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Page 1 of 104
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  CONFIDENTIAL



130*


Endless possibilities.T"'

Finance Committee Meeting

October 6, 2000



=XH005-01094


  E0004402655

Committee Members

Mr. Herbert S. Winokur, Jr., Chairman
Mr. Robert A. Belfer
Mr. Norman P. Blake, Jr.
Mr. Ronnie C. Chan
Mr. Jerome J. Meyer
Mr. Paulo V. Ferraz Pereira
Mr. Frank Savage
Mr. John A. Urq.uhart


GOVERNMENT
EXHIBIT
  210
  Crim. No. H-04-25 (S-2)







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LU
N
O
d'
It
O
O

U
W

Agenda

EXH005-01095


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AGENDA
Meeting of the Finance Committee
of the Board of Directors of Enron Corp.

10:00 a.m. (E.D.T.), October 6, 2000
The Breakers, Flagler Boardroom
Palm Beach, Florida


1. Approval of August 7, 2000 Finance Committee Minutes
Ukl
`



  Page
Mr. Winokur 2

Fastow 9

  LJM 3 21
Approve for Recommendation to the Board

  3. Treasurer Report Mr. Glisan 28

4. Chief Risk Officer Report Mr. Buy 36
Quarterly Risk Update
  - Credit Update 37
- Foreign Exchange Project Update 40
- EES Status Report 46
  Market Risk Update 51

5. Projects and Amendments 61
A) Revision to the Risk Management Policy Mr. Buy 62
- Approve for Recommendation to the Board
  B) Revision to the Transaction Approval Process Mr. Buy 73
- Approve for Recommendation to the Board
  C) Equity Derivatives Authorization Mr. Glisan 80
- Approve for Recommendation to the Board

6. Other Business 85

7. Adjourn 86

E0004402657


Raa Arldandum for Deal Approval Sheets approved between Board meetings Finance Committee Meeting

:H005-01096


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00
L)
(0
N
O
O
O

U

W

Agenda Item I

EXH005-01097


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Enron Corp

Finance Committee Minutes

October 6, 2000

E0004402659

2


y&01

Finance Committee Meeting

:XH005-01098


=============
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DRAFT

MINUTES
MEETING OF THE FINANCE COMMITTEE
OF THE BOARD OF DIRECTORS
ENRON CORP.
AUGUST 7, 2000

  Minutes of a meeting of the Finance Committee ("Committee") of the
- stars-of- ora "Qom an " ,held pursuant to due notice
at 3:00 p.m., C.D.T., on August 7, 2000 at the Enron Building in Houston, -
Texas.

  All of the Committee members were present, either in person or by
telephone conference connection, where each member could hear the
comments of the other participants and join in the discussion, as follows:

Mr. Herbert S. Winokur, Jr., Chairman
Mr. Robert A. Belfer

  Mr. Norman P. Blake, Jr.
Mr. Ronnie C. Chan
  Mr. Jerome J. Meyer
  Mr. Paulo V. Ferraz Pereira
Mr. Frank Savage
  Mr. John A. Urquhart



  Directors Wendy L. Gramm, Ken L. Harrison, Kenneth L. Lay, John
Mendelsohn, and Jeffrey K. Skilling, Messrs. Richard B. Buy, Richard A.
Causey, Andrew S. Fastow, Ben F. Glisan, Jr., David B. Gorte, Mark E.
Koenig, Theodore R. Murphy, and Joseph W. Sutton, and Ms. Rebecca C.
Carter, all of the Company or affiliates thereof, also attended the meeting.
Directors Robert K. Jaedicke, Charles A. LeMaistre, and John Wakeham
and Messrs. James M. Bannantine, Richard A. Lammers, and Brent R.
Wiggs joined the meeting in progress as noted below.

  The Chairman, Mr. Winokur, presided at the meeting, and the
Secretary, Ms. Carter, recorded the proceedings.

  Mr. Winokur called the meeting to order, noted that a draft of the
minutes of the meeting of the Committee held on May 1, 2000 had been
distributed to the Committee members, and called for any corrections or
additions. There being none, upon motion duly made by Mr. Meyer,

E0004402660


  4
Finance Committee Meeting

:H005-01099


=============
Page 7 of 104
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seconded by Mr. Belfer, and carried, the minutes of the meeting of the
Committee held on May 1, 2000 were approved as distributed.

  Mr. Winokur called upon Mr. Fastow to present the Chief Financial
Officer's report, a copy of which is filed with the records of the meeting. Mr.
Fastow discussed the Company's current and projected key financial ratios
and stated that the ratios were based on the current plan. He noted that
certain projected ratios deviated from commitments made to the rating
agencies earlier in the year and he discussed the reasons for the
deviations. He reviewed the stock trading portfolio and he stated that the
all of the positions had been closed by the end of the previous week. He

  discussed me Lompany's exposure o ;
  a chart depicting the Company's interest rate sensitive items, and noted the
intarPSt rateS_ He commented on the
  Company's cost of capital and he stated that the Company was still
reviewing the equity component of the cost of capital calculation.

  Directors Jaedicke and LeMaistre joined the meeting following Mr.
Fastow's presentation.

  Mr. Fastow called upon Mr. Glisan for the Treasurer's report, a copy
of which is filed with the records of the meeting. Mr. Glisan reviewed the a
liquidity, report as of July 25, 2000 and noted that the Company's total
liquidity was over $7 billion. He reviewed year-to-date investments and
proceeds on sales of assets and he stated that without additional action by
the Company the year-end debt balances would be over the target levels.
Messrs. Fastow and Skilling joined him in a discussion of the Company's
capacity in the bank markets, the constraints facing the Company, and the
projected cash flows from new businesses. Mr. Glisan then presented a
schedule describing the vehicles the Company was utilizing to manage its
balance sheet debt. He discussed Raptor I and Raptor II, previously
approved by the Board, and noted that Raptor I was almost completely
utilized and that Raptor II would be not be available for utilization until later
in the year. He noted that Project Whitewing still had available capacity but
that the Company vas proposing an additional Raptor structure, Raptor III,
to increase available capacity. Following a discussion, upon motion duly
made by Mr. Blake, seconded by Mr. Meyer, and carried, the Raptor III
transaction was approved for recommendation to the Board.

  Mr. Winokur called upon Mr. Buy to present the Chief Risk Officer's
report, a copy of which is filed with the records of the meeting. Mr. Buy
discussed the composition of the Company's merchant portfolio as of June
30, 2000 and any significant changes since the May Board meeting. He
commented on the significant increase in the Company's credit exposure
E0004402661

  Finance Committee Meeting

:H005-01100


=============
Page 8 of 104
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and he noted that it was primarily driven by increases in gas and power
prices in North America and a decrease in power prices in Europe. He
reviewed a detail of non-performing debt instruments and the Company's
top 25 credit exposures. He stated that the Company was still working to
reduce its over $1 billion exposure to TXU Europe Energy Trading Ltd., a
BBB+ rated company. He reviewed the top 10 countries where the
Company had the largest trade credit exposure and he noted that the U.S.,
Canada, and the U.K. combined contributed over 96% of the Company's
total trade credit exposure. He commented on the significant increase in
the Company's credit reserve and he noted that it was caused by the
considerable increase in prices and volumes marketed.. He presented the

  Company's equity Investmen po o io e a `- `--`- , - '
region, and performance measurements. He discussed the Company's
  expectations and he.stated
crr rrrv~srrr~rr~ ~~ra~~a a . ~.,, .
  that the assessments were made on a qualitative basis by comparing
current expectations to original expectations and did not imply that the
assets needed to be written-down. He noted that any write-downs taken
on investments were shown on the troubled asset detail. Messrs. Skilling
and Sutton joined him for a discussion of the international investments
included in the troubled assets detail and a general discussion of Project
Summer.

  Mr. Buy then discussed the Company's ten top and bottom
performing investments and commented on investments new to the list
since the first quarter. He postponed the foreign exchange project update,
included in the meeting materials, until a later meeting. He briefly
discussed Project Doorstep, a review by the Company, with assistance
from Arthur Andersen LLP, of the Company's remote offices to ensure the
establishment and maintenance of the Company's global standards.

  Mr. Buy then presented the Market Risk Update and discussed the
returns each commodity group had earned compared to the Value-at-Risk
("VAR") it had taken. He noted that the Company's overall return on VAR
was greater than any of the individual commodity groups' returns due to the
benefits of diversification. He gave an overview of the VAR backtesting,
stress testing, and the Company's exposure under "worst case" scenarios
of 5% and 25% shifts in commodity prices. He reviewed limit violations
during the second quarter of 2000, noted that the majority of the violations
had occurred in the gas portfolio, and discussed the reasons for the
violations.

  Director Wakeham and Messrs. Bannantine, Lammers, and Wiggs
joined the meeting.

E0004402662

L)


  4 .
O
FInnnrn (.nmmlttee Meeting

H005-01101


=============
Page 9 of 104
=============

Mr. Buy then discussed proposed changes to the Enron Corp. Risk
Management Policy ("the Policy"). He stated that the Company was
recommending that the Policy be amended to increase the aggregate VAR
limit by $15 million. He noted that the Executive Committee of the Board
had approved a temporary increase in the aggregate VAR limit at a
meeting on June 1, 2000 with the recommendation that the increased VAR
be submitted to the Board. He discussed how the additional VAR limits
would be allocated to the commodity groups and he noted that there was
not a corresponding increase in the volumetric limits. He then discussed
certain proposed limit increases to existing commodity groups within the
Policy, including Metals and Minerals, Continental Electricity, and Nordic
ec ncr y, an ce am evi
  current practice and to add clarity to roles and responsibilities. He stated
+horc ,,,ca- a pmnncal t~ inc cease the North American_ Electricity
position and VAR limits if the Company was successful in its bidding for
certain power purchase arrangements in Canada, as approved by the
Executive Committee of the Board at the July 31, 2000 meeting. He then
mentioned actions taken by the Company's management, under the Interim
Trading Policy, since the May 2, 2000 Board meeting. Following a
discussion, upon motion duly made by Mr. Urquhart, seconded by Mr.
Belfer, and carried, the proposed revisions to the Policy were approved for
recommendation to the Board.

