?  Also, please show me how the third party deals were booked.

Mike

 -----Original Message-----
From:   Ward, Kim S (Houston)
Sent:   Tuesday, August 28, 2001 6:44 PM
To:     Grigsby, Mike
Subject:        Palo Alto historical loads

 << File: loaddata_June&July_2001.xls >>

 << File: actualloadapril&may.xls >>

 << File: daily usage values2.xls >>


-----Original Message-----
From: 	Gray, Jeff
Sent:	Thursday, September 27, 2001 11:03 AM
To:	Bradley, Rob; Nord, Sue; Shortridge, Pat
Cc:	Allen, Margaret; Maurer, Luiz
Subject:	RE: Draft of Ken Lay Points for Opening Panel

At Rob's request, I added a final bullet and did some minor editing.  Pat and Sue, if at all possible, please send your comments to Rob and me around midday today, so Margaret can complete her briefing book this afternoon.  I've attached both Rob's and my writeups.

Thanks,

Jeff

-----Original Message-----
From: 	Bradley, Rob
Sent:	Wednesday, September 26, 2001 2:32 PM
To:	Nord, Sue; Shortridge, Pat
Cc:	Gray, Jeff
Subject:	Draft of Ken Lay Points for Opening Panel

Attached is my draft that I plan to send up to Ken tomorrow.

I would appreciate comments, particularly (Sue) on the RTO section which is about one page.  You can just use the edit function if you would like.

Thanks,

- Rob

P.S. I will be out until early tomorrow afternoon--contact Jeff Gray in my absence.

 << File: KLL-General Energy Issues.doc >>


---------------------- Forwarded by Brent Hendry/ENRON_DEVELOPMENT on
03/08/99 03:26 PM ---------------------------

Pablo Acevedo
03/08/99 07:22 PM

To:   Federico Cerisoli/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Julian
Poole/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc:   Brent Hendry/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
Subject:  MSA Perez

Received a call from Perez lawyer, Javier Casal, saying that they have been
occupying most of their time in another priority Project and this is why they
are delayed with their answer on the MSA proposal. He said that they have
scheduled an internal meeting for next Monday, Aug. 9 to tackle this MSA with
Enron Corp. and they will contact us asap with their comments.

I told Perez that it was not worth while to delay it further than one more
month. Casal answered that he took resposability for taking care of this
matter.

keep you posted.

Pablo


This could be a problem..........................

Dale

---------------------- Forwarded by Dale Neuner/HOU/ECT on 08/29/2000 02:58
PM ---------------------------

Lynn Aven@ENRON
08/29/2000 03:10 PM
To: Dale Neuner/HOU/ECT@ECT@ENRON_DEVELOPMENT
cc: Jeff Blumenthal/HOU/ECT@ECT@ENRON_DEVELOPMENT
Subject: Re: ARG Power and Gas

When the product is added to the EOL menu, only non-Argentine counterparties
should be allowed to trade that product.

Lynn

Dale Neuner @ ECT   08/29/2000 03:06 PM

To: Lynn Aven/NA/Enron@ENRON@ENRON_DEVELOPMENT, Jeff Blumenthal/HOU/ECT@ECT
cc:

Subject: Re: ARG Power and Gas

The reference in the third product description as a 'US Power Transaction' is
an error - has been corrected.

When you say 'The documentation should indicate that only non-Argentine
counterparties will be allowed to enter into this type of transaction.',
what 'documentation' are you referring to?

Dale

Lynn Aven@ENRON
08/29/2000 02:27 PM
To: Jeff Blumenthal/HOU/ECT@ECT, Scott Mills@ECT, Dale
Neuner@ENRON_DEVELOPMENT
cc: Rudi Zipter/HOU/ECT@ECT, Matthew Adams/Corp/Enron@ENRON, Stephen H
Douglas/HOU/ECT@ECT, Bradley Diebner@ENRON_DEVELOPMENT, Rick Hopkinson
Subject: Re: ARG Power and Gas

Jeff:

I have looked at the products that initially will be traded on EOL in
Argentina.

As stated in the summary, the Argentine Power financial swap transaction will
be enterred into by Enron North America Corp.  The documentation should
indicate that only non-Argentine counterparties will be allowed to enter into
this type of transaction.

The Argentine Power Physical Firm transaction should be changed to show that
the Enron entity enterring into the transaction will be Enron
Comercializadora Energia Argentina.  The counterparties will be Argentine
companies.

The third category of power contract does not make sense to me.  It is
described as a physical trade but is a US transaction.  This does not make
sense in light of the business conducted in Argentina.  Perhaps you can
provide an explanation of this transaction for me.

The Enron party and the counterparties for the Argentine Gas Physical
transaction is correctly stated in the summary.

Regards

Lynn

Jeff Blumenthal@ECT
08/29/2000 10:12 AM
To: Lynn Aven/NA/Enron@Enron
cc:

Subject: ARG Power and Gas

Lynn,

Thanks for any insight you can provide.  Best regards.
---------------------- Forwarded by Jeff Blumenthal/HOU/ECT on 08/29/2000
10:11 AM ---------------------------
Dale Neuner   08/29/2000 08:47 AM

To: Scott Mills/HOU/ECT@ECT, Rudi Zipter/HOU/ECT@ECT, Matthew
Adams/Corp/Enron@ENRON, Jeff Blumenthal/HOU/ECT@ECT, Stephen H
Douglas/HOU/ECT@ECT, Tom Moran/HOU/ECT@ECT, Bradley Diebner/HOU/ECT@ECT
cc: Jennifer deBoisblanc Denny/HOU/ECT@ECT, Tara Sweitzer/HOU/ECT@ECT, Melba
Lozano
Subject: ARG Power and Gas

Scott,

Here are the legal descriptions that we crafted based on information provided
to us by Argentina; they are not in final form b/c they haven't been
signed-off on by Legal.

Things are generally sketchy when they come in from ARG, and the lawyer that
I am working with here in Houston is concerned about he website content.
Additionally, you are right that we should probably expect the number of
Products to build, but at this point, the Product Types are:

ARG Gas Phy Fwd (trading book system set to SITARA); for delivery at
 Aldea Brasilera
 Bahia Blanca
 Buenos Aires
 BuenosAires Sur
 Centro-Cordoba
 CentroCatamarca
 Chubut
 Cuyana-Mendoza
 Cuyana-San Luis
 Cuyana-San Juan
 GBA (TGN)
 GBA (TGS)
 Litoral-ProStFe
 Litoral-Prov-BA
 Neuquen (TGN)
 Neuguen (TGS)
 Noroeste
 Norte-Salta
 Norte-Tucuman
 Santa Cruz
 Tierra delFuego

It is my understanding that these are more delivery zones than they are
delivery points, and each zone has a few meters that gas can be delivered to
with no affect on pricing. We are suggesting to ARG that we use something
like the WAHA language, where Buyer has the right to desinate the meter at
scheduling. I'll keep you up to speed on this as it develops.

ARG Power Financial Swap (trading book system set to SPREADSHEET)
 traded on the Index EZE Flat

ARG Power Phy Index
 traded on the Index Cam EZE Flat

ARG Power Phy Fwd
 for delivery at EZE Flat

This is what we have to date. Please let me know if this is sufficient
information to get you started, or if you need more, I'm glad to help. If you
think access to TEST is the best route, let me or Jenn know and we'll try to
get the ball rolling.

RAC - can you provide Sigma Factors, please.

CREDIT and TAX - for your review and consideration.

Dale
3-9746


Dear Amazon.com Customer,

Come experience the holidays at Amazon.com. We've thought of
everything to make your gift giving easier--plus, for a limited
time, we're offering free shipping on orders over $99.

http://www.amazon.com

Whether you're shopping for books and CDs, electronics and DVDs, or
housewares and toys, you'll find a huge selection, great deals, and
convenient gift services, too:

- Wrap & Ship--Let us do the work (you can take the credit).
- Wish List--Make shopping easier for your loved ones.
- Gift Certificates--Easy, fast, and always appreciated.

