BUSINESS HIGHLIGHTS

Enron Producer One
Enron Producer One facilitates one-stop shopping for the producer,s
infrastructure needs.  Through business relationships with Hanover
Measurement Services and Applied Terravision Systems, Enron Producer One will
offer and custom-configure a number of valuable production services and
pricing plans to reduce overhead and simplify back-office tasks.  Initial
products offered are well connects, transportation, marketing, measurement
and accounting services.  Enron Producer One is managed and supervised by
John Grass.

IN THE NEWS

CEO says Texas in good shape for electricity deregulation
DALLAS (AP) - Enron Corp.'s chief executive and president said Tuesday he
believes that Texas energy markets are in good shape as the state prepares
for deregulation.
Jeffrey Skilling told an audience of about 400 business people at a downtown
hotel that California "has given the term deregulation a terrible name."
Electric deregulation in Texas officially starts Jan. 1. "In Texas, I think
we've got a pretty good system," he said.
In San Francisco on Tuesday, the California Public Utilities Commission
unanimously approved electricity rate increases of up to 46 percent to try to
head off blackouts this summer by keeping the state's two biggest utilities
from going under.  When California officials set up deregulation they allowed
the price of wholesale electricity to rise but capped the amount companies
could charge customers, Skilling said. SoCal Edison and Pacific Gas &
Electric say they have lost more than $13 billion since last summer because
they haven't been able to pass on the high cost of wholesale electricity.
Skilling said Texans are in a much better position and shouldn't worry that
their state's deregulation would be like the California experience.
"California, they just put together a crazy system,8 he said in his first
public comments since becoming the Houston-based company's chief executive
officer in February. "The markets in California are the most regulated
markets in North America today. And that's what is causing the problem."
03/27/2001  Associated Press Newswires   Copyright 2001.

WELCOME
New Hires
EGM  - Charles Crow, Nancy Johnson, Gregor Lehmiller
EIM   - Darrell Aguilar, LaTrisha Allen, Wesley Wilder, Ronald Barnes
ENA  - Brian Cruver, Craig Dean, Martha Kessler

EnronOnline STATISTICS

Below are the latest figures for EnronOnline as of March 16, 2001.

? Total Life to Date Transactions >  813,000
? Life to Date Notional Value of Transactions > $489 billion

NUGGETS & NOTES

Enron is hosting the New York Energy Risk Management Seminar at the St. Regis
Hotel in New York City on April 5, 2001.  Topics include Power Outlook,
Natural Gas Outlook, Hedging Strategies and Weather Risk Management. The RSVP
deadline is March 30th, so please contact Laura Pena as soon as possible at
x3-5376.  This is a great event for "new" as well as established customers.
There will be a cocktail reception immediately following the presentations.

NEWS FROM THE GLOBAL FLASH

Enron Reopens Rassau Power Station Plans
Enron Europe submitted an application to build a 1200MW combined cycle gas
turbine power station on the Rassau Industrial Estate at Ebbw Vale, Wales in
July 1998. In November 2000, the Government lifted its stricter power
consents policy, which placed restrictions on the development of new
gas-fired power stations, and Enron is now concluding the consultation
process for the application

As part of the process, updated environmental information has been submitted
to the Department of Trade and Industry and a team from Enron will be
presenting the plans to Blaenau Gwent Council on March 26. This will be
followed by a three-day public exhibition in the local community.

Enron expects to receive a decision later in the year.

European Economic Summit: Acceleration Directives
On March 23 and 24 the European Economic Council Summit will take place in
Stockholm.  At
this summit the European Commission will present to the heads of the Member
States a legislative proposal for a Directive and a Regulation that the
Commission adopted on March 13 to speed up the completion of the internal
electricity and gas markets.

Enron issued a statement to the media on the evening of Wednesday 21st March
stating that it specifically endorses the following initiatives incorporated
in the text of the adopted proposal:

Legal unbundling of the transmission and distribution networks as a realistic
solution, ensuring the independence of transmission and distribution system
operators.
Mandatory appointment of independent regulators in each country with the
obligation to fix or approve transmission tariffs before they come into force.
The current timetable proposed by the Commission: market opening for
electricity in 2003 and for gas in 2004 (industrial, commercial and wholesale
customers); and for supplies to all consumers including households by 2005.
The setting of rules in the Regulation for how power transmission tariffs can
be charged for cross-border transactions and how congestion and capacity
allocation at borders within the EU should be managed by transmission system
operators.

Enron concludes that it is encouraged by the efforts of the Commission to
accelerate the European electricity and gas market opening and the
reinforcement of third party rights of access to transmission networks. The
Commission's approach of harmonizing both the timetable and the regulatory
framework deserves support from all Member States.

LEGAL STUFF
The information contained in this newsletter is confidential and proprietary
to Enron Corp. and its subsidiaries.  It is intended for internal use only
and should not be disclosed.


Energy Market Report
Thursday, December 27, 2001

*See attached pdf file.
__________________________________________________________
Western Pre-Scheduled Firm Electricity Prices($/MWh)
December 26, 2001 for December 30, 2001

Peak(Heavy)
                   Low     Change**   High    Change**
NW/N. Rockies*    21.00      NA       22.00      NA
Mid-Columbia*     21.00      NA       22.00      NA
COB*              19.25      NA       20.50      NA
N. California*    19.25      NA       23.00      NA
Midway/Sylmar*      NA       NA         NA       NA
S. California*    18.50      NA       25.00      NA
Mead*             18.50      NA       19.00      NA
Palo Verde*       18.00      NA       19.00      NA
Inland SW*        18.00      NA       19.00      NA
4-Corners*        18.25      NA       19.50      NA
Central Rockies*  14.50      NA       15.50      NA
__________________________________________________________
Off-Peak(Light)
                   Low     Change**   High    Change**
NW/N. Rockies*    21.00      NA       22.00      NA
Mid-Columbia*     21.00      NA       22.00      NA
COB*              19.25      NA       20.50      NA
N. California*    19.25      NA       23.00      NA
Midway/Sylmar*      NA       NA         NA       NA
S. California*    18.50      NA       25.00      NA
Mead*             18.50      NA       19.00      NA
Palo Verde*       18.00      NA       19.00      NA
Inland SW*        18.00      NA       19.00      NA
4-Corners*        18.25      NA       19.50      NA
Central Rockies*  14.50      NA       15.50      NA

*Denotes trading of flat, 24-hour products.
**"NA" changes are not applicable because prices for on and off peak goods
are not comparable to flat products.
__________________________________________________________
Western Pre-Scheduled Firm Electricity Prices($/MWh)
December 26, 2001 for December 31, 2001

Peak(Heavy)
                   Low     Change**   High    Change**
NW/N. Rockies     22.75      NA       23.25      NA
Mid-Columbia      22.75      NA       23.25      NA
COB               24.00      NA       24.75      NA
N. California     26.00      NA       26.50      NA
Midway/Sylmar       NA       NA         NA       NA
S. California     25.30      NA       27.00      NA
Mead              25.00      NA       26.00      NA
Palo Verde        25.00      NA       26.00      NA
Inland SW         25.00      NA       26.00      NA
4-Corners         24.75      NA       26.00      NA
Central Rockies   21.50      NA       22.50      NA
__________________________________________________________
Off-Peak(Light)
                   Low     Change**   High    Change**
NW/N. Rockies     21.00      NA       22.00      NA
Mid-Columbia      21.00      NA       22.00      NA
COB               19.25      NA       20.50      NA
N. California     19.25      NA       23.00      NA
Midway/Sylmar       NA       NA         NA       NA
S. California     18.50      NA       25.00      NA
Mead              18.50      NA       19.00      NA
Palo Verde        18.00      NA       19.00      NA
Inland SW         18.00      NA       19.00      NA
4-Corners         18.25      NA       19.50      NA
Central Rockies   14.50      NA       15.50      NA

**"NA" changes are not applicable because prices for on and off peak goods
are not comparable to flat products.
__________________________________________________________
Gasping Over Gas

As EMR staff and Western traders trickled into work from their extended
holidays, peak prices in the Western energy markets backed down slightly
from levels seen on Wednesday.  "Well, weather's not atplay here - there's a
lot of water for the hydro, it's cool, but not cold, and it's the holidays,"
explained one Northwest marketer. "There's just not a lot of motivation to
buy or sell," he added.  Off-peak power firmed up slightly across the entire
WSCC, likely due to increased overnight heating demand, some analysts
ventured.  Other likely contributors to Thursday's softening of WSCC peak
power prices were high gas inventories and lower spot prices, according to
players.  The AGA's weekly natural gas inventory report was released on
Thursday, showing a draw of 81 bcf - a bigger draw than the industry
expectations of 65 to 70 bcf, but well below last year's draw of 175 bcf and
the historical average of 145 bcf.  Combined with the fact that current U.S.
stocks stand at 2.980 tcf, or 90% of capacity, Thursday's natural gas news
wreaked havoc on NYMEX futures prices.  The January contract expired
Thursday after plummeting 35.6 cents to settle at 2.555$/mmBtu, while the
February contract trailed along, losing 31.8 cents to close at 2.619$/mmBtu.
"I felt like I was on a sinking ship," exclaimed one exasperated gas
marketer, "Everyone was yelling 'Bail, bail, bail!'"  Despite the excitement
in natural gas markets, most energy traders reported another day of thin and
illiquid trading as most businesses and all schools will remain closed until
after the New Year.

Northwest peak power prices for the Sunday-Monday package eased off almost
2$/MWh from levels seen on Wednesday.  Monday peak goods at Mid-Columbia
traded in a tight range from 22.75 to 23.25$/MWh.  Temperatures in the
Northwest ranged from the upper-40s west of the Cascade Mountains to below
freezing east of the Cascades.  The five-day forecast called for
temperatures across the region to converge on normal as the weekend
progresses into Monday.  The latest six-to-ten called for temperatures to
range from normal to below normal across the region from January 2 through
6.  Flows at Chief Joseph were revised slightly upward, coming in at 90 kcfs
Friday, 75 kcfs Saturday, 60 kcfs Sunday, 90 kcfs Monday, 55 kcfs New Year's
Day, and 100 kcfs Wednesday through next Thursday.  There was no unit news
to report in the Northwest on Thursday.

