US Power, Gas Companies Restrict Dealings With Enron
Dow Jones Energy Service, 11/08/01
USA: Enron provides financing data, restates earnings.
Reuters English News Service, 11/08/01
Enron Thinks Ex-CFO Got More Than $30M Thru Partnerships
Dow Jones Corporate Filings Alert, 11/08/01
Dynegy confirms in talks with Enron over possible tie-up
AFX News, 11/08/01
USA: Dynegy says in talks with Enron over possible deal.
Reuters English News Service, 11/08/01
U.S. Stocks Open Higher on Retail Sales Data, European Rate Cuts
Dow Jones Business News, 11/08/01
Dynegy/Enron Talks -4: Follows SEC Inquiry Launch
Dow Jones News Service, 11/08/01
Dynegy Confirms Discussions With Enron
Business Wire, 11/08/01
USA: UPDATE 1-Before the Bell - Dynegy flat, Enron slips.
Reuters English News Service, 11/08/01
FERC 'Watching With Interest' Enron's Woes, Chairman Says
Dow Jones Energy Service, 11/08/01
Ripples From Enron's Troubles Hit Its Trading Partners
Dow Jones Energy Service, 11/08/01
Enron in Talks With Dynegy; to Restate Earnings (Update8)
Bloomberg, 11/08/01

Fitch Comment on Wessex Water Ratings Following Enron Downgrade
Bloomberg, 11/08/01

NewPower 3rd-Qtr Loss Narrows After Adding Customers (Update2)
Bloomberg, 11/08/001

Dynegy May Offer at Least $8 Bln to Acquire Enron (Update5)
Bloomberg, 11/08/01

Enron Bonds Gain as Dynegy Considers $8 Bln Buyout (Update1)
Bloomberg, 11/08/01

Enron Confirms Dynegy Talks
TheStreet.com, 11/08/01

Stocks Surge On Rate Cuts, Jobless Numbers
TheStreet.com, 11/08/01

Some Glamour Stocks That Are Ugly Down Deep
RealMoney.com, 11/08/01

Top Of The News
Enron Trades Itself
Forbes.com, 11/08/01

US Power, Gas Companies Restrict Dealings With Enron
By Jon Kamp, Kristen McNamara and Mark Golden
Of DOW JONES NEWSWIRES

11/08/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)
(This article was originally published Wednesday.)

NEW YORK -(Dow Jones)- Trading companies in Enron Corp.'s (ENE) key North American power and gas markets are restricting their dealings with the ailing Houston-based giant, people at those companies said Wednesday.
Concerns have mounted because Enron, which accounts for about a quarter of the trade in the country's power and gas markets and which makes a market for those commodities on its Internet-based system EnronOnline, has seen its share price fall by about 75% and its credit ratings downgraded since mid-October due to uncertainties about its extremely complex financial structure.
"We've restricted our business with them," said Mike Smith, chief financial officer for Mirant Corp. (MIR) unit Mirant Americas Group, a Top 10 trader of power and gas in the U.S.
Smith wouldn't be more specific, but his comments echoed those of others in the business.
"Our exposure to Enron is insignificant compared with the previous exposure," said Al Butkus, spokesman for Aquila Inc. (ILA), a Top 5 U.S. power and gas trader.
Tractebel Energy Marketing, the North American subsidiary of the Belgian company Tractebel S.A., has limited the term of transactions with Enron to three years or less, a person at the company said. And a power broker said some medium sized western utilities have stopped trading with Enron even for near-term delivery.
Enron didn't return calls seeking comment.
The Wall Street Journal reported Wednesday that Enron was in talks for a capital infusion and possible acquisition by competitor Dynegy Inc. (DYN). Also, Enron said Thursday it was restating its financial statements from 1997 through the second quarter of 2001, saying its financial and audit reports are unreliable for all those periods. The company fired its treasurer and general counsel.
Key Markets

Enron's ability to transact in its core markets - North American wholesale gas and power - is essential if the company maintain the earnings and cash flow needed to emerge from its current credit crisis, Wall Street analysts and ratings agencies have said. Standard & Poor's and Moody's Investors Service downgraded Enron's credit
to within two steps of junk-bond status last week and have it on watch for
further downgrade. Enron still has its supporters. Exelon Corp. (EXC) is
monitoring its own risk management, but hasn't changed its relationship with
Enron, said Chief Financial Officer Ruth Ann M. Gillis.

"We haven't changed our relationship," Gillis said.
Enron is a very important factor in the vitality of the wholesale energy markets, she said. They're still the "largest, best" of the companies out there, she said.
Likewise, a trading floor manager at one energy company said Enron called earlier in the week and asked that the company increase its trading on EnronOnline. The company's EOL volumes had fallen, but it honored Enron's request out of respect for Enron's still market-making power.
PPL Corp. (PPL) moved to mitigate its exposure to Enron following the downgrades, a person in the marketing organization at PPL EnergyPlus said.
"Enron would not be a first choice to do long-term transactions," the person said. "For shorter terms, deals, they wouldn't be considered equally with everyone else. There's just too much risk there."
Since Enron's troubles began several weeks ago, energy trading partners had stood by the company in ways that stock and bond traders hadn't. Until this week, "business as usual" was an almost constant refrain. Energy companies' immediate exposure to Enron was limited to a maximum of seven weeks of receivables, and Enron was paying its bills.
But for some of those companies, business as usual also meant not changing value-at-risk formulas, even though the formulas were generating ever lower allowable volumes of business with Enron as the company's credit quality deteriorated, one risk manager said Wednesday.
Lower value-at-risk limits got most trading companies to flatten their portfolios by taking positions to offset currently profitable long-term positions with Enron.
PPL, for example, is still following its credit policy and as a result has limited its dealings with Enron, which has seen its credit quality fall, the person at PPL EnergyPlus said.
"We've taken a look at our book," the person said. "Based on the events of this and last week, we've taken some action to mitigate the risk based on their ratings downgrade."
Trading companies constantly evaluate their counterparties' credit and adjust their dealings accordingly, but rarely have been required to address problems on the scale of Enron's recent difficulties.
"It certainly ranks just behind California," the person at PPL said.
Enron Claims Trading Normal

An Enron spokesman, reached later, said the company continues to see a normal range of transactions, including long-term deals.
"We've not seen closing out of positions," spokesman Eric Thode said.
Susan Abbott, a managing director in corporate finance at Moody's, said the ratings agency wasn't aware of significant changes in trading companies' dealings with Enron. The agency continues to watch for new restrictions, in particular margin calls, which could quickly strain Enron's liquidity. A drop in new business with Enron isn't as much of a concern, she said.
"If you're restricting new business with the company, what you're doing is moving the company out of the market in an orderly way," Abbott said.
PPL is shying away from doing deals with Enron and is limiting the dollar amount and terms of the deals it will do with the company, but hasn't yet imposed margin calls or required additional collateral, the person in the marketing organization said.
"Neither the credit thresholds nor our exposure threshold have been breached," the person said.
PPL said it's limiting exposure to Enron for shorter-term deals too, the person said.
"Their liquidity just isn't there anymore," the person said.
No large company can afford to pull the plug on Enron, given the company's centrality to the power and gas markets.
"Enron is such a large player and they're so important in terms of maintaining the liquidity of the markets," said Sandy Fruhman, spokeswoman for Reliant Energy Inc. (REI). "We see this as a situation that has potential downsides for the entire industry."
Enron's North American wholesale trading unit brought in $1.9 billion in income before interest and taxes in the first nine months of the year, up from $1.1 billion in the same period last year.
Reliant continues to do business, but Fruhman wouldn't say specifically whether it had restricted its dealings.
"We're monitoring the situation carefully and making sure we follow prudent business practices," she said. "But we're trying to work with them, because it's in the best interest of the entire industry to overcome their current problems."
-By Jon Kamp, Dow Jones Newswires; 312-750-4129; jon.kamp@dowjones.com
(Kristen McNamara, Mark Golden and Andrew Dowell in New York, John Edmiston in Houston and Erik Ahlberg in Chicago contributed to this article.)

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

USA: Enron provides financing data, restates earnings.

11/08/2001
Reuters English News Service
(C) Reuters Limited 2001.
HOUSTON, Nov 8 (Reuters) - Enron Corp. said on Thursday it has provided additional information about off-balance sheet and other transactions that led to an investigation by the U.S. Securities and Exchange Commission and a shattering of the energy trader's credibility.
Houston-based Enron also confirmed it is in talks with its hometown rival Dynegy Inc. over a possible business combination. Terms of any transaction have not been agreed on, the two companies said.
Enron said that it will restate its earnings from 1997 to 2000, and the first two quarters of 2001 as the company addresses concerns raised by the SEC and shareholders.

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

Enron Thinks Ex-CFO Got More Than $30M Thru Partnerships

11/08/2001
Dow Jones Corporate Filings Alert
(Copyright (c) 2001, Dow Jones & Company, Inc.)
ISSUER: ENRON CORP.
SYMBOL: ENE

10:02
DJ CFA SOURCE:SEC 8-K
ISSUER: ENRON CORP.
SYMBOL: ENE

REASON CODES: 5 -- Other Materially Important Events

WASHINGTON (Dow Jones)--Enron Corp. (ENE) said it believes the
company's former chief financial officer, Andrew Fastow, received more than
$30 million from managing and investing in several partnerships that did
business with the energy giant.

The company disclosed the information in a Form 8-K filing released
Thursday by the Securities and Exchange Commission.

Enron said it believes it committed $16 million in initial capital to
one of the partnerships run by Fastow and paid $394 million in capital
commitments to another partnership he managed.

The partnerships were described to Enron's board as potential sources
of capital to buy assets from Enron, potential equity partners for Enron
investments, and counterparties to help mitigate risks associated with Enron
investments, the filing said.

As reported, shareholders and analysts have questioned whether the
partnerships posed a conflict by putting Enron's CFO, who has a fiduciary
duty to Enron shareholders, in a position of reaping financial rewards for
representing partnership investors in business deals with Enron.

On Oct. 24, Enron dismissed Fastow as its financial chief.

As reported, the board of Dynegy (DYN) tentatively agreed last night
to acquire Enron for about $8 billion in stock, or roughly $10 a share.

Enron is a Houston-based energy and utilities company.

-Dan Lowrey; Dow Jones Corporate Filings Alert; 202-393-7402;
dan.lowrey@dowjones.com

10:30

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

Dynegy confirms in talks with Enron over possible tie-up

11/08/2001
AFX News
(c) 2001 by AFP-Extel News Ltd
HOUSTON (AFX) - Dynegy Inc, a ChevronTexaco Corp affiliate, confirmed it is in talks with Enron Corp over a possible business combination.
Dynegy said it has not agreed to the terms of any transaction with Enron.
Dynegy added that it does not anticipate making any further announcement with respect to a possible transaction until a definitive agreement is reached or discussions are terminated.
aw/shw For more information and to contact AFX: www.afxnews.com and www.afxpress.com

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

USA: Dynegy says in talks with Enron over possible deal.