We hope you'll stop by today and start your holiday shopping now to
take advantage of free shipping. Discover how easy it can be to
find, buy, give... and relax.

http://www.amazon.com

Sincerely,

Amazon.com Holiday Team

We hope you enjoyed receiving this message. However, if you'd rather
not receive future e-mails of this sort from Amazon.com, please
visit the Help page named Updating Subscriptions and Communication
Preferences through the link below, then click the Customer
Communication Preferences link.

http://www.amazon.com/unsubscribe

Please note that this message was sent to the following e-mail
address:

mike.grigsby@enron.com


Jeff,

My sincere congratulations as regards your promotion.  Enron could not have
asked for two finer leaders than both you and Ken.  I am delighted to be a
part of the Enron team and look forward to reaching new heights of
achievement in 2001!

Dick
---------------------- Forwarded by Richard Leibert/HOU/EES on 12/13/2000
06:12 AM ---------------------------

Ken Lay@ENRON
12/13/2000 06:01 AM

Sent by: Enron Announcements@ENRON
To: All Enron Worldwide
cc:
Subject: Succession Plan

It is my great pleasure to announce that the Board has accepted my
recommendation to appoint Jeff Skilling as chief executive officer, effective
at the time of their next board meeting on February 12, 2001.  Jeff will also
retain his duties as president and chief operating officer.  I will continue
as chairman of the Board and will remain at Enron, working with Jeff on the
strategic direction of the company and our day-to-day global operations.

Jeff will assume the role at a time when the company is hitting on all
cylinders and is positioned for phenomenal growth.  He is clearly ready for
the job, and after 15 years as CEO of this great company, I,m ready for a
somewhat different role.

Our succession plan has been clear for some time.  This has afforded Jeff and
me the freedom to combine our strengths toward building a company that
continues to exceed everyone,s expectations, including our own.  We look
forward to furthering that relationship as Jeff expands his role.

There are no plans for any other changes in our management team nor broad
shifts in strategy and direction.

Please join me in congratulating Jeff.  I look forward to a great 2001.


Message-ID: <794826DE8867D411BAB8009027AE9EB907638878@FMSMSX38>
From: "Sama, Anil" <anil.sama@intel.com>
To: "'vavrek@haas.berkeley.edu'" <vavrek@haas.berkeley.edu>,
"'dasovich@haas.berkeley.edu'" <dasovich@haas.berkeley.edu>,
"'guinney@haas.berkeley.edu'" <guinney@haas.berkeley.edu>
Subject: FW: DB's Research on Pepsi/Quaker Oats
Date: Mon, 9 Apr 2001 10:18:39 -0700
MIME-Version: 1.0
X-Mailer: Internet Mail Service (5.5.2653.19)
Content-Type: text/plain; charset="iso-8859-1"

-----Original Message-----
From: michael.j.napolitana@db.com [mailto:michael.j.napolitana@db.com]
Sent: Monday, April 09, 2001 8:44 AM
To: anil.sama@intel.com
Subject: RE: Help with Research on Pepsi/Quaker Oats

Anil,

Our firm re-launched coverage right before the acquisition, they issued two
First Call notes, no report.  I hope these help.  How is your handspring
stuff coming?

Mike
PEPSICO INC. [PEP] "BUY"
"Actual Results May Vary Materially From Expectations Described Herein"
----------------------------------------------------------------------------
---
Date:            12/04/2000    EPS          1999A       2000E       2001E
Price:           43.81         1Q           0.25        0.29        0.32
52-Wk Range:     49 - 30       2Q           0.31        0.38        0.43
Ann Dividend:    0.56          3Q           0.34        0.40A       0.44
Ann Div Yld:     1.28%         4Q           0.33        0.38        0.45
Mkt Cap (mm):    63,240        FY(Dec.)     1.24        1.45        1.64
3-Yr Growth:     13%           FY  P/EPS   35.3X       30.2X       26.7X
CY    EPS      NE     NE          NE
Est. Changed     No            CY  P/EPS        NM       NM            NM
----------------------------------------------------------------------------
---
Industry:            CONSUMER PRODUCTS
Shares Outstanding(Mil.):  1443.516
Return On Equity (1999) :    30.0%
----------------------------------------------------------------------------
---

DETAILS:
"Quaker Acquisition Meets the Lion's Share of Criterion"

Yesterday PepsiCo announced Quaker would be acquired for stock at an
exchange rate of 2.3 shares per OAT share with quasi collars around $40-$45
per PEP share.  CEO Roger Enrico stated the deal as modeled would boost the
"big 4" financial metrics:  1- Top Line to 7%+, 2 - EBIT Growth to 11-12%,
3- EPS to 13-14% and 4 -ROIC + 200 basis points.  In our view, this one
appears more likely to go 2 for 4 or 3 for 4, with higher returns on our
calculations providing the most significant challenge.  As we stated in our
11/29 note, the mere act of doing the deal on a pooling basis does not
change the fact that $13.5 billion in stock will be floated (@$43.5/PEP
share)- thereby boosting the capital base by which ROIC is measured.  In
addition, we believe earnings accretion relies to some degree on integration
savings which may be "un-bundled" as non-strategic food businesses (and
their distribution systems) are eventually sold.

"Add More To the Core"

PEP has long maintained the higher degree of on-the-go food consumption
necessitates increased product offerings around Frito-Lay in North America.
Quaker's grain based snacks and nutrition bars may fit the bill - but can
they produce enough turns to make it inside Frito's vaunted DSD (direct
store delivery) trucks?  If so, why has PEP not previously attempted to
carve its own niche?  We expect a volume pop as newly freed up system
capacity pushes the new snacks, but do not know whether the Gatorade power
bar and Quaker Rice Cakes can produce a sustainable channel presence.  For
example, in most core products (Fritos, Doritos, Lays) PEP is the undisputed
industry leader where a viable number two player really does not exist.
Many of the newly acquired "add more" ideas target the morning day part and
are likely to face formidable competition from Kraft, General Mills and
Kellogg.  In short, we believe food expansion outside of salty snacks is
laudable (i.e., it may be difficult to growing at the same historic rate as
the last ten years), but PEP's impressive supply chain power and value to
retailers may not readily overcome significant execution risk and heightened
competition.

The Gator Gumshoes.

The clear-cut  winner appears to be the Pepsi bottlers.  Management is
justifiably muted in defining the Gatorade  - PBG/WH opportunity in broad
terms, why disprupt OAT's established warehouse distribution?  More to the
point, we believe management recognizes that much like SOBE, its new, albeit
smaller alt beverage brethren, significant distribution retooling at the
outset risks disruption at retail.  However, we expect the system bottlers
to create volume opportunities immediately.  For example, if only PBG's
vending and "up and down" street distribution capabilities were deployed,
the incremental case volume contribution could create 2% additional growth
points in the first year.  Given such new portal potential, we are therefore
puzzled by management's 9% guidance for Gatorade sales - nearly 3% lower
than anticipated 2000 results.  Is the bar being re-set to make numbers?
Might the mighty green bottle be facing saturation in existing channels as
it closes in on 85% market share? Or might the Pepsi system,  looking to
improve Gatorade margins by gradually transitioning to lower slotting fees,
be anticipating minor volume disruptions?  On this last point, we say
"minor" because the slotting issue we allude to most likely applies to the
convenience and gas channel where Gatorade's indelible brand equity makes it
a must stock for retailers.  We believe that lower CSD volumes in 2000 are
highly instructive: Even the strongest brands face execution risk.

Do food retailers really want to empower bigger suppliers?