Amid near-normal weather forecasts and weak spot gas prices, heavy load
energy costs fell in the Golden State on Thursday, while light load prices
were up on the usual all-day Sunday premium. Sunday-Monday package prices at
SP15 won the pole position on Thursday, with peak goods changing hands
between 25.3 and 27$/MWh, while off-peak power was traded from 18.5 to
25$/MWh.  "L.A. is supposed to be about 10 degrees warmer than load centers
farther north so weather's probably not a factor, but New Year's loads are
usually higher, particularly in Pasadena with the Rose Bowl and all,"
speculated one California player.  Another added that liquidity was still
affecting the market on Thursday.  Spot natural gas prices at the Southern
California border followed the general trend when they slipped 23 cents,
trading between 2.52 and 2.57$/mmBtu.  In generation news, gas-fired Moss
Landing #6 (739 MW) returned to service on Thursday.  The unit has been down
since December 19 for unplanned maintenance.  Los Medanos (550 MW) was
operating at 125 MW, down from Wednesday's level of 200 MW.  Additionally,
there was an extra 640 MW off-line on Thursday from units with a capacity
less than 250 MW.  On the weather front, the outlook was less than exciting,
with temperatures across the state expected to linger within five degrees of
normal through Monday.  Overnight lows were forecast uniformly in the
mid-40s.  The latest six-to-ten from the NWS called for above-normal
temperatures from January 2 to 6.

Not even sustained below-normal temperatures could prop up power prices for
peak goods in the Southwest on Thursday against the gas-led tumble that
rattled the WSCC.  Peak goods at Palo Verde traded in a dollar range from 25
to 26$/MWh, a softening of 4$/MWh on the high end.  Temperatures were normal
to below normal across the region, and one couldn't even break a sweat in
Phoenix on Thursday.  The five-day forecast called for temperatures to heat
up on average, but they were still not expected to warm into above-normal
territory.  The latest six-to-ten predicted temperatures to remain normal or
below normal through January 6.  Nary a murmur was heard of unit outages in
the region on Thursday.

David Ramberg and Jessie Norris
_________________________________________________________

Western Generating Unit Outages

Current                            Begins          Ends          Reason
CAISO units <250/6515 total          NA             NA
planned/unplanned*
Alamitos #3/320/gas               04-Dec-01         ?            planned
Alamitos #4/320/gas               23-Dec-01         ?            planned
Big Creek Project/1020/hydro      09-Dec-01         ?         @752MW,
planned
El Segundo #3/337/gas             02-Oct-01         ?            unplanned
Etiwanda #3/320/gas               22-Dec-01         ?            planned
Etiwanda #4/320/gas               22-Dec-01         ?            planned
Grand Coulee #19/600/hydro        10-Dec-01       March          repairs
Helms PGP #2/407/hydro            01-Oct-01         ?            planned
Hyatt/Thermalito/933/hydro        02-Oct-01         ?      @607 MW,
unplanned
Los Medanos/550/gas               25-Dec-01         ?      @125 MW,
unplanned*
Morro Bay #4/336/gas              22-Dec-01         ?            planned
Ormond Beach #2/750/gas           05-Oct-01         ?      @350 MW,
unplanned
Pittsburg #6/317/gas              22-Nov-01         ?            planned
Sutter Plants/546/gas             04-Dec-01         ?            planned

For unit owners refer to pdf version.
*Indicates a change from previous EMR.
______________________________________________________________________

Eastern Markets Pre-Scheduled Firm Power Prices ($/MWh)

December 27, 2001 for December 28, 2001

Peak (Heavy) in $/MWh
                 Low     Change   High      Change
Into Cinergy    19.00    -3.00    21.50     -5.50
Western PJM     25.50    -0.50    26.35     -0.15
Into Entergy    21.00    -2.50    22.50     -3.00
Into TVA        20.00    -4.00    20.50     -5.00
___________________________________________________________
As natural gas prices dropped considerably and below-normal temperatures
reigned supreme, peak power prices for Friday delivery settled lower across
the Eastern Interconnect.  "The Jan/Feb contract came off a lot today, but
otherwise there wasn't much interest or liquidity in the market," commented
one southern trader.  The AGA's weekly inventory report listed an 81 bcf
draw on Thursday, above most industry forecasts of 65 to 70 bcf.  NYMEX
Henry Hub futures were unable to sustain recent gains, and slipped
substantially.  On its last day of trading, the January contract sunk like a
stone, losing a traumatic 35.6 cents to close at 2.555$/mmBtu.  February
fell an equally depressing 31.8 cents to end at 2.619$/mmBtu.

Despite a new unit outage and continued cold weather, day-ahead electricity
prices edged down in the Mid-Atlantic on Thursday.  According to sources,
Indian Point #2 tripped off-line sometime Wednesday and remained down on
Thursday.  Some traders speculated the unit would be back up Saturday,
December 29.  Western PJM daily goods changed hands between 25.5 and
26.35$/MWh.  "Someone was buying a lot of power early so prices were strong,
but after that they fell.  There was some West to East congestion which kept
them from dropping too much and the real-time number was also robust,"
summed up one PJM player.  LMPs lingered above 40$/MWh for two hours in the
late morning, but were averaging 25.85$/MWh through 15:00 EST.  The five-day
weather outlook predicted sustained below-normal temperatures through
Monday, with highs uniformly expected in the mid-30s across PJM.  The latest
six-to-ten called for below-normal temperatures from January 2 to 6.

Forecasts for bitterly cold temperatures by the weekend cheered Midwestern
sellers, but despite the good news heavy load energy costs for Friday
delivery slumped on Thursday.  Into Cinergy pieces traded between 19 and
21.5$/MWh, losing a painful 5.5$/MWh off the high end and 3$/MWh off the
low.  "Load forecasts for the new week are higher, so we should see some
strength on Friday," opined one trader, while another said, "I think people
will keep the thermostat up and their gas fireplaces crackling over New Year
's."  No new curtailment information was available on Thursday.  High
temperatures were expected in the low-20s to high-teens by Saturday, with
little change expected through Monday.  The most current six-to-ten
predicted below-normal temperatures from January 2 to 6.

Amid much weaker natural gas prices, peak electricity prices tumbled in the
Southeast on Thursday.  Into Entergy deals were done from 21 to 22.5$/MWh,
with the bulk of transactions seen nearer the high end.  Into TVA prices
were heard between 20 and 20.5$/MWh, losing at least 4$/MWh off both ends,
while traders said the hub was very illiquid.  Friday forecasts predicted
slightly below-normal temperatures, with overnight lows in the 28 to 34
degree range.  Substantial cooling was expected by Sunday and Monday, with
lows predicted in the mid-20s across the entire region.  The latest
six-to-ten called for below-normal temperatures from January 2 to 6.
___________________________________________________________
California ISO Congestion Index in $/MWh

                         Path                 Peak   Off-peak
for 28-Dec-01         NW1 to NP15             0.00     0.00
                      NW3 to SP15             0.00     0.00
                      AZ3 to SP15             0.00     0.00
                      LC1 to SP15             0.00     0.00
                      SP15 to NP15            0.00     0.00

OTC Forward Peak Electricity Contracts in $/MWh

                    Mid-C              PV              SP-15
                Bid      Ask      Bid      Ask      Bid      Ask
BOM             --       --       --       --       --       --
January        24.75    26.25    27.25    28.25    28.50    29.50
February       21.50    23.00    26.00    27.00    27.00    28.00
March          19.00    20.50    25.50    26.50    26.50    27.50
Q1 '02         21.50    23.00    25.75    26.75    27.50    28.50
Q2 '02         16.50    18.00    28.00    29.00    28.00    29.00
Q3 '02         33.50    35.50    43.75    44.75    42.00    43.00
Q4 '02         28.50    30.00    28.75    29.75    31.00    32.00
Cal '03        30.75    32.25    34.00    35.00    35.00    36.00

Represents the most recent bid/ask spread obtainable
by the Energy Market Report.

Alberta Power Pool Index (C$/MWh)

                    Peak(14)   Peak(16)   Off-Peak    Flat     Change
for  26-Dec-01       24.48      22.85      16.88      20.98     5.76

BPA's Offer for 12/27/01 and 12/29/01.

Hours        Amount          NW delivered        COB/NOB delivered

7-22         100MW           Market Price*          Market Price*

*Market price will be determined at time of request.

NYMEX Henry Hub Gas Futures in $/mmBtu

                 Close        Change
        Jan      2.555        -0.356
        Feb      2.619        -0.318

Natural Gas Spot Prices in $/mmBtu

                  Low          High
Sumas             2.40         2.45
So. Cal Border    2.52         2.57
San Juan          2.37         2.42
__________________________________________________________

Economic Insight, Inc. - 3004 SW First, Portland, Oregon 97201,
Telephone (503) 222-2425, Internet e-mail emr@econ.com -
Copyright, Economic Insight, Inc. 2001.


14.2 Consequential Damages.

In no event shall Contractor or Owner be liable to the other, either
individually or jointly and irrespective of whether alleged to be by way of
indemnity as a result of breach of contract, breach of warranty, tort,
(including negligence), strict liability, or any other legal theory, and
whether arising before or after completion of the Facility, for, and each of
Contractor and Owner hereby waives any right to, damages that constitute
consequential damages, or incidental, special, indirect, or consequential
damages of any nature whatsoever, including, but not limited to, losses or
damages caused by reason of unavailability of the Facility, shutdowns or
service interruptions, loss of use, non-operation of the Facility or any
Equipment or Contractor,s Equipment, loss of power or cost of replacement
power, loss of profits or revenue, loss of contracts, cost of capital,
inventory or use charges, cost of purchased or replacement power, loss of
fuel, interest charges or claims of Owner,s customers.


Have you had an opportunity to meet with Mark Taylor on this?  If so, can you
provide me with an update?
Thanks
Peggy
---------------------- Forwarded by Peggy Hedstrom/CAL/ECT on 07/05/2000
12:13 PM ---------------------------

Rob Milnthorp
06/30/2000 08:38 AM
To: Peggy Hedstrom/CAL/ECT@ECT
cc:
Subject: "Project DoorStep" TARGET DATE

---------------------- Forwarded by Rob Milnthorp/CAL/ECT on 06/30/2000 07:38
AM ---------------------------

Donna Lowry
06/30/2000 12:01 AM
Sent by: Michael Neves
To: Rob Milnthorp/CAL/ECT@ECT
cc: Richard Lauer/HOU/ECT@ECT, Donna Lowry/HOU/ECT@ECT, Sally
Beck/HOU/ECT@ECT, Rick L Carson/HOU/ECT@ECT, Ted Murphy/HOU/ECT@ECT, John
Sorrells/AA/Corp/Enron@ENRON
Subject: "Project DoorStep" TARGET DATE

The target date specified in an open audit observation has been reached.
Click on the document link below to view the observation / action step(s).
Please provide action step implementation detail along with completion date
and submit return response to Donna Lowry.  If you should have any questions
relating to this audit, please call the Observation Contact listed in the
following observation (document link).  Thank you.  NOTE:  EACH E-MAIL
REPRESENTS A SEPARATE AUDIT OBSERVATION.