11/08/2001
Reuters English News Service
(C) Reuters Limited 2001.
HOUSTON, Nov 8 (Reuters) - Dynegy Inc. said on Thursday it is in talks over a possible combination with Enron Corp., the beleaguered energy-trading giant crippled by an SEC probe and investor doubts about its ability to raise cash.
Dynegy has not agreed to the terms of any transaction with Enron, the Houston-based rival of Enron said.
Dynegy said it does not anticipate making any further announcement with respect to a possible transaction until a definitive agreement is reached or discussions are terminated.
A source close to the talks told Reuters on Wednesday that Dynegy is in talks to buy Enron in a deal that would involve a stock swap and $1.5 billion in capital from ChevronTexaco Corp., which has a big stake in Dynegy,
The deal, which could be announced officially this week, was expected to give what the source called a "modest premium" to Enron shareholders, whose stock has plummeted in value as a fast-moving financial crisis enveloped the company.
Enron shares, which traded as high as $90 in August of last year, dropped to a 10-year-low of $7 during Wednesday trading, before rallying on news of the Dynegy talks and closing at $9.05 a share.

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

U.S. Stocks Open Higher on Retail Sales Data, European Rate Cuts
By Erin Schulte

11/08/2001
Dow Jones Business News
(Copyright (c) 2001, Dow Jones & Company, Inc.)
The Wall Street Journal Online
Stocks logged solid gains Thursday as investors focused on a few bright spots in sales reports from U.S. retailers. Interest-rate cuts from two European central banks also bolstered confidence.
The Dow Jones Industrial Average was up 40 to 9595 soon after the opening bell, after losing 36.75 in the previous session. The Nasdaq Composite Index gained 21.20 to 1858.80, after inching ahead 2.45 points on Wednesday.
Other indexes also lost ground on Thursday. The Standard & Poor's 500-stock index advanced 6.50 to 1122.30, the New York Stock Exchange Composite Index moved up 2.50 to 571 and the Russell 2000 Index edged up 1.90 to 442.70.
Bonds were mixed and the dollar fell.
Traders said interest-rate cuts by the European Central Bank and the Bank of England helped to underpin U.S. equities. Both banks lowered key rates by a half percentage point on Thursday, in an effort to keep the regional economy from slipping into recession.
Investors are hoping October sales figures show that consumer spending is on the road to recovery and will gain steam during the holiday shopping season. Consumer spending slowed significantly in the wake of the Sept. 11 terrorist attacks.
Wal-Mart Stores said sales at stores open at least a year rose 6.7%, including the results of its Sam's Club chain. The nation's biggest retailer, whose same-store sales topped analysts' expectations, also said total sales for the four weeks ended Nov. 2 jumped more than 14% to $16.62 billion. Its shares rose 1.4%.
But Federated Department Stores posted a steeper-than-anticipated 8.7% drop in same-store sales. The company, which operates the Bloomingdale's and Macy's chains, said total sales also suffered, falling 8.9% to nearly $1.12 billion. Its shares slipped.
Trendy discounter Target said same-store sales climbed 2%, while total sales for the week ended Nov. 3 increased 8.9%; its stock edged higher. And TJX, which owns popular discount clothier T.J. Maxx, said same-store sales climbed 4%, while total retail sales jumped 12% for the month.
In addition to sorting through the retail-sales reports, investors also will have two economic indicators to scrutinize Thursday morning.
The Labor Department reported initial jobless claims fell to 450,000 in the week ended Nov. 3 from 496,000 a week earlier. Economists surveyed by Thomson Global Markets anticipated 513,000 jobless claims for the latest period.
A separate Labor Department report showed a 2.4% decline in prices of imported goods for October, following a 0.1% rise in September. Economists had forecast a 0.5% fall in prices.
Among stocks to watch, Dynegy held talks to buy Enron for roughly $7 billion to $8 billion in stock, one-tenth of what Enron was worth 15 months ago. The energy trading and power firm also is expected to inject $1.5 billion into Enron.
Exxon Mobil won a significant victory as an appeals court ruled that a jury's $5 billion punitive-damage verdict for the Exxon Valdez oil spill was excessive and should be reduced. Its shares rose 1.2%.
Gains in key international markets may help put U.S. investors in a buying mood. Frankfurt's DAX index was up 1.6% in intraday trading, while London's Financial Times-Stock Exchange 100-Share Index was 0.6% higher. Earlier, Japan's Nikkei 225 average closed with a gain of 1.4% and Hong Kong's Hang Seng Index jumped 2.6%.
On Wednesday, U.S. blue-chip stocks came under pressure from weakness in overseas markets, particularly in Tokyo, as well as profit-taking following the Federal Reserve's decision Tuesday to cut interest rates.
In major U.S. market action Thursday:
Stocks climbed. On the Big Board, where 32.2 million shares traded, 624 stocks rose and 259 fell. On the Nasdaq, 88.3 million shares changed hands.
Bonds were mixed. The 10-year Treasury note slipped less than 1/8, or $2.50 for a $1,000 bond, pushing the yield to 4.19%. The 30-year bond rose almost 3/8 to yield 4.77%.
The dollar fell. It traded at 89.84 U.S. cents to the euro, compared with 89.81 late Wednesday in New York. The dollar fell to 120.69 yen from 120.92.
For continuously updated news from The Wall Street Journal, see WSJ.com at http://wsj.com.
Copyright (c) 2001 Dow Jones & Company, Inc.
All Rights Reserved.

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

Dynegy/Enron Talks -4: Follows SEC Inquiry Launch

11/08/2001
Dow Jones News Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)
The talks between Enron and Dynegy follow a sharp drop in Enron's stock over the past several weeks as controversy arose over the companies dealings with certain partnerships.
The SEC later requested information from Enron related to the company's dealings with those partnerships, which were set up and run until recently by Andrew S. Fastow, who was recently replaced as Enron's chief financial officer.
The investigation is centered on disclosure controversies that have damaged the Houston energy company's credibility. Internal partnership documents indicate Fastow and possibly a handful of associates made millions of dollars from the partnerships. Fastow severed his ties with those partnerships in July.
Internal documents related to one of the Fastow partnerships disclose that Enron also did as much as hundreds of millions of dollars of business with an entity connected to another company official, who has since left Enron, the Wall Street Journal reported on Oct. 26.
While Enron disclosed its Fastow-related transactions in SEC filings, a computerized search of the SEC's database of public filings produced no reference to this other employee-related entity known as Chewco.
Over the past couple of days, Enron has been scrambling to line up quick financing from a prominent outside investor and has been in discussions with private-equity firms and power-trading companies.
Discussions between Dynegy and Enron began about 10 days ago, but reportedly intensified last weekend.
Also Thursday, Enron restated its earnings for 1997 through 2000 and the first half of 2001 due to the transactions and resulting account adjustments.
-Thomas Gryta; Dow Jones Newswires; 201-938-5400

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

Dynegy Confirms Discussions With Enron

11/08/2001
Business Wire
(Copyright (c) 2001, Business Wire)
HOUSTON--(BUSINESS WIRE)--Nov. 8, 2001--Dynegy Inc. confirmed today that it is engaged in discussions with respect to a possible business combination with Enron. Dynegy has not agreed to the terms of any transaction with Enron.
Dynegy does not anticipate making any further announcement with respect to a possible transaction until a definitive agreement is reached or discussions are terminated.

CONTACT: Dynegy Inc. 713/507-6400
09:36 EST NOVEMBER 8, 2001

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

USA: UPDATE 1-Before the Bell - Dynegy flat, Enron slips.

11/08/2001
Reuters English News Service
(C) Reuters Limited 2001.
NEW YORK, Nov 8 (Reuters) - Dynegy Inc. shares traded flat and Enron Corp. slipped as the market mulled news that the companies are in an advanced stage of talks for Dynegy to acquire Enron by means of a stock swap, according to a source familiar with the deal.
Terms of the possible combinmation have not yet been decided, but Enron stockholders would likely receive an amount of Dynegy stock that would give them a "modest premium" over current Enron stock prices, said the source, who spoke on condition of anonymity.
Enron shares traded at $8.50, down from $9.05, and Dynegy was at $33, in line with the price at the prior New York Stock Exchange close.
More broadly, the U.S. stock markets were expected to gain at the open, based on the upward moves of equity-index futures. The Standard & Poor's 500 December contract rose 7.5 points to 1,127.00 and the Nasdaq 100 index contact added 19.00 points to 1,554.50.
Shares in XO Communications Inc. rose to $1.38 per share from $1.17 in very active pre-open trade on Thursday as the voice and data services company posted a narrower third-quarter loss.
Markets overseas rallied on back-to-back interest-rate cuts by the European Central Bank and the Bank of England on Thursday. The reductions follow the Federal Reserve's rate cut two days ago, the U.S. central's bank's 10th such move of the year.
Among other issues active ahead of the regular trading session, Intel Corp. rose to $28.80 from $28.29, BEA Systems Inc. traded up to $15.25 from $14.71 and Cisco Systems Inc. improved to $19.40 from $18.93.

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

FERC 'Watching With Interest' Enron's Woes, Chairman Says

11/08/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)
(This article was originally published Wednesday)

WASHINGTON -(Dow Jones)- The U.S. Federal Energy Regulatory Commission is "watching with interest" the problems confronting Enron Corp. (ENE), but isn't intervening in the matter, Pat Wood III, FERC's chairman, said Wednesday.
"We're watching the impact Enron or other entities would have on the markets," Wood told reporters during a press conference following the commission's meeting Wednesday. "We are watching with interest," he said for emphasis.
But the commission doesn't intend to intervene in the U.S. Securities and Exchange Commission's investigation of financial hedging instruments with partnerships overseen by Enron's former financial officer, Wood said.
The dealings led to a $1.2 billion writedown in Enron shareholder equity earlier this year.