PEP's profit contribution to retail is well documented.  Aided by strong
brands in three categories and a very efficient distribution system, it is a
major provider of returns.  Gatorade as well as the non-snack food
businesses only augment this role.  In this light, management expects it's
relatively underutilized Tropicana ambient juice brands (Twister) to get a
boost.  Pure economics make this one inviting, but from a retailer
standpoint, (think Bentonville, Arkansas) does giving up leverage to
manufacturers matter?  Again, CSD's are illustrative of the potential risk.
Faced with an arguably better economic profit from higher CSD prices for the
category, certain retailers siezed the opportunity to boost private label
shares at lower prices.  We note that The Twister portfolio's brand equity
is not nearly as strong as Tropicana Pure Premium's, making the logically
appealing distribution opportunity somewhat easier for retailers to resist.

Coin of the Realm: Why does a company use its stock as deal currency?

Because it is likely fairly valued or even overvalued relative to debt based
alternatives.  If there is such as thing as a "cheap way" to spend $13.5
billion, stock swaps in GAAP world is it.  When book value equity is used,
PEP return on capital actually rises 50 via the OAT deal.  (We impact ROIC
for both Quaker's Snapple charge and this deal's anticipated write-off).
However, a share issuance, which equates to much more, will be floated.  We
estimate the consideration of this cost on an economic basis (i.e., what was
spent) would negatively impact return on capital by 400 basis points.  In
addition, while a model based on the present value of future cash flows
might produce a more favorable valuation, we see three hurdles to building
it:

1- No clear visibility on capital allocation or growth prospects for
Gatorade outside the U.S.  In our view this aspect of the deal alone may be
the ultimate arbiter of success or failure.

2- The integration of much of Quaker's food businesses may be only
temporary.

3- Execution issues on the domestic snack and isotonic businesses may yield
a bumpy set of cash flows over the next two years.

On this last point, we believe PEP's experience in restructuring during the
1997-1999 period bears some consideration.  A more brand focussed,
horizontal business model would indeed prove superior to a more vertically
integrated one that included restaurants and bottling.  However, it took
investors quite some time to realize stock price appreciation.  In the
current transaction, OAT also portends strategic value, but the benefits may
not be immediate.

Maintain BUY rating.

For the next 6 months, we see deal integration trumping PepsiCo's many
positive operational attributes.  We see the stock as range bound between
$40-45 until the close in the spring.  At that point, many of the margin
opportunities should become more apparent.  Therefore, we maintain our
12-month price target of $49.

----------------------------------------------------------------------------
--
PEPSICO INC. [PEP] "BUY"
PEPSICO: TRIPPING ON THE ELECTROLYTE FANTASTIC--MEETING WITH CFO INDRA
NOOYI
----------------------------------------------------------------------------
---
Date:            11/29/2000    EPS          1999A       2000E       2001E
Price:           45.38         1Q           0.25        0.29        0.32
52-Wk Range:     49 - 30       2Q           0.31        0.38        0.43
Ann Dividend:    0.56          3Q           0.34        0.40A       0.44
Ann Div Yld:     1.23%         4Q           0.33        0.38        0.45
Mkt Cap (mm):    65,507        FY(Dec.)     1.24        1.45        1.64
3-Yr Growth:     13%           FY  P/EPS   36.6X       31.3X       27.7X
CY    EPS      NE     NE          NE
Est. Changed     No            CY  P/EPS        NM       NM            NM
----------------------------------------------------------------------------
---
Industry:            CONSUMER PRODUCTS
Shares Outstanding(Mil.):  1443.516
Return On Equity (1999) :    30.0%
----------------------------------------------------------------------------
---

HIGHLIGHTS:
Yogi Knows Best
Yesterday, we met with PepsiCo CFO Indra Nooyi, the de facto keeper of the
company's rigorous financial discipline.  Without the ability to make direct
inquiries regarding Quaker, (it only elicits a "no comment" in a Reg. FD
world), our discussion helped build the oatmeal/electrolyte mosaic to the
point where the company's interest may best be capsulated as a
"non-denial/denial". In other words, that great pinstriped poet and
philosopher may be right on with PEP/OAT - "It ain't over till it's over."

Round Up the Usual Suspects
Following the rumored, and in our view, temporarily aborted plays for OAT by
PEP, KO and Danone, a faint Swiss whisper is being heard from Nestle.  Why
not just throw in Cadbury, Kraft and any other food/beverage company with an
unlevered pulse?  Not a bad thing for Quaker, in our opinion, but after
paying so much for Gatorade - we estimate a $105 takeout implies an EBITDA
multiple north of 23 times for the green stuff - only a company with a well
established global distribution system has any shot at attaining enough
return to make it work.  That leaves three - KO, PEP and MO (Kraft) with the
latter perhaps a tad preoccupied at this time.  And if Coke really is
done...

Framing Deal Criterion in a Place Called Purchase
Nooyi remains steadfast that any deal would not dilute earnings or impair
return on capital.  From our standpoint, here's the rub: these metrics point
to stock based pooling which is arguably inferior to a debt based purchase.
PEP's significant cash flow and underlevered balance sheet argue
compellingly for using debt - the after-tax capital cost is cheaper and it
would be free to dispose of non-strategic assets.  We believe such an
approach would produce more attractive returns, but cause earnings dilution
- PEP no-no.  Alternatively, a tax-free stock swap may be accretive to
earnings while the true capital cost is hidden thanks to the vagaries of
GAAP accounting.  In fact, equity capital cost in our analysis is higher and
the company would be holding a portfolio of food businesses for two years
that are for the most part lower returning assets (hot cereal being an
exception).  Hence, we believe a stock-based play for Quaker faces an uphill
battle to value creation.

AmBevolution?
We discussed Pepsi's burgeoning relationship with AmBev, the Brazilian beer
and soft drink giant.  Given PEP's relatively small (6%) soft drink share,
AmBev's distribution is critical to success.  Despite a lower implied profit
for AmBev as a Pepsi bottler vs. its own brands, Nooyi sees significant
opportunity once market execution matches that of AmBev's leading brands
such as Antarctica Guarana.  The trump card here may be AmBev's attraction
to "Power of One" style initiatives with PepsiCo's snacks operations.  Such
developments are encouraging, in our opinion, but our Latin beverage team
sees domestic beer as AmBev's most compelling near-term opportunity.

> -----Original Message-----
> From: Sama, Anil [SMTP:anil.sama@intel.com]
> Sent: Thursday, April 05, 2001 10:45 PM
> To: michael.j.napolitana@db.com
> Subject: Help with Research on Pepsi/Quaker Oats
>
> Hi Mike,
>
> For our Financial Info Analysis class project, we are looking
> for analyst reports on the Pepsi / Quaker Oats acquisition
> that was announced in January.
>
> Would your firm have any analysis/reports on this merger?
> If so, could you provide us some of that analysis?
>
> Thanks,
> - Anil.


Start Date: 4/23/01; HourAhead hour: 13;  No ancillary schedules awarded.  No
variances detected.

    LOG MESSAGES:

PARSING FILE -->> O:\Portland\WestDesk\California Scheduling\ISO Final
Schedules\2001042313.txt


---------------------- Forwarded by Christopher F Calger/PDX/ECT on
10/12/2000 02:17 PM ---------------------------

	Enron North America Corp.

	From:  Ross Mesquita @ ENRON                           10/04/2000 05:19 PM

To: Christopher F Calger/PDX/ECT@ECT
cc: Harry Arora/HOU/ECT@ECT
Subject: DealBench Slides

Chris,

Attached are a few slides that Harry and I put together that outline our
initial thoughts for the California power auction.  Please keep me up to date
as to how we will proceed -- I look forward to working with you.

