UK: Enron threatens double hit to credit tool market.
Reuters English News Service, 11/29/01
UK: Enron Europe splits from U.S. parent.
Reuters English News Service, 11/29/01
USA: UPDATE 1-Enron may not pay previously declared dividends.
Reuters English News Service, 11/29/01
USA: U.S. stocks set to open flat to a little up.
Reuters English News Service, 11/29/01
UK: Enron Europe not seen in default on energy trade.
Reuters English News Service, 11/29/01
USA: UPDATE 1-Enron may not pay previously declared dividends.
Reuters English News Service, 11/29/01
UK: Enron says EnronOnline switched back on.
Reuters English News Service, 11/29/01
USA: Dominion says Enron credit exposure $11 mln.
Reuters English News Service, 11/29/01
Analyst: Enron To Have Minimal Material Impact On Brokers
Dow Jones News Service, 11/29/01
Enron's Demise Leaves Counterparties With Tough Choices
Dow Jones International News, 11/29/01
Enron-Dynegy Merger Collapse Roils Europe's Power Mkts
Dow Jones Energy Service, 11/29/01
USA: Enron shares fall anew, trading partners also down.
Reuters English News Service, 11/29/01
REPEAT: Enron Bankruptcy May Lead To Losing Brazil Assets
Dow Jones International News, 11/29/01
S&P 500 To Drop Enron At Close; Replaced By Nvidia
Dow Jones News Service, 11/29/01
IntercontinentalExchange Volume Rises 65% Vs. Month Ago
Dow Jones Energy Service, 11/29/01
Duke Energy Halts Trading With Enron
Dow Jones News Service, 11/29/01
Northern Border/Enron -2: Pipeline Has 2.8% Rev Exposure
Dow Jones Energy Service, 11/29/01
Fall Of Enron Rattling Nordic Electricity Market
Dow Jones International News, 11/29/01
Enron's Demise Leaves Counterparties With Tough Choices
Dow Jones International News, 11/29/01
Europe Fin Services Cos To Take Small Hit From Enron
Dow Jones International News, 11/29/01
Dollar Under Pressure on U.S. Economic Woes, Enron Situation
Dow Jones Business News, 11/29/01
Electrabel Says Exposure To Enron "Insignificant"
Dow Jones International News, 11/29/01
Duke Energy Confident Energy Sector Will Remain Strong; Halts Trading With Enron
PR Newswire, 11/29/01
Dominion Reports That Enron Exposure Not Expected To Affect Earnings Forecast
Business Wire, 11/29/01
S&P Lwrs Rtg on Yosemite's 2000-A Linked Enron Notes
Business Wire, 11/29/01
Northern Border Partners Reassures Investors Regarding Enron Exposure
PR Newswire, 11/29/01

UK: Enron threatens double hit to credit tool market.
By Tom Bergin

11/29/2001
Reuters English News Service
(C) Reuters Limited 2001.

LONDON, Nov 29 (Reuters) - The credit derivatives market faced a double threat from troubled U.S. energy trader Enron on Thursday, leaving dealers divided on whether the rapid growth of the market might be at risk.
Enron's troubles impact the market through credit derivatives contracts written on the company, which would be triggered if it files for bankruptcy protection, and through deals transacted by its Enron Credit subsidiary, which specialised in trading credit protection on third parties.
Credit derivatives are insurance-like tools that allow investors to hedge or gain the risk of an issuer defaulting on a loan or bond. Default swaps, the most liquid type of credit derivative, involve the buyer paying the protection seller an annual premium, measured in basis points.
Accountants PriceWaterhouseCoopers said they had been appointed administrator to Enron's European division on Thursday. Some dealers predicted that if Enron goes under, the credit derivative contracts on Enron and entered into by Enron would be unwound in an orderly way.
"It will be another good example of how the market does work... it will regain people's confidence in the market," said Guy America, vice president for credit derivatives at J.P. Morgan Chase in London.
IMAGE PROBLEM
However, other dealers predicted a messy conclusion.
"The impact is clearly a loss of confidence in the credit derivative market overall," said a default swaps trader with a European bank.
The most recent corporate failure to trigger a large number of default swaps, that of U.K. rail operator Railtrack , resulted in banks calling in lawyers to see if they had to pay out on certain obligations.
Dealers said Enron was an actively traded name in the default swaps market, mainly in New York. As a privately negotiated market, it is difficult to get accurate figures for the value of contracts outstanding on Enron, however, dealers said well over a billion dollars of protection on Enron had been written.
"(It was) one of the benchmark names for the US credit (derivative market)...so you can guess that a lot of people were involved in this credit through default swaps," said the European bank trader.
UNCERTAIN CREDIT INSURANCE
Potentially more damaging for the credit derivatives market is the failure of Enron Credit. The subsidiary specialised in selling credit risk mitigation tools to companies who wanted to hedge against customers going bankrupt and failing to pay.
If end-users now find the derivatives they bought no longer give them the level of credit protection they expected, it may make it harder for banks in future to convince more of their customers to start using the tools.
On the back of demand from end-users, Enron credit was active in the inter-dealer default swaps market. A filing for bankruptcy by Enron Corp. could trigger settlement on all the contracts into which Enron Credit entered.
This would involve a large number of contracts and dealers say this would be concentrated among the limited circle of banks, mainly Enron Corp.s bank lenders, which accepted Enron Credit as a dealing counterparty.
"It was not broadly accepted as a counterparty," said one dealer, who added that he hadn't seen the firm in the market since October.
LENDERS FACE BIGGEST LOSS
However, most dealers concur that any losses the banks might incur on credit derivatives contracts would be small compared to potential lending losses.
"Counterparty losses would be dwarfed by direct lending exposure," said the head of credit derivatives at a Euroepan bank.
Dealers said some banks had looked at taking on the Enron Credit trading book but that this now looked unlikely.
"The banks that were involved in trying to rescue the bank recently..were also involved in overlooking their credit book and potentially making a bid to take it into their own book," said one trader.
Shares in Enron fell 85 percent to 61 cents after a rescue deal by smaller rival Dynegy Inc fell apart on Wednesday. On Thursday the company said it may not pay previously declared dividends.

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

UK: Enron Europe splits from U.S. parent.

11/29/2001
Reuters English News Service
(C) Reuters Limited 2001.

LONDON, Nov 29 (Reuters) - Enron's European business said on Thursday it has been operating separately from its U.S. parent company since Wednesday when headquarters in Houston stopped cash tranfers to the European trading business.
Accountants PricewaterhouseCoopers in London were appointed administrators on Thursday to the European operation of crisis-hit Enron.
"Effectively London is operating separately. The European operation gets cash from Houston to trade - they stopped giving us cash yesterday," said an Enron Europe spokesman.
He said the administration order covered mainly the European wholesale trading business which is based in London.
It does not cover seven separate businesses belonging to Enron in the UK, including the Teesside power station and regional water utility Wessex Water, as well as Enron's European assets.

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

USA: UPDATE 1-Enron may not pay previously declared dividends.

11/29/2001
Reuters English News Service
(C) Reuters Limited 2001.

HOUSTON, Nov 29 (Reuters) - Beleaguered energy trader Enron Corp. said on Thursday it might not pay previously declared dividends on its various stock issues, in an effort to preserve the value of its core trading and marketing business.
Houston-based Enron said the dividends in question are those on its common stock, cumulative second preferred convertible stock, Enron Capital LLC 8 percent cumulative guaranteed monthly income preferred shares, and Enron Capital Resources LP series A 9 percent cumulative preferred securities.
Enron shares closed at a new low of 61 cents on the New York Stock Exchange in trading on Wednesday, the same day that hometown rival Dynegy Inc. decided to walk away from its planned purchase of the company.
The major credit rating agencies slashed their ratings on Enron's bonds to junk status, also on Wednesday, triggering expectations that Enron would be forced into bankruptcy.

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

USA: U.S. stocks set to open flat to a little up.
By Haitham Haddadin

11/29/2001
Reuters English News Service
(C) Reuters Limited 2001.

NEW YORK, Nov 29 (Reuters) - Stocks are set to open flat to slightly higher on Thursday following some upbeat corporate outlooks, but mixed economic data and the aftermath of the near-collapse of energy trader Enron Corp. could affect trading.
Enron , teetering on the brink of one of the biggest corporate implosions in U.S. history, plunged 85 percent in frenzied trading Wednesday. It dragged on the market as investors also sold amid worry that a rally from Sept. 21 lows reached in the wake of the attacks on the United States was overdone.
"The Enron collapse may have significant ramifications on banks and other energy companies where contracts with Enron may now not be honored. And the Enron equity may be worthless," said Alan Ackerman, market strategist with brokerage Fahnestock & Co.
Equity index futures were up but at one point off earlier highs after the release of data at 8.30 a.m. (1330 GMT) that showed a rise in jobless claims but also a rise in durable goods orders.
"There was a mixed response. We saw an encouraging number in the durable goods but it's too early to see this as a sustained trend up and layoffs continue to be a real concern," Ackerman added.
The number of Americans lining up for first-time jobless benefits rose by 54,000 last week, exceeding Wall Street expectations and showed continued weakening in the U.S. labor market. The data showed the number of so-called continued claims rose by 301,000 to 4.02 million for the week ended Nov. 17, the biggest one-week increase in 27 years.
Orders for costly U.S. durable goods surged at the fastest rate on record in October by 12.8 percent to $184.8 billion, led by huge increases in orders for aircraft and defense capital goods. The data may help rekindle hopes that the economy has rebounded since the Sept. 11 attacks.
Equity index futures suggested a largely flat to slightly higher open. December futures for the S&P 500 index rose 1.70 points to 1,130.80 while futures for the Nasdaq 100 added 8 points to 1,567. Futures for the Dow Jones industrials gained 7 points at 9,720.
Other indicators flagged a mildly higher open. The indicative Dow Jones industrial average , which is based on prices of Dow stocks trading in Germany's Deutsche Boerse U.S. market segment, rose 45.95 points, or 0.47 percent, to 9,757.81.
The Nasdaq-100 premarket indicator was up 9.2 points, or 0.59 percent, based on trading ahead of the open in the tech-heavy index's biggest stocks.
Hand-held computer maker Palm Inc. rose in extended-hours trading on Wednesday and pre-open trade on Thursday after the company said it expects to meet estimates. Palm rose to $3.7 pre-open from its Nasdaq close of $3.41.
Storage networking company Brocade Communications Systems Inc. rose to $30.30 ahead of the open from a close at $28.82. The company reported quarterly operating profits fell sharply as the slower economy kept many corporate buyers on the sidelines, although the results beat Wall Street forecasts.
Enron, which finished at 61 cents on Wednesday, was a little higher in pre-open trading, at 69 cents. Enron sank Wednesday after rival Dynegy Inc. pulled out of its planned $9 billion takeover of the beleaguered energy trader. Credit rating agencies slashed Enron's bonds to junk status and shoved the once mighty company another step closer to bankruptcy.
Enron squeezed other energy traders and financial giants Citigroup Inc. and JP Morgan Chase & Co. Inc. , which may suffer losses of more than $400 million combined on their lending to the energy trading group, according to at least one analyst.
On Wednesday, the blue-chip Dow Jones industrial average surrendered 160.74 points, or 1.63 percent, to 9,711.86, the largest drop in about a month and the lowest close since Nov. 12. The broader Standard & Poor's 500 Index slid 20.98 points, or 1.83 percent, to 1,128.52. The technology-laced Nasdaq Composite Index dropped 48 points, or 2.48 percent, to 1,887.97.
In other pre-open activity, software provider FreeMarkets Inc. rose after raising its quarterly revenue and profit outlook after several large customers renewed long-term contracts. Shares rose to $16.20 from a close of $13.59.
H&R Block Inc. , the No. 1 U.S. tax preparer, rose to $37.25 on the Instinet trading system after closing at $36 on the New York Stock Exchange. The company raised its profit forecasts for the current fiscal year as its second-quarter loss narrowed, helped by new accounting rules and strong mortgage business performance.