Click on this link to view document -->


----- Forwarded by Tana Jones/HOU/ECT on 01/16/2001 04:01 PM -----

	Walter Guidroz@ENRON
	01/16/2001 03:57 PM

		 To: Camille Gerard/Corp/Enron@ENRON, Mary G Gosnell/HOU/ECT@ECT, Samuel
Schott/HOU/ECT@ECT, Adnan Patel/Corp/Enron@ENRON, Tanya Rohauer/HOU/ECT@ECT,
Paul Radous/Corp/Enron@ENRON, Tom Moran/HOU/ECT@ECT, Bradley
Diebner/HOU/ECT@ECT, Tana Jones/HOU/ECT@ECT, Karen Lambert/HOU/ECT@ECT, Frank
L Davis/HOU/ECT@ECT
		 cc:
		 Subject: ClickPaper approvals, 1-16-01

Attached are ClickPaper approvals for January 16, 2001.


Call me, lets chat.


1. Understanding VaR
 2. Curve Mapping
3. Macros
4. Operationa Analysis
5. Options
6. The Greeks

If I think of some more, I will let you know.  Thanks for getting this
together.
PL


Hi Laura:  I've attached three things, but first wanted to give you a bit of
an update on events transpiring in Sacramento and at the Public Utilities
Commission.

Move to Prohibit Customer Choice
As you may know, AB1X, the bill that the Legislature recently passed and the
Governor signed, gives the California Department of Water Resources the
authority to buy power on behalf of the utilities.  Included in that bill,
however, is a provision that prohibits "Direct Access,"  California's term
for customer choice.

In sum, the bill, in its current form, prohibits businesses and consumers
from chosing an alternative energy service provider, like Enron.  Our
understanding is that the Department of Finance called for the prohibition.
Their reasoning is that they need a "captive" customer base to pay for the
bonds that the State will issue in order to finance DWR's power purchases.

Customer choice was of course the foundation of California's restructuring
law, AB 1890, and is arguably the only bright spot in an otherwise fatally
flawed plan.  For example, the only businesses and consumers that were
protected in San Diego when rates were deregulated last year were those
businesses and consumers that had signed fixed price power deals with
competitive service providers.  Ironically, the recently passed legislation
takes choices away from consumers and diminishes their ability to manage
their energy costs.  Before AB 1890, consumers and businesses had one
choice--the monopoly  utility.  With the passage of AB 1X, they again will
have one choice. But this time their only choice will be to buy from a
government agency DWR.

A broad coalition of consumer groups has expressed its opposition to the
prohibition and Senator Debra Bowen (a key player on the Senate side), and
Fred Keeley (a key player on the Assembly side), have promised to "fix" the
prohibition in another bill "SB27X."  I'll forward in another email the
language that the coalition has drafted and hopes Bowen and Keeley will carry.

Unfortunately, we are now hearing rumors that the Governor intends to direct
the California Public Utilities to immediately implement the provisions of
AB1X prohibiting Direct Access, despite the fact that a large coalition of
consumers and service providers are actively working with Bown and Keeley to
amend the prohibition language.

It would be extremely useful if the folks participating in the meeting on
Thursday with the Governor let him know that taking choices away from
businesses and customers is the wrong way to go and that he and the
legislative leaders need to work with the coalition to fix it.  You'll note
in the language developed by the coalition that the proposal strikes a
reasonable balance between the Dept of Finance's concerns about recouping
DWR's costs of buying power, and the need to give consumers and businesses
maximum flexible in managing their energy costs.

Move to Have the State Take Over the Electric Industry in California

John Burton, the Democratic leader of the Senate, insists that, "if
California is going to 'bail out' the utilities, the State needs to get
something in return."  Burton wants the state to buy and operate PG&E's and
Edison's transmission system and create a state power authority that would
get in the business of (among other things) developing, financing,
constructing and operating power plants and natural gas pipelines.  Burton
got both of these bills designed to take over the industry passd out of his
committee yesterday (SB6X and SB33X).  It is unclear how much support he has
in the full Senate or in the Assembly, but the possibility of passage is
certainly greater than zero at this juncture.

Others experts are offering a better alternative.  When the federal
government helped Chrysler out of its financial difficulties 20 years ago,
the federal government received stock warrants in return.  Until recently,
the Governor favored warrants, but more recently he has waivered in his
statements regarding a state take over.  Burton appears to have negotiating
leverage with the Governor and appears to be using it.

Again, it would be extremely useful for folks to let the Govenor know in the
meetings on Thursday that a State take over of the industry is an extreme
move and bad public policy.  I will forward to you in a separate email
letters that we sent to Burton expressing our opposition to his bills and the
reasons for our opposition.  In brief, there is no shortage of private
capital ready and willing to invest in California's energy infrastructure
(i.e., power plants, electric transmission lines, gas pipelines).  All
California needs to do is create the investment climate necessary to attract
the capital.  In addition, history shows that the State is extremely
ill-equipped to become California's mega-utility.

Here are the attachments:

A demand buy-down proposal.  We made this proposal to the Governor (and
continue to propose it to policymakers in Sacramento, Washington D.C. and
just about everywhere else).  In short, the notion is that, if the market is
willing to pay power producers, say, 7 cents/kwh to "produce" power, then the
market ought to be willing to pay businesses and consumers 7 cents/kwh to
"reduce" power consumption.

This approach is critical for two reasons:  first, it provides businesses and
consumers the financial incentives necessary (and that California currently
lacks) to conserve energy and use energy more efficiently.  Second, because
California delayed identifying and implementing a solution to California's
energy crisis, its options for addressing the severe shortages that are
likely occur this summer are very limited.  Reducing demand represents one of
the few options that can help to immediately reduce the gap between supply
and demand.  Putting financial incentives in place now to reduce demand and
"free up" electrons is an investment with significant payback.

A "manifesto" recently released by a group of Berkeley and Stanford
economists and industry experts urging the Govenor to pursue a
"market-oriented" solution to California's energy crisis.

An editorial in yesterday's Wall Street Journal by Dan McFadden, a nobel
prize-winning economist from Berkeley echoing the proposal advanced in the
"manifesto."  McFadden was one of the manifesto's signatories.

Finally, we are working on "model Legislation" proposing a market-based
solution that we will share with you soon and that we hope the business
community--and the Valley in particular--can embrace and advocate.

I realize that this is a lot of information and I apologize for the length of
this note, but I wanted to try to make sure that you're up-to-date.  Please
don't hesitate to give me a call if you'd like to discuss further.

Best,
Jeff

 - Manifesto-final version.doc


---------------------- Forwarded by Dana Davis/HOU/ECT on 10/19/2000 02:23 PM
---------------------------

Rebecca Sanchez
10/11/2000 12:16 PM
To: Dana Davis/HOU/ECT@ECT, Rufino Doroteo/HOU/ECT@ECT, Kevin
Jolly/HOU/ECT@ECT, Julie Torres <jtorres@franchiseconceptsinc.com>,
sanchezma@simplexnet.com
cc:
Subject: This is funny

---------------------- Forwarded by Rebecca Sanchez/HOU/ECT on 10/11/2000
12:14 PM ---------------------------

MyAngelADM@aol.com on 10/11/2000 12:14:01 PM
To: mmathews@modec-intl.com, chrisbeck71@hotmail.com,
rebecca.sanchez@enron.com, jackie.pierce@compaq.com
cc:
Subject: This is funny

One day in the Garden of Eden, Eve calls out to God.  "Father, I have a
problem!"

 "What's the problem, Eve?"

 "Lord, I know you created me and provided this beautiful garden and
all of  these wonderful animals and that hilarious comedic snake, but
I'm
just not  happy."

"Why is that, Eve?" came the reply from above.

"Lord, I am lonely, and I'm sick to death of apples."

"Well Eve, in that case, I have a solution.  I shall create a man for
you."

"What's a man, Lord?"

"This man will be a flawed creature, with many bad traits.  He'll lie,
cheat and be vainglorious; all in all, he'll give you a hard time.
But...he'll be bigger, faster, and will like to hunt and kill things.
He will look silly when he's aroused, but since you've been complaining,
I'll create him in such a way that he will satisfy your physical needs.
He will be witless and will revel in childish things like fighting and
kicking a ball about.  He  won't be too smart, so he'll also need your
advice to think
properly."

"Sounds great." says Eve, with an ironically raised eyebrow. " What's
the catch, Lord?"

"Well...  you can have him on one condition."

"What's that, Lord?"

"As I said, he'll be proud, arrogant, and self-admiring...  So you'll
have to let him believe that I made him first.  Just remember, it's our
little secret... Y'know....Woman to woman..."


TCPL has replied to the NEB they and the signatories wish to proceed with their application unamended.  Now for the board to establish a process.  The earliest this could be in place would be August 1 but realistically it could be much later than that.