Regards,
Ross Mesquita


***************************************************************
Do you have the skills you need to get a good job?
If you want to secure your future, you need training.
http://links.quinstreet.com/adclick?area=fensuihagunduo
***************************************************************

The Word of the Day for October 19 is:

jitney   \JIT-nee\   (noun)
     : a small bus that serves a regular route on a flexible
schedule

Example sentence:
     Guests at the hotel could ride from its parking lot to the
beach in a battered jitney that seated 15 comfortably, but that
held 20 or more on most trips.

Did you know?
     Jitneys weren't worth a dime -- just a nickel. In the early
1900s, "jitney" was slang for "nickel," but it wasn't long before
the term was applied to a new mode of public transportation that
only cost a nickel. When they were introduced in American cities
at the beginning of the century, vehicular jitneys could be any
automobiles that carried passengers over a set route for a cheap
fare, but eventually the term was applied specifically to small
buses that charged a nickel for a ride.

----------------
Brought to you by Merriam-Webster, Inc.
http://www.Merriam-Webster.com
----------------

***************************************************************
Discover the meanings you've been missing!
Click here for your guide to over 900 allusions.
http://www.merriam-webster.com/book/writref/allusion.htm
***************************************************************

Visit http://www.Merriam-Webster.com/service/subinst.htm to
subscribe to or unsubscribe from the Word of the Day mailing list.

To subscribe to the list by e-mail, send a blank e-mail to
mw-wod-subscribe-request@listserv.webster.m-w.com.
To unsubscribe via e-mail, send a blank e-mail to
mw-wod-signoff-request@listserv.webster.m-w.com.

If you have questions about your subscription, write to
mw-wod-request@listserv.webster.m-w.com. Send other questions
or comments about the Word of the Day to
word@Merriam-Webster.com.

(c) 2001 by Merriam-Webster, Incorporated


Chris,  Global Finance (Lisa Bills) needs to be kept in the loop on this,
since this is in TurboPark.

Kay

	From:  Chris Booth                           03/07/2001 09:12 AM

To: Renee Alfaro/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Brian D
Barto/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc: Kay Mann/Corp/Enron@Enron, Ben Jacoby/HOU/ECT@ECT

Subject: FW: Blue Dog #2

Renee and Brian,

Please prepare a change order to add dual fuel to the February '02 delivery
turbine.  The price and commercial information is below.  I have gotten Jeff
Darst to extend the deadline to exercise the change order to 16 March 2001.

Please make sure we get the change order prepared before the deadline expires.

Chris
---------------------- Forwarded by Chris Booth/NA/Enron on 03/07/2001 09:08
AM ---------------------------

jeffrey.darst@ps.ge.com on 02/21/2001 12:24:18 PM
To: chris.booth@enron.com
cc:

Subject: FW: Blue Dog #2

I did send it to the wrong address.  Sorry.

> -----Original Message-----
> From:   Darst, Jeffrey A (PS, PPSD)
> Sent:   Tuesday, February 13, 2001 4:06 PM
> To:   Booth, Chris (Enron)
> Subject:   Blue Dog #2
>
> Chris,
>
> The price to change this unit from Gas Only to Dual Fuel (distillate) is
> $1,445,000.  Based on the payment schedule in Exhibit I-1, 32% of this
> would be due the end of this month.  The remaining payments would be in
> accordance with the payment schedule for Unit #2 in the exhibit.  We are
> putting together a spreadsheet that defines this.
>
> The offer to make this scope change expires at the end of this month.
> After that time, we will be committed to the gas only configuration.
>
> The CM&U group is putting together a proposal to convert unit #1 to dual
> fuel.
>
> Regards,
>
> Jeff
> Global Power Plant Systems
> 518-385-0663
> 518-381-1513 (fax)
>


You can sit in on this call by dialing in on Thursday, December 21 at 3:00
p.m.

Lorna
---------------------- Forwarded by Lorna Brennan/ET&S/Enron on 12/19/2000
04:21 PM ---------------------------

"Webmaster@cera.com" <webmaster on 12/19/2000 04:17:51 PM
To:
cc:

Subject: FERC's December Order for the California Market - A CERA Conferen ce
Call

TITLE: A Cambridge Energy Research Associates Conference Call

TOPIC: FERC's December Order for the California Market: Part One of a
Two-part Solution
* FERC Reconfirms its Market Solutions Approach
* The Spotlight Shifts to California's Officials: A State/Federal Showdown?
* Implications for the Western Wholesale Markets

FORMAT
At the time listed below, our speakers will address this topic for
approximately 30 minutes, followed by an open question and answer period.

SPEAKERS
Mike Zenker, CERA Director, Western Energy
Peter Moritzburke, Associate, Western Energy
Larry Makovich, Director Research, Global Power Forum and North American
Electric Power

TIME
4:00 P.M. Eastern, Thursday, December 21, 2000

ELIGIBILITY
Clients eligible to participate in this conference call are those who
subscribe to the Western Energy Retainer Advisory Service.

AUDIO
For the AUDIO portion of the call, please call in on one of the following
numbers approximately five (5) minutes before the call:

Within the United States:? 1-800-946-0705
Outside the United States:? (719) 457-2637
Confirmation Code: 648850
Title of the call:? Western Energy

Technical Assistance:
U.S. callers:? If you are experiencing difficulties during the call, you may
signal for technical assistance by pressing *0 (star, zero) on your telephone
keypad

International callers:? Please re-dial and ask? the operator for assistance
before giving the confirmation code.

For more information, please contact Donna Masulla via e-mail at
dmasulla@cera.com or via telephone at (617) 441-6896.

A recording of this call (audio only) will be available until March 21, 2001.
To access this recording, please call 1-888-203-1112 (within the U.S.) or
(719) 457-0820 (outside the U.S.).? Please use confirmation number 648850 to
access the call.

E-mail Category: Conference Call
CERA Knowledge Area: Western Energy

**********************************************************************
To make changes to your cera.com account go to:
http://www20.cera.com/client/updateaccount

Forgot your username and password? Go to:
http://www20.cera.com/client/forgot

This electronic message and attachments, if any, contain information from
Cambridge Energy Research Associates, Inc. (CERA) which is confidential and
may be privileged. Unauthorized disclosure, copying,

distribution or use of the contents of this message or any attachments,
in whole or in part, is strictly prohibited.
Terms of Use: http://www20.cera.com/tos
Questions/Comments: webmaster@cera.com
Copyright 2000. Cambridge Energy Research Associates


I don't know what the deal with Doug is. Maybe we are a lot more aggressive
than you when it comes to inviting ourselves on his vacation. I  knew he was
going to be there. Late last week, Julie and I decided to go to Austin
instead of her coming to Houston for the weekend. I called Doug and told him
we were coming. My approach is that if he wants to say no he has one chance
to to so. He didn't say no.

I should have called you earlier. Julie must have told me to call you 5 times
on Sat. The truth is I am so freaking tired that I just didn't do it until
Sun. We did want to stop by and visit but we will catch you next time. Love
Richard


Elizabeth:
Sorry I haven't got back to you sooner.  Can you give me your home number?  I
think that weekends would be easier to schedule since weekdays are still
fairly hectic.  I'll call you soon.  How about this heat?  Fortunately, I've
been playing early in the mornings or late at night so it's not too bad.
I've also am hooked on watching the Open every day - a fringe benefit to
maternity leave.  Tonight should be great.  I hope one of the Williams' gets
beat.  talk to you soon.

Carol St. Clair
EB 3892
713-853-3989 (Phone)
713-646-3393 (Fax)
carol.st.clair@enron.com

	Elizabeth Sager
	08/30/00 08:59 AM

		 To: Carol St Clair/HOU/ECT@ECT
		 cc:
		 Subject: Re: Tennis Anyone?

Hi Carol!

Thrilled to hear all is going well.  I would love to play tennis anytime
(hopefully sooner rather than later so I can take advantage of  that
lingering fatigue that takes months? years? to abate).  We can play at the
Met either around lunchtime or sometime after 4:00.  Weekends would also
work.  Can you play next Tuesday or Wednesday?  Call or write.