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

UK: Enron Europe not seen in default on energy trade.
By Raj Rajendran

11/29/2001
Reuters English News Service
(C) Reuters Limited 2001.

LONDON, Nov 29 (Reuters) - Beleaguered U.S. energy trader Enron so far has not defaulted on any of its over-the-counter energy swap contracts in Europe, dealers said on Thursday. But many in the trading community have arranged alternative trades to cover their exposure as news emerged that Enron had sought protection from its creditors and appointed accountant PricewaterhouseCoopers as administrator.
Enron stands on the brink of bankruptcy after a rescue deal with its smaller rival Dynegy fell apart on Wednesday. The company halted trading on its EnronOnline platform on the same day.
"They haven't had any defaults yet. But nobody's trading with them at the moment," a dealer at a major oil company which had trading links with Enron said.
Dealers said Enron had been missing from the European oil OTC market for over a week and many companies had stopped trading with them a month ago as signs emerged of financial difficulties at America's largest energy trader.
In the oil market, Enron's trading activities extended right across the petroleum product chain as well as various Brent crude derivatives contracts.
They said the Dated to front line (DFL) Brent contract, which balances the risk of Dated Brent against the front-month IPE futures contract, had seen substantial activity on Thursday amid speculation that some players had moved to square off their positions against exposures to Enron.
"It's a case of closing up positions," a Brent trader said.
Dealers said Enron was believed to have closed positions on London's International Petroleum Exchange. The IPE declined comment.
The dealers said a shortlived price spike late on Wednesday on IPE and NYMEX crude oil and NYMEX natural gas futures markets suggested a brief session of short covering.
"There was a short spell when the natural gas market was strengthening and WTI moved up. One broker was doing most of the buying and most people thought he was covering for Enron. But the market came straight back down," said one futures dealer.
An spokeswoman for the IPE said its compliance department was looking at Enron's positions on the market and had been talking with financial services authority and clearing house.
"We will be able to maintain the integrity of the market," the spokeswoman said.
(With additional reporting by Jonathan Leff).

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

USA: UPDATE 1-Enron may not pay previously declared dividends.

11/29/2001
Reuters English News Service
(C) Reuters Limited 2001.

HOUSTON, Nov 29 (Reuters) - Beleaguered energy trader Enron Corp. said on Thursday it might not pay previously declared dividends on its various stock issues, in an effort to preserve the value of its core trading and marketing business.
Houston-based Enron said the dividends in question are those on its common stock, cumulative second preferred convertible stock, Enron Capital LLC 8 percent cumulative guaranteed monthly income preferred shares, and Enron Capital Resources LP series A 9 percent cumulative preferred securities.
Enron shares closed at a new low of 61 cents on the New York Stock Exchange in trading on Wednesday, the same day that hometown rival Dynegy Inc. decided to walk away from its planned purchase of the company.
The major credit rating agencies slashed their ratings on Enron's bonds to junk status, also on Wednesday, triggering expectations that Enron would be forced into bankruptcy.

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

UK: Enron says EnronOnline switched back on.

11/29/2001
Reuters English News Service
(C) Reuters Limited 2001.

LONDON, Nov 29 (Reuters) - Enron Metals Ltd, the metals trading arm of U.S. energy trader Enron Corp , said on Thursday that its EnronOnline screen-based trading system was switched back on after shutting down on Wednesday evening.
"EnronOnline Metals is definitely up and running," a senior official at Enron Metals said.
"It was switched on around nine thirty or 10 o'clock (0930 or 1000 GMT) this morning," he said.

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

USA: Dominion says Enron credit exposure $11 mln.

11/29/2001
Reuters English News Service
(C) Reuters Limited 2001.

NEW YORK, Nov 29 (Reuters) - Dominion Resources Inc. on Thursday said its past credit exposure to trading partner Enron Corp. , which is teetering on the brink of bankruptcy, is less than $11 million and current trading exposure is less than 5 percent of earnings.
The Virginia-based natural gas and power producer also reaffirmed its earnings for this year at $4.15 per share or better, $4.90 to $4.95 in 2002 and 10 percent annual earnings growth after 2002.
Dominion earned $334 million, or $1.37 per share, in the third quarter of 2001, with its independent power and natural gas subsidiary posting profits of $288 million.
Shares of Dominion fell 5 cents at $58.50 Thursday on the New York Stock Exchange.

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

Analyst: Enron To Have Minimal Material Impact On Brokers
By Chad Bray
Of DOW JONES NEWSWIRES

11/29/2001
Dow Jones News Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

NEW YORK -(Dow Jones)- Salomon Smith Barney analyst Guy Moszkowski said the troubles at Enron Corp. (ENE) will not have a material impact on brokerage firms' credit and counterparty energy trading exposure.
In a research note Thursday, Moszkowski said the credit exposure to Enron among the larger securities firms - Morgan Stanley (MWD), Merrill Lynch & Co. (MER), Goldman Sachs Group Inc. (GS), Bear Stearns Cos. (BSC) and Lehman Brothers Holdings Inc. (LEH) - is minimal and is largely hedged where it exists.
Among the larger brokers, only Morgan Stanley and Goldman Sachs have "meaningful" operations in energy trading, Moszkowski said.
"Against the backdrop of significantly improved risk management procedures in the industry, we believe exposure to Enron has been curtailed for some time now, particularly as concern regarding the firm's credit worthiness is hardly a new development," Moszkowski said. "However, given the sophistication and complexity of energy contracts, we believe it is fair to assume there will be some - albeit likely limited and, ultimately, immaterial - counterparty exposure at both Goldman Sachs and Morgan Stanley."
In a research note Wednesday, Goldman Sachs analyst Richard Strauss said Citigroup Inc. (C) - Salomon Smith Barney's parent - and J.P. Morgan Chase & Co. (JPM) could have a total exposure of about $800 million to Enron, including derivatives and secured lending. Total unsecured lending would amount to about $270 million, or 8% of the total amount syndicated, he said.
Strauss said the Enron mess will likely cost Citigroup and J.P. Morgan Chase about 5 cents a share and 10 cents a share, respectively.
-By Chad Bray, Dow Jones Newswires; 201-938-5293; chad.bray@dowjones.com

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

Enron's Demise Leaves Counterparties With Tough Choices
By Sarah Spikes
Of DOW JONES NEWSWIRES

11/29/2001
Dow Jones International News
(Copyright (c) 2001, Dow Jones & Company, Inc.)

LONDON -(Dow Jones)- U.S. energy giant Enron Corp.'s (ENE) financial troubles have left counterparties with difficult choices.
Enron's significant trading presence in the U.K. electricity market means there are many trading partners who are counterparties in deals with a company that looks bound for bankruptcy.
Since Enron revealed a $1.2 billion reduction in shareholder equity last month related to controversial transactions with entities connected to former Chief Financial Officer Andrew Fastow, the company has taken a nosedive that was only momentarily relieved when it looked as if Dynegy might step in and rescue the company.
Most trading partners were quick to stop trading forward with Enron, although some continued, and almost all U.K. companies have some exposure to Enron. Several also continued trading short term contracts.
With the company as it is, there are two options for counterparties.
They can wait, anticipating that Enron will go bust, and then terminate contracts, or try to invoke a controversial clause in their contracts and get Enron to put up more collateral.
An apparently much less likely option would be to sit tight and hope that another buyer for Enron steps in.
Of course, terminating contracts doesn't guarantee payment. While Enron appears to have plenty of assets that could be sold to pay off its debts, the company's record of inaccurate earnings reporting sheds doubt on the value of its assets as well.
Terminating parties would be reimbursed, or charged, based on a marked-to-market value of their contracts.
U.K. power prices have declined sharply since the introduction of the New Electricity Trading Arrangements in March, so parties with majority selling positions through Enron would suffer financial losses when they had to resell their power for a lower figure. But had they bought through Enron, they would be able to source the same power for less money on the U.K. market today.
However, the immediate future of power prices is uncertain, making it difficult to know exactly which contracts will be in or out of the money. In August, just five months after the introduction of the New Electricity Trading Arrangements, the Office of Gas and Electricity Markets announced that wholesale power prices were down substantially and that price volatility on the balancing market had all but stopped.
But this has changed with the onset of colder weather, after one of the warmest Octobers in recent history led to some complacency. The cost of having to cover a short position has been spiking to well above GBP300/MWh routinely, and prices on the power exchanges have soared for peak time periods.
The National Grid has also recently issued several warnings regarding a system shortfall during peak hours.
The second option open to Enron's trading partners involves trying to invoke a muddied clause in the standard U.K. power-trading contract - the material adverse change, or MAC, clause.
Asserting that the downgrade of Enron's debt to non-investment grade status clearly calls the security of their contracts into question, they may be able get Enron to put up more collateral in support of the contracts.
Before the downgrade, it might have been tough to invoke this clause, but it's now a possible option.
-By Sarah Spikes, Dow Jones Newswires; (+44 20) 7842 9345; sarah.spikesdowjones.com