 -----Original Message-----
From: 	Heal, Kevin
Sent:	Monday, June 11, 2001 12:55 PM
To:	Hemstock, Robert; Tiberi, Fino; Mckay, Jonathan; Le dain, Eric; Concannon, Ruth; Pearson, Jeff; Hedstrom, Peggy; Milnthorp, Rob; Storey, Geoff
Subject:	TCPL Toll Application

The NEB has advised that because of the substantial opposition to the Settlement, it can not treat it as a "Negotiated Settlement".  This means the board will not be obligated to approve or deny the application as a whole and could cherry pick what components get approved.  The board has asked TCPL to confirm whether to they wish to proceed with the application or file something new before the board establishes a process to consider the tolls.  Interesting to see if any of the signatories walk away from the deal in light of this.
Kevin


--------- Inline attachment follows ---------

From:  <susanmlewis@prodigy.net>
To: Don Miller <themiller@charter.net>, Beverly Jones <BJONES110@houston.rr.com>, Bob Hurt <bobhurt66@hotmail.com>, Brent Edwards <pamedwards@academicplanet.com>, Christy Wussow <cwussow@houston.rr.com>, Craig Shields <shields.craig@yahoo.com>, Darian Hawkins <darianhawkins@msn.com>, David Marye <davidandaudra@msn.com>, David Salley <dhsalley@ev1.net>, Helen Mathews <hmathews@houston.rr.com>, Joel Anderson <indyandy06@msn.com>, Karen Harrison <the-harrisons@houston.rr.com>, Kathy Gibbins <pgibbins@houston.rr.com>, Kurt Wangenheim <kwangenheim@houston.rr.com>, Lindsay Renaud <lindsayrenaud@msn.com>, Lmfoust@aol.com, Mariano Gomez <mgomezsa@yahoo.com>, Mark Kiddle <markkiddle@aol.com>, Mary John <sxjohn_2000@yahoo.com>, Mary Sapalio <msapalio@aol.com>, Mary Vasquez <rvasquez1@houston.rr.com>, melissaevans@pdq.net, Micah Hatten <dhatten@houston.rr.com>, Natalie Bondareva <natbond@lycos.com>, Neil Anderson <necanderson@mail.com>, Peter Vint <pvint@houston.rr.com>, Rob Krotee <rkrotee@houston.rr.com>, Robert Massey <massey.r@worldnet.att.net>, Sarah Driscoll <sshimeall@hotmail.com>, Shelly Farias <anthony_f@worldnet.att.net>, Tracy Davis <tldavis@houston.rr.com>, Fawcett Jeffery <jlfawcett@earthlink.net>
Date: Saturday, January 19, 2002 4:25:48 GMT
Subject:

From: News and Views | Opinion |
Wednesday, January 09, 2002

Biz School Blindness
Sank Enron

By JOHN LEBOUTILLIER

 arvard Business School: It's called the West Point of capitalism. In fact, the school's bottom-line-only philosophy has had a poisonous effect on American business practices. The Enron disaster is the most recent - and spectacular - manifestation.

To illustrate my point, let me take you back to a classroom at the school in the late winter of 1978. The course was productions and operation management, taught by Chip Bupp, a thoughtful and serious man.

On this particular day, the case study involved a company that manufactured a product that might be harmful, even fatal, to the consumer. The question was, what should you do, if you were the company's CEO, in such an ambiguous but potentially dangerous situation?

Several students offered suggestions, none of which galvanized the class. Then a hand shot up, and Bupp said, "Jeff, what would you do?"

Jeff, with his thinning blond hair, wire-rim spectacles and slight Southern drawl, was one of the brightest members of the class and a natural leader. When he talked, as the commercial used to say, everyone listened.

"I'd keep making and selling the product," Jeff said. "My job as a businessman is to be a profit center and to maximize return to the shareholders. It's the government's job to step in if a product is dangerous." Several heads nodded.

Neither Jeff nor those who agreed with him seemed to care about the potential effects of their cavalier attitude. What if the product really did harm consumers? How about the company's employees? Were they in danger during the manufacture of the product? What would happen to the company if the CEO's decision was wrong?

Few in the classroom that day dared to raise these questions. At Harvard Business School - and business schools nationwide - you're considered soft, a wuss, if you dwell on morality or scruples.

As the years went by, Jeff had a meteoric career. He became a partner in the McKinsey consulting firm. From there he joined Enron and was soon promoted to president and chief executive officer.

Jeff is Jeffrey Skilling, who resigned under unexplained circumstances in August after only six months on the job.

In two stock sales before and after his departure, he cashed out $30.6 million worth of Enron stock.

Skilling and other senior managers encouraged employees to buy and keep Enron stock, even when things started to sour, while they were hurriedly selling huge blocks of their own stock. And now Enron has collapsed, "the largest bankruptcy case in American history," according to Sen. John McCain (R-Ariz.).

One analyst told CNBC, "It's the biggest insider trading scandal ever." Another observer said, "Enron was run to benefit the top executives. They literally looted the company."

Yet Skilling proclaims total ignorance of any problems. "I had no idea the company was in anything but excellent shape," he has said.

Articles about Skilling written since the demise of his company cite his arrogance and cold-heartedness. But as I witnessed sitting in that Harvard Business School classroom nearly 24 years ago, the seeds of his destruction grew out of a gross misunderstanding about the role of a business leader in our society. In his view, it is to be "a profit center" and to "maximize return for the shareholder," no matter the peril to consumers or employees.

Harvard and other business schools must pay more than lip service to the gross ethical blind spots that the Enron case has exposed. Starting with an admissions policy that selects potential students for ethics and character as well as brains, these institutions need to return to the goal of teaching their students to be good citizens first and moneymakers second.

America can't afford many more Enrons - or Jeffrey Skilling-like CEOs.

LeBoutillier graduated from Harvard Business School in 1979.
He is the author of "Harvard Hates America."


Joanna Carina
3027 Garfield St NE
Minneapolis, MN 55418
joanna@groupdesigninc.com

To Mr. Ken Lay,

I'm writing to urge you to donate the millions of dollars you made from selling Enron stock before the company declared bankruptcy to funds, such as Enron Employee Transition Fund and REACH, that benefit the company's employees, who lost their retirement savings, and provide relief to low-income consumers in California, who can't afford to pay their energy bills.  Enron and you made millions out of the pocketbooks of California consumers and from the efforts of your employees.

Indeed, while you netted well over a $100 million, many of Enron's employees were financially devastated when the company declared bankruptcy and their retirement plans were wiped out.  And Enron made an astronomical profit during the California energy crisis last year.  As a result, there are thousands of consumers who are unable to pay their basic energy bills and the largest utility in the state is bankrupt.

The New York Times reported that you sold $101 million worth of Enron stock while aggressively urging the company's employees to keep buying it.  Please donate this money to the funds set up to help repair the lives of those Americans hurt by Enron's underhanded dealings.

Sincerely,

Joanna Carina


Hi guys,

Could someone send an electronic file of the execution copy of the Coyote
Springs contract?

Thank you,

Kay


Dennis,

Thanks for you message. I shall send you more information regarding the
dinner later this week.
Christie Patrick, who is in charge of our university liaison unit, is making
arrangements for
the evening  at the Enron Field. Hopefully, we shall be able to combine
dinner with a game.

Vince

"Dennis W. Loughridge" <loughrid@ruf.rice.edu> on 04/30/2001 10:49:10 AM
Please respond to <loughrid@rice.edu>
To: <Vince.J.Kaminski@enron.com>
cc:
Subject: RE: ALP presentation

Vince
I will be attending the ALP presentation on May 7 and would be pleased to
join the team for dinner if it is not too late.
Thank you
Dennis Loughridge

Dennis W. Loughridge
Director of Energy Consortium
Rice University
713-348-2812

-----Original Message-----
From: Vince.J.Kaminski@enron.com [mailto:Vince.J.Kaminski@enron.com]
Sent: Tuesday, April 10, 2001 8:16 AM
To: loughrid@rice.edu
Cc: luigical@rice.edu
Subject: ALP presentation

Sorry, trying again. I probably got a wrong E-mail address and the original
message
was returned.

Vince Kaminski
---------------------- Forwarded by Vince J Kaminski/HOU/ECT on 04/10/2001
08:15 AM ---------------------------

Vince J Kaminski
04/10/2001 08:13 AM

To:   barrett@rice.edu, uecker@rice.edu, cmiller@rice.edu,
      lounghrid@rice.edu, luigical@rice.edu
cc:   Vince J Kaminski/HOU/ECT@ECT, Christie Patrick/HOU/ECT@ECT, Shirley
      Crenshaw/HOU/ECT@ECT, Kenneth Parkhill/NA/Enron@ENRON
Subject:  ALP presentation

On behalf of  Enron Corp. I would like to invite you to an ALP Project
presentation by a group of students
of Jesse H. Jones Graduate School of Management, Rice University.

The students will present the results of a research project regarding
electronic trading
platforms in the energy industry.

The presentation will be held on May 7, at 4:00 p.m. at Enron, 1400 Smith.

We would also like to invite you to dinner, following the presentation.

Vince Kaminski

Vincent Kaminski
Managing Director - Research
Enron Corp.
1400 Smith Street
Room EB1962
Houston, TX 77002-7361

Phone:    (713) 853 3848
     (713) 410 5396 (cell)
Fax  :      (713) 646 2503
E-mail: vkamins@enron.com


I have 3 flat screen monitors and a Sun monitor.

DG

From: Chris Austin/ENRON@enronXgate on 03/21/2001 12:33 PM
To: Anne Bike/Corp/Enron@Enron, Alejandra Chavez/NA/Enron@ENRON, Kristen
Clause/ENRON@enronXgate, Kulvinder Fowler/NA/Enron@ENRON, Carole
Frank/NA/Enron@ENRON, Maria Garza/HOU/ECT@ECT, Darron C Giron/HOU/ECT@ECT,
Elizabeth L Hernandez/HOU/ECT@ECT, Luchas Johnson/NA/Enron@Enron, Kam
Keiser/HOU/ECT@ECT, Kyle R Lilly/HOU/ECT@ECT, Ryan O'Rourke/ENRON@enronXgate,
Scott L PALMER/ENRON@enronxgate, Jeff Royed/Corp/Enron@ENRON, Patrick
Ryder/NA/Enron@Enron, Elizabeth Shim/Corp/Enron@ENRON, Kimat
Singla/HOU/ECT@ECT, Yuan Tian/NA/Enron@ENRON
cc:
Subject: Machine Info

Please let me know how many video screens/computers you have if you have more
than one.

Thanks again!

Chris Austin
GEM Project, MCSE, CCNA
Enron Corp
713-345-6002 Work
281-830-6092 Cell
877-482-0926 Pager
chris.austin@enron.com


fyi...

 -----Original Message-----
From: 	Cantrell, Rebecca W.
Sent:	Monday, November 26, 2001 11:16 AM
To:	Concannon, Ruth; Townsend, Judy; Lamadrid, Victor; Muhl, Gil; Superty, Robert; Calcagno, Suzanne; McMichael Jr., Ed; Smith, George F.; Pollan, Sylvia S.; Kinsey, Lisa; Luce, Laura; Shireman, Kristann; Miller, Stephanie; Lucci, Paul T.; Gay, Randall L.; Sullivan, Patti; Hodge, John; Tholt, Jane M.; Kuykendall, Tori; Mahmassani, Souad; South, Steven P.; Shively, Hunter S.; Grigsby, Mike; Neal, Scott; Gomez, Julie A.; Sullivan, Colleen
Cc:	Steffes, James D.; Lawner, Leslie; Neustaedter, Robert
Subject:	New FERC Policy on Negotiated Rate Deals

This is an alert that FERC will be more critical in the future of negotiated rate deals.  The orders discussed below dealt with buyout provisions in negotiated rate deals that Tennessee, ANR and Columbia had done.  These provisions had previously been permitted as negotiated rates, but FERC has decided that there is "significant potential for undue discrimination" and the recourse rates do not provide an adequate alternative.   Thus, anything in a negotiated rate deal that is not strictly rate-related will most likely be subject to intense scrutiny.