  Mr. Winokur left the meeting and with the Committee's permission
Mr. Blake acted as Chairman and presided for the remainder of the
meeting. Mr. Blake changed the order of the agenda to discuss Project
Tammy during the executive session of the meeting.

  Mr. Blake called upon Mr. Bannantine to present the proposed Enron
South America ("ESA") transactions. Mr. Bannantine began his
presentation, a copy of which is filed with the records of the meeting, by
discussing how the proposed transactions would be impacted if Project
Summer was completed. He then stated that ESA was proposing three
transactions, including: 1) the RioGen Merchant Plant, 2) financing related
to the Cuiaba Integfated Energy Project ("Cuiaba"), and 3) a buyout of
Transredes' interest in Cuiaba. He began with the RioGen project and
stated that ESA had the opportunity to build capacity in a power market
that was short power. He stated that the RioGen project was to build, own,
and operate a 355-megawatt skid mounted merchant power plant near Rio
de Janeiro, Brazil. He noted that the transaction would be structured to
minimize the downside risk while retaining significant upside potential. He
noted that Petrobras, the national oil and gas company of Brazil, was
willing to provide a minimum investment return guarantee in order to
increase its sales of natural gas and to obtain a minimal participation in the
004402663 To
  EC
  Finance Committee Meetin-

(H005-01102


=============
Page 10 of 104
=============

upside of the power plant. He reviewed the Brazilian market fundamentals
and he noted that ESA was projecting that an energy shortage would occur
during the next three to five years thereby driving up the price of power. He
presented an overview of the transaction structure and he stated that the
project was structured to give the Company the maximum flexibility and
upside potentiall while providing a guaranteed return on its investment. He
noted that the plant would provide a full payback in five years even if it
were not utilized. He discussed the assumptions that were used in the
project analysis and the economics of the project. He stated that ESA was
seeking approval for the remaining $119 million of project costs, with final
review and approval delegated to Messrs. Lay or Skilling after the
comp e ion o e ini ive documents, Company's LM6000 turbines. Following a discussion, upon motion duly
  b n r_ B f r p y_ the pro osals
were approved for recommendation to the Board.

  Mr. Bannantine then discussed the transaction related to the
financing of the Cuiaba project. He stated that ESA was seeking approval
for commitments required to support a $365 million funding of limited
recourse project financing provided by the Overseas Private Investment
Corporation and Kreditanstalt fur Wiederaufbau and to obtain approval for
the Company to also provide Transredes' (a partner in the project) share of h
the support until Transredes' Cuiaba interest was sold to Shell Cuiaba
Holdings Ltd. and Shell Gas (Latin America) B.V. (together with their
affiliates, "Shell") or a combination of the Company and Shell. He updated
the Committee on the status of the Cuiaba project and reviewed the details
of the $365 million in guarantees. He requested that the Committee
approve the Company's share of the loan guarantee commitments and
authorize the Company to provide up to $46 million of loan guarantee
commitments on. behalf of Transredes. Following a discussion, upon
motion duly made by Mr. Savage, seconded by Mr. Chan, and carried, the
proposals were approved for recommendation to the Board.

  Mr. Bannantine then discussed a proposal , for the Company to
participate on an equal basis with Shell in the purchase of Transredes'
interest in Cuiaba. He stated that the Company desired to maintain a 50%
or greater voting control of Cuiaba to protect the upside value associated
with additional Cuiaba projects and he noted that purchasing the additional
interest would allow the underlying investment to eventually be sold with a
control premium in place. He reviewed the proposed deal structure and
detailed the Company's current and proposed ownership in the individual
Cuiaba assets. He presented an investment analysis, noted that the
Company would be paying a control premium when compared to the
analysis performed by the Company's Risk Assessment and Control group,
E0004402664 '0

  Finance Committee Meeting

:H005-01103


=============
Page 11 of 104
=============

and stated that if Project Summer were completed the additional Cuiaba
investment would be treated as a purchase price adjustment. He
requested that the Committee recommend to the Board that the authority' to
approve a capital expenditure of $59.7 million to purchase 50% of
Transredes' interest in the Cuiaba project be delegated to Messrs. Lay and
Skilling. Following a discussion, upon motion duly made by Mr. Meyer,
seconded by Mr. Ferraz, and carried, the proposal was approved for
recommendation to the Board.

Koenig, Lammers,

1 ..7 7

  nracAnt FPr ient Tammy. Mr.
  I~i1.._CT(fCC [`CC~+aPvrr rvri `c. c~.o~7-tea T-. ~_ n,. ._~..
  Causey stated that the Company was proposing the formation of a _new
company to serve as an intermediate financing vehicle for the Company.
He noted that the new company, Enron Finance Partners, LLC ("EFP"),
would be created to own certain of the Company's assets. He discussed
how transactions would be conducted between the Company and EFP,
EFP's plans to raise capital through third parties, and how the capital would
be utilized. He stated that the proposal included the formation of EFP, the
contribution of certain operating assets into EFP, the assumption by EFP of
$1.047 billion of the Company's intermediate and long-term debt, and the
sale of $500 million of preferred securities in EFP to outside investors.
Following a discussion, upon motion duly made by Mr. Meyer, seconded by
Mr. Belfer, and carried, the proposal was approved for recommendation to
the Board.

  There being no further business to come before the Committee, the
meeting was adjourned at 5:00 p.m., C.D.T.

Secretary

APPROVED:

Chairman

H:\a Minutes\2000 Minutes\080700F.doc


E0004402665
  O
  Finonro f.nmmi"nn Meeting

Mr. Blake called for an executive session at 4:50 p.m., C.D.T., to
s Project Tammy and Messrs. Bannantine, Buy, Glisan, Gorte,

H005-01104


=============
Page 12 of 104
=============

Agenda Item 2



=XH005-01105


=============
Page 13 of 104
=============

Enron Corp

  lO
Chief Financial Officer 9eprt

October 6, 2000

E0004402667

9


Finance Committee Meeting

=XH005-01106


=============
Page 14 of 104
=============

Targeted Key
Financial Ratio


EXH005-01107

5

4

3

2

13

78

1994 1995 1996 1997 1998 1999 2000P
'c" Funds Flow Interest Coverage i

  "s, Interest Coverage

55% +"'

	49.6		49.2
		47.1	46.0 42.0
45%			40.4
	44.2		44.6
	42.8	
8
39	41.9
41.0
		.	38.5
35%			
I
25%			- 26.0
			25.3
	...~
"		21.5

15%	19.9	
`	
	14.7	15.5'	
			11.6
			
5%		
1994 1995	1996	1997 1998 1999 2000P
		To	Ell Obligations/Total Capital	
		+- DI	V B/S Capital	
		' FF	!/Total Obligation	


  E00044 2668 j 4~0 "

10 Finance Committee Meeting



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Page 15 of 104
=============

Stock Trading Port Ii
Mark-to-Market Ba ic.

ENE

  Position - Thousands f S fares
1/1/00 Purchases Sal bs

  0 16,250 (I6,25p)

  EGF Equity Position Limits
  V @ R Notional Open
Limit ($MM) $10.00 $300.00
Current Position ($MM) $0 $0

1 1

Notes:
Positic
reflect
Include

9/20/00
0

imits exclude ENA position, which is
n EN {, equity book position report
iO% o JEDI if an open position

E000440P..669


  O

Finance Committee Meeting


EXH005-01108


=============
Page 16 of 104
=============

Stock Purchase Act vi
Treasury Share
1/1/00 - 9/20/00
(000's except share pri e)

Date

ENE Shares

Avg. Price

Total 0


  Authorization' Activity
15,000,000 -
i
  ISubject to Jim Derrick's approval

E

12

Amount

0


Finance Committee Meeting


=XH005-01109


=============
Page 17 of 104
=============

Interest Rate Exposur r
25, 000, 000

  559,712 5,9 3,979
1,757,963
  0
20,000,000 - _
- t
  4.
i
  }
i
I
i
15,000,000 -
  244,836
2,861,468-~
6,896,423

10, 000, 000 iF
510,000
  1,806,845
  i
5,000,000 -

  16 93 II
7, 5
  0 - r - ---~ - -r--- - 7
Projects Prepays CP STD Other LTD Leases NE
Notes: Lia ilities
1. Current CP Balance of $2.9B represents 41% of floating rate debt. Fix/floating mix ex-CP is 79/21
  2. EGF goal of 80/20 fix/fit composition.

13 E

  $22,417,972

0)
r
rn
C6
N
0)

(0

990,000)

Hedges Total

o Floating
p Fixed


  /IPI ~10~ O~
Finance Committee Meeting

:XH005-01110



=============
Page 18 of 104
=============


=XH005-01111

10.5%

  9.9%
10.0%

9.5%
9.0%
8.5%
8.0
7.5%
1996

Cost of Capital*',

1997 1998 1999

* Calculated using historical CAPM Model



10 2000 20 2000

14

ECO(

		
%	Change from
last report
Debt (		4.68	(0.50)
Equity		11.17	(0.21)
W ACC		9.65	(0.30)
UST 3	r	5.90	(0.50)

Uom m
Despit the decrease in interest rates, The
WAC remained steady because the
weight pg of the Equity component
increa jed with the rise in the stock price.