-By Bryan Lee, Dow Jones Newswires; 202-862-6647; Bryan.Lee@dowjones.com

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

Ripples From Enron's Troubles Hit Its Trading Partners
By Sarah Spikes
Of DOW JONES NEWSWIRES

11/08/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)
LONDON -(Dow Jones)- Enron Corp.'s (ENE) financial troubles have created a new problem for U.K. power market players, and they don't quite know how to respond.
Enron's significant presence in the U.K. market means there are many trading partners who are counterparties in deals with a company whose creditworthiness is now less secure than when those deals were struck. Companies are reluctant to cease doing business with a firm of Enron's size and stature, but they're also aware of the risk of becoming creditors to a bankrupt Enron.
Since Enron revealed a $1.2 billion reduction in shareholder equity last month related to controversial transactions with entities connected to former Chief Financial Officer Andrew Fastow, the company's shares have tumbled; its senior unsecured debt has been downgraded by Fitch Inc., Standard & Poor's Corp. and Moody's Investors Service; and the U.S. Securities and Exchange Commission has launched a formal investigation into the matter.
Already, many have backed off from trading power with Enron, citing the need to minimize exposure, but to what, exactly, they're not sure.
Three Options For Enron's Trading Partners

Enron's problems give rise to three major options for counterparties. They can wait, anticipating that Enron will go bust, and then terminate their contracts; they can try to invoke a controversial clause in their contracts and get Enron to put up more collateral; or they can back off from new forward trading and hope a company like Dynegy Inc. (DYN) will take Enron over and assume the contracts. One is available only if Enron goes bankrupt, and the other two are available right now, but most market-makers are still undecided.
"No huge power merchant has ever had serious problems with their credit in the U.K. market before, so the viability of any theoretical option is uncertain," said a partner in a London-based law firm with an international energy practice.
If a company takes the first option - continuing to trade with Enron - and Enron does go bankrupt, the trading partner would then be able to terminate existing contracts.
Sarah Moynihan, an associate with Allen & Overy, the firm that wrote the Grid Trade Master Agreement - the contract used by most power trading parties in the U.K. - says the GTMA allows parties to terminate outstanding transactions with an insolvent company.
"To terminate any transactions under one master agreement though, they would have to terminate all of them," she added.
Terminating parties would be reimbursed, or charged, based on a marked-to-market value of their contracts. Power prices have been on a steep decline since the introduction of the New Electricity Trading Arrangements in March, so parties with majority selling positions through Enron would suffer financial penalties when they had to resell their power for less, but if they had bought through Enron, they would be able to get the same power for less money on the U.K. market today.
"Market participants calculate the mark-to-market value all the time anyway, but particularly as this is the first NETA winter, the trust in price forecasting isn't as strong as it could be, so you may not be confident that (would be able to get) the equivalent of your contract...and you will live without peace of mind in the meantime," said the head of trading at a large generating and trading company.
"Even if you were successful in terminating contracts, you might not get paid, and then who will trade with you, if you have a big debt owed to you by someone who can't pay it?" said a lawyer from a London law firm with an international energy practice.
The only U.K. power-related company to go into insolvency recently was Independent Energy a small supply company. In that case, Innogy Holdings PLC (U.IOG), the company which took it over, assumed its contracts.
Many Can't Afford To Lose Enron As A Partner

Enron has always traded with a wide range of counterparties, some of which other big players wouldn't go near because of their relative lack of size and financial strength. This means there will be many companies that may not be able to afford to let Enron go.
Not trading with Enron will make recovery harder, but a trading party will appear foolhardy if it continues to trade with a company that eventually goes under.
The second option open to Enron's trading partners involves trying to invoke a muddied clause in the GTMA - the material adverse change, or MAC, clause.
By asserting that the company's credit is not compatible with one with which they would normally agree to trade, they may be able get Enron to put up more collateral in support of the contracts. By asserting that Enron's credit isn't as secure as they expected when they agreed to the contracts, they may be able get Enron to put up more collateral in support of the contracts.
The problem is that it's hard to be sure that a change in circumstances warrants invoking the MAC clause. However, this hasn't stopped some counterparties from asking their lawyers to investigate the feasibility of invoking MACs in their contracts with Enron, said lawyers who declined to be identified.
"People are definitely talking about the chances of getting a MAC through these days," said one lawyer who declined to be named.
Having to put up more capital would worsen Enron's situation, particularly if several counterparties were to ask for it, and most aren't interested in making Enron's situation worse.
"Enron helps the U.K. market. It would be unhelpful for them not to be there and do what they do in terms of providing liquidity," said British Energy PLC (BGY) Chief Financial Officer Keith Lough in a conference call Wednesday.
He said BE's dealings with Enron are two-way - Enron takes part of its baseload generation from BE's nuclear facilities while BE takes peak power from Enron for its direct sales unit.
So far, the dilemma means most companies are taking the middle ground. They are reducing the number of new forward contract deals they do with Enron, but they aren't ceasing altogether and they aren't trying to get out of existing contracts.
This partly reflects confidence that Enron will remain solvent, either on its own or through a merger.
The company does have several things in its favor.
First, Enron secured $1 billion in new credit lines using its gas pipeline assets as collateral. Second, there is no evidence that Enron is on the wrong side of the U.K. power market. Many traders say Enron has in fact gone into the first NETA winter short - a strategy that appears prescient in light of the warmest October in recent memory and low power prices.
-Sarah Spikes, Dow Jones Newswires; (+44 20) 7842 9345; sarah.spikes@dowjones.com

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

Enron in Talks With Dynegy; to Restate Earnings (Update8)
2001-11-08 11:09 (New York)

Enron in Talks With Dynegy; to Restate Earnings (Update8)

     (Updating to add stock movement.)

     Houston, Nov. 8 (Bloomberg) -- Enron Corp., the largest
energy trader, restated and reduced its earnings for the past four
years because of losses from partnerships that are under
investigation by the Securities and Exchange Commission.

     Dynegy Inc. said it may acquire Enron, whose shares have
plunged 89 percent this year. Dynegy's board last night weighed a
proposal to pay $8 billion in stock, said people familiar with the
situation. Concerns Enron may be lowered to a junk credit rating
within days stalled the talks, the people said.

     Houston-based Dynegy is concerned that a reduction to junk
status would precipitate a cash crisis by requiring Enron to repay
early $3.3 billion of bonds. Enron's credit rating, currently
rated ``BBB'' by Standard & Poor's Corp., or two levels above
junk, is on review to be lowered.

     ``Merging with Enron is fraught with potential problems for
Dynegy,'' said Commerzbank analyst Andre Meade. ``The bulk of
Enron's value is in its trading business, and it's trading
business is people.''

     Enron shares were little changed after the announcement hich
will result in a $96 million reduction in 1997 net income, $113
million in 1998, $250 million in 1999 and $132 million in 2000. In
2001, the changes result in an increase to net income of $17
million and $5 million in the first and second quarters,

respectively, and reduction of $17 million for the third quarter.
     Enron also fired Treasurer Ben Glisan and Kristina Mourdant,
a lawyer for an Enron division. The company ``now believes''
Glisan, Mourdant and two other employees no longer working for
Enron bought interests in subsidiaries of a partnership run by
former Chief Financial Officer Andrew Fastow.

      Enron said it believes Fastow made more than $30 million
from partnerships called LJM1 and LJM2 which he ran.

                       `Running Out of Time'

     ``Enron is running out of time and that's what's pushing them
to the bargaining table,'' said Zach Wagner, an analyst with
Edward Jones & Co., who cut his recommendation on Enron to
``reduce'' from ``accumulate'' on Oct. 23.

     Dynegy would gain a wholesale energy business, the leading
energy manager for commercial and small-industrial customers, and
an Internet energy trading operation many times larger than its
own, said UBS Warburg LLC analyst James Yanello.

     ChevronTexaco Corp., which owns about 27 percent of Dynegy,
is also involved in the talks.

     ``If history is any guide, Dynegy is stingy when it comes to
acquisitions, so I don't expect them to do anything stupid'' such
as overpaying for Enron, said Yanello. ``A deal could provide
Dynegy with tremendous opportunity.'' He rates Dynegy ``strong
buy'' and doesn't own shares of either company.

     Enron Chairman and Chief Executive Officer Kenneth Lay
wouldn't hold a management position with the combined company
under terms being discussed Wednesday, the Wall Street Journal
reported. He would get a seat on the board, the paper added.

     ChevronTexaco is considering adding $1.5 billion to the
transaction to help Enron. It would provide another $1 billion
when the purchase is closed, the New York Times and Wall Street
Journal reported.

     The companies agreed on a breakup fee providing Dynegy with
about $400 million if Enron accepts a higher offer, people
familiar with the talks said.

     Dynegy spokesman Steve Stengel, Enron spokesman Mark Palmer
and ChevronTexaco spokesman Fred Gorell declined to comment.

                         Losing Confidence

     Companies that trade natural gas, electricity and other
commodities with Enron may pull back if Enron's finances
deteriorate to the point that it loses its investment-grade credit
rating, investors say.

     ``Dynegy has to act fast,'' said Roger Hamilton, a money
manager with John Hancock Advisers Inc., which sold its Enron
shares in recent weeks. ``If Enron can't get financing and its
bonds go to junk, they lose counterparties and their marvelous
business vanishes.''

     Moody's Investors Service lowered its rating on Enron's bonds
to ``Baa2'' and Standard & Poor's cut the debt to ``BBB.'' in the
past two weeks.

     Federal regulators may overlook antitrust concerns in order
to keep Enron afloat, Hamilton said.

     Securities regulators are investigating trading by
partnerships run by Fastow, the former financial director. The
entities bought and sold Enron shares and assets, with trades
costing Enron $35 million and $1.2 billion in lost shareholder
equity. Enron ousted CFO Fastow last month.

     Shares of ChevronTexaco rose 34 cents to $87.80 in early
trading.  Dynegy, the fifth-largest U.S. natural gas marketer,
rose 25 cents to $33.25.

     Enron shares and bonds have tumbled in the past month. One of
its bonds, an issue paying 6.725 percent that matures in November
2008, fell to 69.11 cents on the dollar, according to Bloomberg
data, down from 71.90 cents yesterday.

     ``We would be very surprised if Dynegy buys the whole
company,'' said Tim Ghriskey, president of Ghriskey Capital
Partners, which doesn't own Enron or Dynegy shares. ``All the
(Dynegy) board has to do is look at what's happening to their
stock price today, and you'd wonder why they would want to do it
in the face of what's happening with the stock.'' Ghriskey made
his comments on Wednesday.

                       Enron Meets Creditors

     Enron is to meet with J.P. Morgan Chase & Co., Citigroup Inc.
and other lenders on Friday to discuss merger plans and a possible
increase in the amount the company pays for existing credit lines,
according to bankers familiar with the matter.

     The company has invited more than 300 creditors to its
offices in Houston to listen to presentations by Enron's financial
team, led by its new chief financial officer, Jeffrey McMahon, the
bankers said.

     Dynegy began in 1985 as Natural Gas Clearinghouse, a gas-
trading company. In 1998, the company took the name Dynegy -- a
combination of the words dynamic and energy -- to reflect its
expansion beyond natural gas. Chuck Watson, the company's
president from 1985, became chairman and chief executive in 1989.

     Watson is an investor with Enron CEO Lay in the Houston
Texans, who begin playing in the National Football League next
year, and is a board member at Baker Hughes Inc. As of an April
filing with the SEC, Watson owned 12.3 million Dynegy shares, or
about 5.1 percent of the common stock.