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

Enron-Dynegy Merger Collapse Roils Europe's Power Mkts
By Sarah Wachter
Of DOW JONES NEWSWIRES

11/29/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

PARIS -(Dow Jones)- Amid news that Enron Corp. (ENE) will spin off its European operations, the collapse of a buyout from Dynegy Inc. (DYN) touched off a bout of volatile, frantic buying in European power markets Thursday, prompting questions about financial liabilities for the region's power companies if Enron declares bankruptcy.
"There was panic this morning," a European power trader said, with frenzied activity in Germany, Europe's largest power market. Prices for the most important long-term German contract - full-year electricity in 2002 - moved a full EUR0.40 up and down from one deal to the next. The yield curve strengthened as much as EUR0.20 cents sheerly due to Enron's troubles, even while electricity prices dropped, as buyers scurried to close out positions. Trade was eerily quiet in the rest of the forwards market.
By midday, the Nord Pool Power Exchange, market operator for the Nordic region, excluded Enron from trading and clearing financial contracts for the firm's Scandinavian arm, Enron Nordic Energy, which had failed to post margin requirements. The UKPX followed shortly thereafter, and suspended Enron's trading rights.
Otherwise it was business as usual on other European electricity exchanges, which offer the security of clearing and settlement. German bourses in Leipzig and Frankfurt, the LPX and EEX, and the Netherlands' Amsterdam Power Exchange continued to allow Enron to trade Thursday in the spot electricity market.
It's a steep fall for the once-mighty Enron in Europe, said to account for as much as 20% of all power trades in the region. Enron built up its European book through an aggressive push in the region, challenging regulations and filing lawsuits to pry open the region's notoriously slow-to-deregulate power markets.
Also midday Thursday, consultancy PriceWaterhouseCoopers said they will administrate a split of Enron's European operations, but won't be responsible for the energy sales branch. Enron traders - considered among the best and the brightest in the industry - will be prize assets to be snapped up by other European trading houses, which are still expanding, as European power markets are poised for full market deregulation in coming years.
Many now wonder who will now fill the breach and continue to press for much-needed reforms.
"Enron was one of the few progressive companies promoting the trading business," said Katrin Duerwald, an analyst with Germany's HEW Trading AG. "Continental power companies are conservative, and it's possible we'll enter a period of consolidation now."
Others wonder whether such a big counterparty can be replaced, and whether Europe's nascent power markets may experience a downturn in activity.
"Markets will probably dry up a bit. It will be more difficult for companies to trade. It isn't completely obvious to me that these guys will be able to have such an active market without Enron," said Vincent Gilles, utilities research head for UBS Warburg.
European power companies rushed Thursday morning to issue statements that their liabilities to Enron were limited, but analysts remain uncertain what the true long-term liabilities will be, if Enron declares bankruptcy.
Long-term contracts will be a little more difficult to unravel, says Commerzbank utilities analyst, Mark Robinson.
Deutsche Bank was one of the few to estimate its full liability Thursday, saying it would come in under $100 million, according to a VWD press report.
Analysts say Enron did a good job of spreading around its counterparty risk in Europe, so large power companies may not take a big hit, but small utilities could suffer significant financial damage, HEW's Duerwald says.
In Germany, close to 600 small utilities have recently entered trading, and they tend to have lower risk management thresholds than big power companies. They could either take a financial beating or decide trading is too risky and get out altogether, she said.
Enron's clout is greatest in Europe's lesser-developed power trading markets, like France and Spain, which could suffer a slowdown in development due to a loss of liquidity if Enron collapses, a power trader said.
Traders said the fall of Enron has been a wake-up call for greater vigilance. "We'll be much more careful about managing credit risk. Risk management will become much more important, too," a power trader said.
-By Sarah Wachter, Dow Jones Newswires; 331-4017-1740; sarah.wachter@dowjones.com

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

USA: Enron shares fall anew, trading partners also down.

11/29/2001
Reuters English News Service
(C) Reuters Limited 2001.

NEW YORK, Nov 29 (Reuters) - Shares of Enron Corp. renewed their relentless plunge on Thursday, as energy traders and creditors assessed their exposure to the teetering company.
Enron was down 24 cents, or 39.3 percent, to 37 cents, and topped the most active list once again on the New York Stock Exchange with more 19.1 million shares traded. The stock was valued at more than $33 before it started its plunge in mid-October.
Shares of companies in the utility sector opened mixed on Thursday, with those owed the most money from financially troubled Enron losing the most ground.
The 40-company Standard & Poors Utility Index opened slightly down .27 points at 231.34, with Enron once again the top loser.
Shares of rival power company Dynegy Inc. , which backed of a deal on Wednesday to bail out Enron, were down 3.7 percent, or $1.34, to $34.55.
Aquila, another large trader which is 80 percent owned by Kansas-based Utilicorp. and that could be exposed to Enron, dropped 1.16 percent, or 21 percent, to $17.95.

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

REPEAT: Enron Bankruptcy May Lead To Losing Brazil Assets

11/29/2001
Dow Jones International News
(Copyright (c) 2001, Dow Jones & Company, Inc.)

RIO DE JANEIRO -(Dow Jones)- Enron Corp. (ENE) could lose the concession for its Brazilian assets if it files for bankruptcy, Brazil's power sector regulator Aneel said Thursday.
"According to Brazil's privatization rules, local assets controlled by Enron would be transferred back to state control in case of insolvency," said an Aneel spokeswoman.
Enron controls Brazilian electricity distributor Elektro Eletricidade e Servico SA (E.EKO), which was acquired in 1998 for BRR1.479 billion ($1=BRR2.48). It also owns two gas-fired thermoelectric plants: Eletrobolt, with a capacity of 380 megawatts, and Cuiaba, with a 480-MW capacity.
The Houston-based company also owns important stakes in natural gas distributor Companhia Distribuidora de Gas do Rio de Janeiro (E.CDR), or CEG, and its smaller unit CEG-Rio.
In late April, Brazil's oil giant Petroleo Brasileiro (PBR), or Petrobras, agreed to pay $240 million for the stake Enron owns in CEG. Petrobras agreed to buy the 25.38% stake the U.S. energy group owns in CEG as well as the 33.75% stake Enron has in CEG-Rio. The deal is seen closing in the next few days.
CEG serves the metropolitan Rio de Janeiro area, and CEG-Rio supplies industrial towns in the greater Rio de Janeiro region and the interior of the state.
Enron, one of the heavyweights of the international power market, is widely expected to apply for Chapter 11 bankruptcy following the downgrading of its debt to "junk" status and the withdrawal of Dynegy Inc.'s (DYN) merger plans Wednesday.
As reported, the Houston-based energy giant's shares, which traded as high as $84.87 this year, closed Wednesday at just 61 cents, 85% lower than their opening price of $4.11.
Enron said it was suspending all payments other than those needed to maintain core operations.
The company could still try to sell its Brazilian assets, although the sale of Elektro is unlikely given the large size of the company and the current unfavorable market conditions, analysts said.
Elektro serves about 1.6 million clients in 223 municipalities in Brazil's industrialized state of Sao Paulo.

-By Adriana Brasileiro, Dow Jones Newswires; (5521) 9965-1193, adriana.brasileiro@dowjones.com

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

S&P 500 To Drop Enron At Close; Replaced By Nvidia
By Karen Talley
Of DOW JONES NEWSWIRES

11/29/2001
Dow Jones News Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

NEW YORK -(Dow Jones)- Standard & Poor's Corp. will remove beleaguered energy trader Enron Corp. (ENE) from the S&P 500 Index at the close of trading Thursday and replace it with Nvidia (NVDA), a designer of 3D graphics for the personal computer market.
Enron is trading down 9 cents, or 15.5%, to 40 cents. There is a 12.5 cent dividend on Enron payable today that has yet to be rescinded.
As is usually the case, S&P chose a large stock from the Standard & Poor's Midcap 400 to graduate up. Nvidia had been the fourth-largest weighting in the midcap index with $7.8 billion market cap. Nvidia is trading at $54.55, up $3.19, or 6.2%. -By Karen Talley, Dow Jones Newswires; 201-938-5106; karen.talley@dowjones.com

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

IntercontinentalExchange Volume Rises 65% Vs. Month Ago

11/29/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

NEW YORK -(Dow Jones)- The volume of trading on IntercontinentalExchange, an Internet-based energy trading platform, rose 65% during the last days of November compared with one month ago, the exchange said Thursday.
ICE is considered a primary alternative to Enron Corp.'s (ENE) Internet-based commodities market, EnronOnline.
Users of ICE rose 30%, according to the exchange's press release.
EnronOnline is different from ICE because EnronOnline is a mechanism for companies to buy from, and sell to, Enron. ICE is a neutral multi-party exchange, allowing energy trading companies to trade with all other members.
ICE's trading system, which has been installed in 7,000 desktops worldwide, covers 600 commodity and derivative contract types. ICE also owns the International Petroleum Exchange of London, Europes largest energy futures exchange.
ICE is owned by companies including American Electric Power (AEP), Aquila Energy (ILA), BP Amoco PLC (BP), Deutshe Bank AG (G.DBK), Duke Energy Corp. (DUK), El Paso Corp. (EPG), Goldman Sachs Group (GS), Morgan Stanley Dean Witter & Co. (MWD), Reliant Energy (REI), Royal Dutch/Shell Group (RD), Societe General SA (F.SGF), Mirant Corp. (MIR) and TotalFina Elf SA (TOT).
-By Mark Golden, Dow Jones Newswires; 201-938-4604; mark.golden@dowjones.com

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

Duke Energy Halts Trading With Enron

11/29/2001
Dow Jones News Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

CHARLOTTE, N.C. -(Dow Jones)- Duke Energy Corp. (DUK) has about $100 million in non-collatorized exposure to financially-battered Enron Corp. (ENE), and has halted trading with the energy conglomerate.
Duke Energy, which affirmed annual earnings growth targets, is the latest energy company trying to quell concerns about its exposure to Enron, which continues a downward spiral in New York Stock Exchange trading.
Enron recently traded at 44 cents a share, a sharp drop from its year high of $66.10 a share in late December. The company's stock closed down 85.2% on Wednesday after announcing plans for a merger with Dynegy Inc. (DYN) fell through.