Finance Committee Meeting



  10.0% 10.0%


=============
Page 19 of 104
=============

Cost of Capital`

20.0%			
19.5%			
19.0%		17.7%	
18.5%			17.2%
18.0%			
17.5%			
17.0%			
16.5%			
16.0%		
14.70/6	
15.5%			
15.0%			
14.5			
14.0%			
13.5	
12		
13.0%			
12.5			
12.0%			
11.5%			
11.0%			
10.5%			
10.0%	
1996	
1997 1998 1999 1Q 2000	
2Q 2000
		r r ,	
				
			E C 0044
			
			
	* Calculated u	sing Current Estimate of Equity Cost	
I		15	
			
			

EXH005-01112

Cai
:nts


2673

  Finance Committee Meeting
I ~'



=============
Page 20 of 104
=============

Enron Corp. Re-Offer Spr j ~rads

230.0-	
210.0-	
190.0-	
170.0-	
150.0-	
N	
CL	
'~ 130.0-	
	
110.0-	
L	
CL	
(J) 90.0-	
70.0-	
50.0-	
	
30.0	
	to
	
	N

C)) d N 0C) d N C))

M d to to r- 00 rn

E

  16
:XH005-01113

p131/98
7/25/00

1/99


  12J31197
12/31/96

  `C m m
4)1 4) 4)
  to 0 O
r N t")
i

674

  Finance Committee Meeting


=============
Page 21 of 104
=============


EXH005-01114

7.0
6.5
6.0

0
~_ 5.5
0-
  5.0
4.5

4.0

  i
i
U.S. Treasury Yield Qurve

  12/31/96
12/31/99
09/20/00
12/31/97




O	


O	


T	


N	


M	

cts
.'	L

CO
A	
L


M
							

  E00044102675
17

12131/98


441~ >OR)
Finance Committee meeting


=============
Page 22 of 104
=============

U.K. Yield Curv

8.0-
7.5-
7.0-

12/31/96


  12/31197
6.0

o 1,
ol 5.5

  5.0 09/20/00
i
4.5 12/31/99
  12/31/98
4.0
  N N L L L L L L L L L L L L L
  +~+ t0 (0 R 01 t0 N c0 l0 t0 N 01 01
C C O O d O d W O d O d O d d
O O ~' A A >+ ~+ ~ A >. A A >. ~+ A
  r N M to w M O O to O O
0
  T T N M
M to

E00044( 2676

18


  ti~ a
0

Finance Committee Meeting


=XH005-01115


=============
Page 23 of 104
=============

Brazil Yield Curv


0

19.0 12/31198
18.0

17.0
16.0-
15.0-
14.0- 09/20/00
13.0-
  12/31/96
I
12.0 -' 12/31/99
11.0 12/31/97
10.0-

  9.0-
8.0-
7.0-
6.0-
a
  5.0-
4.0
L L L L I L'

  W
  M In O t1) O O
r r N M

  E00044 2677 O,,
O
  19 Finance Committee Meeting

=XH005-01116


=============
Page 24 of 104
=============

x
0
0
cn

0

v

			Spread	
		O	O s j N N	
		O
O	m O (.7l O CTI
O O O O O	
				C
		03/04/1999					,
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08/04/1999			
		C
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09/04/1999				
							
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  3


=============
Page 25 of 104
=============

E0004402679

21

  Fy

Finance Committee Meeting

EXH005-01118



=============
Page 26 of 104
=============


  Private Equity Strateg

$70,000

$60,000

$50,000

m
O
$40,000


y} $30,000

$20,000

Continued significant capital investment by Enrn
Energy and communications investments typic tlly d not generate significant
cashflow and earnings for 1-3 years
Limited cash flow to service additional debt
Limited earnings to cover dilution of additional ;quit
Result: Enron must syndicate its capital invest ents in order to grow

23,798

			21,132
	15,414	17,242	18,811
$10,000	13,815		
11,504 11,966 13,239
	9,849 10,072	10,312	
$U			
			
	1990 1991	1992	1993 1994 1995
		V-+ -Total Assets & Combined Assets of Unconsolidated Affiliates
		
		r	
			

22

XH005-01119

27,690
16,137
1996

  / 60,364
51,475

  33,381
29,350

  197 1998 1999
,/Total Assets

0
  Finance Conuninee Meeting


=============
Page 27 of 104
=============


  Rationale for LJM Structu
 New FASB consolidation rules



.

Better ability to manage risk positions (non-q ffili4te status)

Better ability to manage financial flexibility

23


E00044q;2681


  *&,O
Finance Committee Meeting

=XH005-01120


=============
Page 28 of 104
=============

Agenda Item 3

E0004402682

EXH005-01121


=============
Page 29 of 104
=============

LJM1 and LJM2 Summary ~

=XH005-01122



LJM1
 Formed in June, 1999, with $16 million of e cuity.
   Hedged Enron investment in Rhythms Vet 'onnections
resulting in a gain of approximately $175 million for Enron.
Purchased minority interest in Cuiaba ;o th it Enron could
deconsolidate the project.

 LJM2
   Formed in December, 1999, with $394
 Invested $403 million in 21 transaction
kl
  &--o v~o.,,_')

E00044

24

milli

pn of equity.


  O

Finance Committee Meeting
i/~


=============
Page 30 of 104
=============

Conflicts of Interest

  LJM creates a conflict of interest for EVP/ 'F0 of'Enron
   Negotiates investments in Enron transacts ns/b siness for LJM.
Receives value from LJM if fund performs ell.

	.t,L
Allocates time to LJM matters.	.x i.. . ,	.
+
			A
	Conflict largely mitigated		
4	I
 Board resolution does not relieve A.Fasto	
i of f	
duciary E t."
	responsibility to Enron.		
	OOC or Board can ask A. Fastow to resign	fro	LJM at any time.
	 R. Causey/R. Buy/J. Skilling approve all E	ron	LJM transactions.
	Annual audit committee review of LJM (Fe	rua	y).
LA`	Legal department responsible for maintain	ng	udit trails/files on
-			
	all transactions.		
			
	 Review of A. Fastow economic interest in	nr	and LJM
	presented to J. Skilling.		
			E0004402684
	 No obligation for Enron to transact with LJ		
		.	



r.,


  25 Finance Committee Meeting
U

XH005-01123


=============
Page 31 of 104
=============

LJM3


 Follow-on private equity fund to LJM1 and LJM2
 Purpose: Alternative, optional source of private E
  to manage its investment portfolio risk and finan~

 Structure to be substantially similar to LJM21

 Finance Committee/Board of Directors action re
 Ratify decision of Office of Chairman to waive Co
order to allow A. Fastow involvement as General

E00044026

26

quity for Enron
:ial flexibility.

uested:

e of Conduct in
partner of LJM.


my
0

Finance Committee Meeting

=XH005-01124


=============
Page 32 of 104
=============

Agenda Item 2
RATIFICATION OF DETERMINATION
  (Suggested Form of Resolutions)

  WHEREAS, Andrew S. Fastow serves as the Executive Vice President
and Chief Financial Officer of the Company;

  WHEREAS, Mr. Fastow has the opportunity to participate in the formation
of an investment partnership (the "Partnership") that would not be affiliated with the
Company;

  WHEREAS, it is anticipated that Mr. Fastow will serve as the managing
partner/manager of the Partnership; ti

  WHEREAS, it is anticipated that the Partnership will invest in, among ';
other things, energy and communications-related businesses and assets, including
businesses an asse s o e ompany; ~ _

  WHEREAS, the Partnership, as a potential ready purchaser of the

Company's businesses and assets or as a.potential contract counterparty, could provide
liquidity, risk management, and other financial benefits to the Company;

  WHEREAS, the Board has evaluated two similar previous investment
partnerships in which Mr. Fastow has served as the managing partner/manager and has
concluded that the existence of such investment partnerships, and Mr. Fastow's
involvement therein, has been beneficial to and in the best interests of the Company;

  WHEREAS, the Office of the Chairman of the Company has determined,
for the foregoing reasons, that Mr. Fastow's participation as the managing
partner/manager of the Partnership will not adversely affect the interests of, the
Company;
- --------------
  NOW, THEREFORE IT IS RESOLVED, that the Board hereby adopts and
ratifies the determination by the Office of the Chairman pursuant to the Company's
Code of Ethics (Conflicts of Interests, Investments, and Outside Business Interests of
Officers and Employees) that participation of Mr. Fastow as the managing
partner/manager of the Partnership will not adversely affect- the interests of the
Company; and

RESOLVED FURTHER, that the proper officers of the Company and its counsel be, and
each of them hereby is, authorized, empowered, and directed (any one of them acting
alone) to take any and all such further action, to amend, execute, and deliver all such
further instruments and documents, for and in the name and on behalf of the Company,
under its corporate seal or otherwise, and to pay all such expenses as in their discretion
appear to be necessary, proper, or advisable to carry into effect the purposes and
intentions of this and each of the foregoing resolutions.

E0004402686

0AECM\Por Man\Board Meeting\B0D UHM-0OWM 3 resolution.doc

:H005-01125










d.~


  Finance Committee Meeting


=============
Page 33 of 104
=============

Enron Corp ';
Treasurer Report
October 6, 2000

E0004402687

28


  ~AO (R)
v

Finance Committee Meeting

:XH005-01126


=============
Page 34 of 104
=============

Enron Corp.
Liquidity Report
As of September 20, 2000
($000)

	Overnight	2-30 Days	31-60 Days	61-90	jDays	91 + Days	Total
Commercial Paper & Uncommitted Lines	1,011,777						1,011,777
Bank Facilities							
B HF	18,000						18,000
Accounts Recievable	190,000						190,000
W hitewing		301,000					301,000
Shelf Registration - Debt		1,000,000					1,000,000
Shelf Registration - Equity'		1,275,000					1,275,000
Merchant Portfolio Monetizations (as of:03/31/00)						
Public Equity		1,162,458					1,162,458
Debt Instruments			220,524				220,524
Private Equity						2,025,720	2,025,720
							
Total	1,219,777	3,738,458	220,524		-	2,025,720	( 7,204,478
' Reflects 15mm shares at $85 per. share.							
							