Fitch Comment on Wessex Water Ratings Following Enron Downgrade
2001-11-08 10:48 (New York)

FITCH COMMENT ON WESSEX WATER RATINGS FOLLOWING ENRON DOWNGRADE

Fitch-London-08 November 2001: In light of the recent downgrade
of the Senior Unsecured and Short-term ratings of Enron Corp
("Enron") to 'BBB-' and 'F3' respectively, Fitch has commented
today on the ratings of the Azurix Europe Limited group of
companies. Enron, in conjunction with Marlin Water Trust, owns
Azurix Corp. ("AZX"), which in turn owns Azurix Europe Limited
("AEL", rated 'BBB+/F2'). AEL is the ultimate UK parent of
Wessex Water Services Limited ("WWSL", rated 'A-/F2'). AEL owns
WWSL via an intermediate holding company, Wessex Water Limited
("WWL"), rated 'BBB+/F2'. The Outlook for the ratings of AEL,
WWL and WWSL is Stable. WWSL is one of the UK's 10 monopoly,
regulated water and sewerage companies.

Fitch has not changed the ratings of the AEL group companies
but notes the deteriorating credit profile of Enron, the
group's ultimate US parent. Ring-fencing provisions between AEL
and AZX are not considered by Fitch to be entirely watertight,
particularly as AEL is allowed to loan funds to subsidiaries of
AZX, which can be used for acquisitions and for general
corporate purposes within the acquired businesses.
Notwithstanding, the companies remain largely insulated from
potential negative events at Enron.

Credit protection is derived from a GBP425 million banking
facility to AEL, which prohibits the company from making
dividends or loans directly to AZX. AEL is also prohibited from
taking on additional indebtedness and engaging in any business
other than owning WWSL. In addition, under the banking
facility, the total amount that can be borrowed by AEL in its
name, yet on-lent to AZX subsidiaries, is capped at GBP240m.
The capped amount was originally earmarked to help fund AZX's
growth aspirations. All loans from AEL to AZX subsidiaries are
short-term, on commercial terms, are senior obligations of the
SPV (AEL's direct counter-party) and are guaranteed by AZX.
However, hypothetically, these loans may have been re-invested
in a subordinated stake in a water project. Mitigating this
risk profile, the bank facility has certain ratio thresholds
measured on a consolidated AEL group and a de-consolidated AEL
basis. Considering a worst case scenario, (assuming a failure
to recover the maximum amount that could be on-lent to entities
outside the AEL group), within the bank facility's ratio
thresholds, Fitch calculates that the AEL group would be able
to maintain its current rating category.

Going forward, Enron has publicly stated that is does not view
AZX as a core strategic asset. The latter has stated that it is
pursuing the disposal of certain assets, including those in
North America that have since been sold for USD150m. This deal,
which is not expected to have any impact on AEL, is due to
close soon. At this time Enron has made no public statement
about the future of the AEL business although it is reviewing
its options internally. Fitch will continue to monitor
developments in this respect and would expect to review the
ratings of AEL and WWSL in the context of clear announcements
from Enron. A key factor in assessing the remaining AEL group
would be the level of debt "crystallised", or assumed, by that
entity.

The assigned ratings reflect Fitch's approach to rating
regulated utilities in the UK, which starts with the
consolidated debt and income profiles of the ultimate UK
holding company, (in this case AEL), while considering both
intermediate holding companies (here, WWL) and the operating
business (WWSL). The ratings of AEL and WWL are supported by
strong operating performance in the monopoly business of WWSL,
which is regulated by Ofwat, and delivers relatively
predictable cash flows within the context of its regulatory
price controls.

NewPower 3rd-Qtr Loss Narrows After Adding Customers (Update2)
2001-11-08 10:38 (New York)

NewPower 3rd-Qtr Loss Narrows After Adding Customers (Update2)

     (Adds job cuts in fourth paragraph.)

     Purchase, New York, Nov. 8 (Bloomberg) -- NewPower Holdings
Inc., a venture formed by Enron Corp. to compete with traditional
gas and electric utilities, said its third-quarter loss narrowed
after cutting costs and adding customers.

     The loss was $67.1 million, or $1.15 a share, compared with a
loss of $69.9 million, or $2.96, a year earlier. Revenue tripled
to $54.7 million from $18.2 million, the company said. NewPower
was forecast to have a loss of $1.16 a share, the average estimate
of three analysts polled by Thomson Financial/First Call.

     NewPower added 80,000 customers in the third quarter and
expects to have 840,000 to 860,000 customers by the end of the
year. The company, based in Purchase, New York, reduced sales,
general and administrative costs by 41 percent, primarily by
cutting systems-development and professional expenses.

     The company is eliminating 40 jobs, or 22 percent of its
workforce, to cut costs, Chief Financial Officer William Jacobs
said on a conference call. The company expects severance costs of
$16 million in the fourth quarter.

     Enron, the largest energy trader, owns about 44 percent of
NewPower. Houston-based Enron, whose shares have fallen 73 percent
since Oct. 16 amid concern over affiliated partnerships run by its
former chief financial officer, said it had $544 million in losses
on investments including NewPower in the third quarter.

     Shares of NewPower rose 39 cents to $1.20 in midmorning
trading. The company went public in October 2000 for $21 a share.

                              Fourth-Quarter

     Excluding severance costs, NewPower expects a fourth-quarter
loss of $41 million to $46 million, or 65 cents to 73 cents a
share, and a full-year loss of $210 million to $215 million, or
$3.55 to $3.63.

     The company was expected to lose 74 cents in the fourth
quarter, according to First Call's average of three analysts'
estimates. The full-year's loss was expected to be $3.71, the
average of four analysts' estimates.

     In 2002, NewPower expects to have a loss of $100 million to
$125 million, or $1.59 to $1.99 a share. The average estimate of
four analysts polled by First Call was $2.26.

     NewPower expects to be profitable in 2003 with 1.5 million
customers. The company is focusing more on small businesses. It
now has 25,000 small-business customers and expects to have more
than 35,000 by the end of the year.

     International Business Machines Corp. owns 1.5 million shares
of NewPower, less than 5 percent of the company.

Dynegy May Offer at Least $8 Bln to Acquire Enron (Update5)
2001-11-08 10:17 (New York)

Dynegy May Offer at Least $8 Bln to Acquire Enron (Update5)

     (Updates with Dynegy statement.)

     Houston, Nov. 8 (Bloomberg) -- Dynegy Inc.'s board last night
failed to agree to pay $8 billion in stock to acquire Enron Corp.
in part because of concerns the biggest energy trader may be
lowered to a junk rating within the coming days, people familiar
with the situtation said.

     Dynegy, a Houston-based energy trader, said the talks were
continuing. The company is concerned that Enron's ``BBB'' credit
rating may be lowered by Standard & Poor's Corp. The rating
company is reviewing the company, which it downgraded Nov. 1.
ChevronTexaco Corp., which owns about 27 percent of Dynegy, is
also involved in the talks.

     The prospect of a lower credit rating, which would force
Enron to repay $3.3 billion of bonds that mature in 2003 early,
along with an investigation by the Securities and Exchange
Commission investigation into partnerships run by former Chief
Financial Officer Andrew Fastow prompted Enron's board to consider
selling the company.

     Enron today said it would restate its financial statements
since 1997 after concluding some of the accounting for its
partnerships didn't comply with generally accepted accounting
principles.

     ``Enron is running out of time and that's what's pushing them
to the bargaining table,'' said Zach Wagner, an analyst with
Edward Jones & Co., who cut his recommendation on Enron to
``reduce'' from ``accumulate'' on Oct. 23.

     Shares of Enron fell 45 cents to $8.60 cents in early trading
on the news, which was previously reported by the Wall Street
Journal and New York Times. The stock reached a record $90.75 in
August 2000. With 850 million shares outstanding, the company has
a market value of about $7.7 billion.

     Dynegy would gain a wholesale energy business, the leading
energy manager for commercial and small-industrial customers, and
an Internet energy trading operation many times larger than its
own, said UBS Warburg LLC analyst James Yanello.

                          `Stingy' Buyer

     ``If history is any guide, Dynegy is stingy when it comes to
acquisitions, so I don't expect them to do anything stupid'' such
as overpaying for Enron, said Yanello. ``A deal could provide
Dynegy with tremendous opportunity.'' He rates Dynegy ``strong
buy'' and doesn't own shares of either company.

     Enron Chairman and Chief Executive Officer Kenneth Lay
wouldn't hold a management position with the combined company
under terms being discussed Wednesday, the Wall Street Journal
reported. He would get a seat on the board, the paper added.

     ChevronTexaco is considering adding $1.5 billion to the
transaction to help Enron. It would provide another $1 billion
when the purchase is closed, the New York Times and Wall Street
Journal reported.

     The companies agreed on a breakup fee providing Dynegy with
about $400 million if Enron accepts a higher offer, people
familiar with the talks said.

     Dynegy spokesman Steve Stengel, Enron spokesman Mark Palmer
and ChevronTexaco spokesman Fred Gorell declined to comment.

                         Losing Confidence

     Companies that trade natural gas, electricity and other
commodities with Enron may pull back if Enron's finances
deteriorate to the point that it loses its investment-grade credit
rating, investors say.

     ``Dynegy has to act fast,'' said Roger Hamilton, a money
manager with John Hancock Advisers Inc., which sold its Enron
shares in recent weeks. ``If Enron can't get financing and its
bonds go to junk, they lose counterparties and their marvelous
business vanishes.''

     Moody's Investors Service lowered its rating on Enron's bonds
to ``Baa2'' and Standard & Poor's cut the debt to ``BBB.'' in the
past two weeks.

     Federal regulators may overlook antitrust concerns in order
to keep Enron afloat, Hamilton said.

                             SEC Probe

     Securities regulators are investigating trading by
partnerships run by Fastow, the former financial director. The
entities bought and sold Enron shares and assets, with trades
costing Enron $35 million and $1.2 billion in lost shareholder
equity. Enron ousted CFO Andrew Fastow last month.

     Shares of ChevronTexaco rose 34 cents to $87.80 in early
trading.  Dynegy, the fifth-largest U.S. natural gas marketer,
rose 25 cents to $33.25.

     Enron shares and bonds have tumbled in the past month. One of
its bonds, an issue paying 6.725 percent that matures in November
2008, fell to 69.11 cents on the dollar, according to Bloomberg
data, down from 71.90 cents yesterday.

     ``We would be very surprised if Dynegy buys the whole
company,'' said Tim Ghriskey, president of Ghriskey Capital
Partners, which doesn't own Enron or Dynegy shares. ``All the
(Dynegy) board has to do is look at what's happening to their
stock price today, and you'd wonder why they would want to do it
in the face of what's happening with the stock.'' Ghriskey made
his comments on Wednesday.