FERC ADDS ANOTHER LAYER TO POLICY ON NEGOTIATED-RATE AUTHORITY

Acting on a series of contract-specific cases, FERC last week sharpened its policy on what is, and is
not, allowed under negotiated rates. In further defining its policy, the commission continued to lean
heavily on the "linchpin" of negotiated-rate authority - that a customer not willing or able to negotiate a
deal must always have the option of obtaining needed capacity under cost-based recourse rates.
During discussion of the orders, Chairman Pat Wood III said it was "important to keep in mind, as we
rush into the brave new world on the gas side," that "all customers must be treated on a nondiscriminatory
basis by pipelines." Last week's proclamation should be considered "a reaffirmation of that nondiscriminatory
trend," he asserted.
In representative language, the commission said it wants to ensure that parties "are clear about contracting
practices that we find unacceptable because they present a significant potential for undue discrimination and those
that we find acceptable because they can be permitted without substantial risk" of such unequal treatment.
FERC declared that a "key factor" in determining whether a negotiated provision is considered an
"appropriate material deviation" from a pipeline's filed tariff schedule is the extent to which recourse rates
provide "adequate alternatives" to other shippers.
In cases involving rates negotiated by ANR Pipeline Co. (GT01-25, RP99-301), Tennessee Gas Pipeline
Co. (RP96-312, et al.) and Columbia Gas Transmission Corp. (CP01-70), the commission ruled that the
buyout provisions are not allowed unless they are offered to all shippers as part of the pipelines' generally
available tariffs.
The provisions at issue allow customers to buy out or terminate their contract demand levels prior to
the end of the deals. While the commission previously has held that such provisions can be included in a
negotiated-rate package, "we have reconsidered that holding" because similar buyout opportunities are
not available to more traditional shippers operating under recourse rates, it said in the Tennessee order.
Where a customer is seeking service for a set contract term and quantity, recourse service provides an
"adequate alternative," the commission observed. "However, if the customer desires a special contract
demand reduction or early termination right not provided in the generally applicable tariff, the availability
of service at the recourse rate does not provide an adequate substitute, since recourse service would not
include any such provision." A shipper obtaining such a provision would be insulated from a certain
degree of risk, giving it "an advantage over recourse-rate shippers," the commission pointed out.
"A shipper's right to reduce, or terminate, its contract demand before the expiration of its contract is a
valuable right, since it can enable the shipper to avoid significant liability for future reservation charges,"
FERC said, adding that "such a valuable right must be granted in a not unduly discriminatory manner."
Requiring pipelines to file generally applicable tariff provisions setting forth the conditions under
which they will offer contract demand reduction rights "is the best means of assuring that those rights will
be negotiated" in a fair manner, FERC reasoned. Once approved, the tariff language "will require the
pipeline to grant similar rights to similarly situated customers."
Commissioner Linda Breathitt applauded the policy shift, characterizing it as a much-needed shot in
the arm for a program that had become "muddled." Through a "tortured line of cases," FERC's definitions
of allowable contracting practices were "obscured," Breathitt said in welcoming the new "common-sense"
approach. The "tug of war" that parties have engaged in over the past few years "really hasn't served our
objective of ensuring that nondiscriminatory rates and service" are available to all shippers, she said.


Jack:

    We routinely work with applications that have been "sent to the national
office."  If an application is "sent to the national office," it means that
an issue or issues have been identified in the application by the original
reviewing agent that give the agent pause, and which the agent feels a more
technical review by a more skilled agent is required.  It always means that
there is some problem with the application that could result in denial of the
application.

    I suspect that what the IRS would really like your client to do is
establish objective standards in your organization's fundamental documents
for determining who is to receive the assistance of the charity.   Such
standards would give the IRS assurance that only poor people would receive
the benefits, and make it easier to determine if the mission was being
adhered to in an audit of activities.  Addressing this concern could be as
simple as enacting a Bylaw amendment or more likely an amendment to the
Articles of Incorporation.

    Last year, our office was brought in at the "national office" stage, well
after the Form 1024 was filed, to help a group of ranchers and cattlemen in
Wyoming/Montana opposed to illegal imports of below cost beef, to obtain
trade association status, (501(c)(6)), that the national office kept trying
to deny by saying they were an agriculture organization (which meant
potentially less availability of tax deductible contributions under o162).
What we did in that case was setup a conference call with the client's
lawyers and the IRS national office team assigned to the file.  We talked
through the application, identified each and every problem the IRS had
identified, and then our firm prepared, in essence, a supplemental brief
addressing each issue.  In the process, we learned that a few minor changes
to the Articles of Incorporation and Bylaws, plus the supplemental
application information, were enough to address the IRS's agents concerns,
and they issued the tax determination letter.

    Thus, I would suggest that you request a conference call with the
national office agent or "team" reviewing the application, and get them to
identify each and every concern with the application.   Then, ask them for a
period of time to respond.  Ask them if changes in the fundamental corporate
documents would help address their concerns.  And of course, be mindful that
if you have had ongoing activities, you will want to be sure that anything
you do will result in retroactive deductibility for what contributions you
have already received.

    During late 1999, the IRS was accused of responding to political pressure
in triggering audits of exempt organizations by the Landmark Legal
Foundation, a conservative, Washington, D.C. legal foundation.  Landmark did
a Freedom of Information Act request and released documents which tended to
indicate that the IRS was auditing groups in response to complaints from
Congressmen.  The IRS denied that political influence plays a role in its
decisions, and, since then, the IRS exempt organizations unit has been very
careful about not creating an impression that they respond to political
pressure.

    If your client would like our firm to help as a consultant to work with
the national office, we'd be pleased to be of assistance.  We would need to
review the file and have your client execute a Form 2848 Power of Attorney
for us to join the team.

    Hope this is helpful.

Best regards,

Jim Lacy
Wewer & Lacy, LLP

CONFIDENTIALITY NOTICE: The information contained in this communication and
any
accompanying document(s) is protected by the attorney-client and/or the
attorney/work product privileges.  It is intended for the sole use of the
addressee.  If the person actually receiving this communication or any other
reader of the communication is not the named recipient, or the employee or
agent responsible to deliver it to the named recipient, you are advised that
any disclosure, copying, distribution, or the taking of any action in
reliance upon the communication is strictly prohibited.  Any such inadvertent
disclosure shall not compromise or be a waiver of any applicable privilege as
to this communication or otherwise.  If you have received this communication
in error, please immediately notify us by telephone at (949) 248-1154, or
contact the sender at our email address above.  Thank you.


Comments:

1.  In the sentence between eqn. 3 and eqn. 4,  I think "annualized
volatility"  should replace "annualized standard deviation."

2.  As to the comment,  "Immediately we see something quite
counter-intuitive."    I would disagree.   I think that its quite intuitive
that this model should get closer to the Black-Scholes price as what is
defined as the "jump" component becomes just part of the main price
distribution, which happens if we define a jump to be only a 1-sigma
event.    The table does show, however, that the results of using this model
are very sensitive to exactly how you choose to define a "jump" (i.e. 2-sigma
or 3-sigma... events),  and this is one difficulty in using the model in
practice.

3.  In the paragraph after the table, I don't understand the argument about
hedging the option.  Especially about buying a swap which would pay on the
difference between the strike and Fs.   This seems non-sensical.

4.  I could not follow the logic of the last two sentences of the article, so
this point should probably be explained more clearly.

--Stinson

Vince J Kaminski
08/18/2000 08:15 AM
To: Grant Masson/HOU/ECT@ECT, Stinson Gibner/HOU/ECT@ECT, Alex
Huang/Corp/Enron@ENRON
cc:
Subject: Alex's paper

Minor changes I made to Alex's paper.

Vince


FYI
----- Forwarded by Bernadette Hawkins/Corp/Enron on 03/20/2001 03:55 PM -----

	"Jackie Gallagher" <JGallagher@epsa.org>
	03/20/2001 02:30 PM

		 To: <bhawkin@enron.com>, <bmerola@enron.com>, <christi.l.nicolay@enron.com>,
<donna.fulton@enron.com>, <janelle.scheuer@enron.com>,
<jeff_brown@enron.com>, <jhartso@enron.com>, <jsteffe@enron.com>,
<Mary.Hain@enron.com>, <rshapiro@enron.com>, <sarah.novosel@enron.com>,
<tom.hoatson@enron.com>
		 cc:
		 Subject: Commission Actions to Remove Obstacles in Western US- Key Points
for EPSA Comments, Due MARCH 30TH

MEMORANDUM

TO: Regulatory Affairs Committee
       Power Marketers Working Group

FROM: Joe Hartsoe, Regulatory Affairs Committee Chair
            Bob Reilley, Power Marketers Working Group Chair
            Julie Simon, Vice President of Policy
            Mark Bennett, Senior Manager of Policy
            Erin Perrigo, Manager of Policy

DATE: March 20, 2001

RE: Commission Actions to Increase Supply and Decrease
      Consumption in the Western United States--Key Points for
      EPSA Comments Due MARCH 30TH

As we previously reported, on March 14, 2001, FERC announced certain actions
to address the energy problems in California and other areas of the West in
an Order Removing Obstacles to Increased Electric Generation and Natural Gas
Supply in the Western United States and Requesting Comments on Further
Actions to Increase Energy Supply and Decrease Energy Consumption.  The
following is an overview of the steps the Commission proposes to "immediately
help increase supply from existing power sources and to provide regulatory
incentives to build new electric and natural gas infrastructure."  The
Commission also invited comments on certain proposals.  This memo includes a
list of key points we intend to make in comments that are due by March 30th.

Overview of Order

The Order reflects a thorough review of  "all of [FERC's] rate and facility
certification authorities in the areas of electric energy, natural gas,
hydroelectric and oil to determine how it can increase electric energy
supply"; however, the Commission noted that its authority is "somewhat
limited."  While the Commission believes state regulators must assume the
lead role due to their authority over siting of generation and transmission,
as well as demand reduction measures, the Commission noted that the impact of
California's energy shortage on the Western Interconnection "underscores the
regional, interstate nature of the energy marketplace."  Accordingly, it
encouraged the formation of a single regional transmission organization for
western markets.

EPSA appreciates the Commission's effort to exercise the full extent of its
authority to help ease the West's energy problems.  Taken together, the
Commission's proposed actions represent positive steps toward rational
solutions to the difficult circumstances in the West.  Most importantly, the
Order highlights the importance of promoting infrastructure investment,
including increased generation, transmission and natural gas pipeline
facilities.