							
							(R)
							
		29	EC0044	)2680		1	Finance Committee Meeting
							
:XH005-01127							


=============
Page 35 of 104
=============

Impact on 2000 Plan Balance Sheet

Transportation and Distribution	(126)
Wholesale Energy Business	(733)
Retail Energy Services	(295)
Enron Broadband Services	(425)

Enron NetWorks 0
Other (475)

Enron Global Finance I 0

  1 (2054)

Variance from I	an	
2nd Current		
Estimate Contingenill
Asset Sales Financial
less Items	Bus,

Sensi	
nit
~ivities
Investments
(
186) 0
I		
0
I
(1398) (933)
I		450)
'h
108 (75)		
0
(224) 0		200)
(10) 0		250)
(557) 0		0

0 (200)		i
i 0

(2267)	17-
(1208) j,		
900)

(186)
(2781)

33
(424)
(260)
(557)
(200)

(4375)

i


  ~,fy
O
Finance Committee Meeting



=============
Page 36 of 104
=============

Board Plan Variance f

- Business Unit Variance

- Finance Contingencies
- Shortfall

- EGF Vehicles

- Asset Monetizations

- FAS 125
- Total Shortfall

($3.167 billion

  ($1.208 b'Ilion
  7---
($4.375 b `I l i on

  $1.05 billion:', $1.821 billion

  $1.504 illio
  r--
-0-

E0004402690

31


~~ CRS
Finance Committee Meeting

:XH005-01129


=============
Page 37 of 104
=============

Finance Ac


tivity

June through Decernb

  Number of To Be
  Month Transactions Closed I$V
June 2
  July 1
August 2
September 7
October 8
  November 9
December 7
12 24
E0004402691
  32
:XH005-01130

or

ium

  630
290
575
2, 525
2 900
2815 2:650
  /
12,385


  *O~R)

Finance Committee Meeting


=============
Page 38 of 104
=============

Enron Corp.
Active Letters of Credit by C
  (ooos)

9/20/00

Bids	$ 33,653
Debt	56,687
Portland General	0
Leases	13,175
Performance	449,449
Trade	155,046
EOTT	118,905
Other Third-Party	5,500
Other	28,676

  12/31/99

$ 5,968
52,946
  0
15,604
522,006
  76,269
150,310
24,078
80,071

  Grand Total $ 861,091 $ 927,25
C
  33 E00044
:XH005-01131

pry

12/31/98

$ 81,493
26,605
  2,711
171329
114,440
  1,184,103
39,929
173,163
  18,909
$156585682

  F

  Finance Committee Meeting


=============
Page 39 of 104
=============

Enron Corp.
Guarantee Portfolio
  (000's)
9/20/00 12/3'1/99

  Trade (Payment & Performance) $19,424,180
EOTT Trade 494,790
Swap Agreements
  (Master & Individual) 11,243,684
Projects (Non-Debt) 4,466,558
Debt
  Consolidated Subsidiaries 2,892,635
Unconsolidated Subsidiaries 337,746
Grand Total $38,859,593
\Lt

  34
:XH005-01132

$17,31 ,817
44 x,375

7,14 ,443
4,75 ',470

  2,151,303
337,746

$32,15 1,154

E0004402693

12/31/98
$12,553,735

  352,346

4,756,369
2,912,781

  1,241,291
565,808

$22,382,330


  Finance Committee Meeting


=============
Page 40 of 104
=============

Rating Summa

  Rating Agency Long Term
Fitch IBCA/Duff & Phelps BBB+
Moody's Baal
R and ((Japan) A-
Standard & Poors BBB+



35


=XH005-01133

E0004402694

m ~ercial
P 'per
F-?/D-2
pi

Outlook

Stable
Stable
Stable
Stable


  Finance Committee Meeting


=============
Page 41 of 104
=============

Agenda Item 4

  ECO04402695

EXH005-01134


=============
Page 42 of 104
=============

Enron Corp

Chief Risk Officer Re

October 6, 2000


  i


f 9

E0004402696

36

0


  ti~

Finance Committee Meeting

EXH005-01135


=============
Page 43 of 104
=============

Credit Update


EXH005-01136

E0004402697

37


  4
Fy~o 0

Finance Committee Meeting


=============
Page 44 of 104
=============


  r


  r
C c,

  _y.
r ~.
  n







		Top 25 Credit Exposu			s		
		December 31, 199		Jun	f 30, 2000	August 31, 2000'
pe of Credit	E-Ratings	Counterparty Name In $MMs			I	j$MMs	In $MMs
Trade	4	TXU Europe Energy Trading Ltd.	51	8		1,452	1,462
Trade	2	The Chase Manhattan Bank		6		159	523
Trade	5	Sithe/Independence Power Partners, L.P.	3,	5		307	313
Trade	5	Sithe/Independence Power Partners, L.P. Tracking Account	1	1		212	229
Trade	2	Bonneville Power Administration		6		162	163
Merchant		East Coast Power	1	2		158	158
Trade	5	Williams Energy Marketing & Trading Company		A		114	149
Trade	4	Reliant Energy Resources Corp.	1~	8		166	143
Merchant	American Coal Tranche I	1	3		133	133
Trade	4	Canadian Natural Resources		14		124	130
Merchant	Mariner Combined Debt	N	A		114	114
Trade	2	Merrill Lynch Capital Services, Inc.	N	A		57	114
Trade	4	Reliant Energy Services, Inc.		18		56	98
Trade	2	Koch Energy Trading, Inc.	N	A		89	93
Trade	3	Sempra Energy Trading Corp.		1		N/A	92
Trade	2	Florida Power & Light Company	11	16		149	90
Trade	4	Petro-Canada Oil and Gas		49		74	84
Trade	4	American Electric Power Service Corporation	N	A		62	83
Trade	3	Duke Energy Trading and Marketing, L.L.C.	t	1		N/A
I	81
Trade	4	Dynegy Power Marketing, Inc.	N	A		
N/A	
81
Trade	3	AEP Energy Services, Inc.	N	:A		N/A	76
Trade	4	Merchant Energy Group of the Americas, Inc.	N	'A		N/A
11	74
Trade	2	J. Aron & Company	N	A		N/A	66
Trade	3	NSTAR Companies		A		N/A	58
Trade	5	Avista Corporation		'A		N/A	57
Trade	8	Calpine Fuels Texas Corporation		2		N/A	N/A
Trade	8	Midland Cogeneration Venture Limited Partnership		I5		WA	N/A
Trade	3	British Gas Trading Limited		44		! N/A	N/A
Trade	3	Brooklyn Union Gas Company	,	19		N/A	N/A
Trade	2	City of Tallahassee		S8		N/A	N/A
Trade	5	Commonwealth Edison Company		16		N/A	N/A
Trade	4	California Power Exchange Corporation	1	5		N/A	N/A
Merchant	8 Enron Wind Corp. Lake Benton II
E000440269$	1	19		N/A	N/A
Trade	5	Tractebel Energy Marketing, Inc.		!A		85	N/A
Trade	2	Koch Petroleum Group, L.P.		/A		66	N/A
Trade	4	Yorkshire Electricity Group plc		(A		62	N/A
Trade	4	United Illuminating Company		53		62	N/A
Trade	4	Southern Company Energy Marketing, L.P.	W	A		58	N/A
Trade	3	Pacific Gas & Electric Company		954		54	N/A
Trade	2	The Power Authority of the State of New York ___		57		52	N/A

  l
Transactions new to "Top 25" list

I Non-investment Grade Credit Exposures
August 31, 2000 data is estimated.

  Top 25 Total
Other Credit Exposures
  c j Total Credit Exposure

  38

5

956

664
037
701
Finance Committee Meeting

=XH005-01137


=============
Page 45 of 104
=============

Credit Reserve Historical Co~npOrison
($MM) ~

380

360 Actual
340 - -- - - Required*
320 --

300
280
260 -
240 --
220 --

200 -- `~~
r
  
180

160- ` e
140 --

120
100
po' po' Op 00 00 5P Cb pob SP 0b 5P 0P pO

* Required Reserve: Amount of reserve required for existing portfolio after simulating

39

  r~ ,~ \I
J I w w .r

  { r
r
e
  a
V
  e y

Op ~ pp 00 pO p0 O

E

Its and; assuming 50% recovery


  F~~o v

Finance Committee Meeting
  P

=XH005-01138


=============
Page 46 of 104
=============

l~
Foreign Exchange ProjectUpdate

=XH005-01139


  EC00440270O
40


  /*, ~10* >0~
Finance Committee Meeting


=============
Page 47 of 104
=============


  Foreign Exchange Project
Objective

  Identification, measurement and reporting of foreign currency icon Pmic exposure for
Enron worldwide.

  Project Timeline
  I
i
Merchant and Strategic Trading land Iher


=XH005-01140

  Asset Review Target Completion Activity ReviFw Target Completion

  I 4'ooiplete d
ftl"y/ 2000
  R


*Other Includes: CAL ME, APACHI, EES, EBS, EE&CC, EWC and ENA.
41


Phase IV
December, 2000

_ Phase III
October, 2000


Phaso 11 - eon-tpleto(l
t-t t95"I, 2000

ler Exposure
r

  5

  E~irope

Phase IV
December, 2000


  'ypo

  Finance Committee Meeting


  E000440270



  ' Elex
WktroJ}



=============
Page 48 of 104
=============



=XH005-01141

16
14
12
10

8

6
4
2
0


  Enron Europe
Net Notional Position by Project and 'Cur
  ~,
as of August 31, 2000
($MM)
Total Europe Exposure $35MMf
  i

  N British Pound (GBP)
   Hungarian Forint (HUF)
U Polish Zloty (PLN)

ency

  P,.UwKP -46A rWA- A L'IJF,
ILI
r
  OPET OSI Torpy ETOL Octagon Eni.rgovil Nowa
Sarzyna
$30 MM

  42 E0004402 702 i
  1

  Fy~o

Finance Committee Meeting


=============
Page 49 of 104
=============

Enron Europe
Net Notional Position by Type
as of August 31, 2000
($MM)

Total Europe Exposure $35MM

   Net Income
   TransactionhTranslation  P&L
40  Investment CT)

30 1 1


Finance Committee Meeting



=============
Page 50 of 104
=============


Net Notional Position by Currency an Region
as of August 31, 2000
  ($MM)

  $2,775
Total Exposure
  I!