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

Northern Border/Enron -2: Pipeline Has 2.8% Rev Exposure

11/29/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

OMAHA, Neb.-(Dow Jones)- Northern Border Partners LP (NBP) and its 70%-owned unit Northern Border Pipeline Co. said the recent downgrades of Enron Corp.'s (ENE) credit ratings and other financial problems shouldn't hurt the pipeline operator's financial condition.
Northern Border Partners, which includes Enron and Williams Co. (WMB) as some of its general partners, receives operating and administrative services from Northern Plains Natural Gas Co. and NBP Services Corp., a unit of Enron.
In a press release Thursday, Northern Border said its Northern Border Pipeline unit has about $9 million, or 2.8% of its revenue, tied into firm transportation contracts with Enron's North America unit. Northern Border Pipeline has the right to remarket this capacity to other shippers.
Also, another Northern Border unit entered a swap arrangement with Enron North America to hedge risks of changes in commodity prices. As of Wednesday, the market value of the swap was $5 million in favor of the partnership. If the Enron unit can't perform its obligations under the contracts or swap arrangements, the limited partnership won't be hurt financially.
The Northern Border partnership will continue to monitor its exposure to Enron.
Northern Border's New York Stock Exchange-listed shares closed Wednesday at $36.15, down 4.6%, or $1.73.
-Maria P. Vallejo; Dow Jones Newswires; 201-938-5400

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

Fall Of Enron Rattling Nordic Electricity Market
By Frances Schwartzkopff
Of DOW JONES NEWSWIRES

11/29/2001
Dow Jones International News
(Copyright (c) 2001, Dow Jones & Company, Inc.)

COPENHAGEN -(Dow Jones)- The precipitous fall of U.S. power giant Enron Corp. (ENE) hit the Nordic market Thursday, when the region's power exchange said the company's Scandinavian arm, Enron Nordic Energy, was excluded from trading and clearing.
The development - plus the continual stream of news about Enron's woes - triggered worries among market participants over their exposure, and also over the possibility of wider spreads on the Nord Pool exchange if Enron Nordic Energy closes up shop and liquidity in the market falls.
By the company's own estimates, it is the leading electricity trader in the Nordic market, where it first established its headquarters, in Oslo, in 1996. According to Enron Nordic Energy, it traded 77 terawatt-hours last year.
"If Enron would disappear from the Nordic electricity market, liquidity would be substantially reduced and there is a risk that spreads would widen," said Bo Andersson, an analyst with Graninge Trading in Stockholm.
Nord Pool announced Thursday that Enron Nordic had failed to post required financial security margins, and as a result it was being excluded from trading and clearing of financial contracts. It is still allowed to trade in the spot market.
The announcement followed an earlier one Thursday that contracts to which Enron Nordic Energy is a party would no longer be cleared automatically. Instead, each would be evaluated separately, and additional financial security margins could be required.
In acting as the clearing agent, Nord Pool assumes the financial risk to ensure a contract is fulfilled. Nord Pool officials declined to say how large the exchange's exposure would be, either in the financial or the spot market, should Enron go bankrupt.
But they said the exchange was prepared.
"I am relaxed and calm," said CEO Torger Lien, adding he hoped the rest of the market was too. "It's a bit messy when the larger players go bust, regardless of what business you're in. (But) we're set up to deal with this."
It's yet to be seen whether trading houses that have bilaterally traded contracts with Enron not cleared through Nord Pool will be able to deal with the company's closure, should it happen.
Traders declined to go on the record about their positions except to note that those contracts are at risk.
Upwards of 80% of power contracts traded bilaterally are cleared through the exchange, according to Nord Pool estimates. What share Enron has of the remaining portion is hard to say.
The total volume of financial contracts traded on Nord Pool in 2000 was 359 TWh, while the spot market's traded volume was 97 TWh. Another 1,180 TWh from the OTC/bilateral market were reported to Nord Pool for clearing.
Observers said Enron's troubles could also open the market to other players and reverse opposition to mandatory clearing of bilaterally traded contracts.
Many traders have been opposed to the plan, which is currently under consideration as part of Nord Pool's application to the Norwegian government to become a licensed financial exchange and a licensed clearing house.
That may be one upside to Enron's demise, said Nord Pool's Lien. Otherwise, he said, "Enron is an innovative, strong company. It's quite sad."
But, he added, "They haven't gone bust yet."
-By Frances Schwartzkopff, Dow Jones Newswires; +45 3311 1524; frances.schwartzkopffdowjones.com
(Maria Aakerhielm in Stockholm contributed to this story)

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

Enron's Demise Leaves Counterparties With Tough Choices
By Sarah Spikes
Of DOW JONES NEWSWIRES

11/29/2001
Dow Jones International News
(Copyright (c) 2001, Dow Jones & Company, Inc.)

LONDON -(Dow Jones)- U.S. energy giant Enron Corp.'s (ENE) financial troubles have left counterparties with difficult choices.
Enron's significant trading presence in the U.K. electricity market means there are many trading partners who are counterparties in deals with a company that looks bound for bankruptcy.
Since Enron revealed a $1.2 billion reduction in shareholder equity last month related to controversial transactions with entities connected to former Chief Financial Officer Andrew Fastow, the company has taken a nosedive that was only momentarily relieved when it looked as if Dynegy might step in and rescue the company.
Most trading partners were quick to stop trading forward with Enron, although some continued, and almost all U.K. companies have some exposure to Enron. Several also continued trading short term contracts.
With the company as it is, there are two options for counterparties.
They can wait, anticipating that Enron will go bust, and then terminate contracts, or try to invoke a controversial clause in their contracts and get Enron to put up more collateral.
An apparently much less likely option would be to sit tight and hope that another buyer for Enron steps in.
Of course, terminating contracts doesn't guarantee payment. While Enron appears to have plenty of assets that could be sold to pay off its debts, the company's record of inaccurate earnings reporting sheds doubt on the value of its assets as well.
Terminating parties would be reimbursed, or charged, based on a marked-to-market value of their contracts.
U.K. power prices have declined sharply since the introduction of the New Electricity Trading Arrangements in March, so parties with majority selling positions through Enron would suffer financial losses when they had to resell their power for a lower figure. But had they bought through Enron, they would be able to source the same power for less money on the U.K. market today.
However, the immediate future of power prices is uncertain, making it difficult to know exactly which contracts will be in or out of the money. In August, just five months after the introduction of the New Electricity Trading Arrangements, the Office of Gas and Electricity Markets announced that wholesale power prices were down substantially and that price volatility on the balancing market had all but stopped.
But this has changed with the onset of colder weather, after one of the warmest Octobers in recent history led to some complacency. The cost of having to cover a short position has been spiking to well above GBP300/MWh routinely, and prices on the power exchanges have soared for peak time periods.
The National Grid has also recently issued several warnings regarding a system shortfall during peak hours.
The second option open to Enron's trading partners involves trying to invoke a muddied clause in the standard U.K. power-trading contract - the material adverse change, or MAC, clause.
Asserting that the downgrade of Enron's debt to non-investment grade status clearly calls the security of their contracts into question, they may be able get Enron to put up more collateral in support of the contracts.
Before the downgrade, it might have been tough to invoke this clause, but it's now a possible option.
-By Sarah Spikes, Dow Jones Newswires; (+44 20) 7842 9345; sarah.spikesdowjones.com

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

Europe Fin Services Cos To Take Small Hit From Enron
By Evelina Shmukler and Catherine Taylor
Of DOW JONES NEWSWIRES

11/29/2001
Dow Jones International News
(Copyright (c) 2001, Dow Jones & Company, Inc.)

LONDON -(Dow Jones)- Europe's financial services groups are expected to be hit by Wednesday's downgrade of Enron's debt rating to junk, but analysts say the impact isn't going to be as severe as it may first look on paper.
Many large European banks underwrote or arranged large loans for the troubled energy trading company, but they've sold off a large amount of that debt to other banks or insurers, mitigating the effects on their provisioning and balance sheets.
That syndication, however, makes it unclear at this point how much Enron debt paper each bank and insurer in the region is holding onto.
Enron's troubles are a "good reminder that there is still high unexpected credit risk latent in the large corporate loan books of banks," said UBS Warburg's Anik Sen. But he estimates that the large European banks' exposure risk is still relatively small.
In total, he estimates an exposure risk of about 2% of the market capitalization per large European bank - or around the intraday volatility of most banks anyway. It represents about 5% to 10% of a bank's earnings as a one-off hit, implying, he said, that the banks' capital is not at risk.
Most of Europe's major banks, and some minor ones, have helped to finance loans for Enron. The bank's with the greatest involvement, according to Fox-Pitt, are Barclays, ABN Amro (ABN), Credit Suisse (CS), Societe Generale (F.SGS), Credit Lyonnais (CL) and Dresdner Bank AG (G.DRS).
Fox-Pitt estimates these six banks each has exposure of $400 million to $450 million, and though the downgrading of Enron will increase financial market risk generally, they said these banks will feel the weakening effect most.
Enron's debt rating downgrading is "clearly a significant event for European banks," Sen said, but he pointed out most of the large European banks don't keep all of those loans on their books.
"Banks are in the business of mitigating risk," he said. The few banks Sen is concerned about are those that keep the loans as part of their core business, rather than selling them off. These banks' holdings, especially those of some German and Italian ones, could be a concern for shareholders.
Also smaller European banks, to whom even a small loan could be significant, may find this situation a "painful experience," Sen said. Banks' Say Don't Overreact