                       Enron Meets Creditors

     Enron is to meet with J.P. Morgan Chase & Co., Citigroup Inc.
and other lenders on Friday to discuss merger plans and a possible
increase in the amount the company pays for existing credit lines,
according to bankers familiar with the matter.

     The company has invited more than 300 creditors to its
offices in Houston to listen to presentations by Enron's financial
team, led by its new chief financial officer, Jeffrey McMahon, the
bankers said.

     Dynegy began in 1985 as Natural Gas Clearinghouse, a gas-
trading company. In 1998, the company took the name Dynegy -- a
combination of the words dynamic and energy -- to reflect its
expansion beyond natural gas. Chuck Watson, the company's
president from 1985, became chairman and chief executive in 1989.

     Watson is an investor with Enron CEO Lay in the Houston
Texans, who begin playing in the National Football League next
year, and is a board member at Baker Hughes Inc. As of an April
filing with the SEC, Watson owned 12.3 million Dynegy shares, or
about 5.1 percent of the common stock.

Enron Bonds Gain as Dynegy Considers $8 Bln Buyout (Update1)
2001-11-08 10:12 (New York)

Enron Bonds Gain as Dynegy Considers $8 Bln Buyout (Update1)

     (Updates note prices in second and fourth paragraphs.)

     New York, Nov. 8 (Bloomberg) -- Enron Corp. bonds gained as
Dynegy Inc. considered paying about $8 billion in stock for the
biggest energy trader. An acquisition would bolster Enron's credit
rating, which was recently lowered, traders said.

     Enron's 7.88 percent coupon notes due in 2003 rose 5 cents to
be bid at 82 cents on the dollar this morning from 77 cents
yesterday, traders said. The yield declined to 22 percent from 27
percent. The debt was trading near 100 last month.

      ``Enron bonds have been in free fall,'' said Joe Walker, who
follows Dynegy bonds for SWS Securities in Dallas. Enron's
bondholders ``now have the opportunity of going to a much stronger
source.''

     Enron's 6.4 percent notes due in 2006 traded at 84 cents on
the dollar today, up 10 cents to 12 cents from yesterday, traders
said. The company's longer-dated debt, bonds with maturities of 10
years or more, rose as much as 10 cents.

     While Moody's Investors Service rates Enron's credit as
``Baa2'', one rung higher than its ``Baa3'' grade for Dynegy,
other ratings companies including Standard & Poor's and Fitch Inc.
have assigned Dynegy a higher rating. Also, Enron's ratings have
been cut in recent weeks and face further reduction, while
Dynegy's credit outlook is stable.

     Enron bonds and shares have fallen in recent weeks on concern
about partnerships run by the company's former chief financial
officer and concerns the company's trading business will be hurt
by the downgrades. Dynegy and Enron, both based in Houston, met
yesterday to negotiate terms of a buyout, said people familiar
with the situation.

Enron Confirms Dynegy Talks
By TSC Staff <<mailto:letters@thestreet.com>>

TheStreet.com
11/08/2001 08:00 AM EST

Enron (ENE:NYSE - news - commentary) and rival energy trader Dynegy (DYN:NYSE - news - commentary) confirmed Thursday they were in merger talks.
According to reports, Dynegy held talks to acquire Enron for up to $8 billion in stock and to make an immediate cash infusion of up to $2 billion to help relieve Enron's debt crisis. The possible agreement is said to have the backing of ChevronTexaco (CVX:NYSE - news - commentary) , which owns about a quarter of Dynegy.
Enron shares continued their recent fall, dropping 16 cents to $8.89, while Dynegy jumped $1.83 to $34.83.

Stocks Surge On Rate Cuts, Jobless Numbers
By Kevin Burke <<mailto:kburke@thestreet.com>>
Staff Reporter
11/08/2001 09:42 AM EST

TheStreet.com
Updated from 8:49 a.m. EST
Stocks surged at the open following surprising moves by two European central banks and a positive report from the Labor Department.
The Dow was recently gaining 39 points, or 0.41%, to 9594. The Nasdaq was up about 17 points, or 0.95%, to 1855, and the S&P 500 was unchanged at 1116.
Both the Bank of England and European Central Bank announced half-point reductions in their key lending rates Thursday, the BOE dropping its to 4% and the ECB lowering to 3.25%. The cuts were larger than expected and reflected increased economic risk in a low-inflation environment, the banks said.
Overseas markets were uniformly higher on the moves. London's FTSE 100 was gaining fractionally at 5219, while Germany's Xetra DAX was up 1.5% to 4936. In Asia, Japan's Nikkei gained 1.4% to 10,432 while Hong Kong's Hang Seng added 2.6% to 10,539.
The Labor Department said initial claims for jobless benefits fell unexpectedly by 46,000 to 450,000 in the week ended Saturday.
Retail sales reports for October were also pouring in Thursday, with Wal-Mart (WMT:NYSE - news - commentary) posting a slightly higher-than-expected gain in same-store sales. Limited (LTD:NYSE - news - commentary) said same-store sales fell 6% while Gap Stores' (GPS:NYSE - news - commentary) fell 17%.
The Enron (ENE:NYSE - news - commentary) saga continued with news that rival energy trader Dynegy (DYN:NYSE - news - commentary) has held talks to buy the company for up to $8 billion in stock. The possible deal is said to have the blessing of ChevronTexaco (CVX:NYSE - news - commentary) , which owns 27% of Dynegy.
The price of crude oil was rising Thursday after Saudi Arabia's oil minister warned of impending OPEC production cuts. Prices were up almost 4% on the news, the biggest jump since just after the terrorist attacks.
The 10-year Treasury note was recently losing 6/32 to 106 11/32, yielding 4.20%.

Some Glamour Stocks That Are Ugly Down Deep
By Brett Messing <<mailto:bmessing@oscarcap.com>>
Special to TheStreet.com
11/08/2001 08:16 AM EST

RealMoney.com
I know it's tempting. I know what you're thinking: If I can catch a big ride on one of these beaten-down stocks, I can get my portfolio back to where it was in March 2000.
Forget it. Rip up those old statements. Treat them like UFOs. Instead, think singles and doubles instead of homers. While a number of glamour stocks have been decimated, they deserve to be decimated. I am an opportunist. I've looked at all of them. They are a collective disaster, and they are not worth the risk.
Let's start with Jim Cramer's favorite punching bag, Enron (ENE:NYSE - news - commentary) . As bad as this situation is, it is going to get worse before it is over. And while the Bushies may have been willing to help out Bill Gates with his little Justice Department problem, they will not go near this one with a 10-foot pole. Enron is not an energy company. It is a trading company. Moreover, it appears they are not particularly good traders.
Instead of Enron, invest your money with the best trading company in the world, Goldman Sachs (GS:NYSE - news - commentary) . These guys have probably been picking Enron's pockets for years. Isn't it interesting that Goldman Sachs was unwilling to participate in the recent short-term loans to Enron, an investment banking client? They might actually know what's behind the curtain.
I worked at Goldman Sachs for eight years, and I have tremendous respect for them. They know how to trade. They made a ton of money handling Sid Bass' recent 125 million-share block of Walt Disney (DIS:NYSE - news - commentary) stock. Forget about the 6-cent-per-share fee they charged. How about the 10 million to 20 million shares that they kept for themselves? I imagine that Goldman made more than $30 million on this one trade. Not a bad day's work.
Stay away from Qwest (Q:NYSE - news - commentary) . Taken in the best light, the company is way too aggressive with its accounting; Qwest bullies the analyst community and it overpromises and underdelivers. Qwest has justifiably lost the trust of the investment community. It will take years of execution and fence-mending to earn this trust back. Ask Cendant CEO Henry Silverman. He is still paying for the damage inflicted upon him by former Cendant Chairman Walter Forbes, who has pleaded not guilty to conspiracy and wire fraud charges.
Go with WorldCom (WCOM:Nasdaq - news - commentary) instead. These guys actually get it. They are among the telecom industry's best operators, and they are the best dealmakers. Like everyone else, they goofed, but they have found religion. This quarter's operating results show some promise. Previously skeptical analysts at Lehman and Merrill had some nice things to say about the company. I think WorldCom is an up stock from here. It is not going back to the $60s, but I could see it above the driving age by year-end.
I know it's also tempting to think that if the economy rebounds, consumer finance stocks will scream. You are turned on by Providian (PVN:NYSE - news - commentary) and Conseco (CNC:NYSE - news - commentary) . Providian recently hired my pals at Goldman Sachs to help them out.
Forget this, too. Providian feels like a doughnut to me. Their balance sheet is a mess. We do not know how bad it is. They may not know how bad it is. Moreover, they were not candid with the investment community.
Conseco announced that Gary Wendt and other senior managers bought a bunch of stock with their own money. While I love to see management buying stock, this one feels too staged to me. Pre-Wendt, Conseco had a long history of management buying stock with loans from the corporate treasury. Moreover, 1 million shares (or $3 million) is not that much money to Wendt. I would like to see him buy $25 million of restricted stock directly from the company.
Conseco is probably the best speculative bet of the bunch, but I would still pass. It is a very high-risk situation, given the leveraged state of its balance sheet. Wendt is a tremendous manager, and he did a great job with GE Capital. However, he would not be the first guy to have a sequel that bombs at the box office.
Go with Citigroup (C:NYSE - news - commentary) instead. Citigroup is the biggest and best financial services company in the world. While Wendt is something special, I would draft Weill and Rubin ahead of him in my CEO Rotisserie League.
The best way to make money is to stay out of trouble. Stick with singles and doubles. Don't be tempted.

Top Of The News
Enron Trades Itself
Dan Ackman ,
Forbes.com , 11.08.01, 8:47 AM ET

NEW YORK - Enron, once a star, has lately looked more like a truck racing down a Texas highway with a load of burning lumber: no one knew where it was going or why.
Finally, it seems to be nearing a rest stop as Enron (nyse: ENE) is reportedly about to sell itself to its much smaller rival Dynegy (DYN ) for $8 billion in stock, a fraction of its former value. As part of the deal, ChevronTexaco (CVX ) , which owns 27% of Dynegy, would pump at least $1.5 billion in cash into Enron upon the inking of an agreement and an additional $1 billion when the deal closed.

The deal, if consummated, represents a possible way out for Enron, which has been humbled by an accounting scandal, the resignation and firing of top executives, the defection of investors, and massive losses.

The rough outlines of what humbled Houston-based Enron are known, but the details remain a mystery, as well as the subject of a Securities and Exchange Commission investigation and at least one major lawsuit, with more to come.

Once basically an oil and natural gas pipeline company, Enron expanded into energy trading, broadband telecommunications and other businesses. It was often said to be at the center of a "revolution," perhaps several revolutions, with telecommunications, the Internet, and energy deregulation among them.