See you soon
Elizabeth
713 853 6349


I do not like to recieve these emails.  PLEASE update the dispatch log
immediately after being dispatched.

The Enron Canada dispatch log and updating the El Paso Reconciliation sheet
are considered to be important performance criteria (just like inadvertancy)
with regards to customer service and settlements

Bill

---------------------- Forwarded by Bill Williams III/PDX/ECT on 01/30/2001
07:05 AM ---------------------------

	From:  John Zufferli                           01/30/2001 05:51 AM

To: Bill Williams III/PDX/ECT@ECT
cc:

Subject: Dispatch log

The last time that the dispatch log was updated was 1/27/01, can your guys
bring the log up to date?

Thanks


I doubt I'll have one Mondays especially!

From: The Pulse@ENRON on 12/10/2000 18:47 CDT
Sent by: Enron Announcements@ENRON
To: The Pulse, The Pulse-Assoc&Analysts
cc:
Subject: It's almost time

On Monday it will be time to check your pulse...


-----Original Message-----
From: IssueAlert@SCIENTECH.COM [mailto:IssueAlert@SCIENTECH.COM]
Sent: Tuesday, November 27, 2001 11:12 AM
To: ISSUEALERTHTML@LISTSERV.SCIENTECH.COM
Subject: FERC Enacts Major Constraints on Wholesale Market

  <http://secure.scientech.com/images/spacer.gif>	  <http://secure.scientech.com/images/spacer.gif>
  <http://secure.scientech.com/_IA_TEST/Corner_TL.jpg>	  <http://secure.scientech.com/images/spacer.gif>	  <http://secure.scientech.com/_IA_TEST/Corner_TR.jpg>
	  <http://secure.scientech.com/rci/wsimages/ia_banner02.gif>
  <http://secure.scientech.com/_IA_TEST/Corner_BL.jpg>		  <http://secure.scientech.com/_IA_TEST/Corner_BR.jpg>

  <http://secure.scientech.com/images/spacer.gif>	 <http://secure.scientech.com/specialpages/Multi_Client.asp>

  <http://secure.scientech.com/images/spacer.gif>	  <http://secure.scientech.com/images/spacer.gif>
	  <http://secure.scientech.com/rci/wsimages/will100border_copy.jpg>
  <http://secure.scientech.com/_IA_TEST/Corner_TL.jpg>		  <http://secure.scientech.com/_IA_TEST/Corner_TR.jpg>
	  <http://secure.scientech.com/images/spacer.gif> <http://www.thestructuregroup.com>
  <http://secure.scientech.com/images/spacer.gif> <http://secure.scientech.com/specialpages/Strategic_Planning.asp>   <http://secure.scientech.com/images/spacer.gif> <http://secure.scientech.com/rci/details.asp?ProductID=909>   <http://secure.scientech.com/images/spacer.gif>
  <http://secure.scientech.com/_IA_TEST/Corner_BL.jpg>		  <http://secure.scientech.com/_IA_TEST/Corner_BR.jpg>

November 27, 2001

FERC Enacts Major Constraints
on Wholesale Market

By Will McNamara
Director, Electric Industry Analysis

AEP, Entergy Corp. and Southern Company told by FERC to charge cost-based prices instead of market-based prices for wholesale spot transactions.

[News item from Reuters] The U.S. Federal Energy Regulatory Commission (FERC) voted 3-1 last week to adopt new rules to measure market power, as a condition for approving mergers and granting utilities the right to trade power in the wholesale market. FERC commissioners said the new test would improve a system that allowed a meltdown to take place in the California market last winter, when wholesale power prices soared to record highs amid tight supplies. FERC commissioners agreed to produce a new market power test based on supply margin assessments, which examines a company's importance in serving peak electricity loads. "If you're big enough to control the market at the time we look at it, you'll have mitigation put on you," said FERC Chairman Pat Wood.

Analysis: Many participants in the wholesale sector of the energy industry are still reeling from FERC's new ruling, which may have slipped past some radar screens considering that it was issued right before the long holiday weekend. This is a mammoth ruling on FERC's part, however, and it holds tremendous impact for those companies that increasingly find the lion's share of their profits coming from wholesale transactions. In addition, state regulators have also started gauging the impact of the ruling on retail rates, which some utilities may seek to increase as a way to compensate for shrinking profits in their wholesale operations. While FERC has presented this ruling as an attempt to circumvent on the national level problems experienced in the California market, the new limits on wholesale transactions can also be seen as another example of the "big stick" that the commission is using to force utilities into participating in regional transmission organizations (RTO). Further, the ruling is another striking indication that Chairman Wood is following through with his promise to monitor rampant wholesale markets while still attempting to support competition. The objective represents a tall order, and the new ruling from the commission is certain to prompt intense resistance among companies involved in wholesale trading.

Put into a nutshell, FERC has ruled that some companies can no longer charge unregulated, market-based rates for spot market wholesale transactions. Instead, companies identified as having market power and that aren't part of an approved RTO must charge cost-based prices for power that isn't committed in a long-term contract, and publicly disclose those cost-based prices. Columbus, Ohio-based American Electric Power (NYSE: AEP), Atlanta-based Southern Company (NYSE: SO) and New Orleans-based Entergy Corp. (NYSE: ETR) have been singled out as case studies on which FERC will be immediately applying its new standards for wholesale transactions. Note that Mirant Corp., a former subsidiary of Southern Company, has also been identified as having to submit information to FERC in order to gauge its level of market power separate from its former parent. The commission has essentially determined that these three utilities hold an unacceptable level of market power in the areas in which they operate. Under FERC's new market power "test," a generator or marketer is viewed as having too much market power if its electricity is "pivotal" during peak demand, which enables the company to demand a price above competitive levels. Regional transmission constraints will also be considered now as a measurement of a company's market power. This is a dramatic departure from previous standards, by which (under one of FERC's main criterions) a company that supplied less than 20 percent of the power needed in a particular region was freed from rate regulation on the federal level.

There are some important exceptions to the ruling. First, FERC has not eliminated the utilities' ability to charge market-based rates in areas where the grid and markets are controlled by a FERC-approved RTO. This is significant, as I will expand upon subsequently, because it indicates that there are secondary objectives in FERC's new ruling. In addition, the current ruling only impacts short-term sales transactions in which these three utilities are involved. In other words, long-term contracts that the three companies may have previously established or will establish in the future are not impacted by the ruling. However, the three companies named in the ruling will have to post pricing information related to long-term contracts, and FERC has retained the possibility that further price mitigation for long-term contracts may be necessary. Also note that the Western market, which already is under a price mitigation policy that FERC imposed in June, was not included in the new ruling.

The three utilities named in the ruling now have 15 days to submit proposals to FERC outlining a transition to charging cost-based wholesale rates for all power not currently committed to a buyer. Specifically, the utilities will have to post on their open-access same-time information systems (OASIS) the incremental cost of producing the uncommitted power during each hour in a 24-hour period. Moving forward, the price that the utilities can charge for non-committed power on the spot market will be the difference between their cost of production and the bid of more expensive power in the region that their power displaces. The new cost-based rates must be administered by an independent third party.

The new pricing standards revert back to an older, cost-based technique known as "split the savings." The methodology for this standard can get rather complicated, but essentially under FERC's new ruling the three companies identified will have to post their cost-based, incremental costs for spot power into the OASIS system for viewing by potential purchases. Purchasers who want to make a bid will post their decremental energy bid for not producing or buying the power on their own. The final price for the transactions will be the split between the seller's incremental cost and the buyer's decremental bid. For instance, if Southern Company bids its incremental cost at $20/MWh and a purchaser bids its decremental cost at $30/MWh, the transaction price would be $25/MWh. Assuming a midnight-to-midnight trading day, sellers would have to submit their incremental bid by noon on the previous day and buyers would submit their decremental bids by 6 p.m. What this potentially creates is an "information advantage" for buyers who have six hours to evaluate and respond to the incremental bids from some sellers. Some of the drawbacks to this system are that it requires both parties to post price information that may not be readily available and it potentially allows the purchaser to game the system by having access to the seller's original incremental bid and competing around the seller's price.