  Korean /on Other
f i 1%
  Indian Rupee $321 $26
$104 11%
4%
British Pound
  n

2,500

2,000

1,500

1,000

500

0



=XH005-01143

South America South Korea India

44

Europe
E0004402


  tipO

Finance Committee Meeting



=============
Page 51 of 104
=============

Enron Sensitivity Analysis
by Region
for the four months ending December 31, 2000
($MM)

200

100	
1
1
0
i	
(4)
(100)	
	2000 Budgeted
	Impact
(200)	(69)
(300)	
(400)	
(500)-	
(600)-	



South America
   CTA Impact
P&L Impact

Other: South Korea, India an Eu
 CTA Impact
  P&L Impact

2

  (9)
10% Devaluation
from Plan
(290)

EOO04402705

45

4


  -(17)
30% Devaluation
from Plan
(627)

10% Appreciation
above Plan
  199
,2


  y~o 0

Finance Committee Meeting


=XH005-01144


=============
Page 52 of 104
=============

EES Status Re

E0004402706

46


it


  ti~ co
0

Finance Committee Meeting

EXH005-01145


=============
Page 53 of 104
=============

Total Value
Created

=XH005-01146


EES offers energy cost savings through a cc
lower commodity prices and consumjptio

  47 E000440??707

ES Customer
gross
argin Savings

mbination of
i reduction.


  4 *0(,
Finance Committee Meeting




=============
Page 54 of 104
=============

Commodity Position Sumrnai
as of August 31, 2000

REGULATED

NET OPEN POSITIONS
Gas (55 Bcf)
  Power (79 TWHrs)

VaR immateria



* Includes commodity from outsourcing transactions. 48

ECO

DEREGULATED

ET OPEN POSITIONS
Gas (0.2 Bcf)
  Power (5 TWHrs)

VaR $4 MM


  t Finance Committee Meeting

:XH005-01147



=============
Page 55 of 104
=============

Outsourcing Transactiains


+ Outsourcing +
Transactions

Demand
Side
Management
("DSM* t)


Future Up~,ell
Potential)

  4


Commodity
Price Risk
Management

Total Value
Created

  a

*DSM = Consumption reduction from l'iEn gy Asset
Capital Expenditures and more efficient perations.

:XH005-01148

Commodity
Transactions

E0004402109

49


  c


  Fy ~~

Finance Committee Meeting


=============
Page 56 of 104
=============

:XH005-01149

  100
90 -
80
70
60
N
0 50
2
  40

30


  I

  Energy Asset Capital Exper'dit

  as of August 31, 2000
Step 1 - Project estimation and modeling
-+-Step 2 - Project development and approval by Enron
Step 3 - Project approval by customer
-k Step 4 - Project implementation (actual / forecasted)

  ar

20
  ~ ~ rr
10
  00

0 - Jan-00 Feb-00 Mar-00 Apr-00 May-00 Jun-00 Jul-00 Aug-00 Sip-00

   Improvements have been made in developing projects and ob~,tainir
 Actual project implementation lags original projections

   Capital has been approved for the following technologies:
Lighting 34%
  Compressed Air 14%
Chillers / Cooling 13%
  All Others 39% 50 E0004402710

res

A,k u (Ac.. 9
n

  Wo .
rr Yr

  i
Oct 00 Nov-00 Dec-00 > A ,

I customer approvals ! '


  40 C
l
  Finance Committee Meeting



=============
Page 57 of 104
=============

Market Risk Up

E0004402711

51

te


Finance Committee Meeting

EXH005-01150


=============
Page 58 of 104
=============

Table of Contents

o Risk Profile

o Risk Profile Grouped by Commodity a
o VaR Backtesting

o Parallel Shift Stress Testing
o Limit Violations

o Loss Notifications
0 Policy Changes

EC

52

?712

jegion


  &000
Finance Committee Meeting

=XH005-01151


=============
Page 59 of 104
=============

Risk Profile
as of August 31, 2000

		
YTD P&L		YTD P&L = $1.6 B
($MM)	~	'
700
750		
600		
433		
450 298		
300		
111		
150
54 45 29 11 6 4 4		(2) (11) (51)
		
0		
(150) NA NA UK EES Fln'l Liquids EMG(1) Metals Cross SA A u	s No	is SA Cont Eur
Gas Power Power Comm Gas Po	er Po	er Power Power Gas

YTD Average VaR
($MM)
  10 (29) (21) (11) (3) (3) (6) (2) (7) (3) (0.6)
0
(10)-
(20) (30) 11
(40)

(50) NA NA UK EES Fin'l Liquids EMG(1) Metals Cross SA
Gas Power Power Comm Gas

Return on
VaR YTD 186% 159% 211% 261% 147% 60% 94% 23% 19% 51% 5(%
Limit
Utilization 65% 53% 66% 66% 26% 72% 18% 82% 57% 28% 1 %
YTD

(1) Emerging Businesses (EMG) include Weather, Coal, Emissions Credits, Paper, Lumber, and Bandwidth

E00044024 13

53


  YTD Average VaR = $39 MM
I
() ((),1) (1) (3)

  Enron
n on VaR YTD 322%
Utilization YTD 52%

  SA Cont Eur
Power Power Gas

% nil nil nil
% 7% 32% 43%


  f
  Finance Committee Meeting

=XH005-01152


=============
Page 60 of 104
=============

=XH005-01153

  Risk Pi
as of Augus

Commodi

YTD P&L
($MM)
1,000 830
  800 659
600
  400
200

  0

Comparison

  I YTD P&L = $1.6 B

YTD Average VaR	YTD Average VaR = $39 MM
($MM) (24) (30)	(3) (8) (6)
0		
(10)		
(20)		
(30)		
(40)-		
(50) Power Gas	Financial Other(l) Liquids

Return on
  VaR YTD 266% 173% 147% 47% 60%

(1) Includes Cross Commodity, Metals, Weather, Coal, Emissions Credits, Paper, Lumber,

54

-of i le		
t3152000		
Busine	ss U p	it Comparison
-
YTD P&L		r
YTD P&L = $1.6 B
($
0M)		
1,135
52		
1,000		
750		
Soo		
	255	
250		113 111 19
0		
North E	rope	Global EES Industrial
America		Markets Markets
		
		
YTD Average	VaR		D Average VaR = $39 MM	
($MM)		
(36)	(13)	(7) (3) (1)
0			
(10)			
(20)			
(30)-			
(40).			
(50)	North E	urope	I Global EES Industrial
	America		I Markets Markets
		
		
Return on		
VaR YTD 243%	49%	1 133% 261% 109%
and Bandwidth		

EO00440	I
714	
y~0
		
		Finance Committee


/(R0

Meeting


Power Gas Financial Other(1) Liquids



=============
Page 61 of 104
=============

Value-At-Risk Backtesti ng

  Backtesting Aggregate ENRON VaR -1/4/00 - 1311 j0
($MM) El Paso Pipeline
225 Curve Shift P&L VaR ----VaR Limit Explosion
August 21-30

175
125
75
25
(25)
(75)
(125)
(175)

(225) 8~~ gg~~~~g~~~~~80 8$ 88888080opop
  0 C O 0 0 0 0 0 0 O 0 0 O O p 0 0 0 0
N N N N N N 0N N N N _N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N
4 4 _ _
  rn rn N ~~ M o0 N rn rn N M oo M oo N M oo M oo N ~1 t= N 1 cv r
  N ^^ c` N N [~1 -N N M
N N
.. .-. /~ a a M m M M M f1 `t 7 vi ' n .n v\-, v`-i 3 3 r r n t`~  o0 od 03 0~

  E00044 2715 4~2 `~
55
  Finance Committee Meeting

=XH005-01154

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

Stress Testing
5% & 25% Parallel Price Shift
as of August 31, 2000

Worst Case Exposure - 5% Parallel Shift Worst Case Exposure
($MM) ($MM)

UK Power	116
Power-West	~ 36
European Gas	.17
NA Gas	0 20
Power-East	- 19
Global Liquids	j 8
Paper	1 4
Nordic Power	, 7
Continental Power	16
Coal	14

UK Power

Power-West

European Gas	~ 131
NA Gas	101
Power-East	_ 100
Global Liquids	= 70
Paper	.41
Nordic Power	 33
Continental Power	.29
Coal	121

  OUP  DOWN

- 25/d'f Parallel Shift

87

E000440P716

56

629


  Finance Committee Meeting

:XH005-01155


=============
Page 63 of 104
=============

.N_
=XH005-01156

July & August 2000
Violations
by Portfolio

VaR
 Position
  [] Maturity/Gap

Comparison
2000 and 1999

  Q VaR
 Position
  [] Maturity/Gap

10.
9
s
6-
5-
4-
3
2-
1-
0-"

Limit Violations
as of August 31, 2000

July

  1999

-j/
ust Ey o

  Finance Committee Meeting


  July August
2000 57




=============
Page 64 of 104
=============

i

Loss Notifications
as of August 31, 2000

  7
6-
5-
July & August 2000 4-
Notifications
by Portfolio 3
  2-
1
  0
  EES

  Comparison
2000 and 1999


:XH005-01157


I


  UK Gas Global Cross Enron ENA B
Liquids Commodity Corp. Electricity
  Total*

20
18
16
14
12
10
8
6
4
2
0

  * CEO Loss Notification > 56.25 MM (75% of VaR)
Loss of $60.29 MM on July 5, 2000
  Loss of $72.95 MM on August 29, 2000

  * BOD Level Loss Notification >J0% of Vat
Loss of $193.5 MM on August 30, 2000

July August
2000


  T-- ~
  July

58 E000440'2718

  so

ENA
Gas


  August
Ni999

Metals


  *49(,R)
Finance Committee Meeting




=============
Page 65 of 104
=============

Summary of Policy Change

Requested Changes to Current Policy:

I. We are recommending full Board approval of the following amendments to the Risk janagement Policy:

   Limit increases to existing Commodity Groups within the Trading P
Proposed

r. _ t Enron Corp.	
Aggregate VaR Limit	$100 MM
North American Natural Gas	
Net Open Position Limit	No Change
Rolling 12-Month Position Limit	No Change
VaR Limit	$60 MM
	
Continental Electricity	
Net Open Position Limit	20 Twh
Rolling 12-Month Position Limit	20 Twh
VaR Limit	No Change

Southern Cone Electricity
Net Open Position Limit 3.5 Twh
Rolling 12-Month Position Limit 3.5 Twh
VaR Limit $5 MM

Coal and Freight
Net Open Position Limit No Change
Rolling 12-Month Position Limit No Change
VaR Limit $4 MM

59

:XH005-01158

)Ho:
T

MM

iMM

Current

$60 MM
300 Bcf
350 Bcf
$40 MM
15 Twh
15 Twh
$4 MM

3 Twh
2 Twh
$2 MM

15 MM MT
15 MM MT

$2 MM 41Q o
O

  Finance Committee Meeting



=============
Page 66 of 104
=============

Summary of Policy Chanjge~

Requested Changes to Current Policy (continued):
 New Commodity Groups:
  Proposed
Discretionary VaR
  VaR Limit $25 MM
Enron Energy Services
  Net Open Position Limit None
Rolling 12-Month Position Limit None
VaR Limit $5 MM

II. Changes to the Risk Management Policy to set guidelines for allocations of the Disc
Ill. The following Commodity Group has obtained limits under the Interim Policy:

  Steel Trading Proposed
  Net Open Position Limit 100,000 Net Tons
Rolling 12-Month Open Position Limit 200,000 Net Tons
VaR Limit $1 MM

60 E

  Teni

  $151IMM

  $5 tom

Current
None

None

fy VaR (Appendix III).