The large European corporates, however, tend to not hold onto such loans. Barclays, for example, has said in the past that it sells down at least 90% of what it provides via syndication.
A Barclays spokeswoman said Wednesday that the bank's exposure was not material, but investors seem worried anyway. Barclays shares fell 4% Wednesday to 2093 pence. Thursday, shares fell another 1.5%, before recovering to a smidge about the previous day's close at 2106 pence.
Investment bank Nomura, however, staunchly maintained its "buy" rating on Barclays shares, explaining the size of the exposure is being substantially overestimated.
But Nomura also said the potential fallout from an Enron bankruptcy will continue to weigh on shares of global wholesale banks until the issue is resolved.
European banks' share prices have already begun to feel it: ABN Amro was down 1.2% to EUR17.73 and Credit Suisse fell 0.4% to CHF64.90 at 1215GMT. Societe Generale was down 0.8% at EUR61.75, and Credit Lyonnais fell 0.6% at EUR37.64.
Commerzbank shares were off 2.3% to EUR 19.54.
Commerzbank spokesperson Dennis Phillips said the bank's exposure to Enron "is a low double-digit million Euro figure, and it has already been accounted for in terms of provisioning for 2001."
French insurance group AXA SA (AXA) also said there would be no direct impact on the company, even though one of its subsidiaries is one of Enron's largest shareholders. An AXA spokesperson said that the subsidiary holds the shares in an investment fund on behalf its investors. AXA shares were up 1% to EUR24.24 at 1230GMT.
In general, Europe's insurers are unlikely to have a large exposure to Enron, said Tom Bennett, a European insurance analyst at BNP Paribas. As far as their bond portfolios are concerned, they tend to make less risky investments than banks, he said.
"They don't invest in junk, it's the basic rule," he said. "People are prepared to take much more risk [at banks]." Large, listed European insurers "tend not to invest outside the investment grade area, and Enron hasn't been that for ages."
In the U.K., both Standard Chartered PLC (U.STA) and Royal Bank of Scotland Group PLC (RBSB) have some exposure to Enron, but spokespeople at both banks downplayed any potential risk.
Carolyn McAdam of Royal Bank of Scotland declined to say to what extent the Scottish bank was exposed to Enron.
"All we're prepared to say just now is that Enron is obviously a very large business, with a range of business interests and assets," she said. "And it's far too early at this stage to reach any firm conclusions on the level of our exposure."
Standard Chartered also said it has some exposure.
"But it is very small. We're probably one of the smallest, if not the smallest, lenders in one of the syndicates, so it's small stuff for us," Standard Chartered spokeswoman Pamela McGann said.
She declined to quantify "small," but said, "it's not something that's going to keep me awake tonight, that's for sure."
-By Evelina Shmukler and Catherine Taylor, Dow Jones Newswires; 44-20-7842-9268; evelina.shmukler@dowjones.com
(Additional reporting by Bert-Erik Tencate in Frankfurt)

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

Dollar Under Pressure on U.S. Economic Woes, Enron Situation

11/29/2001
Dow Jones Business News
(Copyright (c) 2001, Dow Jones & Company, Inc.)

Dow Jones Newswires
NEW YORK -- The dollar was under pressure Thursday, weighed down by a combination of the Federal Reserve's somber outlook for the U.S. economy, waning U.S. consumer confidence and concerns about the financial woes of Enron Corp.
In morning New York trading, the euro was at 89.04 U.S. cents, up from 88.82 cents late Wednesday in New York. The dollar was at 123.07 yen, little changed from 123.06 yen late Wednesday.
The greenback was also at 1.6480 Swiss francs, compared with 1.6465, while sterling was trading at $1.4254, down slightly from $1.4259 late Wednesday.
The dollar managed to get a brief respite from U.S. durable goods data for October, which showed orders for big ticket items sharply rebounded by a record amount, more than reversing September's large drop.
But the overall tone for the dollar remains weak, amid a growing sense that the U.S. might not be able to rebound from recession as fast as previously thought.
"The dollar is a little heavy across the board," said Robert Sinche, head of global currency strategy at Citibank in New York. "Unless you get something completely outrageous, it looks likely to remain that way."
The dollar has fallen below key support levels against both the euro and the yen, as traders moved to liquidate a spate of long dollar positions.
While the Enron situation doesn't have a direct effect on foreign exchange markets, analysts said that it wasn't helping dollar sentiment.
"The market was ripe for an unwinding of long dollar positions," said Mr. Sinche. "Enron...is the kind of situation that just acts as a catalyst."
As is often the case, the euro's gains appeared to be more a result of pessimism towards the U.S. rather than any optimism about the euro zone.
The market largely shrugged off third quarter euro-zone gross domestic product data earlier Thursday which came in exactly as expected: up 0.1% on the quarter and 1.3% on the year.
The dollar's direction Thursday will also be influenced by U.S. shares, with prospects for a marked rebound looking slim in the wake of the Enron woes.
Analysts said a sustained move above the 89 cent level could set the euro up for a test of 89.45 cents and then 90 cents, which is expected to offer more formidable resistance.
Its difficulty in making a concerted push for 90 cents is probably down to the potential outflows related to the Morgan Stanley Capital International indexes rebalancing, and the Deutsche Telekom/Voicestream deal.
The first phase of the new MSCI weightings comes into effect Friday, and should involve fund managers reducing their exposure to euro zone equities.
So far, this seems to have been discounted, although it could still help to keep a lid on the euro.
The lockup period for Voicestream shareholders to keep hold of their Deutsche Telekom shares expires Dec. 1, which could prompt them to offload the stock, in effect resulting in sizable euro-zone outflows.
Benign inflation data from Switzerland out earlier Thursday - up only 0.3% in November on the year - has paved the way for the Swiss National Bank to cut interest rates at its next meeting Dec. 7.
"With the market looking only for a rate cut of 25 basis points, we would expect the Swiss franc to remain capped around current levels," said UBS Warburg analysts.
Grainne McCarthy of Dow Jones Newswires contributed to this article
Copyright (c) 2001 Dow Jones & Company, Inc.
All Rights Reserved

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

Electrabel Says Exposure To Enron "Insignificant"

11/29/2001
Dow Jones International News
(Copyright (c) 2001, Dow Jones & Company, Inc.)

BRUSSELS -(Dow Jones)- Belgian power utility Electrabel (B.ELE) said Thursday that it has a low financial exposure to Enron Corp. (ENE).
"Electrabel had anticipated the actual situation for the past month, and has taken a number of measures to reduce its positions," an Electrabel spokesman said. "Our exposure is totally insignificant."
Electrabel has stopped trading with Enron, and began reducing its trading activities with Enron back in August, when news started to emerge of Enron's deteriorating financial condition.
Electrabel has an asset-based trading strategy, not a policy of speculation, he added.
The spokesman declined to detail the amount of Electrabel's liabilities with Enron. Analysts are skeptical of statements power companies are making Thursday about their limited liabilities to Enron, saying it isn't clear whether the figures given represent gross exposure, or what the liabilities will be if Enron goes bankrupt.
Enron is thought to account for up to 20% of all power trading in Europe.
Enron is widely expected to apply for Chapter 11 bankruptcy following the downgrading of its debt to "junk" status and the withdrawl Wendesday of Dynegy Inc.'s merger plans.
-By Sarah Wachter, Dow Jones Newswires; 331-4017-1740; sarah.wachter@dowjones.com

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

Duke Energy Confident Energy Sector Will Remain Strong; Halts Trading With Enron

11/29/2001
PR Newswire
(Copyright (c) 2001, PR Newswire)

CHARLOTTE, N.C., Nov. 29 /PRNewswire/ -- Duke Energy (NYSE: DUK) today expressed confidence in the vitality of the energy sector and said it had taken steps to manage its exposure during the very serious difficulties being experienced by Enron, including instituting a trading halt.
"Although we didn't completely cease trading with Enron until yesterday, in the course of our normal credit practices, we took steps to limit our exposure to Enron. We currently have approximately $100 million in non- collaterized exposure to Enron. We are closely monitoring this unfortunate situation to determine if a provision against earnings is appropriate," said Richard J. Osborne, executive vice president and chief risk officer for Duke Energy.
Osborne was referring to Dynegy's announcement that it is terminating the merger agreement with Enron and the decision by major rating agencies to downgrade Enron's long-term debt below investment grade.
"The market is larger than any one player and is very resilient. Enron's role and activities in the energy market have significantly diminished over the past several weeks. And, market liquidity is provided by many active trading and marketing companies that have effective risk management practices and sound capitalizations," Osborne noted.
"We at Duke Energy are committed to our customers and fulfilling our contracts and services without disruption. We also continue to see strong growth opportunities ahead and are extremely confident in our ability to achieve or exceed our financial targets this year and next," Osborne said.
The company remains fully committed to deliver earnings growth within its stated guidance of 10 percent to 15 percent compound annual growth in earnings per share from a base of $2.10 in 2000. Based on the strong results reported for the first three quarters of this year, Duke Energy had previously communicated it will likely exceed 15 percent earnings growth in 2001. Yesterday's developments do not change that view.
Duke Energy, a diversified multinational energy company, creates value for customers and shareholders through an integrated network of energy assets and expertise. Duke Energy manages a dynamic portfolio of natural gas and electric supply, delivery and trading businesses -- generating revenues of more than $49 billion in 2000. Duke Energy, headquartered in Charlotte, N.C., is a Fortune 100 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available on the Internet at: www.duke-energy.com.
CONTACT: Jennifer Hillings Epstein of Duke Energy, +1-704-382-1221, or 24-Hour, +1-704-382-8333.
MAKE YOUR OPINION COUNT - Click Here
http://tbutton.prnewswire.com/prn/11690X12208513

/CONTACT: Jennifer Hillings Epstein of Duke Energy, +1-704-382-1221, or 24-Hour, +1-704-382-8333/ 09:30 EST
Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.