But a revolution is not a tea party. For a while, the fact that few investors understood what Enron did was probably a plus. Between 1997 and the end of 2000, Enron's share price climbed steadily from less than $20 per share to over $80 per share. It had a $70 billion market value as recently as a year ago.

During the run-up, Enron's financial conditions don't seem to have justified the surge. Revenues were growing wildly, from $20 billion in 1997 to $101 billion in 2000. But much of that increase was due to the fact that Enron was now a trading company, and revenues were of a different type altogether.

In any event, profits, after a huge jump between 1997 and 1998, increased much more slowly, from $878 million in 1998 to $1.4 billion. Of course, whether these profits were real is now very much in doubt. Last quarter, Enron reported a $618 million loss, mostly due to accounting charges.

The road down has been a lot steeper. Over the last 12 months, the stock fell all the way back and closed Wednesday at $9.05, wiping out all the gains and then some.

Today, the inscrutability of Enron's finances is considered a bad thing. Jeffrey Skilling, the company's new chief executive officer, resigned in August after just six months at the helm. Kenneth Lay, 58, the former C.E.O. and a close friend of President George W. Bush, was brought back in. Lay will have a seat on the combined company's board, but no day-to-day job, according to reports.

Lay earned $12 million in total compensation from Enron in 2000, not counting his profits from the exercise of $123 million in options. Other Enron executives also exercised tens of millions in options in 2000, when the stock was flying high. Enron paid Skilling, once Lay's top lieutenant, $84.5 million over the last five years.

Last month, the company's problems became public. It disclosed $1 billion in write-downs and a $1.2 billion reduction in shareholder equity. The reduction in equity arose from "related party" transactions that turned out to be with investment partnerships involving Andrew Fastow, the chief financial officer. Fastow was forced to resign on Oct. 24. The Securities and Exchange Commission is investigating.

Today, Enron is expected to send the S.E.C. answers to questions the agency has posed in its investigation. Dynegy officials have seen those answers already, and the public should see them soon.

Enron will meet Friday with its creditors about the company's continuing crisis and the proposed merger. The hope is a deal with Dynegy, also based in Houston, will lead Enron out of the storm and cause its trading partners to have enough confidence to do business with the company.

Enron's credit rating is in jeopardy. Both Moody's Investors Service and Standard & Poor's have already cut it to two rungs above junk status. On Nov. 5, Fitch cut it to one notch above junk.

As part of the deal, Dynegy, which had 2000 revenues of $29.5 billion, would be taking on Enron's $12.8 billion debt load. But this figure does not include billions of dollars of other debt, accumulated off the balance sheet, that has played a major role in Enron's current problems. Some of Enron's assets will likely be sold to pay down the debt.

The acquisition would combine Enron, a dominant player in the trading of electricity and natural gas in the U.S., but which has been selling off hard assets such as utilities, with Dynegy, a company that uses trading to maximize earnings from its power plants.

Dynegy will pick up the pieces of Enron, hoping it can make some sense of it. After that it may make some money, too.


Vince,
?
Please find attached a replacement invoice for invoice number 215.?  This
invoice includes the correction in charges for the weather course, and for
only one attendee for the energy derivatives course.
?
If you should have any questions, please contact me.
?
Sincerely,
Julie
 - Enron283_9_04_01.doc


----- Forwarded by Jeff Dasovich/NA/Enron on 06/19/2001 05:49 PM -----

	Jeff Dasovich
	Sent by: Jeff Dasovich
	06/18/2001 05:09 PM

		 To: mail@joesdesk.com, joe.kaishkill@enron.com
		 cc:
		 Subject: Re: brazil contact

Joe, meet Joe.  My apologies.  I've had trouble getting contact information
for Joe (Kaishkill).  Joe  K. could you confirm that you've received this
note.  Also, I left you Joe A.'s phone contact numbers on your Houston
voicemail last week.  Joe A. could you please send Joe K. your contact
numbers again?  Thanks very much.

If there's anything else either of you need, please don't hesitate to let me
know.

All the best,
Jeff

	mail@joesdesk.com
	06/18/2001 09:20 AM

		 To: jeff.dasovich@enron.com, Jeff.Dasovich@enron.com
		 cc:
		 Subject: brazil contact

Hello Jeff:

I am back from my Asia trip and will be leaving for Brazil tomorrow. I would
like to contact Joe Kaischkill in anticipation of my trip to schedule time
with him. Could I get a contact # or email to intitiate contact?

Thanks for your help once again.
Best regards,
Joe Alcantara


This request has been pending your approval for  4 days.  Please click http://itcapps.corp.enron.com/srrs/auth/emailLink.asp?ID=000000000076886&Page=Approval to review and act upon this request.

Request ID          : 000000000076886
Request Create Date : 11/20/01 12:47:06 PM
Requested For       : hai.chen@enron.com
Resource Name       : Reuters Kobra 3.5.1
Resource Type       : Applications


p.s.  Kate Cole has been helping us with lists of officers for ECI and
other US entities

**********NOTE**********
The information contained in this email message is intended only
for use of the individual or entity named above.  If the reader
of this message is not the intended recipient, or the employee or
agent responsible to deliver it to the intended recipient, you
are hereby notified that any dissemination, distribution or
copying of this communication is strictly prohibited.  If you
have received this communication in error, please immediately
notify us by telephone (44-20-7903-1000), and destroy the original
message. Thank you.


Here is the revised ABB spreadsheet showing the new option premium
allocations we discussed this morning.

Regards,
Rebecca
x57968


Please see attached.

Thanks.
Donna

 <<1-17-02.doc>>


Our research indicates that in 1998 Wisvest paid UI $272 million or approx. $245/kW for these two plants.  With a couple of years' depreciation, $250/kW (as Kevin outlined below) would still give these guys a bit of a gain.

Don

---Original Message-----
From: Presto, Kevin M.
Sent: Wednesday, September 26, 2001 9:38 PM
To: Miller, Don (Asset Mktg); Robinson, Mitch; Davis, Mark Dana; Llodra, John; Broderick, Paul J.
Cc: Lavorato, John; Kitchen, Louise; Duran, W. David
Subject: Conn. Coal Plants

As most of you know, NRG's proposed purchase of two coal plants in Conneticut (UI's territory) was recently cancelled due to regulatory issues at FERC.   The purchase and sale transaction between Wisvest and NRG was originally entered into almost two years ago.   The proposed purchase price of $350 million for 1000 MW of coal was a "bargain price" at the time due to environmental risks that are specific to the state of CT.

Over the past 2-3 years, the State of Conneticut has threatened to have these coal plants shut down due to pollution issues and Wisvest was concerned enough about this risk that they "puked" the plants to NRG for $350/kW in early 2000.   At a minimum, it is expected that $100-150/kW of SCR and/or scrubbers will be required at these facilities to appease the CT regulatory bodies.

My strong view is that, as a practical matter, the plants cannot be shut down or the lights would go out in CT.   The area where the plants are located is quite possibly the most congested area in the entire Eastern Interconnect.   The load pocket is significantly short MW and transmission import capability is inadequate to serve the load in this area.   In a true "locational marginal price" environment, the prices would likely be similar to Zone J in New York   Currently, pricing in NEPOOL is generally socialized with congestion costs spread equally to all loads, regardless of who causes the congestion.

In the recently proposed "single NE RTO" model, it is about 80% certain that the PJM "locational marginal price" market model will be implemented sometime between mid-2003 and mid-2004.   At that point in time, consumers in the congested areas of NEPOOL (in-city Boston and CT) will be exposed to higher energy prices, while consumers in Maine, New Hampshire, and Rhode Island should see lower prices.

Given the facts above, coupled with traditional asset companies too long to show good bids for incremental assets, I think EWS should pursue discussions with Wisvest immediately and attempt to buy these coal plants at what could be extremely favorable economics relative to our forward curve in NEPOOL and our bullish view for relative pricing at the asset "node".

If we could buy these plants for approx $250/kW with $150/kW of environmental upgrades, the resulting "all-in" (depr, fixed & variable O&M, fuel costs, NOx, SO2, capital reserve, interest) 7x24 plant cost would be approx. $34-36/Mwh.    This is lower than our energy only socialized NEPOOL curve.   Additional upside is derived from positive basis, ICAP, ancillary services, emissions allowances, and long term requirements sales to LSE's.

Lavo and Louise - This could be the "Alberta PPA" for 2002.   Lots of "hair" but lots of upside.

Any thoughts?


Version 2.0 of the ClickAtHome Portal is now available!
 Log into www.clickathome.net now, from work or home!

Access the PEP System through the portal!
 Choose your reviewers and fill out your evaluations in the comfort and
privacy of your home!

Outlook Web Access and eHRonline will be available SOON!

The ClickAtHome portal is fully customizable for you!
 YOU choose the content on each page, as well as the look and feel!

Note: the ClickAtHome portal must be launched through an Internet Explorer
browser, 5.0 or higher.


FYI
---------------------- Forwarded by Chris Long/Corp/Enron on 05/19/2000 04:22
PM ---------------------------

Jeremy Bash <Jbash@Fontheiminternational.com> on 05/19/2000 10:50:15 AM
To: clong@enron.com
cc: Ken Levinson <KLevinson@fontheiminternational.com>, Claude Fontheim
<CFontheim@fontheiminternational.com>, Sally Painter
<SPainter@fontheiminternational.com>