2720


Finance Committee Meeting

XH005-01159


=============
Page 67 of 104
=============

i
EXH005-01160

Chief Risk Offil
Supplement
October 6, 20(


  j

-e



721




=============
Page 68 of 104
=============

Enron Corp. Transaction Appro~al

TRANSACTIONS APPROVED IN 2000 THROUGH

RISK
ASSESSMENT
& CONTROL
(RAC)

DEAL SIZE PROVING
$MM UNIT

ORIGINATING			< 5	
				
ENTITY	TRANSACTION			
				
	REVIEW				< 20*	
Request for:			REGION / BUSINESS			
					
Capital Expenditure	INVESTMENT			< 25*	
	VALUATION				
					
or	PRICING	Conforming		< 75*	
Risk Adjusted					
Capital	PORTFOLIO			75+	

RE
G
W	ION/BUSINESS
OUP HE
DLESALE OOC
E	E-OOC/CRO"
E	E-CEO/COO
	ENE-BOD

Revised 10-7-00

64 TRANSACTIONS- *i
i	39%
f
25 TRANSACTIONS- i1
i	15%
34 TRANSACTIONS- ~~	20%
t	
35 TRANSACTIONS-	21%
i
8 TRANSACTIONS - ~~	
5%

  (>$500,000) REVIEW URTOTA CONFORMING 166 TRANSACTIONS i 100%

  A GL BAL' FUNCTIONS t
5ROUP HEAD ,

  GLOBAL FUNCTIONS < 25* ENE.000/CRO ** ------------ *1
<75* FNE-CEO/COO ------------ *
  r ,
i
75+ ENE-BOD ------------~
  i
< 10* E -OOC/CRO ** 1- 5 TRANSACTIONS - *i 50%
NON-CONFORMING < 25* NE-CEO/COO F- 3 TRANSACTIONS - i 30% -CE I i i 25+ ENE-1301) TRANSACTIONS - 20%

  i r---- i
Deal Approval Sheet With All Signatures SUBTOTAL WIN-CONFORMING 10 TRANSACTIONS 100%
----------------------------------------------------- --------------------- -
* Transaction Deal Approval Sheets will be distributed to the ENE-BOD (Finance C mmitte e) after approval.
** As delegated by the ENE-OOC, the ENE-CRO has approval authority. IOTA TRANSACTIONS 176 y~
D
E0004402722 Finance Committee Meeting

rocess

EXH005-01161


=============
Page 69 of 104
=============

Annualized VaR versus

	Annualized VaR  Tradin	P&L~	
			
$2,500				
				2,053
				
$2,000 -				
				
$1,500				
0			
I
1,029	
E				
$1
000				
,	
620	712
541
383480		

620
				
$500 -	251	3 5	
33	136		
			
1995	1996 1997 1998	1999	2000(l)
Return on VaR: 1874%	397% 125% 284%	IR99%	331%

(1) Through September 30, 2000

2

E0004402723



Finance Committee Meeting

EXH005-01162



=============
Page 70 of 104
=============

Annualized VaR as a Percent of Tr	di	'g P&L
				
	Cw
90%			
	80%~ -			
				
	
! <;
80%			
				
	70%			
					
					
	60%				
	-				
	50%				
					
	40%
	
35%	
34	
1/0	
	-				
				30%	
	30/	25%			
						
	20%					
						
	10%	5%				
				
	0% l-- - - - ~- --r			
				
	1995 1996 1997 1998	1	X99 2000(l)	
		
() Through September 30, 2000 E0004402	724	
a
	I	
		
Finance Committee Meeting
1-


=XH005-01163


=============
Page 71 of 104
=============


Average Daily VaR and VaR Limit as a Prc Fnt of Market
i
  Capitalization

EXH005-01164

Av Daily VaR as % of Market Ca	-- VaR Lim i~,t as		P of Market Cap
	--		r
0
60%			
.				

0
50%		1		
.				
0
40%				
.					
0
30%	
4600 'good				
.					
20%
0		I			
.		j		
10%
0				
.				
0
00%				
.			
1995 1996 1997	1998	1	?99 2000(l)
($MM)			
Market Ca 4,839 5,519 6,615
Avg Daily VaR: 2 9 24
VaR Limit: 15 20 36	9,574
16
36		
22 46
H 60 100

(1) Through September 30, 2000


  E0004402725


  04

n
Finance Committee Meeting


=============
Page 72 of 104
=============

Required Returns on VaR

VaR Limit (daily):

VaR Limit (annual):

$100 MM

$1.6 B


Expected P&L based on:

  - S & P Historical Returns

  - Historical Enron Performance (1998, 1 199)
Expected VaR to support 2001 Budget:

  - S & P Historical Returns

  - Historical Enron Performance (1998, 19,199)


5 E0004402!726

$1.0 B
$3.7 B

$268 MM
$ 73 MM

   W

Finance Committee Meeting

EXH005-01165


=============
Page 73 of 104
=============


  Why Do We Want Discretionary Va
i

 EnronOnline

 Enron Global Markets

 Enron Net Works

 Enron Industrial Markets

 Enron Broadband Services

			
			
			
			r
			
			V
			
			
			r
			
			
			

6 EC


i

727




  Finance Committee Meeting

EXH005-01166



=============
Page 74 of 104
=============

8ZL<lvOtibOOO3

Agenda Item 5

EXH005-01167


=============
Page 75 of 104
=============

Enron Corp

Projects and Amendment
October 6, 2000

E0004402729

61


Finance Committee Meeting

=XH005-01168


=============
Page 76 of 104
=============

Agenda Item 5a

0
m
N
0
d'
lqT
0
0

U
w

EXH005-01169


=============
Page 77 of 104
=============

Ill &'GI %JI i.rCi
Memorandum

To: The Finance Committee of the Board of Directors

From:	Jeff Skilling and Rick Buy	Department:	Risk Assessment and Controls
Subject:	Changes to the Risk Management Policy	Date:	October 6, 2000

I. We are recommending full Board approval of the following amendments to the Risk Management Policy:
Limit increases to existing Commodity Groups within the Trading Portfolio:		
	Proposed	Temp	Current
Enron Corp.			
Aggregate VaR Limit	$100 MM	$75 MM	$60 MM
North American Natural Gas			
Net Open Position Limit	No Change		300 Bcf
Rolling 12-Month Position Limit	No Change		350 Bcf
VaR Limit	$60 MM	$45 MM	$40 MM
Continental Electricity			
Net Open Position Limit	20 Twh		15 Twh
Rolling 12-Month Position Limit	20 Twh		15 Twh
VaR Limit	No Change		$4 MM
Southern Cone Electricity			
Net Open Position Limit	3.5 Twh		3 Twh
Rolling 12-Month Position Limit	3.5 Twh		2 Twh
VaR Limit	$5 MM		$2 MM
Coal and Freight			
Net Open Position Limit	No Change		15 MM MT
Rolling 12-Month Position Limit	No Change		15 MM MT
VaR Limit	$4 MM		$2 MM
 New Commodity Groups:			
Discretionary VaR			
VaR Limit	$25 MM	$15 MM	None
Enron Energy Services			
Net Open Position Limit	None		None
Rolling 12-Month Position Limit	None		None
VaR Limit	$5 MM	$5 MM	None
 Changes to the Risk Management Policy to set guidelines for allocations of the Discretionary VaR (Appendix III).

E0004402731

Respect
Form 000-469-1 (7/92)


  O

Finance Committee Me,


(H005-01170

Integrity

Communication

Excellence



=============
Page 78 of 104
=============

The Finance Committee of the Board of Directors
II. The following Commodity Group has obtain
Steel Trading
  Net Open Position Limit
  Rolling 12-Month Open Position Limit
VaR Limit

  October 6, 2000 Page 2
~d limits under the Interim Policy:

  Proposed
100,000 Net Tons
200,000 Net Tons
$1 MM

Your Personal Best Makes Enron Best Communicate- Facts Are Friendly
-Orm UUU-40U-I 10/04)

ECO04402732

Better, Faster, Simpler Finance Committee mew


XH005-01171


=============
Page 79 of 104
=============

ENRON CORP. Proprietary and Confidential

RISK MANAGEMENT POLICY
Approved by Enron Corp. Board of Directors

Approved: October 1, 1996
Amended: December 8, 1998
  Amended: May 3, 1999
Amended: August 10, 1999
Amended: October 20, 1999
Amended: December 14, 1999
Amended: February 7, 2000
Amended: May 2, 2000
  Amended: August 8, 2000
Amended: October 6, 2000

I. General Authorization

  Enron Corp. is authorized to execute Transactions and manage these Transactions within certain authorized Portfolios in
support of its businesses.