Note also that in a separate development FERC simultaneously opened a broad investigation under Section 206 of the Federal Power Act to apply the new market-based-sales policy to all U.S. sellers nationwide. What this means is that, although only three utilities are mentioned in this initial order, it is expected that FERC will continue to take steps to constrain what it believes to be erratic wholesale markets. Reportedly, some 30 companies are awaiting similar reviews by FERC to determine if the commission believes they exert market power. The 206 investigation reportedly also requires power providers with market-based sales authority to amend their tariffs within 60 days to provide FERC with open-ended authority to order refunds if the commission determines that market manipulation has occurred.

I made a previous reference to the "big stick" that FERC is carrying related to participation in RTOs. Remember that a few months ago, Chairman Wood had threatened to deny utilities that refused to join an RTO the benefits of charging market-based wholesale rates and swift approvals for merger applications, advantages that the chairman equated with the "new world" of the deregulated energy market. With this in mind, note that only Southern Company, Entergy and AEP are included in the present ruling (although it may be subsequently expanded). Southern Company and Entergy in particular have exhibited some resistance in following FERC's consolidation mandate regarding national RTOs, so it is probably not a mere coincidence that these three utilities have been singled out. This must be particularly painful for Southern Company, which gains a good part of its profits from wholesale trading and previously expressed plans to double the size of its generation assets over the next five years.

Interestingly, Commissioner Linda Key Breathitt represented the single dissenting vote in the ruling. Breathitt's concern was that the ruling had been pulled together too quickly and not enough time had been provided to evaluate the impact on wholesale markets. This issue will undoubtedly be contested, and to a certain extent the utilities impacted by the ruling appear to have been caught off-guard. AEP, Entergy and Southern Company all issued statements to the effect that they were uncertain about the extent to which the ruling would impact them, and that they were reserving the right for possible litigation.

Moreover, to summarize the commission's rulemaking, I think there are a handful of important points that should be considered. First, the ruling illustrates the steps that FERC is taking to revoke market-price authority that was for the most part unrestricted prior to the time that Pat Wood assumed his post as chairman. Second, FERC is implementing cost-based prices on the spot market only, and in only very defined circumstances. However, this could be an indication that the commission may extend cost-based pricing to other wholesale transactions, including long-term contracts, at a later time. Third, the "split the savings" cost-based formula could become fraught with its own problems. Its requirements are rather complex and it offers the potential to give power purchasers a market advantage on the spot market over power sellers, which will now be required to post incremental costs in the bidding process. Finally, one of the inherent drivers of FERC's new ruling is its desire to have large utilities join the RTOs that the commission has approved. It is very significant that the new ruling immediately impacts AEP, Entergy and Southern Company, utilities that have not only been deemed by the commission to have market power in their regions but which have also not yet joined an approved RTO. However, even though only three companies are immediately impacted by this ruling, it should not be overlooked that the ruling holds impact for the market as a whole as other sellers now will gain important pricing information about the major suppliers in certain areas. Thus, overall this is a very significant ruling and one that could substantially change the manner in which transactions in the wholesale power market are conducted.

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

  _____

We encourage our readers to contact us with their comments. We look forward to hearing from you. Nancy Spring  <mailto:nspring@scientech.com>

Reach thousands of utility analysts and decision makers every day. Your company can schedule a sponsorship of IssueAlert by contacting Jane Pelz  <mailto:jpelz@scientech.com>at 505.244.7650. Advertising opportunities are also available on our Website.

  _____

Our staff is comprised of leading energy experts with diverse backgrounds in utility generation, transmission and distribution, retail markets, new technologies, I/T, renewable energy, regulatory affairs, community relations and international issues. Contact consulting@scientech.com <http://consulting@scientech.com> or call Nancy Spring at 505.244.7613.

  _____

SCIENTECH is pleased to provide you with your free, daily IssueAlert. Let us know if we can help you with in-depth analyses or any other SCIENTECH information products. If you would like to refer colleagues to receive our free, daily IssueAlert articles, please register directly on our site at secure.scientech.com/issuealert <http://secure.scientech.com/issuealert/>.

If you no longer wish to receive this daily e-mail, and you are currently a registered subscriber to IssueAlert via SCIENTECH's website, please visit <http://secure.scientech.com/account/> to unsubscribe. Otherwise, please send an e-mail to IssueAlert <mailto:IssueAlert@scientech.com>, with "Delete IA Subscription" in the subject line.

  _____

SCIENTECH's IssueAlert(SM) articles are compiled based on the independent analysis of SCIENTECH consultants. The opinions expressed in SCIENTECH's IssueAlerts are not intended to predict financial performance of companies discussed, or to be the basis for investment decisions of any kind. SCIENTECH's sole purpose in publishing its IssueAlert articles is to offer an independent perspective regarding the key events occurring in the energy industry, based on its long-standing reputation as an expert on energy issues.

Copyright 2001. SCIENTECH, Inc. All rights reserved.
  <http://infostore.consultrci.com/spacerdot.gif?IssueAlert=11/27/2001>


Sorry - that was the old pick sheet we sent out.  (Still had Dallas and
Oakland on it - I guess that would have made you Oakland fans happy!)

Here is the revised pick sheet:

Remember games start on Thursday!!

-


Sara Shackleton
Enron North America Corp.
1400 Smith Street, EB 3801a
Houston, Texas  77002
713-853-5620 (phone)
713-646-3490 (fax)
sara.shackleton@enron.com
----- Forwarded by Sara Shackleton/HOU/ECT on 03/23/2001 09:58 AM -----

	Sara Shackleton
	03/23/2001 09:57 AM

		 To: Sara Shackleton/HOU/ECT
		 cc:
		 Subject: Re:  Brokerage rates (J.P. Morgan Futures)

Sheila:  Thanks for the message.  I spoke with Mike Schneider (who contacted
me - he's at 212-648-1164) to confirm our agreement and wanted to let you
know that he was apologetic for having not having "better rates" to charge
ENA.  He said he's been after Enron's business for some time and hopes to
reduce rates in the course of business, if possible.  I thought you might
want to have this bit of information.  Regards.  Sara

Sara Shackleton
Enron North America Corp.
1400 Smith Street, EB 3801a
Houston, Texas  77002
713-853-5620 (phone)
713-646-3490 (fax)
sara.shackleton@enron.com

	Sheila Glover
	03/20/2001 05:13 AM

		 To: Sara Shackleton/HOU/ECT@ECT
		 cc: Theresa T Brogan/HOU/ECT@ECT
		 Subject: Brokerage Rates

Sara,
We are okay on the rate schedule as it stands.
Sheila
---------------------- Forwarded by Sheila Glover/HOU/ECT on 03/20/2001 05:04
AM ---------------------------

	From:  Sheila Glover                           03/20/2001 11:12 AM

To: Theresa T Brogan/HOU/ECT@ECT, Greg Whiting/Corp/Enron
cc: Pushkar Shahi/HOU/ECT@ECT, Shane Dallmann/LON/ECT@ECT
Subject: Brokerage Rates

Theresa and Greg,
The rates from JP Morgan for the Futures account appear to be competitive
(acutally better) than the terms for our other current agreements.
With 90 day t bill at 4.41%, 90% of this is 3.969% on the credit side vs 4.16
using JP morgan's less 25 bp.
On the debit side it is competitive.
Therefore, I am okay with the rate schedule from JP morgan and we can go
ahead unless anyone can see an objection.
Thanks. Sheila