Dominion Reports That Enron Exposure Not Expected To Affect Earnings Forecast

11/29/2001
Business Wire
(Copyright (c) 2001, Business Wire)

RICHMOND, Va.--(BUSINESS WIRE)--Nov. 29, 2001--Dominion (NYSE:D) said today that it has pre-tax credit exposure to Enron of $11 million for past sales. Dominion said it has forward commodity sales contracts with Enron that represent an exposure of less than 5 percent of earnings, based on today's forward prices. Dominion reaffirmed its public operating earnings per share targets of $4.15 or better in 2001, $4.90 to $4.95 in 2002 and 10 percent annual earnings growth after 2002.
Dominion is one of the nation's largest producers of natural gas and power.

CONTACT: Dominion, Richmond Media: Mark Lazenby, 804/819-2042 Hunter Applewhite, 804/819-2043 or Analysts: Tom Wohlfarth, 804/819-2150 Suzette Mata, 804/819-2154
09:06 EST NOVEMBER 29, 2001
Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.

S&P Lwrs Rtg on Yosemite's 2000-A Linked Enron Notes

11/29/2001
Business Wire
(Copyright (c) 2001, Business Wire)

LONDON--(BUSINESS WIRE)--Standard & Poor's--Nov. 29, 2001-- Standard & Poor's today lowered its rating on the GBP200 million 8.75% series 2000-A linked Enron obligations issued by Yosemite Securities Co. Ltd. to 'B-' from 'BBB-'. Concurrently, the ratings have been placed on CreditWatch with developing implications.
The rating action reflects the Nov. 28, 2001 downgrade of Enron Corp.--which supports Yosemite Securities Co.--which was prompted by Standard & Poor's concerns about the viability of the merger agreement with Dynergy Inc. and the liquidity implications of the possible failure of that transaction.
Yosemite Securities' CreditWatch developing situation reflects the possibility that Enron Corp.'s ratings can move higher or lower from the 'B-' level. If the Dynergy merger or a similar transaction materializes, the rating could be upgraded.
In the absence of Dynergy or another partner, the credit quality of Enron could go even lower. A copy of the related press release, dated Nov. 28, 2001, can be found on Standard & Poor's Web-based credit analysis system, at www.ratingsdirect.com.

Copyright 2001, Standard & Poor's Ratings Services

CONTACT: Standard & Poor's, London Perry Inglis, (44) 20-7826-3857 Rebecca Geen
08:13 EST NOVEMBER 29, 2001
Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.

Northern Border Partners Reassures Investors Regarding Enron Exposure

11/29/2001
PR Newswire
(Copyright (c) 2001, PR Newswire)

OMAHA, Neb., Nov. 29 /PRNewswire/ -- Northern Border Partners, L.P. (NYSE: NBP) announced today that it believes that the recent downgrades of Enron Corp.'s credit ratings and other events involving Enron should not have a material adverse impact on Northern Border Partners' financial condition. However, it is too early to determine with certainty the extent to which the Partnership will be impacted by these events.
As detailed in its September 30, 2001 Quarterly Report on Form 10-Q, Northern Border Partners has a number of relationships with Enron and its subsidiaries. Northern Plains Natural Gas Company and NBP Services Corporation, wholly-owned subsidiaries of Enron, provide operating and administrative services for Northern Border Partners and its subsidiaries. Certain of the services are provided through other Enron subsidiaries. Management believes that Northern Plains and NBP Services will continue to be able to meet their operational and administrative services obligations under the existing agreements. Northern Border Pipeline, a 70 percent-owned subsidiary, has an aggregate financial exposure over the next 12 months of approximately $9 million (2.8 percent) of revenues under its firm transportation contracts with Enron North America (ENA), a wholly owned subsidiary of Enron. Also, another subsidiary of Northern Border Partners has entered into certain swap arrangements with ENA to hedge risks of changes in commodity prices. As of November 28, 2001, the market value of the swaps is approximately $5 million in favor of the Partnership. The Partnership believes that failure by ENA to perform its obligations under the firm transportation contracts or the swap arrangements, will not have a material adverse impact on the Partnership's financial condition.
Management plans to continue to monitor developments at Enron, to continue to assess the impact on Northern Border Partners of its existing agreements and relationships with Enron and its subsidiaries, and to take appropriate action to protect the interests of Northern Border Partners and its unitholders.
Northern Border Partners, L.P. owns a 70 percent general partner interest in Northern Border Pipeline Company, a 1,249-mile pipeline system that transports natural gas from the Montana-Saskatchewan border to markets in the Midwestern U. S. Additionally, the Partnership owns the 350-mile long Midwestern Gas Transmission system, which stretches from Portland, Tennessee to Joliet, Illinois. The Partnership also has gathering systems and processing plants in the Powder River, Wind River and Williston Basins in the U.S.; owns and operates processing plants and gathering pipelines in Alberta, Canada; and transports coal-water slurry via a pipeline in the Southwestern U.S. The general partners of the Partnership are owned by Enron Corp. (NYSE: ENE), one of the world's leading electricity, natural gas and communications companies and by Williams (NYSE: WMB), who through its subsidiaries, connects businesses to energy, delivering innovative, reliable products and services. Public Relations Contact:
Beth Jensen
(402) 398-7806
Investor Relations Contact:
Ellen Konsdorf
(402) 398-7840
MAKE YOUR OPINION COUNT - Click Here
http://tbutton.prnewswire.com/prn/11690X88342863

/CONTACT: Beth Jensen, +1-402-398-7806, or Ellen Konsdorf, +1-402-398-7840, both of Northern Border Partners, L.P./ 08:05 EST
Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.


I think I'm going to buy a Grand Cherokee Limited instead of the X5 and save myself 30K. Are we on with Johnny next week?

 -----Original Message-----
From: 	"George, Mike (CA - Calgary)" <migeorge@deloitte.ca>@ENRON [mailto:IMCEANOTES-+22George+2C+20Mike+20+28CA+20-+20Calgary+29+22+20+3Cmigeorge+40deloitte+2Eca+3E+40ENRON@ENRON.com]
Sent:	Thursday, August 30, 2001 12:45 PM
To:	Dorland, Chris
Subject:	FW: guide

When  you have 5 minutes you have to read this e-mail about shitting at work.  It  is the funniest thing I have ever read.
-----Original Message-----
From: Schoenhals, Jeff CIC  [mailto:JSchoenhals@cicorp.sk.ca]
Sent: Tuesday, August 14, 2001 8:14  AM
To: 'George, Mike (CA - Calgary)'
Subject: RE:  guide
I  know, it's so true!!  I had a jailbreak last week and I just about died  laughing.
-----Original Message-----
From: George, Mike (CA - Calgary)  [mailto:migeorge@deloitte.ca]
Sent: August 14, 2001 8:07  AM
To: 'Schoenhals, Jeff CIC'
Subject: RE:  guide
this is the funniest thing I have ever read in my life!
-----Original Message-----
From:  Schoenhals, Jeff CIC [mailto:JSchoenhals@cicorp.sk.ca << File: mailto:JSchoenhals@cicorp.sk.ca >> ]
Sent: Tuesday, July 31, 2001 8:38 AM
To: Brent Ehrich (E-mail); C. A. Hatlelid (E-mail); Colin Clements (CA
Calgary) (E-mail); Colin Laturnus (E-mail); Geoff  Yaworski (E-mail);
Jason Wessel (E-mail); John Gorst  (E-mail); Max Zureski (E-mail);
Michael O'Krancy  (E-mail); Mike George (E-mail); Scott. Parks (E-mail);
Tyler Stuart (E-mail)
Subject: FW: guide
-----Original Message-----
From:  brett.selinger@sasktel.sk.ca [mailto:brett.selinger@sasktel.sk.ca << File: mailto:brett.selinger@sasktel.sk.ca >> ]
Sent: July 30, 2001 4:51 PM
To: Craig  Bryksa; eharmel; Mike Harmel; jjknoll@jpm.hewitt.com; C.
Leier; coltsback@hotmail.com; jschoenhals@cicorp.sk.ca
Subject: guide
----- Forwarded by Brett Selinger/SaskTel/CA on 07/30/2001  04:49 PM -----

                     Larry Martin
                                          To:     Brett
Selinger/SaskTel/CA@SaskTel
                     07/30/2001            cc:
                     04:18  PM              Subject:     guide