The Commission's immediate actions, which will expire on December 31, 2001,
include:

-Requiring the California ISO and transmission owners within the WSCC to
provide FERC with a list of short-term grid enhancements.

-Extending and broadening waivers of operating and efficiency standards and
fuel use requirements for qualifying facilities (QF).

-Providing wholesale power sales from generation used primarily for backup
and self-generation for businesses with prior notice waivers and market-based
rate authorization.

-Allowing wholesale and retail load reduction to be resold at wholesale
market-based rates.

The Commission seeks comment on several other proposals, including:

-Rolling in new supply interconnection and upgrade costs.

-Increasing the rate of return on equity for projects that significantly
increase transmission on constrained and new routes in the near term.

-10-year depreciation for short-term transmission projects, and 15-year
depreciation for upgrades involving new rights of way that can be in service
by November 1, 2002.

-Use of the interconnection authority set forth in FPA  o210(d) to help
alleviate obstacles to electric supply reaching load.

EPSA's Comments

In its conclusion, the Commission stated that comments should be "concise and
focused."  Accordingly, we suggest that EPSA's comments focus on the
following areas:

? Applaud the Commission's effort to increase supplies from QFs, but
encourage it to provide relief from existing contracts by allowing QFs to
sell to creditworthy parties.

? We understand that there are ongoing differences of opinion regarding the
relative merits of an incremental versus a "rolled in" approach to
interconnection and upgrade costs.  Therefore, while we may lack a consensus
on the question as a final policy position, we believe that the extreme
circumstances surrounding the Order, and the urgent need to move power
quickly into the Western system, make it wise to endorse FERC's instant
recommendation.

? The Commission's proposed actions to create and enhance incentives relating
to expanding and improving the transmission infrastructure through higher
ROEs and accelerated depreciation schedules are positive steps.  The
Commission normally conditions such premiums on meaningful participation in
regional transmission organizations.  However, given the current situation
and the immediate impact of any projects that might be entitled to the higher
ROE, EPSA could support this proposal.

? Constraints on the gas infrastructure have a generally adverse impact on
the energy supply system.  Therefore, the Commission's proposed waivers of
blanket certificates and rate incentives to expedite construction projects,
are favorable developments.

We will discuss the Order and EPSA's comments during tomorrow's Regulatory
Affairs/Power Marketers' conference call.  In addition, we have been asked to
consider what type of short-term relief could be included in federal
legislation.  We will discuss this question as well.  To access the call,
dial 1-800-937-6563 and ask for the Julie Simon/EPSA call. In the meantime,
if you have any questions, please contact either Julie Simon, jsimon@epsa.org
or Mark Bennett, mbennett@epsa.org at (202 628-8200).


We should include David Oxley -- VP of human resources.

From: Kelly Johnson/ENRON@enronXgate on 07/18/2001 11:13 AM

To: Steven J Kean/NA/Enron@Enron

cc: Maureen McVicker/NA/Enron@Enron

Subject: ENE Officer Elections

Steve:

Please review the attached ENE Officer list for your direct reports and
approve.

Thank you.

Kelly M. Johnson
Enron Corp.
Executive Assistant
Tel: (713) 853-6485
Fax: (713) 853-2534
E-Mail: kelly.johnson@enron.com


The Regulatory Roundtable meeting scheduled for Wednesday, December 20 has
been canceled.

Thanks


and where did you see that?

-----Original Message-----
From: shusser@enron.com [mailto:shusser@enron.com]
Sent: Wednesday, December 05, 2001 7:37 AM
To: ebass@enron.com
Subject: Standard Power in Enron takeover bid - Dec. 3, 2001

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 	 I told you that it got down to 14 cents.

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Start Date: 10/29/01; HourAhead hour: 19;  No ancillary schedules awarded.  No variances detected.

    LOG MESSAGES:

PARSING FILE -->> O:\Portland\WestDesk\California Scheduling\ISO Final Schedules\2001102919.txt

Error retrieving HourAhead price data - process continuing...
---- SC Trades Schedule ----
*** Final schedule not found for preferred schedule.
     Details:

  TRANS_TYPE: FINAL
  SC_ID: EPMI
  MKT_TYPE: 2
  TRANS_DATE: 10/29/01
  TRADING_SC: EPPS
  PNT_OF_INTRC: NP15
  SCHED_TYPE: ENGY
  PURCH_SALE: 2
  DEAL_NO: 1


Harry-

I just offered up a trade to you.  Take a look when you get a chance and let
me know what you think.


Start Date: 4/6/01; HourAhead hour: 16;  No ancillary schedules awarded.
Variances detected.
Variances detected in Energy Import/Export schedule.
Variances detected in SC Trades schedule.

    LOG MESSAGES:

PARSING FILE -->> O:\Portland\WestDesk\California Scheduling\ISO Final
Schedules\2001040616.txt

---- Energy Import/Export Schedule ----
$$$ Variance found in table tblINTCHG_IMPEXP.
     Details: (Hour: 16 / Preferred:  12.00 / Final:  11.98)
  TRANS_TYPE: FINAL
  SC_ID: ECTRT
  MKT_TYPE: 2
  TRANS_DATE: 4/6/01
  TIE_POINT: PVERDE_5_DEVERS
  INTERCHG_ID: EPMI_CISO_SCOUT
  ENGY_TYPE: WHEEL

---- SC Trades Schedule ----
$$$ Variance found in table tblInt_Interchange.
     Details: (Hour: 16 / Preferred: 871.00 / Final: 850.00)
  TRANS_TYPE: FINAL
  SC_ID: EPMI
  MKT_TYPE: 2
  TRANS_DATE: 4/6/01
  TRADING_SC: APX1
  PNT_OF_INTRC: NP15
  SCHED_TYPE: ENGY
  PURCH_SALE: 2
  DEAL_NO: 1
*** Final schedule not found for preferred schedule.
     Details:

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

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


-----Original Message-----
From: Smith, George F.
Sent: Thursday, October 25, 2001 4:16 PM
To: Gay, Randall L.
Subject: FW: Texas Monthly November 2001: How Enron Blew It

-----Original Message-----
From: Lessor, James N.
Sent: Thursday, October 25, 2001 3:18 PM
To: Smith, George F.
Subject: FW: Texas Monthly November 2001: How Enron Blew It

-----Original Message-----
From: Lessor, Mary
Sent: Thursday, October 25, 2001 11:00 AM
To: Lessor, James N.
Subject: FW: Texas Monthly November 2001: How Enron Blew It

-----Original Message-----
From: Patel, Tania
Sent: Thursday, October 25, 2001 10:41 AM
To: Acevedo, Felecia; Aguilar, Christa; Aulds, Sharon; Brown, Aaron (Executive Comp); Bryant, Dana; Butler, Pam; Carrera, Susan; Etienne, Bernadette; Garcia, Susan; Ivy, Jason; Lessor, Mary; Ratcliff, Renee; Shealor, Bob; Skarness, Susan; Ward, Cindy R.; Wright, Teresa
Subject: FW: Texas Monthly November 2001: How Enron Blew It

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In celebration of EnronOnline's one millionth transaction this week, we would like to invite you to a celebration party on 	Thursday, June 7th from 5- 8 p.m. at The Grasshopper (506 Main Street @ Prairie in downtown).  Please RSVP as soon as 	possible by clicking on the link below.

	http://207.21.193.94/invitation/

	I hope to see you there.

	Andy Zipper


Joe,

I faxed the Cleary, Gottlieb letter to you.

Please forward the Enron North America Corp. check to Laurel Adams, ECS 04487.

Many thanks for all your assistance.

Sheila


Thanks for this note Lou  - I will making a special effort to recommunicate
this to the wider Metals group in London

Louis Colarusso@MGUSA
15/02/2001 16:28
To: Craig Brown/SAP Systems/LON/ECT@ECT, Rayees Moizuddin/LON/ECT@ECT,
Charlotte McKinty/Corp/Enron@ENRON, Sean Connor/LON/ECT@ECT, Mike
Jordan/LON/ECT@ECT, Andrew Cornfield/LON/ECT@ECT, Marcelo
Parra/NYC/MGUSA@MGUSA
cc:

Subject: SAP Implementation

After a successful period 1 close by 1041 and 1123 I wanted to summarize the
positives and negatives of the project in order to improve the process for
the London Metals implementation.

Positives:

Seamless consolidation process with Enron worldwide

Common design allows users in North America to access key financial data to
help control London Metals business
 accounts receivable
 accounts payable

Aging of accounts receivable for proper control monitoring

Profit Center report functionality for controlling of business by business
group

Timing of close process in conjunction with Enron worldwide

Cost center control by category link by design to corresponding profit center

Cash control procedures utilizing the Treasury Work Station of Enron Corp.

Direct posting of intercompany accounts to reduce duplicate entries

Production of the Daily Profit Report direct from SAP utilizing the
consolidation ledger

SAP trail balance controlled by the ledger owner agrees with the DPR by
profit center

Negatives:

FIT 3 testing should be expanded in order to identify all types of business
flows and to evaluate how they are being treated in SAP.  NY did a two day
roll forward of equity which proved useful.  This type of testing could be
expanded for the London companies.

Poor links of information between GCP system and TWS created many manual
payments.
 This problem is being sorted out by a process outside the SAP implementation
team.

Strict intercompany common design rules around intercompany relationships
have created a difficult control environment.
 SAP intercompany meetings are being conducted to create a system that
adheres to the common design   however allows better intercompany control
features between broker and physical company.

A special thanks goes out to the SAP team who's continued dedication on this
project has made it a success:

Charlotte McKinty
Craig Brown
Rayees Moizuddin
Sean Connor

Regards,

Louis Colarusso
Enron Metals & Commodity Corp
E-Mail: louis.colarusso@enron.com


Please plan to attend a Revenue Management Science Kick-off Meeting on
Wednesday, August 23, from 10:30 - 5:00 p.m. located in the Enron Building
conference room 49C1.  The purpose of this meeting will be to identify and
prioritize our forecasting and optimization efforts for Revenue Management.
Your  attendance in Houston for this meeting is critical.  We will send out
an agenda prior to the meeting.  Please call  Kim Watson at 713-853-3098, by
Friday, August 18,  if you are unable to attend.  Lunch will be provided.

We look forward to seeing you there.