---------------------- Forwarded by Sheila Glover/HOU/ECT on 03/20/2001 04:59
AM ---------------------------

	From:  Theresa T Brogan                           03/19/2001 10:12 PM

To: Sheila Glover/HOU/ECT@ECT
cc:
Subject: Brokerage Rates

Sheila,
 Below is the information I received from Joe Hunter's group regarding
funding rates for some of the exchange brokers.  For comparison JP Morgan's
Futures funding rates are:

  Credit rate     Debit rate
US Dollars 90 day US TBill auction rate less 0.25%  JP Morgan Overnight
Borrowing Rate plus 0.25 %

TB
---------------------- Forwarded by Theresa T Brogan/HOU/ECT on 03/19/2001
03:47 PM ---------------------------

Jason Fischer@ENRON
03/19/2001 03:09 PM
To: Theresa T Brogan/HOU/ECT@ECT
cc: Larry Joe Hunter/HOU/ECT@ECT
Subject: Brokerage Rates

                                              CREDIT
RATE                             DEBIT RATE

BNP Paribas                  90% of 90 day T-Bill rate
They loan Enron the money

                                      with no interest cost.

ED&F MANN                 100% of 90 day T-Bill rate                    150
Basis points over

                                            fed fund rate

REVCO                         90% of the 30 Day T-Bill rate
1%  over Prime Rate


---------------------- Forwarded by Robert Benson/Corp/Enron on 05/11/2001
12:32 PM ---------------------------

Chris Dorland@ECT
05/11/2001 12:14 PM
To: Robert Benson/Corp/Enron@ENRON
cc:

Subject: Why One Firm Thinks Enron Is Running Out of Gas

---------------------- Forwarded by Chris Dorland/HOU/ECT on 05/11/2001 12:14
PM ---------------------------

	Dan Dorland
	05/11/2001 07:50 AM

To: Paul Devries/TOR/ECT@ECT, Jan Wilson/TOR/ECT@ECT, Jeff Borg/TOR/ECT@ECT,
Dave Ellis/TOR/ECT@ECT, Garrett Tripp/TOR/ECT@ECT, Stephane
Brodeur/CAL/ECT@ECT, Chris Dorland/HOU/ECT@ECT, kdorland@flint-energy.com
cc:
Subject: Why One Firm Thinks Enron Is Running Out of Gas

http://www.thestreet.com/_yahoo/comment/detox/1422781.html

Why One Firm Thinks Enron Is Running Out of Gas
By Peter Eavis
Senior Columnist
Originally posted at 5:23 PM ET 5/9/01 on RealMoney.com

A small research boutique with a reputation for rigorous analysis is telling
clients to quickly dump Enron (ENE:NYSE - news), believing that the energy
trading giant's 2001 earnings will fall well short of Wall Street's
forecasts.
Cambridge, Mass.-based Off Wall Street, led by analyst Mark Roberts, thinks
Enron's 2001 earnings will fall 6 cents short of the consensus estimate of
$1.79. The firm also believes Enron stock should trade around $30, nearly 50%
below Wednesday's $59.20.
The firm's 26-page report, published May 6, highlights Enron's declining
profitability and increasing leverage and suggests that the company should
trade on the same sort of multiple as a trading firm like Goldman Sachs (GS
:NYSE - news), which has a 2001 price-to-earnings ratio about half of Enron's
33 times. OWS also alleges that Enron's earnings quality is poor and that key
parts of its financial statements are confusing and opaque.
Houston-based Enron didn't comment by publication time on elements of the
report that Detox sent the company. An energy analyst who is bullish on
Enron's outlook says the OWS report contains fundamental misunderstandings
about the energy market and Enron's business model, but he says the report
does include some ground-breaking and valid insights. (The analyst's firm
doesn't give stock recommendations.)
Economies of Scale
Why care what Off Wall Street writes, compared with, say, analysts at Merrill
Lynch (MER:NYSE - news)? For one, OWS has an excellent track record.
Particularly sweet was 2000, when the tech stocks it had bashed came crashing
down. It has also shown itself to be well ahead of the curve, recommending
that clients sell e-tailer priceline.com (PCLN:Nasdaq - news) in June 1999,
when faith in Internet stocks was at its blindest and their prices at their
most insane.

Pulling Back
Enron retreats after long rally

Enron, with its domination of a burgeoning energy market, annual revenue of
over $100 billion and impressive earnings growth, can hardly be ranked
alongside the likes of priceline. But OWS thinks Enron is set for a
precipitous drop nonetheless. Why?
OWS's main beef is that key profitability measures are in decline. Margins on
Enron's pretax operating earnings (which the company's earnings releases call
IBIT, or income before interest, taxes and other items) are falling. Total
IBIT of $795 million in the first quarter amounted to only 1.59% of the $50
billion in revenue for the period, compared with a 2.08% margin in the fourth
quarter and 4.75% in the year-earlier period. Revenue in the first quarter
was nearly quadrupled from the year-earlier period, yet IBIT rose only 27%.
This shrinkage is due to lower-margin trading income making up an
increasingly large share of Enron's revenue base.
OWS thus calculates that for the remainder of 2001 Enron needs to generate an
extra $2.1 billion in revenue for each additional penny it makes over its
2000 EPS of $1.47 to reach analysts' expectation of $1.79.
The energy analyst counters that OWS apparently hasn't grasped how Enron can
continue to increase earnings even when margins shrink. It does so simply by
increasing volumes as the energy market balloons in size. In other words,
margins may decline, but since revenues are so much higher, earnings still go
up. Illustrating this, first-quarter 2001 EPS of 49 cents was 23% ahead of
the year-ago figure, even though the IBIT margin shrank by 3.2 percentage
points. The analyst thinks Enron will make $1.82 per share in 2001.
Growing On You
In addition, the huge growth in the energy market that has so helped Enron is
likely to continue for several years, according to the analyst. He notes that
roughly 75% of the electricity available in the U.S. still isn't traded in a
market. "Eventually it will be part of a competitive environment, but it'll
take five to 10 years," says the analyst. And he believes the extreme
volatility in energy-related commodities that has also benefited Enron will
exist for longer than OWS projects.
Still, OWS's point on profitability is bolstered by other profit measures.
Return on capital (net income as a percentage of equity plus debt) was 6.6%
in 2000, down on 1999's 6.9% and well below the 2000 returns on capital at
Duke (DUK:NYSE - news) (11.8%), Dynegy (DYN:NYSE - news) (12.1%) and even
Goldman (8.9%).
Even Enron bulls will admit that its financials are hard to follow. For
example, it doesn't give a gross margin number for its wholesale services, or
trading, business, which accounts for 96% of revenue. But one area of the
company's financial statements registered with the Securities and Exchange
Commission that consistently bugs analysts is the part that describes Enron's
related party transactions, which are the deals it does with entities that
have some sort of link to the firm. In fact, one of the related entities that
Enron has traded with is headed by Enron's CFO, Andrew Fastow. The energy
analyst comments: "Why are they doing this? It's just inappropriate."
The reason for maintaining these hard-to-follow related party deals has been
a source of speculation. But OWS analysis shows how a sales of optical fiber
to a related party may have been used to goose earnings in the second quarter
of 2000. Estimated profits from the so-called dark fiber (optical cable
without the gear to send data over it) transaction allowed Enron to beat
analysts' second-earnings earnings estimate by 2 cents a share, rather than
missing by 2 cents.
How soon before Wall Street follows Off Wall Street on Enron?


Here are first Devon numbers for Nov.  Will advise you for changes.

Bev
---------------------- Forwarded by Beverly Beaty/HOU/ECT on 10/20/2000 03:26
PM ---------------------------

	Enron Capital & Trade Resources Corp.