1999 SURVIVAL GUIDE FOR TAKING A DUMP AT WORK.
ESCAPEE
Definition:
  A fart that slips out while taking a leak at the urinal   or
forcing poop in a stall. This is usually  accompanied by a sudden wave
of panic/embarrassment.  This is similar to the hot flash you receive
when  passing an unseen police car and speeding. If you release an
escapee, do not acknowledge it. Pretend it did not happen. If you  are
standing next to the farter at the urinal, pretend  that you did not
hearit. No one likes an escapee, it  is uncomfortable for all involved.
Making a joke or  laughing makes both parties feel uneasy.
JAILBREAK (Used in conjunction with escapee)
Definition: When forcing poop, several farts slip out at a machine  guns
pace. This is usually a side effect of diarrhea  or a hangover. If this
should happen do not panic,  remain in the stall until everyone has left
the  bathroom so to spare everyone the awkwardness of what just occurred.
COURTESY FLUSH
Definition: The act of  flushing the toilet the instant the nose cone of
the  poop log hits the water and the poop is whisked away to an
undisclosed location. This reduces the amount of air time the poop  has
to stink up the bathroom. This can help you avoid  being caught doing the
WALK OF SHAME.
WALK OF SHAME
Definition: Walking from  the stall, to the sink, to the door after you
have  just stunk-up the bathroom. This can be a very uncomfortable moment
if someone walks in and busts you. As with all farts, it is  best to
pretend that the smell does not exist. Can be  avoided with the use of a
COURTESY FLUSH.
OUT OF THE CLOSET POOPER
Definition: A  colleague who poops at work and is damn proud of it. You
will often see an Out of the Closet Pooper enter the bathroom with
newspaper or magazine under their arm. Always look  around the office for
the Out of the Closet pooper  before entering the bathroom.
THE POOPING FRIENDS NETWORK (PFN)
Definition: A group of coworkers who band together to ensure  emergency
pooping goes off without incident. This  group can help you to monitor
the whereabouts of OUT  OF THE CLOSET POOPERS and identify SAFE HAVENS.
SAFE HAVEN
Definition: A seldom used  bathroom somewhere in the building where you
can least  expect visitors. Try floors that are predominantly of the
opposite sex. This will reduce the odds of a pooper of your sex  entering
the bathroom.
TURD BURGLAR
Definition: A pooper who  does not realize that you are in the stall and
tries  to force the door open. This is one of the most shocking and
vulnerable moments that occur when taking a dump at work. If  this
occurs, remain in the stall until the TURD  BURGLAR leaves. This way you
will avoid all  uncomfortable eye contact.
CAMO-COUGH
Definition: A phony cough  which alerts all new entrants into the
bathroom that  you are in a stall. This can be used to cover-up a
WATERMELON or to alert potential TURD BURGLARS. Very effective when  used
 in
conjunction with  an ASTAIRE.
ASTAIRE
Definition: A subtle toe-tap  that is used to alert potential TURD
BURGLARS that you  are occupying a stall. This will remove all doubt that
the stall is occupied. If you hear an ASTAIRE, leave the  bathroom
immediately so the pooper can poop in  peace.
WATERMELON
Definition: A turd that  creates a loud splash when hitting the toilet
water.  This is also an embarrassing incident. If you feel a WATERMELON
coming on, create a diversion. See CAMO-COUGH.
HAVANA OMELET
Definition: A load of  diarrhea that creates a series of loud splashes
in the  toilet water. Often accompanied by an escapee. Try using a
CAMO-COUGH with an ASTAIRE.
UNCLE TED
Definition: A bathroom user  who seems to linger around forever. Could
spend  extended lengths of time in front of the mirror or sitting on the
pot. An UNCLE TED makes it difficult to relax while on the  crapper, as
 you
should  always wait to drop your load when the bathroom is empty.This
benefits you as well as the other bathroom attendees.
FLY BY
Definition: The act of scouting  out a bathroom before pooping. Walk in,
check for  other poopers. If there are others in the bathroom, leave and
come back again. Be careful not to become a FREQUENT FLYER.   People may
become suspicious if they catch you  constantly going into the bathroom.
CRACK WHORE
Definition: A crapper that  has seen more ass than a Greyhound Bus.
Tell tale  signs of a CRACK WHORE include hairs, stains and streaks.
Avoid CRACK WHORES at all cost. Try finding out when the janitor  cleans
each particular bathroom. Don't forget with a  good cleaning,a CRACK
 WHORE
can become a SAFE HAVEN.


Charles Schwab & Co., Inc.
Email Alert

Midday Market View(TM)
for Thursday, October 25, 2001
as of 1:00PM EDT
Information provided by Schwab Center for Investment Research
and Bridge

U.S. INDICES
(1:00 p.m. EDT)

----------------------------------
Market            Value     Change

DJIA           9,238.57   - 107.05
Nasdaq Comp.   1,704.26    - 27.28
S&P 500        1,071.97    - 13.23
----------------------------------
NYSE Advancing Issues        1,225
NYSE Declining Issues        1,699
NYSE Trading Volume        562 mln
NASDAQ Advancing Issues      1,306
NASDAQ Declining Issues    1,916
NASDAQ Trading Volume      917 mln

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

U.S. TREASURIES
----------------------------------
Value            Yield      Change

6-month bill      1.99%        n/a
5-year note        3.73%     - 6/32
10-year note      4.53%     - 6/32
30-year bond      5.28%     - 5/32

The tables above look best when viewed in a fixed-width font,
such as "Courier."

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

STOCKS SUFFER MORE ECONOMIC BLUES

Stocks slid at the open and remained firmly in negative
territory following this morning's mostly ominous economic
releases, as the fallout from the September attacks continues.
Durable goods orders dropped sharply, lending further support to
the notion of a contraction in 3Q, while first-time jobless
claims hit their highest level in almost a decade. Existing home
sales also weakened as prospective buyers put large purchases on
hold.

As of 11:54 a.m. EDT, the Dow Jones Industrial Average was down
1.3%, with the Nasdaq Composite Index lower by 2%. The S&P 500
Index was down 1.3%. Retailing, software, semiconductor and
communication stocks paced the decliners, while oil-related,
healthcare and transport issues were widely higher.

Shares of American International Group (AIG,81) were lower after
the company posted an 81% decline in 3Q earnings as a result of
the terrorist attacks, its acquisition of American General Corp.
and debt write-offs. Excluding the charges, but including the
$820 million in World Trade Center claims, the insurance giant
posted operating earnings of $0.55 per share, ahead of the First
Call consensus estimate of $0.54 per share.

Shares of Electronic Data Systems (EDS,64,f2) were higher after
the computer systems consulting company posted 3Q earnings,
excluding items, of $0.69 per share, $0.01 ahead of the Street's
mean estimate. CFO James Daley said he expects the company to
continue to grow earnings in the double-digit range, and EDS
remains comfortable with the Street's 4Q consensus earnings
forecast of $0.78 per share.

Long distance and data services company WorldCom Group
(WCOM,12.32,f1) reported a 41% decline in 3Q profits to $0.16
per share, matching the First Call consensus forecast. Revenues
rose 12%, boosted by growth in the company's data and Internet
services segments, and the company's CEO, Bernard Ebbers, said
he expects WorldCom's growth segments to gain market share,
despite the current economic malaise.

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

TREASURY AND ECONOMIC SUMMARY

Bonds held on to gains at midday following the release of
largely pessimistic economic data this morning. Durable goods
orders for September fell 8.5%, according to the Commerce
Department, much worse than the expected 1.3% decline per Dow
Jones Newswires, suggestive of a potential 3Q economic
contraction. Excluding transportation, orders fell 5.5% as
aircraft orders plummeted 29%. Excluding defense, orders fell
9.1%, while defense capital goods orders rose 4.6%.

Initial jobless claims rose by 8,000 to 504,000 for the week
ended Oct. 20, according to the Labor Department, the first time
above the 500,000 level since 1992. Analysts were looking for an
increase to 500,000. The four-week moving average of claims rose
to 505,000, a 10-year high, and continuing claims for the week
ended Oct. 13 increased to 3,654,000, an 18-year high.

The 3Q employment cost index rose 1.0%, slightly above the Dow
Jones Newswires forecast of a 0.9% increase. Year over year, the
increase was 4.1% through September, above the 3.9%
year-over-year reading through June. Most of the increase was
attributed to a 1.6% rise in benefits costs for the quarter,
while wages and salaries rose 0.8% versus 2Q's 1.0% rise. The
government said the data was not distorted by the Sept. 11
attacks.

Existing home sales plunged in September, down 11.7% to a
seasonally adjusted annual rate of 4.89 million units, less than
the Bloomberg consensus forecast of a decline to a 5.20 million
rate. The drop was the largest since 1995 as consumers pulled
back following the attacks. According to the National
Association of Realtors, the inventory of unsold homes rose to a
5.4-month supply from August's 4.8 reading.

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

WORLD MARKETS

Technology stocks led European bourses lower late in the session
following the dismal economic data in the U.S. and the European
Central Bank's decision to leave the benchmark lending rate
unchanged at 3.75%. The Bloomberg European 500 Index was down
2.04% as of 11:54 a.m. EDT. European Central Bank President Wim
Duisenberg said, "If there were to be a further improvement in
inflation prospects, then that would provide for further room to
maneuver on monetary policy." The euro was virtually flat
against the U.S. dollar in choppy trading following this
morning's uninspiring economic situation.

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Susan:

I think this is yours.

Thanks!

 -----Original Message-----
From: 	Adams, Laurel
Sent:	Thursday, October 11, 2001 9:48 AM
To:	Heard, Marie
Subject:	master agreement with Enron Japan

Marie,

We've done our first FX trade with Enron Japan Corp.  Can we put a master agreement in place with them asap?

Thanks!  First trade date:  October 11, 2001

Please call if you have any questions!


Twanda, please print this and attachment.  Thanks.  Michelle

----- Forwarded by Michelle Cash/HOU/ECT on 06/17/2000 09:18 AM -----

	Kelly Noel Higgason@ENRON
	06/07/2000 02:21 PM

		 To: Michelle Cash/HOU/ECT@ECT
		 cc: Jana Domke/Corp/Enron@Enron
		 Subject: AESOP 2000 - Country Summaries

Michelle:
 I got the answer to the voicemail message I left for you about which lawyer
would be the contact for the Enron Europe countries for the new Enron
employee stock option plan.  Jon Chapman will be responsible for Norway,
Poland, Spain, Sweden and Turkey (and any other Enron Europe countries that
are added between now and December).  I assume you are the appropriate lawyer
for Mexico.  (If not, please forward this message to the right lawyer, and cc
me so that I know who it is!)  Please read the message below for an
explanation of the first action item (due June 23rd).  The Mexico spreadsheet
is contained in the file marked "CALME AESOP" at the  end of Jana's message.
Thanks for your help!

Kelly
----- Forwarded by Kelly Noel Higgason/Corp/Enron on 06/07/2000 01:14 PM -----

	Kelly Noel Higgason
	06/07/2000 01:14 PM

		 To: Jon Chapman/LON/ECT@ECT
		 cc: Melissa Laing/LON/ECT@ECT, Jana Domke/Corp/Enron@Enron
		 Subject: AESOP 2000 - Country Summaries

Jonathon:
 I was in a meeting this morning concerning the new Enron employee stock
option plan that will be implemented at the end of this year, and Melissa
Laing (who participated by telephone) informed me that you were the lawyer to
support Enron Europe HR on this project.  I recently joined the Enron Corp.
legal staff from Enron International legal.  My role in this project is to
coordinate the international legal support for the new option plan.  As such,
I have contacted lawyers in various international business units to work with
local counsel in each of the countries in which Enron has employees who will
participate in the plan, to ensure that the plan does not run afoul of any
legal restrictions.  Based on current information (which is likely to change
between now and December, per Melissa Laing), the relevant countries in the
Enron Europe group are Norway, Poland, Spain, Sweden and Turkey.  In the
attachment labeled "asiapac" at the end of Jana Domke's message, you will
find spreadsheets for all five of the Enron Europe companies.  Please review
(with local counsel, if necessary) the information in the "Legal Compliance"
section of each spreadsheet to confirm that the information therein is
accurate.  Please forward any changes or comments to me and Jana Domke (Jana
has requested that the review be complete by June 23rd).  The Public
Relations department is currently preparing the written material that will
communicate the details of the plan to the participating employees.  When
that is available, I will send it to you so that you may make any
modifications that are necessary to comply with local laws in each of the
Enron Europe countries.  The communication documents will be available in
English, Spanish, Portuguese, German and Greek.  Please call me at
713-853-5698 with any questions.  Thank you for your assistance!