  All Transactions covered by this policy must be conducted in compliance with all Enron Corp. policies, as each may be
amen e, supp emen a or res a e m i

II. Portfolios

Designated Enron Business Units are authorized to enter into Transactions which create Positions for Enron Corp. and its
affiliates, other Enron Business Units or their respective customers within the authorized Commodity Groups and limits,
specified in Appendix I. These Positions are managed in the following Portfolios:

A. Trading Portfolios - designed to capture and manage risks related to physical delivery of energy and other
commodities, to provide related risk management services, to take advantage of market arbitrage opportunities
and to manage positions within the approved limits. This portfolio includes commodity transactions, financial
instruments and securities transactions.

B. Merchant Portfolio - designed to capture and manage merchant investments in public and private companies,
including the active management of embedded exposures and to provide greater liquidity for Enron's merchant
investment activities, consistent with Enron Corp.'s core competencies within the approved limits. This portfolio
includes equity, "equity-like," debt and "debt-like" investments in the public and private sector.

C. Capital Portfolio - designed to accommodate positions and transactions in Enron's own stock, or derivatives
thereof which may occur from time to time in the execution of approved structural transactions (for example, stock
buy-backs, hedging of stock option programs)

III. Position and Loss Notification Requirements

Generally, Enron Companies' business activities are subject to a combination of limits. These limits include, but are not
limited to, Net Open Position, Maturity/Gap Risk, Potential Exposure, Regulated Exchange limits, and Loss notifications,
as appropriate for the type of business activity under consideration.

Limits will be applied at the Commodity Group and Portfolio level, as appropriate.

A. Net Open Position Limits. Enron Business Units' activities are subject to the Net Open Position limits at the
Commodity Group level, as specified in Appendix 1, Appendix II and Appendix III.

B. Maturity/Gap Risk Limits. Enron Business Units' activities are subject to the Maturity/Gap Risk limits at
the Commodity Group level, as specified in Appendix I, Appendix II and Appendix III.

  C. Potential Exposure Limits. Enron Business Units' activities are subject to potential exposure analysis using
stress-testing and scenario analysis, as directed by the Enron Corp. Chief Risk Officer, and limits based on
Value-at-Risk (VaR), calculated daily or as appropriate to the business activity under consideration at the
Portfolio level and at the Commodity Group level.
  O

O:1ERMSICONTROLSWOLICYUMUcy LUUUUU-UA- J va,cy Ammrnu L- EC 004402733 Fin,,- rnmmitlre Mee
U'J. U.J11UU I.JU 11.1

XH005-01172


=============
Page 80 of 104
=============

ENRON CORP.
RISK MANAGEMENT POLICY
Proprietary -and Confidential

D. Regulated Exchange Limits. Enron Business Units' may be subject to limits imposed by regulated
exchanges on which they transact. Enron Companies shall comply with any such limits imposed on them, as
such limits may be modified from time to time.

E. Loss Notifications. Daily and Cumulative Losses resulting from Enron Business Units' activities are subject
to the reporting requirements, as specified in Section IV.C.

All Enron Business Units are expected to formulate limits subordinate to approved limits, which should be monitored
internally, and act as triggers for reference to and action by senior Business Unit management.

IV. Limit Violation/Loss Notification Requirements

  otwithstan mg t e of er provastons o tis Policy, any violation o iris m
  Officer. Such report should be made prior to entering into a Transaction if there is a sufficient reason to believe that a limit
violation will occur. Requirements for limit violation notifications, each accompanied by an explanation for all limit
violations an are ommen e ur Open
  as follows:

A. Net Open Position Limits; Maturity/Gap Risk Limits. If the limit violation is equal to or in excess of five
percent (5%) of the applicable limit, the Enron Corp. Chief Risk Officer shall promptly communicate the
occurrence to the President of Enron Corp. If the limit violation is equal to or in excess of ten percent (10%) of
the applicable limit, the Enron Corp. Chief Risk Officer shall promptly communicate the occurrence to the
Chairman of Enron Corp.

B. Value-at-Risk Limits. If the aggregate VaR limit is exceeded or if the VaR for any Commodity Group or
Portfolio is equal to or in excess of five percent (5%) of the applicable limit, the Enron Corp. Chief Risk Officer
shall promptly communicate the occurrence to the President of Enron Corp. If the aggregate VaR or the VaR for
any Commodity Group or Portfolio is equal to or in excess of ten percent (10%) of the applicable limit, the Enron
Corp. Chief Risk Officer shall promptly communicate the occurrence to the Chairman of Enron Corp.

C. Loss Notifications. If at any time the aggregate Daily Loss or the Daily Loss in any Commodity Group or
Portfolio is equal to or in excess of 50% of the respective VaR limit as approved by the Board of Directors, the
Enron Corp. Chief Risk Officer shall promptly communicate the occurrence to the President of Enron Corp. If at
any time the aggregate Daily Loss or the Daily Loss in any Commodity Group is equal to or in excess of 75% of
the respective VaR limit as approved by the Board of Directors, the Enron Corp. Chief Risk Officer shall promptly
communicate the occurrence to the Chairman of Enron Corp.

If at any time the aggregate Cumulative Loss or Cumulative Loss in any Commodity Group or Portfolio is equal to
or in excess of 75% of the respective VaR limit as approved by the Board of Directors, the Enron Corp. Chief Risk
Officer shall promptly communicate the occurrence to the President of Enron Corp. If at any time the aggregate
Cumulative Loss or Cumulative Loss in any Commodity Group or Portfolio is equal to or in excess of the
respective VaR limit as approved by the Board of Directors, the Enron Corp. Chief Risk Officer shall promptly
communicate the occurrence to the Chairman of Enron Corp. Cumulative Loss violations are not reported for
events, for which a respective Daily Loss has been previously reported.

XH005-01173

D. Finance Committee of the Board of Directors Notification. The Chief Risk Officer shall communicate to the
Chairman of the Finance Committee violation of the aggregate VaR limit of 15% or greater and aggregate Daily
Loss in excess of the respective VaR Limit. These and other limit violations and Loss Notifications and a
summary of Enron's market risks will be reported to the Audit Committee of the Board by the Chief Risk Officer
of Enron Corp. at all regularly scheduled Audit Committee meetings.


  E0004402734 ~'ypQ

  Finnnco


=============
Page 81 of 104
=============

ENRON CORP.
RISK MANAGEMENT POLICY
Proprietary and Confidential

V. Operations and Controls

A. Segregation of Duties. Enron Business Units shall keep segregated from the business groups or individuals
entering into Transactions each of the following activities: recording and aggregation of Transactions;
preparation, issuance and verification of Enron Corp. or third-party documentation; reporting of Positions and
Commodity Group information; review of the reasonableness of prices and models, periodic validation of
prices from independent market sources; monitoring of limits; physical and/or financial settlement of
Transactions; reconciliation of accounts; and preparation of financial statements.

  B. Position Reporting. Designated Enron Business Units shall prepare, distribute and make available data
constituting a daily report ("Daily Position Report") including Commodity Group Net Open Position, profit or
loss, potential exposure and any other parameters as may be required by the President or the Chief Risk
  lLatcticannc~\c~rin>~limit.Q_cmmnacedtatheir- resneetivP_--
  actual amounts and will be signed off by the Commodity Group Manager of the position(s) and the head of the
commercial support group responsible for their preparation, before any subsequent trading occurs.

  The President of Enron Corp. and Enron Corp. Chief Risk Officer shall designate individuals who are
authorized to approve the Daily Position Report on behalf of Enron Corp. After approval, a consolidated
Daily Position Report shall be distributed to the Chairman, the President, the Chief Information,
Administrative & Accounting Officer and the Chief Risk Officer of Enron Corp. and others as designated by
the President or the Chief Risk Officer of Enron Corp.

C. Stress and Scenario Testing. On a monthly basis, or as markets dictate, designated Enron Business Units
shall formulate and examine the effects of extreme changes in the market parameters relevant to exposures
and positions. Results of these tests should be made available to the Enron Corp. Chief Risk Officer, or his
designee(s).

D. Valuation. On a monthly basis, or as markets dictate, designated Enron Business Units shall provide
evidence of verification of all market parameters used in the calculation of risk metrics and profits and losses.
This should be made available to the Enron Corp. Chief Risk Officer, or his designee(s).

E. Transaction Approvals. Only those employees designated by the Enron Corp. Chief Risk Officer or his
designee(s) will be authorized to enter into Transactions on behalf of Enron. The Chief Risk Officer must
also approve and maintain a record of those employees responsible for the individual Commodity Groups
(Commodity Group Manager) as specified in Appendix I, Appendix II and Appendix III. All Transactions
must be entered into in compliance with current or future policies, prevailing at the time transactions are
contemplated, of the Credit Group, Market Risk Management Group, Legal Department, and other relevant
groups, as determined by the Enron Corp. Chief Risk Officer.

F. Brokerage Accounts. Designated Enron Business Units are authorized to open trading accounts with
clearing brokers to facilitate the conduct of their business. All openings or revisions of trading accounts with a
broker or brokers will be reviewed and approved by the Enron Corp. Chief Risk Officer or his designee(s).
The Enron Corp. Chief Risk Officer or his designee(s) will also notify the brokers of the names of personnel
authorized to trade futures, options or other contracts on regulated exchanges if the account has been
designated for this purpose.

G. Calculation of the Net Open Position by Commodity Group. For purposes of monitoring the Net Open
Position Limits, as specified in Section IIIA.. all Positions within a Commodity Group shall be aggregated
into a reference Benchmark Position assigned to each group. Subject to approval by the Enron Corp. Chief
Risk Officer, certain Positions within a Commodity Group may be authorized to have those Positions
designated to a second Commodity Group for use as Cross-Commodity Hedges. If designated for this
purpose, the relevant Position will be reported and monitored in the second Commodity Group for the

purposes of limit monitoring. Affiliate positions are excluded from the Net Open Position calculation for
purposes of limit monitoring.