Bob:  I am going to pass on the playoff tickets.  Thanks.   Mark

	"Baird, Bob" <RBaird@velaw.com>
	03/27/2001 01:45 PM

		 To: "Haedicke, Mark (Enron North America Corp.)"
<mark.e.haedicke@enron.com>, "Rob Walls (E-mail)" <rob_walls@enron.com>
		 cc:
		 Subject: Rockets Playoff Tickets - Response needed this week.

Mark and Rob:

Rockets have been looking good (despite the recent slump) and have a chance
to make the playoffs.  (I heard on the radio this morning that Hakeem may be
back.)

So the Rockets have sent out invoices for playoff tickets.  We are supposed
to respond by this Friday, March 30.

This year (perhaps because they know there's a decent chance they won't make
the playoffs) the Rockets are invoicing playoff tickets in two installments.
The first installment covers rounds one and two, and the second covers the
Western Conference Finals and the NBA Championship.

I can't tell whether if you commit for the first two rounds you have a legal
obligation to buy the second and third if they make it to the Western
Conference Finals, but I assume that doesn't matter (we should assume that a
commitment now means a financial commitment for the entire playoffs).

Rounds 1 and 2 encompass 6 games.  $549 per seat, or $2,196 total.  That's
two games in Round 1 at $88.50 per ticket, and four games in Round 2 at
$93.00 per ticket.

Rounds 3 and 4 (which we wouldn't have to pay for until later) are $916 per
seat, or $3,664.  I assume that Rounds 3 and 4 will include 8 games.

For the regular season I had 6/44 of the tickets, which is 13.6%.  That's
approximately 1 ticket in Rounds 1 and 2 and 1 ticket in Rounds 3 and 4.
I'd be glad to spring for that, although if you all want all the playoff
tickets that's fine also.

So I suppose how much it's going to cost each of you depends on whether my
ticket is Round 1 or 2.  If it's in round 2 each of you would pay $912 for
the first two rounds, and if it's in round 1 each of you would pay $921.  If
the two of you want all the playoff tickets, each of you would pay $1,098
for Rounds 1 and 2.

This year the Rockets are saying that if the tickets are not used you can
ask for a refund by the same means that you paid.  So what I would propose
to do it put all the charges on my credit card and if they don't make the
playoffs that charge will be reversed; and it may not even make it on my
bill if they don't make the playoffs.

Since I will put it on my card I won't need your money until about the 20th
of April.

So please let me know if you want to commit and whether you want me to take
a ticket out of each of the sets of rounds. (I'm fine either way)

Robert S. Baird
Vinson & Elkins L.L.P.
One American Center
600 Congress
Austin, Texas 78701
Telephone: (512)495-8451
When calling from Houston (713)758-2414
Fax: (512)236-3210
Email: rbaird@velaw.com
Home telephone (512)347-8066
Car phone: (512)627-8065
Home fax: (512)347-8065
Pager: 1-888-487-2651

          ++++++CONFIDENTIALITY NOTICE+++++
The information in this email may be confidential and/or privileged.  This
email is intended to be reviewed by only the individual or organization
named above.  If you are not the intended recipient or an authorized
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review, dissemination or copying of this email and its attachments, if any,
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this email in error, please immediately notify the sender by return email
and delete this email from your system.  Thank You


Start Date: 4/28/01; HourAhead hour: 19;  HourAhead schedule download failed.
Manual intervention required.


When: Tuesday, May 14, 2002 11:00 AM-12:00 PM (GMT-08:00) Pacific Time (US & Canada); Tijuana.
Where: 4th Floor Conference Room

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


-----Original Message-----
From: 	Hyatt, Kevin
Sent:	Friday, March 01, 2002 10:12 AM
To:	Gadd, Eric; Harris, Steven; Horton, Stanley; Dowd, Steve
Cc:	Wadle, Susan; Stark, Cindy
Subject:	ETS Asset Development weekly update - 3/1/02

Sun Devil Project

	El Paso Full Requirements contracts - this debate was stricken from FERC's agenda again this week (for the 3rd time) indicating dissent among Commissioners on how best to settle the allocation of El Paso's system serving Arizona and California markets.  We may see a draft allocation order circulated prior to the next FERC meeting on 3/14.

	Az Public Service - Conference call was held 2/28 to discuss the latest proposal.  APS remains hesitant to make any project commitment until they have a clearer direction from FERC on their EP full requirements contract.  APS is forwarding to TW their likely operating scenarios for the 2000 Mw Red Hawk plant so we can draft an SFV rate design.

	The Arizona Corporation Commission granted permit approval this week to a new 1000 Mw gas-fired power plant in southeast Arizona.  The new Bowie plant sits on the El Paso south system and is slated to be on-line in 2004.  The new plant will only add to the capacity pressure on El Paso.

	Panda Energy - credit discussions were held outlining the provisions ETS would like to see from Panda to support a transport agreement.  Panda is forwarding to us the cash waterfall language from their debt agreements that puts the fuel supply (including transport) and electric transmission payments ahead of all others (including bondholders).


As we discussed last week, we are in the process of scheduling lunch seminars
with credit, confirms/settlements and global contracts for the following
dates:

May 5th, 12th and 24th.

Please let Sara and I know ASAP if you plan to be out onh any of these dates
as we feel that it is very important that you attend.

Tana:
Have you talked to the Global Contracts Group about the 24th?

Carol


Rebecca,
pls see the attached for our expectation of imbalance for 8/2.


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The Senate Rules Committee just met.  During the hearing, Senate Leader John Burton stated that:
the Senate intends to rewrite the version of the MOU that the Assembly approved last Thursday night and sent over to the Senate for final approval (SB78).
the version of the MOU that will emerge from the Senate sometime this week will look much more like the bill that originally passed out of the Senate prior to the July summer recess.  That bill was unacceptable to Edison and Davis, which led to the version that the Assembly developed and approved last Thursday night.
If the Senate proceeds as Burton suggests, the chances are very low that an MOU will make it through the Legislature and get Davis' signature.
Burton generally sticks to his word. But there is still time for additional negotiations and SB78 could squeak by. However, Burton's comments in the Rules Committee certainly don't help 78's chances for survival.
Finally, the Assembly is currently debating the last surviving windfall profits bill, and the bill is having a hard time getting the votes necessary for passage.  More information on the windfall profits bill as we get it.

Best,
Jeff


I was meaning to give you a call this week and inquire as to when you guys are planning to come up.  Things are good here.  Feeling poor as well.

 -----Original Message-----
From: 	Berger, John
Sent:	Friday, June 15, 2001 9:54 AM
To:	Zufferli, John
Subject:

How are things going up there?  Kristen and I are trying to come with some way to come see you guys, even as our wealth is slowly going down with the ENE ship!

John


I've skimmed it.  I see that the option expires August 9th.  Are we planning
to renew it?  If so maybe we can renew early and fix what we can to preserve
some optionality (no pun intended) and cover the fee issue.  Might take too
long to address the immediate issue.

I don't see anyway we can get around the balance sheet issue unless we let
the option expire and then reoption, but in that case the option payment
would have to be smaller (acct says an option of 5% creates a problem as it
would be considered a down payment).  Just fyi.

Kathleen, was the option recorded, or just a memo of option, or neither?  I'm
just wondering what is public info.

Herman is out of the office today, but I can discuss the fee issue to get his
vote.

More to come...

ckm

From: Greg Krause/ENRON@enronXgate on 05/23/2001 02:19 PM
To: Kay Mann/Corp/Enron@Enron
cc:

Subject: RE: AEW's backup

I think the invoice was for between $20,000 and $30,000, but I can't
remember.  AEW has the invoice.  This probably will not be the final as we
will need to work with them in discussions with DERM on delaying the landfill
closure and in moving jurisdiction of the project from CZAB to the County
Commissioners.   I think Shutts & Bowen (who may get stiffed by their client
if this deal blows up) and Certosa Holdings would be open to any suggestions
and we need to renegotiate the option anyway.  Shall I call and suggest this
this flat fee for retooling the option agreement to them or shall we do it
together?  I,m not sure I could explain to them acequately the idiosyncrasies
of our accounting requirements.

 -----Original Message-----
From:  Mann, Kay
Sent: Wednesday, May 23, 2001 2:00 PM
To: Krause, Greg
Subject: RE: AEW's backup

How much is it and should this be the final amount?  One thought I have is
that maybe we can retool the option agreement so that we pay them a flat fee,
which is enough to cover the expenditures.  Don't know if this works, but it
is one thought.  What do you think?

Kay

From: Greg Krause/ENRON@enronXgate on 05/23/2001 01:50 PM
To: Kay Mann/Corp/Enron@Enron
cc:

Subject: RE: AEW's backup

One more thing on the SDEC project:  According to the option agreement we
executed last October, we agreed to reimburse Certosa Holdings for actual
third party costs that they incurred in support of our necessary
applications, submittals and in seeking local approval.  Several weeks ago,
we recieved an invoice from Shutts & Bowen, attorney for Certosa Holdings
requesting reimbursement pursuant to the contract.  I forwarded this invoice
on th Ann Elizabeth not necessarily to pay for but to review considering this
whole soft cost hard cost discussion.  I recieved another call this morning
from Shutts & Bowen asking about the invoice.  What should I do?
 -----Original Message-----
From:  Mann, Kay
Sent: Wednesday, May 23, 2001 11:03 AM
To: Krause, Greg
Subject: RE: AEW's backup

Greg,

You can call me on whatever you have, including Midway, SDEC and Medley
Dunn.  If I have a problem getting to something, I'll find help.

Kay

From: Greg Krause/ENRON@enronXgate on 05/23/2001 10:50 AM
To: Kay Mann/Corp/Enron@Enron
cc:

Subject: RE: AEW's backup

Kay,

Ann Elizabeth did not provide a designated hitter for the South Dade Energy
Center (Dade Development Company LLC is Optionee, Certosa Holdings is
Optionor) nor did she provide one for tne Medley Dunn project.  I have been
told that the Dunns are considering backing off their ultimatums that they
gave Ann Elizabeth and I regarding taxes to the town and assumption of
enviromental liability.  Who do I talk to about the Dunn contract while Ann
Elizabeth is out?
 -----Original Message-----
From:  White, Ann Elizabeth
Sent: Tuesday, May 22, 2001 10:33 PM
To: gkrause@enron.com; Krimsky, Steven; Ben Jacoby/HOU/ECT@ENRON; Carnahan,
Kathleen
Cc: Milligan, Taffy
Subject: AEW's backup

Kay Mann is the designated hitter for the Pompano and Deerfied projects while
I'm on vacation.  I've given her a down load of the status of Greg and
Steve's projects.  Chris Boehler at A&K will be the designated hitter for
Midway.  I'm not going to check my voice mail while I'm gone but, if
necessary, here are the contact numbers while I'm gone.