Kelly
----- Forwarded by Kelly Noel Higgason/Corp/Enron on 06/07/2000 12:57 PM -----

	Jana Domke
	06/02/2000 04:13 PM

		 To: Janie Bonnard/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Gerry
Chatham/Corp/Enron@ENRON, Scott
Gilchrist/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Kelly Noel
Higgason/Corp/Enron@Enron, Miguel Padron/SA/Enron@Enron, Ranendra
Sengupta/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Willie
Williams/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
		 cc: Jane Allen/HOU/ECT@ECT, Pam Butler/HR/Corp/Enron@ENRON, Timothy
Callahan/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Dung Huynh/HR/Corp/Enron@ENRON,
Michael Feuerbacher/Corp/Enron@Enron, Tony Jarrett/Corp/Enron@ENRON, Sheila
Knudsen/Corp/Enron@ENRON, Amy Moore/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT,
Diana Perez/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Bob Shealor/Corp/Enron@ENRON
		 Subject: AESOP 2000 - Country Summaries

If you attended the recent AESOP meeting, you are aware that the approval for
establishing an Enron AESOP 2000 Program was granted by the Executive
Committee on April 6, 2000.  In most instances, the plan design replicates
the prior Plan parameters.  However, on an international basis, there have
been numerous regulatory and legislative changes which may impact this
program.

Attached are individual Country Summary Highlights which consolidate the
various accounting/tax/legal/banking/human resource, etc. details and issues
into one document.  This consolidated document is based not only on
information gleaned from the previous AESOP inplementation, but it also
reflects the most recent local tax changes - at least based upon the
information we have here.

Because successful Plan implementation and rollout is predicated upon solid
information, understanding and interpretation, we need your assistance.
Please coordinate review of the your appropriate country documents with your
local financial, legal, tax and/or other professionals, as required.  We want
to ensure that AESOP incents our employees and reinforces the "One ENRON"
philosophy - but at the same time, we need to ensure this program is cost
effective, tax efficient, legally defensible and culturally acceptable in
your areas of responsibility.

Please document any specific issues and/or concerns, and where appropriate,
provide input on viable options, corrective action, etc.. Also, if you have
plans to be in other foreign locations prior to AESOP implementation and they
need to be included, please advise ASAP.  Please send your responses via
e-mail to either Dung Huynh or myself or by fax to (713) 646-7203.  If you
have questions or if you need to discuss further, please call me @ (713)
345-6142.  Our timeline is tight so would appreciate your responses at the
latest by June 23rd - earlier if possible.

Once we have the input, we'll roll this information up into a revised Summary
Document, identifying issues that need further assessment/discussion and move
forward to coordiinate final resolution with the AESOP team members.

Appreciate your assistance!

Regards/Jana Domke & Dung Huynh

PS - I apologize ahead of time for not getting all the countries correctly
sorted by region.  You may need to extrapolate your specific locations from
one or more of the following attachments.

Attachments


NG
PR

NG
VO


There is not much noted in the finished column.  An explanation or revised
finish date would be helpful.  Is the report not up to date or are we falling
bhind in gettin items completed!

Stan Horton


Risk Controls
Scoped out new Rho & Drift process with IT (1.5 months to completion)
New process will be web-based reconciliation of Infinity Rho & Drift and ERMS Rho & Drift.  Infinity numbers will be taken off the website Sheila is building and we will pull the ERMS numbers directly from ERMS
Models - completed testing of website (looks great)
Tested Options NYMEX reporting - testing didn't go as well as for the model website - we still need additional IT work
Building of Sch C web based tool put on hold to devote IT resources to Rho & Drift

Risk Analytics
New books and curves web based tool documented with IT
Started scoping exception reporting tools (enhancements to current tools as well as new tools) with IT
Started using the one fully functioning exception reporting tool (Post ID's not captured by RisktRAC - cleaned up all 47 missing Post ID's) - put daily process in place to use this tool
Took over the daily credit exception reporting from IT (used to be part of 830) - now there is no need for the 830 - 830 completely done away with!!

Merchant Assets
Recalculated 99, 2000, and 2001 SEC VAR for earnings restatement.

Other
Obtained 1 RAC IT resource from Steve Stock


On November 23rd, the FERC issued an order that I believe is crucial in our
case with the California PX.  In a case involving the New York ISO (New York
Independent System Operator, Docket ER97-1523-010) FERC put the PX on notice
that it will be revisiting the authorities and discretion it gave the PX to
address exercises of market power.

In the case, FERC only allowed the ISO to engage in voluntary actions on the
part of ISO participants (such as negotiations).  However, in response to
Enron (& ironically PG&E's) protests it found that the mitigation plan
proposed by the ISO gave the ISO too much discretion and lacked specificity.
FERC suggested that in filing a revised mitigation plan, the ISO propose to
file on a case-by-case basis under section 205 of the Federal Power Act, to
impose specific mitigation measures when the ISO concludes that they are
warranted.  The filing would identify the particular conduct and justify the
specific mitigation measures as a remedy.  Also, for recurring types of
conduct it could propose mitigation and propose that it be authorized to
impose the same mitigation measures on a prospective basis without making a
subsequent filing in response to future conduct.

In addition, the FERC specifically names California (although it doesn't
mention the PX) and states that "In rejecting the measures proposed here, we
are aware that we have previously approved similar measures for other ISOs,
such as those in New England and California.  We approved these earlier
proposals in order to give these ISOs discretion to respond quickly to
unforeseen market power and market design flaws, given the lack of prior
experience with ISO operations.  This initial period is now passed and the
authorities and discretion we previously accorded ISOs are, we believe, no
longer appropriate.  We intend to revisit the authorities and discretion of
these other ISOs."

Not only is this a major victory for Enron, I believe this is our strongest
argument for why the PX is now on notice that its proposed letter is beyond
its authority.  Essentially, this case notifies the PX that the tariff the PX
used as the basis for its proposed letter is at best of suspect effectiveness
and at worst unlawful.  Further, it suggests that the PX cannot act against
EPMI without making a Section 205 filing with FERC under which the PX bears
the burden of proof.

I think if Greg Whalley is going to call the PX, he should bring up this FERC
order.


Ina:
Can you set up a 5 minute mtg with me and all of the assistants and runners
in regards to what we discussed this week


We would like to schedule our trip to Cancun, Ritz Carlton for March 29,
Thursday through Sunday.  It will be the trading group only, less Tori
Kuykendall.  Please look into planning this trip.  You are the queen.

Sincerely,
Mike


CNG SAbine contact is Alain Diza 713-752-7690.

---------------------- Forwarded by Chris Germany/HOU/ECT on 12/28/99 05:49
PM ---------------------------

Richard Pinion
12/28/99 03:54 PM
To: Chris Germany/HOU/ECT@ECT
cc: Molly LaFuze/HOU/ECT@ECT, Sylvia A Campos/HOU/ECT@ECT, Gloria G
Barkowsky/HOU/ECT@ECT, Victor Lamadrid/HOU/ECT@ECT
Subject: Re: CNG Sabine Hub Services

Actually, the service is called "Parkfolio" by the hub.  Sylvia just needs to
verify that this is a point based service like the IHT service to finish.  If
you could call sylvia ASAP and all will be finished by today.

RP

Richard Pinion
12/20/99 04:31 PM
To: Chris Germany/HOU/ECT@ECT
cc: Molly LaFuze/HOU/ECT@ECT, Sylvia A Campos/HOU/ECT@ECT, Linda S
Bryan/HOU/ECT@ECT, Gloria G Barkowsky/HOU/ECT@ECT, Kirk Lenart/HOU/ECT@ECT
(bcc: Richard Pinion/HOU/ECT)
Subject: CNG Sabine Hub Services

As per our conversation today, we will set up a new service for contract
I00059 that will be "Park and Lend".

I talked with Scott Mills regarding the Sitara end; he said two tickets were
necessary:

 1.  An Exchange ticket with the counterparty "CPR PIPELINE EXCHANGE" (when
done with the pipeline) and
 2.  A Storage Capacity Ticket with the pipeline (CNG Sabine Hub Services) as
the counterparty.  This is where you
  will set up the rate you have negotiated with the pipeline and the service
that Molly can path on so as to
  get the correct rate for the service.

I will check with Kirk Lenart to confirm the correct way for Global to set
this up and I will let you know so you may select it on your deal ticket.


Here it is, it is not yet in final form.

 -----Original Message-----
From: 	Butler, Janet
Sent:	Tuesday, November 13, 2001 8:44 AM
To:	Hayslett, Rod
Subject:	RE: AcSEC Exposure Draft on Proposed Statement of Position

Thank you. If you remember, would you send either Joe Hartsoe or myself a copy of the INGAA filing?

 -----Original Message-----
From: 	Hayslett, Rod
Sent:	Monday, November 12, 2001 6:19 PM
To:	Butler, Janet
Subject:	RE: AcSEC Exposure Draft on Proposed Statement of Position

WE are following the issue and I believe INGAA is going to be filing somethiong that we have had input on.

 -----Original Message-----
From: 	Butler, Janet
Sent:	Monday, November 12, 2001 6:14 PM
To:	Hayslett, Rod
Subject:	AcSEC Exposure Draft on Proposed Statement of Position

Rod:  Attached are AGA comments concerning the Exposure Draft of the Proposed Statement of Position. Are you following this issue or planning on filing comments? Comment letter deadline is November 15, 2001.

 << File: American Gas Association draft 06NOV01.doc >>


I have not taken any time off.

Thanks,
Robin