Subject: Today's Post Story on Gore Campaign

Chris: In case you haven't see this ...  -JB

Voters Hear a Dull Gore, So Aides Sharpen Message
By Ceci Connolly
Washington Post Staff Writer
Friday, May 19, 2000; Page A06
NASHVILLE, May 18 -- Vice President Gore's top political strategists met
here for more than three hours today in a fresh effort to sharpen a
campaign that has ceded much of the spring to George W. Bush.
High on the agenda, according to consultants and officials in the
session, was a debate over new television ads and how to bring more
logic to the vice president's travel schedule, so that what he is saying
and where he is saying it do not appear random. "We need to make sure
our message and travel make sense," said one participant.
On Wednesday night, Gore spent a few hours before the cameras in a union
hall here with his admakers Bill Knapp and Carter Eskew, as they
continue fine-tuning commercials to be aired by the Democratic National
Committee between now and the August convention.
The DNC is preparing to sign an advertising contract with Knapp, Eskew
and other Gore top media consultants, said party spokeswoman Jenny
Backus.
Sources in Washington said today the party could easily spend $10
million over the next three months indirectly promoting Gore and other
Democratic candidates, although no firm budget has been set. From August
1995 to July 1996, the DNC and state Democratic committees ran $45
million worth of issue ads, party officials said today.
Gore campaign officials confirmed that for several weeks they have
test-marketed ads, many of them biographical spots aimed at
reintroducing Gore to a public that continues to have an ill-defined,
somewhat unfavorable impression of him. The DNC also has studied focus
groups to determine the best lines of attack against the presumptive GOP
nominee.
More broadly, the Gore team is struggling to seize back the agenda after
watching the Texas governor dominate the airwaves with proposals on
housing, education, health care and Social Security. Some Gore aides
argued that a turnaround began this week with the vice president's
response to Bush's proposal to privatize Social Security. "If you had
asked me a week ago, I would have said things were much worse," said one
staff member here. "But I think Bush has made a big mistake with that
proposal."
Addressing 10,000 retirees in Orlando on Wednesday, Gore gave one of his
most forceful, cogent speeches since locking up the Democratic
nomination in March. His advisers hope that methodical critique of
Bush's Social Security plan offers a blueprint for refocusing his
candidacy and boosts his lagging poll numbers.
"This was one of the first times since the end of the primaries we had
direct engagement on an issue voters care about," said one campaign
aide. "Both the candidate and the operation perform better when there is
something to compare to and we have a mission or task at hand."
One longtime Gore aide said the vice president was "warming up" to the
Social Security debate, reveling in the complex details of the program
and its broad scope. "Finally, a presidential issue," this person said.
Yet the campaign continued today to debate how much time Gore should
devote to attacking Bush rather than selling himself. Several Gore
advisers say they are lining up more "surrogates" to handle the Bush
critique so that Gore can carry a more positive message.
Today's high-level session was the second of new weekly meetings called
by campaign chairman Tony Coelho aimed in part at consolidating power at
the headquarters here. Many Gore allies have grumbled in recent weeks
about three competing power centers--here, at the White House and aboard
Air Force Two. In addition to Knapp, consultants Tad Devine, Michael
Whouley and Elaine Kamarck flew to Nashville for the session. Coelho is
moving the scheduling staff, led by Lisa Berg, to Nashville and has
asked Devine to spend two to three days a week here.
Gore has salted the DNC with several top advisers, including Whouley,
who will run the party, Knapp, who helped coordinate the 1996
advertising, and Laura Quinn, who is leaving the office of the vice
president to oversee the DNC communications shop.
DNC lawyers are finalizing the legal and financial details on a
consulting contract with a new company that will include principals from
three Democratic firms: Squier, Knapp, Dunn; Shrum, Devine and Donilon;
and Century Media (which is composed of several of the same Gore
consultants).
, 2000 The Washington Post Company


FYI

 -----Original Message-----
From:  "Young, Michael" <Michael.Young@northwestern.com>@ENRON
[mailto:IMCEANOTES-+22Young+2C+20Michael+22+20+3CMichael+2EYoung+40northwester
n+2Ecom+3E+40ENRON@ENRON.com]
Sent: Thursday, May 24, 2001 1:56 PM
To: Booth, Chris
Cc: 'margueritekahn@paulhastings.com'
Subject: Escrow Agreement

Chris, per our conversation this afternoon, this e-mail will document the
fact that, due to travel schedules, NorthWestern is unable to obtain the
necessary officer signatures for the incumbency documents requested by
Citibank as part of establishing the escrow arrangement called for under the
Letter Agreement.  You agreed that NorthWestern could complete the necessary
paperwork with Citibank on Tuesday of next week.  Thanks again for your
flexibility.

Michael J. Young
Senior Corporate Counsel
NorthWestern Corporation
125 S. Dakota Avenue
Sioux Falls, SD  57104
Fax:  605/978-2840
Phone:  605/978-2836
Cell:  605/351-4040


please put on schedule
---------------------- Forwarded by David W Delainey/HOU/ECT on 08/01/2000
06:30 PM ---------------------------

Tracy L Arthur
07/31/2000 11:47 AM
To: James M Bannantine/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Cliff
Baxter/HOU/ECT@ECT, Sanjay Bhatnagar/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT,
Rick Buy/HOU/ECT@ECT, Richard Causey/Corp/Enron@ENRON, David W
Delainey/HOU/ECT@ECT, Diomedes Christodoulou/SA/Enron@Enron, James
Derrick/Corp/Enron@ENRON, Andrew S Fastow/HOU/ECT@ECT, PEGGY
FOWLER/ENRON@Gateway, Mark Frevert/NA/Enron@Enron, Kevin Hannon/Enron
Communications@Enron Communications, David
Haug/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Joe Hirko/Enron
Communications@Enron Communications, Stanley Horton/Corp/Enron@Enron, Kurt S
Huneke/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Larry L
Izzo/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Steven J Kean/HOU/EES@EES, Mark
Koenig/Corp/Enron@ENRON, Kenneth Lay/Corp/Enron@ENRON, rebecca
mark-jusbasche/HOU/AZURIX@Azurix, Mike McConnell/HOU/ECT@ECT, Rebecca
McDonald/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Jeffrey McMahon/HOU/ECT@ECT, J
Mark Metts/NA/Enron@Enron, Cindy Olson/Corp/Enron@ENRON, Lou L
Pai/HOU/EES@EES, Ken Rice/Enron Communications@Enron Communications, Jeffrey
Sherrick/Corp/Enron@ENRON, John Sherriff/LON/ECT@ECT, Jeff
Skilling/Corp/Enron@ENRON, Joseph W Sutton@Enron, Greg Whalley/HOU/ECT@ECT,
Thomas E White/HOU/EES@EES
cc: Brenda Garza-Castillo/NA/Enron@Enron, Marcia Manarin/SA/Enron@Enron,
Susan Skarness/HOU/ECT@ECT, Stacy
Guidroz/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Beena
Pradhan/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Karen K Heathman/HOU/ECT@ECT,
Sharron Westbrook/Corp/Enron@ENRON, Kay Chapman/HOU/ECT@ECT, Rosane
Fabozzi/SA/Enron@Enron, Molly Bobrow/NA/Enron@Enron, Stephanie
Harris/Corp/Enron@ENRON, Bridget Maronge/HOU/ECT@ECT, Mary
Trosper/ENRON@Gateway, Nicki Daw/NA/Enron@Enron, Carol Ann Brown/Enron
Communications@Enron Communications, Elaine
Rodriguez/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Nancy Young/Enron
Communications@Enron Communications, Ann Joyner/Enron Communications@Enron
Communications, Cindy Stark/Corp/Enron@ENRON, Sherryl
Stone/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Mary E
Garza/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Maureen McVicker/HOU/EES@EES,
Joannie Williamson/Corp/Enron@ENRON, Rosalee Fleming/Corp/Enron@ENRON, Marsha
Lindsey/HOU/AZURIX@AZURIX, Cathy Phillips/HOU/ECT@ECT, Loretta
Brelsford/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Sue Ford/HOU/ECT@ECT, Dolores
Fisher/HOU/ECT@ECT, Bobbie Power/Corp/Enron@ENRON, Karen Owens/HOU/EES@EES,
Dorothy Dalton/Enron Communications@Enron Communications, Christina
Grow/Corp/Enron@ENRON, Lauren Urquhart/LON/ECT@ECT, Sherri
Sera/Corp/Enron@ENRON, Katherine Brown/Corp/Enron@ENRON, Pam Benson@Enron,
Liz M Taylor/HOU/ECT@ECT, Judy G Smith/HOU/EES@EES, Sandy
Roberts/Corp/Enron@ENRON
Subject: Welcome New Associates - Reception


The Following memo will be hand delivered to you in hard copy form on Tuesday
morning, Feb. 20.  We will enclose the pledge form and
an Enron matching gifts form for your convenience.

Our meeting with Bob May, Dean of the McCombs School of Business at
UT-Austin, was a great success.  We had 14 attendees who received an update
from Bob about the many great things going on in Austin, as well as
opportunities to participate in the &We,re Texas8 capital campaign.

After Bob,s presentation, the 14 Enron officers met separately and were
extremely supportive about the idea of contributing in a coordinated manner
to the McCombs School.  This was evidenced by an expression of intent in
giving totaling about $175,000 from just the 14 people!

Here is what we propose and how it would work.

1. The UT Alumni at Enron would pledge $1 million over four years to the
McCombs School.  This would consist of $500,000 of gifts from employees and a
matching $500,000 from Enron.

2. The matching program provided through the McCombs gift to the Business
School would match the $1 million.

3. The result would be a permanently endowed $2 million &Enron Chair8 to
support &star quality8 faculty for the school.  This will represent one of
the largest Faculty Chairs at the Business School.

A few additional details:

1. Each individual,s contribution will also be credited to their name (along
with the Enron match) for recognition purposes in Business School,s Annual
Report, President,s Associates, etc.  In other words, a $10,000 contribution
matched by Enron will be considered as a $20,000 contribution by that
individual for recognition purposes.

2. Enron has agreed to not count it,s match against an employee,s annual
matching gift limitation of $15,000, as long as the gift is coordinated in a
way that makes it a part of the &Enron Chair8.

3. The gift may also be counted toward any previous pledge made to the &We,re
Texas8 campaign as long as that pledge is not supporting a separately named
contribution.  Please let us know that this is your intent.

Please carefully consider this request.  I do not plan to finalize the pledge
until I receive responses from enough officers to support this contribution.
We have about 40 officers of Enron who are UT alumni and with some
participation by each of us, we will achieve this level of gift.  Our plans
are to follow this up with a broader opportunity for all Enron employees that
are UT alumni; however, the leadership of the group will determine our
success.

Thanks for your consideration and continuing support of The University of
Texas.


Tracy:

Sounds like there is lots going on today.  Danny just had a meeting with everyone on the 13th floor.

Attached is the weekly.  Please review.

Jan


FYI
---------------------- Forwarded by Chris Booth/NA/Enron on 05/21/2001 11:39
AM ---------------------------

"Maher, Andrea M" <andrea.m.maher@citi.com> on 05/21/2001 11:30:56 AM
To: "'chris.booth@enron.com'" <chris.booth@enron.com>
cc:

Subject: Citibank's documents for upcoming escrow

Chris,

As we discussed I am attaching our schedule of fees for services as escrow
agent.  Please forward me a copy of the escrow agreement and the underlying
document (Purchase Letter) at your earliest convenience so we may begin to
review these.

I am also attaching a list of Money Market investment options for review by
Northwestern as well as the appropriate tax forms and Incumbency Certificate
for establishing the new account.

Please do not hesitate to call me should you have any questions.

Kind Regards,
Andrea

 <<Enron-F7.doc>>  <<Immf.doc>>  <<Form-W-9-2000.pdf>>  <<INCUMB1.DOC>>

Andrea M. Maher
Citibank Agency & Trust Services
111 Wall Street - 14th Floor / Zone 3
New York, New York 10005
Tel: 212-657-1007
Fax: 212-657-4009
andrea.m.maher@citi.com

 - Enron-F7.doc
 - Immf.doc
 - Form-W-9-2000.pdf
 - INCUMB1.DOC


Kay,

is this what you meant?