Walter and Marlena Schilling  011-49-8218-89351 schilling.jun@freenet.de

Monika and Bernhard Steinacher 011-49-8232-8932 m.steinacher@schwabmuenchen.de

If you call, Walter and Bernhard and Bernhard's daughter, Susanne, speak very
good English.  Monika's isn't bad.  Marlena may get flustered and hang up on
you.

Best of luck at Deerfield and hope to see Pompano on track when I get back in
the office on June 11th.  Kay is planning on going to Florida on June 12 for
the moratorium hearing and the rezoning hearing.


The agenda for our Property User Group meeting has been modified to better reflect the focus of the meeting.  The meeting is as follows:

	Date:		Thursday, November 29, 2001
	Time:		10:00 - 11:30 AM
	Location:	3AC 33C1

See ya' on Thursday,
    Thx,
       Ron


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May 22, 2001

Enron Locked in Contentious Battle over Indian Project

By Will McNamara
Director, Electric Industry Analysis

[IMAGE][News item from Reuters] The Indian federal government is optimistic
that Enron Corp. (NYSE: ENE) and the Maharashtra state government will
resolve their wrangle, which has jeopardized the U.S. energy giant's $2.9
billion power project. Indian lenders want their federal government to
intervene after a threat by Enron Corp., the country's largest foreign
investor, to walk out of a giant power project has put the loan of the Indian
groups in jeopardy. Local lenders including the Industrial Development Bank
of India and the country's largest commercial bank, State Bank of India,
stand to lose billions if Enron pulls out the deal. On May 19, Enron took a
major step toward pulling the plug on the project by issuing a notice to
terminate its contract to sell power to the Maharashstra state.

Analysis: This news item is significant for two reasons. First, Enron's
ongoing troubles in India are causing other power companies to also scramble
from their investments in the country or avoid India altogether. This comes
at an unfortunate time for the undeveloped country, as it was hoped that the
investment from Enron and other companies would provide a significant
financial boost to India's energy infrastructure. Second, it is rather ironic
that Enron, which has gained an earnings boon from its wholesale and trading
activities in the United States, has faced financial challenges overseas by
following the one business strategy that it has mostly avoided in this
country: owning hard generation assets.

By way of background, Enron was first approached by the Maharashtra
government back in 1992 regarding the joint development of a new power
project to serve the western part of India. In the mid-1990s, Enron broke
ground on the 2,184 MW project on India's western coast (near Bombay, which
is the capital of Maharashtra) that reportedly will be the largest natural
gas-fired power project in the country upon its completion. Some reports
suggest that it is the largest natural-gas plant in the world. The plant is
in the midst of its first operational phase (with 750 MW up and running) and
is scheduled to begin its second phase (1,444 MW) in June. The company that
owns and operates the power project is Dabhol Power Company, in which Enron
holds a 65-percent interest (the state of Maharashtra owns the other 35
percent). Under terms of the contract, the state of Maharashtra agreed to
purchase the totality of power produced at Enron's plant.

However, problems began to surface over the last six months or so, heightened
by Maharashtra's recent default on payments to Enron. Dabhol Power has been
criticized for charging 7.1 rupees per kilowatt-hour, compared with the
market's average of 1.5 rupees (for conversion purposes, $1 equals 46.93
rupees). Citing what it claimed were high costs charged by Dabhol, the state
of Maharashtra reportedly refused to pay for any power produced from the
second phase of the Dabhol plant. At last count, the state government owes
Enron approximately $48 million for power transactions completed last
December and January, and could owe $607 million if the contract is
terminated.

Citing payment defaults by the state of Maharashtra and non-cooperation from
both the state and federal government in India, Enron issued a preliminary
notice to terminate future power sales from its Dabhol plant. Enron also
declared a state of force majeure, a legal strategy that allows a company to
break a contract for reasons beyond their control. In response, Indian
leaders-driven by valid concerns about the financial repercussions that a
broken contract would have-are requesting the country's federal government to
intervene and prevent any break in the contract. Lenders such as the State
Bank of India, the country's largest commercial bank, also plan to fight
Enron on its plans to rescind the contract.

As noted, Enron's problems in India are causing a damaging domino effect for
the undeveloped country. Being the international energy giant that it is,
Enron probably won't suffer too much if it does indeed terminate its contract
with the Indian government, and perhaps can find another buyer in the country
for the power produced by the Dabhol plant. Enron also has reportedly pulled
out from all of the other projects in India in which it had once planned to
invest, including Metgas (a liquefied natural-gas pipeline) and India-based
projects led by Enron Broadband Services and Enron Oil & Gas. This ongoing
divestiture in India should reduce the company's risk exposure related to the
country's instability.

On the other hand, the failed contract will most likely do a fair amount of
damage to the energy market in India, which is already perceived as a less
than lucrative country in which to develop power projects. Some reports have
indicated that India received only $2.6 billion in foreign investment in
2000, representing three times less than Singapore, a country representing
only one-fourth of the economy of India. Any deterrent toward further power
expansion in India would exacerbate concerns about the country's ability to
meet growing demand for electricity.

Further, at least four foreign power companies (Cogentrix of the United
States, EDF of France, Powergen of the United Kingdom, and Daewoo Corp. of
South Korea) already have pulled out of the Indian energy market. At the same
time, many domestic companies also have postponed their own power projects as
a result of legal obstacles. In addition to a tainted reputation, Indian
leaders also stand to lose financially as well, as loans given to the Indian
government reportedly are not covered by any guarantee (unlike overseas
lenders who are protected by guarantees).

Enron's announcement that it intends to terminate the contract has triggered
a "cooling period" that will last for six months, during which time the
Indian federal government will continue trying to convince Enron to maintain
its end of the contract. Interestingly, in early May Enron said that it had
"no immediate plans" to sell its stake in the Dabhol power project and added
that it would make no move on the plant until the payment disputes with the
state of Maharashtra are resolved. Other statements made by Enron Chairman
Kenneth Lay have suggested that the company might continue to own the Dabhol
project and proceed with the completion of the second phase, regardless of
any payment that Maharashtra may or may not make. Given the sharp increase in
demand that is expected in India, it would make sense for Enron to want to
retain its majority ownership of the power plant and work a deal to sell its
power to another Indian buyer.

Enron has been fairly consistent with regard to its strategy of not owning
hard assets on any long-term basis. Typically, Enron has accumulated
infrastructure in various commodities (e.g., electricity generation, natural
gas, bandwidth) in order to ensure that it can provide a product where the
customer wants it. However, once Enron has established itself within that
commodity, all it really needs is access to the infrastructure, rather than
outright ownership, so divestiture has typically followed. The company might
have perceived the Indian market to offer unique opportunities, due to the
lack of infrastructure across the country. However, now it appears that
Enron's majority ownership in the Dabhol plant may be causing more for the
company than the assets are worth.

The possible termination of the Dabhol contract with the state of Maharashtra
would mark the third sales deal that Enron has broken in recent months. Most
recently, the company announced that it is bowing out of $43.5-billion
project to route Qatari gas to the United Arab Emirates and has sold its
stake in Dolphin Energy to UAE Offsets Group for an undisclosed amount.

In addition, Enron is being sued by a group of California universities over
the schools' claim that the company breached a four-year contract, signed in
1998, to provide power at a 5-percent discount to the utility rate frozen by
California's 1996 deregulation law. Scheduled to expire in 2002, the deal
between Enron and the California university system included a peak power load
of 350 MW and is estimated to be worth about $500 million. Although Enron
cited problems associated with California's energy crisis, once in court the
company disclosed that the contract with the California universities no
longer represented an economic business strategy and that the company was
actually losing money on the contracts (although it would not confirm a
specific amount).

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Attached is a revised Credit Watch listing for the week of 6/4/01.   Please note that Continental Gas, Inc., Continental Resources Inc., Hiland Partners, LLC, North Texas Gas Partners and Florida Gas Utility were added to the Credit Watch List.
If there are any personnel in your group that were not included in this distribution, please insure that they receive a copy of this report.
To add additional people to this distribution, or if this report has been sent to you in error, please contact Veronica Espinoza at x6-6002.
For other questions, please contact Jason R. Williams at x5-3923, Russell Diamond at x5-7095, or Veronica Espinoza at x6-6002.


Does this make sense?

Jim

 -----Original Message-----
From: 	"Jackie Gallagher" <JGallagher@epsa.org>@ENRON
Sent:	Tuesday, October 16, 2001 1:02 PM
To:	acomnes@enron.com; Hawkins, Bernadette; Nersesian, Carin; Nicolay, Christi L.; Fulton, Donna; Scheuer, Janelle; Hartsoe, Joe; Shelk, John; jsteffe@enron.com; Noske, Linda J.; Robertson, Linda; Alvarez, Ray; Shapiro, Richard; Novosel, Sarah; Mara, Susan; Lindberg, Susan; Hoatson, Tom
Subject:	EPSA Draft Comments on NYISO and Con Ed Requests to Extend AMP	and LMM

MEMORANDUM

TO: Regulatory Affairs Committee
       Power Marketers Working Group

FROM: Jim Steffes, Regulatory Affairs Committee Chair
            Bob Reilley, Power Marketers Working Group Chair
            Erin Perrigo, Manager of Policy

DATE: 10/16/01

RE: EPSA Draft Comments on NYISO and Con Ed Requests to
      Extend AMP and LMM
      ? Filings Due on Friday, October 19th

The New York Independent System Operator, Inc. (NYISO) and Con Ed have again made requests to extend both the Automated Mitigation Procedures (AMP) and the revised localized market-power mitigation measures  (LMM) until October 31, 2002.  Once again, EPSA has drafted a protest, arguing that the use of price correction mechanisms result in unintended, yet harmful, consequences on the market such as limiting market entry, slowing the development of risk mitigation tools, and undermining demand-side response.  EPSA's also stresses that yet another extension of the provisions, intended to address flaws in the start-up of the market two years ago, is unwarranted.

Please review the draft and forward any comments or suggestions to Erin Perrigo at EPSA at 202-628-8200 or eperrigo@epsa.org by noon on Thursday, October 18th so that we can make a timely filing by Friday.

 - Con Ed and AMP Extension Protest.doc


broker is right - this is changed to DYPMI

Kerri Thompson@ENRON
03/08/2001 01:51 PM
To: Kate Symes/PDX/ECT@ECT
cc:

Subject: tfs

disregard previous email....(about deals 541200 & 541201)

541365
broker has dynegy for the cp