	From:  "Steve Holmes" <Steve.Holmes@dvn.com>
10/20/2000 02:49 PM

To: <Beverly.Beaty@enron.com>
cc: "Cynthia Cantrell" <Cynthia.Cantrell@dvn.com>
Subject: November Availabilities

Attached are the estimated availabilities for Devon Energy Production
Company, L.C.  I will pass along any revised numbers as we receive them.
Please let me know of any questions you may have.

Thanks,
Steve

 - EnronAvails1100.xls


Executive Summary:
? BC's NDP Leader Publicly Concedes Defeat to Liberals
? BPA seeks Federal Loan for Improvements, Future Fish Credits Limited
? Washington House Extends Aluminum Smelters' Power Re-Sale Rights by 1,500
MWs

BC Elections
According to our information, the BC government is preparing for the Liberal
take this week.  The election is slated for 16 May 2001 and it appears likely
that we are looking at a near Liberal sweep -- they are currently leading 41%
to 25% at the polls.  There is about a three-week lead time between the
general election on May 16th, the Final Count on May 29th, and the Return Day
on June 7th -- so there will be a period of jockeying around some issues.
The New Democratic Party (NDP) leader, Ujjal Dosanjh, has effectively
conceded the election in a public announcement.  Dosanjh is making public
pleas to voters not to desert the NDP in favor of the Greens so that the NDP
can retain official party status (4 seats).  Dosanjh has stated that he "will
be happy if the NDP gets 10 to 15 seats."

The following are likely to be the key energy policy officials once the
Liberal Party takes power in BC:

? Richard Neufeld, Minister of Energy, Mines and Northern Development
(replacing NDP Minister Glenn Robertson)
? Dan Jarvis, Deputy critic on Energy, Mines and Northern Development Murray
Coell, Minister of Environment, Lands and Parks (replacing Ian Waddell)
? John Van Dongen, Fisheries Neufeld, Jarvis, Coell and Van Dongen are
currently Members of the Legislative Assembly (MLAs).

While Gordon Campbell, the probable incoming premier, will have been
effectively muzzled in the interim when it comes to talk about energy
deregulation, the opposition will likely have plenty to say about it.  The
people we'll need to be looking at this regard are:  Glenn Robertson -
Minister of Energy and Mines, and Ian Waddell - Minister of Environment, Land
& Parks.

It appears certain that the Liberals will move to privatize at least some of
the power crown corporations almost immediately.  They have promised a
balanced budget and a chunk of  money to do it their way; they have made
campaign promises about privatization to stir the economy; and they have
tight back channels with the crown corporations' management who want "a
straight privatization plan instead of coop approach to deregulation."
Sources report that, if elected, the Liberals promise a referendum on land
claims treaties with the local native Indians (or "First Nations").  These
treaties result from overlapping claims to land and serve to block land
development, forestry, mining, etc.  While the NDP has been supportive of the
First Nations land claims process while in office, the promised Liberal
referendum would seem to suggest that the Liberals intend to backtrack and
not recognize the First Nations' rights.  In other words, there would be an
increased impetus for mining and forestry.  This development is surprising
since the Liberals have traditionally enjoyed strong Indian support, and the
land claims process was originally started under a Liberal government.  If
the Liberals press forward with a referendum on the process, there is the
potential for violent flare-ups between the First Nations and the
government.  (These flare-ups have occurred in the past, though not recently.)

BPA
BPA is urging the White House to increase its authority to borrow from the
federal Treasury by $2 billion to build over 20 new projects for 500-kilovolt
transmission lines and substations online between 2003 and 2006.  BPA
officials hope the new borrowing authority will be included in a
comprehensive energy strategy the Bush administration is expected to release
next week, although federal officials have yet to give the final word on the
BPA request.  Energy Secretary Spencer Abraham, key members of Congress and
the staff of Vice President Dick Cheney, who has taken charge of developing
the administration's energy strategy, all have been briefed on BPA's
proposal.  BPA has been building a case for a budget item that officials say
would be a significant boost to the region's power infrastructure in the near
term. If the administration doesn't include it in its energy strategy, BPA
officials say they will nevertheless press for the increased borrowing
authority in Congress.   BPA plans for the first time to use more "fish
credits" than cash to meet its annual debt obligation, reducing its cash
outlay by some $400 million.  BPA had expected its borrowing authority to be
sufficient until 2006, but given the energy situation, BPA could hit the
ceiling by 2003.

BPA will be spilling water over its dams as a part of the salmon protection
plan.  To make up for the shortfall, the agency will have to repurchase
approximately $1.2 billion on the electricity spot market -- these costs will
be passed on to energy consumers as a part of the subscription rate hike in
October.  Oregon Governor Kitzhaber is pushing for more spills.  Steve Wright
& other BPA officials are considering the effects of keeping water in the
reservoirs as a safety net, should there be a cold spell next winter, which
has precipitated a federal lawsuit from 12 environmental organizations
against the National Marine Fisheries Service.

Earthjustice Legal Defense Fund is leading this charge, a coalition which
includes Trout Unlimited and the Sierra Club.  The official line is they want
to disallow the Federal Caucus and BPA from declaring a 'fish emergency'
which would allow them to determine the amount of water spilled over the
dams, among other things.  However, by exercising a 'fish emergency', BPA
becomes qualified for additional federal credits - which is probably the real
source of contention here.

Aluminum Smelters
The bill passed by the House Energy Committee  yesterday does extend the
resale rights of the smelters to 1500 megawatts of  power beyond the October
2001 termination date.  BPA is negotiating, even though they have no legal
obligation to serve the smelters.  New attack ads paid for by the  aluminum
companies are running to build political pressure to continue to  receive and
resell 1500 megawatts of power beyond October 2001, in addition to  receiving
other payments for staying offline.


Durch,

It looks like the unwind was booked incorrectly. Instead of deal QF9221.1
netting out the original deal, it was adding to it.  I have killed deal
NN6788.1 for 5000/day, so that all that is left is the deal for 2500/day.

Errol

	From:  Dutch Quigley @ ECT                           03/27/2001 07:50 AM

To: Errol McLaughlin/Corp/Enron@ENRON
cc:

Subject: Still Getting Involiced for Your Deal #258505

Errol,

Check this in the system and see if he is being billed for the original deal
and an unwind deal to net him to the correct position.
Let me know or contact Perry please.

Dutch

---------------------- Forwarded by Dutch Quigley/HOU/ECT on 03/27/2001 07:55
AM ---------------------------

John Arnold
03/26/2001 02:57 PM
To: Dutch Quigley/HOU/ECT@ECT, Errol McLaughlin/Corp/Enron@ENRON
cc:
Subject: Still Getting Involiced for Your Deal #258505

---------------------- Forwarded by John Arnold/HOU/ECT on 03/26/2001 02:56
PM ---------------------------

"Piazza, Perry A [CORP]" <perry.a.piazza@citi.com> on 03/26/2001 02:46:53 PM
To: "'john.arnold@enron.com'" <john.arnold@enron.com>
cc:
Subject: Still Getting Involiced for Your Deal #258505

John - Could you please alert your back office that they are still invoicing
us on a Nov-Mar strip that was traded on June 20, 2000 at $4.105.  That deal
was cancelled per our discussion and rebooked for half the volume in
November (I beleive it was November).  Your deal number on the rebook is
QF9221.1 I beleive.  I beleive Dutch Quigley on your end was involved when
we originally discussed the deal.

Thanks and call if you have any questions.

Perry A. Piazza
Citibank/Salomon Smith Barney
Global Commodities
390 Greenwich Street, 5th Floor
New York,  NY  10013-2375
Phone: (212) 723-6912 / (212) 723-6979
Fax: (212) 723-8556
E-Mail:  perry.a.piazza@ssmb.com <mailto:perry.a.piazza@ssmb.com>