Consistent with the results of the Feasibility and Facilities Studies and
discussions that have been held to date between Florida Power & Light Company
(&FPL8) and Midway Development Company, L.L.C (& Midway and its designees
referred to as &MDC8), by this letter MDC authorizes FPL to perform the
necessary studies, analysis and other activities required to develop and
support a schedule the necessary for a potential power project to
interconnect with FPL,s transmission grid system and receive back-feed by
March 15, 2002.

Does this letter get the "Oricle's" seal of approval?

If Ben needs to sign this, would it be ok if he faxed it to FPL?

 -----Original Message-----
From:  Mann, Kay
Sent: Friday, May 25, 2001 9:05 AM
To: Krause, Greg
Subject: letter

My suggestions:


Please find attached our Weekly Report (29th November 2000) for your perusal
and information.

Regards,

Beverley


Dave,

Attached please find a clean and blacklined copy of the Energy Argus
Information Services Agreement marked to show changes to the previously
distributed draft.  Please call me with any comments or questions.

Jason


EFF_DT PORTFOLIO_ID DOWN95
2/8/01  MANAGEMENT-COAL 0
2/8/01  MANAGEMENT-CRD 0
2/8/01  MANAGEMENT-GAS 1,395,617
2/8/01  MANAGEMENT-PWR 171,132
2/8/01  AGG-MANAGEMENT 1,449,781


john arnold if fixing


Heather,

I am forwarding this message to 2 groups in Enron that may be interested.

Vince

"Heather Thorne" <hethorne@wharton.upenn.edu> on 04/26/2001 08:55:56 PM
To: "Christie Patrick" <christie.patrick@enron.com>, "Vince Kaminsky"
<vkamins@enron.com>
cc: "Greg Hunt home" <gregoryhunt@home.com>
Subject: Recruiting for weather risk management group

Dear Vince and Christie,

?

I hope that you are both well, and are ready for the onset of summer in
Houston!? I was disappointed that I was not able to see you at the final
Tiger Team presentations last month due to a family emergency.? I hope that
the teams, analyses will be helpful to your work, and echo their appreciation
of your involvement and support.

?

I am writing with a question regarding recruiting for Enron,s weather risk
management group. ?My boyfriend, Greg Hunt, is currently seeking
opportunities to combine his background in meteorology (MS and 2 years of
research at Lawrence Livermore Nat,l Lab) and an MBA in finance and
information technology.? I began thinking about Enron,s work in weather
derivatives, and realized that there could possibly be a great fit there.

?

I have copied Greg on this message, and would appreciate any suggestions you
can offer regarding opportunities in this group. ?Thank you very much!

?

Best regards,

?

Heather

?

?

?

?

Heather N. Thorne

MBA Candidate, 2001

The Wharton School at University of Pennsylvania

2516 Pine Street

Philadelphia, PA 19103

(215) 545-3022

?


---------------------- Forwarded by Chris Germany/HOU/ECT on 09/08/2000 07:27
AM ---------------------------

Trogg522@aol.com on 09/07/2000 09:10:37 PM
To: chris.germany@enron.com
cc:
Subject: Photo


What's the basis--do you currently use a laptop?

DENISE LAGESSE
11/07/2000 03:46 PM
To: Drew Fossum/ET&S/Enron@ENRON
cc: Susan Scott/ET&S/Enron@ENRON

Subject: Request for approval to purchase laptop, etc. for Susan Scott

Please approve the following purchase for Susan Scott: (and please don't take
it out of my huge raise come Feb!)

Compaq laptop (1 ea)  $2,745.00 2,745.00 total
Memory upgrade (1 ea)        575.00    575.00 total
Docking stations (2 ea)        587.00 ea 1,174.00 total

      4,494.00 grand total


CALENDAR ENTRY:	APPOINTMENT

Description:
	Flight from Paris to Houston (10:40 Duration)

Date:		5/18/2001
Time:		10:20 AM - 2:00 PM (Central Standard Time)

Chairperson:	Stacey W White

Detailed Description:


i really don't want to go out, but think i should at least stop by.

 -----Original Message-----
From: 	Jai Hawker <JHawker@petersco.com>@ENRON
Sent:	Friday, January 25, 2002 1:46 PM
To:	Richey, Cooper
Subject:	RE: squash

Leaning towards not.

-----Original Message-----
From: Cooper.Richey@enron.com [mailto:Cooper.Richey@enron.com]
Sent: Friday, January 25, 2002 1:44 PM
To: JHawker@petersco.com
Subject: RE: squash

want to go?

    -----Original Message-----
   From:   Jai Hawker <JHawker@petersco.com>@ENRON
   Sent:   Friday, January 25, 2002 1:39 PM
   To:     Richey, Cooper
   Subject:  RE: squash

   You going to Ceili's then?

   -----Original Message-----
   From: Cooper.Richey@enron.com [mailto:Cooper.Richey@enron.com]
   Sent: Friday, January 25, 2002 1:37 PM
   To: JHawker@petersco.com
   Subject: RE: squash

   3 to 1 - the games were close, but carlos controlled the match.

       -----Original Message-----
      From:   Jai Hawker <JHawker@petersco.com>@ENRON
      Sent:   Friday, January 25, 2002 1:29 PM
      To:     Richey, Cooper
      Subject:  RE: squash

      The maid was average at best.  Was the squash game close?

      -----Original Message-----
      From: Richey, Cooper [mailto:Cooper.Richey@ENRON.com]
      Sent: Friday, January 25, 2002 1:20 PM
      To: jhawker@petersco.com
      Subject: squash

      carl beat cowan

      how was the maid?

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

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


Dear Errol-

Could I please get your response ASAP?  I would appreciate it.

Christy

 -----Original Message-----
From: 	Lobusch, Christy
Sent:	Wednesday, November 07, 2001 3:47 PM
To:	McLaughlin Jr., Errol
Cc:	McIntyre, Burton
Subject:	Financial gas hierarchy

Dear Errol-

In an effort to clean up RisktRAC, we have created a new hierarchy structure in RisktRAC that is currently in the testing phases.  I have attached a spreadsheet that contains the new hierarchy structure for Financial Gas (please look at all the tabs).  Also included is a list of your books that are linked to the lowest level portfolio of the hierarchy structure.

Could you please review the proposed hierarchy structure and let me know of any issues (i.e. all traders are captured or that we don't have any "extra" traders reflected.)
Additionally, could you please review the "books" tab and ensure that the book list is complete and accurate and that the book is linked to the correct trader (please note - if more than one trader trades out of the same book, the book should be assigned to the most senior trader.  Please ensure that this has been done correctly).  Please advise us of any missing books as well.
Finally, I would like to get an understanding of what reports/hierarchies you all are currently using in RisktRAC and for what purpose.

I would like a response ASAP, but by Monday at the latest.  Please call me to discuss at your convenience or email me your response.  Thanks, Errol.

Christy

 << File: Financial gas.xls >>


Richard,
 Here is my quick reaction to the idea of Enron terminating its PX
participation agreement in the Core Market:

 1. PX tariff 18.3 says that a participation agreement "may be
terminated by either party upon written notice."

 2. PX tariff 5.3 says with respect to the Core Market
Proportional Charge-Back Methodology:

  "The PX Participant's outstanding default amount will be
charged back to all current PX Participants based upon the percentage of its
gross sales in MWHs to the Total gross MWHs sales in the Core Market during
the three calendar months preceding the event plus the current month to
date."

  3. PX Participant is a defined term:

  "An entity that is authorized to buy or sell Energy or
Ancillary Services through the PX, and any agent authorized to act on behalf
of such entity."

  4. Energy is also a defined term:

  "The electrical energy produced, flowing or supplied by
generation, transmission or distribution facilities, being the integral with
respect to time of the instantaneous power, measured in units of watt-hours
or standard multiples thereof, e.g. 1000 Wh.

  5. Ancillary services is also a defined term:

  "Regulation, Spinning Reserve, Non-Spinning Reserve,
Replacement Reserve, Voltage Support and Black start together with such
other interconnected operation services as the ISO may develop in
cooperation with Market Participants to support the transmission of Energy
from Generation resources to Loads while maintaining reliable operation of
the ISO controlled grid in accordance with good utility practice."

  Bottom line:

  If a PX Participant, as defined in the PX tariff as opposed
to the PX rate schedule for the CTS market, is an entity that is authorized
to buy or sell "instantaneous power" rather than power in the future, then
Enron by withdrawing from its PX participation agreement would no longer be
a current PX participant.  Thus, there is an argument that by withdrawing in
writing prior to any chargeback in the core market, that Enron may be able
to argue it cannot be charged back.

  I also looked at the ADR and dispute resolution procedures
to see if Enron had to be PX Participant to initiate the procedure and
maintain it.  Schedule 9 section 1.1 states that PX ADR procedures shall
apply to all disputes between parties which arise under PX Documents.
Section 2.1 states that the "PX and PX Participants shall negotiate in good
faith..." It goes on to state in Section 2.2 that "any one of the parties"
may submit a statement of claim.  Thereafter, in Schedule 9 it appears that
the references are to parties not PX Participants.  My quick reading is that
you still have to use and get the benefits of the ADR even if you are no
longer a PX Participant.

  Operational Downside:

  Does Enron have to be a PX Participant to get the PX to
schedule the power that Enron has sold in the CTS market as it becomes due?
In other words, if Enron is not a PX Participant, does that mean the PX will
not schedule the power leading to an Enron default under its obligations to
the PX to deliver power?  Could that lead to the underscheduling penalty if
PX  balances its schedule without Enron's power?  I do not know the answer
to this but I am reviewing the tariff.

  Hope this helps
  Thanks
  Gary

=======================================================
This email message is for the sole use of the intended recipient(s) and may
contain confidential and privileged information. Any unauthorized review,
use, disclosure or distribution is prohibited. If you are not the intended
recipient, please contact the sender by reply email and destroy all copies of
the original message.

To reply to our email administrator directly, send an email to
postmaster@brobeck.com
BROBECK PHLEGER & HARRISON LLP
http://www.brobeck.com


As per my discussion with Leigh Searcy, attached is a redline version of the
Gregory Power Partners Confidentiality Agreement.  I will fax and/or Federal
Express  you an executed copy of the revised CA today, so that if you are
satisfied with the changes, we can meet the January 5 deadline.  If there are
issues that you would like to discuss regarding the CA please call me or
email me today at 713 345 3613 or call Michelle Parks or myself at 713 249
3745 (cell phone) tomorrow.  We will be out of the office tomorrow but will
do the best we can to make any changes while on the road..

Thanks,
Chris Ahn