  O:\ERMS\CONTROLS\POLICY\PMicy 2000\10-06-00 Pnluy Ammend 2dac
mava^ !ovc

=XH005-01174

E0004402735



Finance Committee Meetin


=============
Page 82 of 104
=============

ENRON CORP.
RISK MANAGEMENT POLICY
Proprietary and Confidential

VI. Policy Amendment Authority

A. Portfolios, Commodity Groups and Positions. Subject to the authorization of the Board of Directors, the
Enron Corp. Chairman, the President of Enron Corp. and the Enron Corp. Chief Risk Officer, additional
Portfolios may be created and additional Commodity Groups may be added within existing Portfolios. The
related limits will be created or revised accordingly. The President of Enron Corp., in conjunction with the
Enron Corp. Chief Risk Officer, can authorize additional Positions within the existing Commodity Groups,
provided that such Positions can be aggregated within the limits of a currently authorized Commodity Group.
Any amendment that authorizes additional Positions should be communicated to the Enron Corp. Chairman
and the Board of Directors.

  B. Position Measurement Parameters. Any changes to parameters used in the aggregation and measurement of
Positions must e approve y e - - W,
Benchmark Positions, VaR parameters, Maturity/Gap Risk periods, conversion ratios, volatility factors and
correlation factors. Any substantive change will be communicated to Enron's Board at the next regularly

C. Interim Policy for New Commodity Groups. The President of Enron Corp. and the Chief Risk Officer of
Enron Corp. may approve positions in new Commodity Group(s) prior to ratification by the Enron Corp.
Board of Directors, subject to the following constraints: i) the new positions do not increase the respective
Portfolio limits and ii) meet the criteria in the New Commodity Group requirements specified in Appendix II.

D. Discretionary VaR. The President of Enron Corp. and the Chief Risk Officer of Enron Corp. may
temporarily allocate "Discretionary VaR" to other Commodity Groups in the Trading Portfolio under the
guidelines described in Appendix III.

E. Limit Changes and Other Policy Amendments. Any modification of limits or other amendments,
supplements or updates to this Policy, unless covered by Sections VI A, VI B, VI C, or VI D, must be either
(i) approved by the Enron Corp. Board of Directors or (ii) approved by the Enron Corp. Chairman or
President and ratified by the Enron Corp. Board of Directors at the next regularly scheduled Board of
Directors' meeting.

VII. Miscellaneous

Employee Trading. No employee of any Enron Business Unit may engage in the trading of any Position for the
benefit of any party other than an Enron Business Unit (whether for their own account or for the account of any
third party) where such Position relates to (i) any financial instrument, security, financial asset or liability which
falls within such employee's responsibility at an Enron Business Unit or (ii) any other commodity, included in any
Commodity Group.

Employee Review of Policies. An employee of any Enron Business Unit participating in any activity or
transaction within the coverage of this Policy shall sign, on an annual basis or upon any material revision to this
Policy, a statement approved by the Enron Corp. Chief Risk Officer that such employee (i) has read this Policy and
the Enron Corp. Trading Policies, (ii) understands such Policies, and (iii) has and will comply with such Policies.
Supersedes Prior Policies. This Policy supersedes and replaces all previous Policies of Enron Corp. approved by
the Enron Corp. Board of Directors concerning risk management or trading, including the Enron Corp. Risk
Management Policy and Addendums approved by the Enron Corp. Board of Directors on December 14, 1993,
which was last amended on May 7, 1996. This Risk Management Policy was approved by the Enron Corp. Board
of Directors on October 1, 1996, and as permitted hereunder it has been amended as of the date reflected on the
first page hereof.

Compliance with Policy. All Business Units and their relevant employees should comply with this Policy.
Dispensation for non-compliance should be sought from the President of Enron Corp., the Enron Corp. Chief Risk
Officer or their designee(s). Willful or deliberate non-compliance or falsification of risk metrics or profits and
losses referred to by this Policy will be regarded as gross misconduct. ~0

E0004402736

:XH005-01175


=============
Page 83 of 104
=============

ENRON CORP.
RISK MANAGEMENT POLICY
Proprietary and Confidential

VIII. Definitions

  "Affiliate Position" shall mean the Position between a Designated Enron Business Unit and any other Enron
Business Unit ("Affiliate Transactions"), and any such other Transaction designated as a hedge of any Affiliate
Transaction, in accordance with the Affiliate Policy.

  "Benchmark Position" shall mean the Position within a Commodity Group into which all other Positions within
the same Commodity Group can be converted using price volatility and correlation based conversion factors. Such
conversion factors shall be established and authorized by the Enron Corp. Chief Risk Officer, in conjunction with
the President of Enron Corp.

  "Commodity Group" shall mean a collection of Positions having sufficient relationship and correlation (as
"Cross-Commodity Hedge" shall mean a Position within a certain Commodity Group that is suitably used as a
hedge -nom on.~t er Positi n wi in a d;fferent Commodity C'. 1,n (i f-. Nnnir l Gas position used t hedge a
Electricity position). The suitability and approval of Cross-Commodity Hedges for each Position for purposes of
limit measurement shall be reviewed and approved by the Chief Risk Officer of Enron Corp. or his designee(s).

"Cumulative Loss" shall mean a sum of Daily Losses for the last consecutive five days. Upon occurrence of a
Cumulative Loss Limit violation, Cumulative Loss calculation is reset and begins with the Daily Loss following
the day on which the violation took place.

"Daily Loss" shall mean the loss in value of any Commodity Group (other than the Affiliate Position) on a daily
basis, exclusive of originations and prudence. The Daily Loss will be calculated using the mark-to-market method
on a net present value basis.

"Designated Enron Companies" shall mean Enron Corp. and such other Enron Companies as are designated for the
specific relevant purpose under this Policy by the Enron Corp. Chief Risk Officer and the President of Enron
Corp., acting jointly.

"Enron Business Unit(s)" shall mean Enron Corp. and any entity controlled, directly or indirectly, by Enron Corp.,
(including internal groups created for the purposes of trading, or aligned according to, the commodities as set out
in Appendix III), or any entity directly or indirectly under common control of Enron Corp. For this purpose, the
criteria for establishing "control" of any entity include but are not limited to, ownership of more than fifty percent
(50%) of the voting power of such entity.

"Maturity/Gap Risk" shall mean the risks related to non-parallel changes of forward prices or interest rates. For
purposes of this Policy, the Maturity/Gap Risk related to commodity Positions with forward prices shall be
measured using a rolling total of the net open position per period, which may be modified based on the market
structure of the underlying Position and pending authorization of the Chief Risk Officer of Enron Corp. (see
Appendix I).

"Net Open Position" shall mean the aggregate of the open Positions in a Commodity Group on a Benchmark
Position equivalent basis.

"Position" shall mean, collectively, the risk components (including, but not limited to, price risk, basis risk, index
risk, credit risk and liquidity risk) of all commodities, financial instruments, securities, equities, financial assets or
liabilities which have been authorized for trading in the Enron Corp. Risk Management Policy, any of the Enron
Corp. Policies or approved for trading through any amendments to this Policy.

  "Market Parameters" shall mean market spot and forward prices/curves, market spot and forward volatility,
correlation (where appropriate), market interest rates, spot foreign exchange rates (where appropriate).

  E0004402737
OdERMSICONTROLSWOLICY(Poncy !wmiU.4I( u Mlwy nmmcnu ~.uoe rinonoc Commr1-

XH005-01176


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ENRON CORP.
RISK MANAGEMENT POLICY
Proprietary and Confidential

"Daily Position Report" shall mean hard or soft copy report including, but not limited to the following, for each
major commodity and price curve traded, and for all positions regardless of financial accounting treatment:

The amounts by which the mark-to-market value of the portfolio can change for small (or unit)
changes in all "market parameters", as a term structure (i.e. by time "bucket") and on a net aggregate
basis.
For portfolios with option or non linear risks, the concentration of sensitivities (delta, gamma, vega)
according to expiry date and strike price ("strike concentration").
The VaR for the portfolios, according to Enron's approved methodology.

"Potential Exposure" shall mean the potential change in value of a Position or Commodity Group resulting from
changes in, but not limited to, market prices, interest rates, currency rates, counterparty credit condition, liquidity,
funding and settlement risk.

  ransactions shall mean, co ecttve y, orwar s, futures, swaps, options,
and any other derivative or cash market instruments creating a Position.

  a u -a - t z n' i' r r rrr3=
Enron Corp. adopted VaR methodology at the 95% confidence interval using a 1-day time horizon. Any
recalibration or modification of the VaR methodology or parameters that take into account observed or anticipated
changes in market factors or developments in VaR technologies must be approved by the Enron Corp. Chief Risk
Officer or his designee(s).

  Fy
E0004402738 'pp

rinnncc Committs' ^^'

KHO05-01177


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ENRON CORP.
RISK MANAGEMENT POLICY
1'rolxietary and ( Iliidintial

Appendix I

Commodity Group	Benchmark Position	Net Open Position Limit	w	laturit
I	/ Gap Risk Limit	Valk Limit
TRADING PORTFOLIO			$100 MM
Discretionary VaR						$25 MM
North American Natural Gas	NYMEX Henry Hub Equivalents	300 Bcf		350 Bcf	Rolling 12-Month)	$60 MM
Global Products	NYMEX WTI Equivalents	12.5 Mil Bbl	III	Mil Bb	(Rolling 12-Month)	$8 MM
North American Electricity	Electricity Equivalents	90 Twh		25 Twh (	ollin 12-Month)	$50 MM
Metals & Minerals	LME Copper Futures E uiv.	375,000 MT	60	D,000 M	f' (Rolling 12-Month)	$8 MM
Coal & Freight	U.S. Eastern Coal Equivalents	15 MM MT	15'	MM M	r-(Rollin 12-Month)	$4 MM
Pulp & Paper	Pul ex NBSK (Pulp) Futures E uiv.	300,000 MT	30	),000 M	r (Rolling 12-Month)	$3 MM
Weather Derivatives	Maximum USD Exposure	$100 MM			N/A	$3 MM
Emission Allowances	SO2 Credits	1,000,000 Credits	1,00	,000 Cr	its (Rollin 12-Month)	$3 MM
* European Natural Gas	UK NBP Gas Equivalents	60 Bcf		0 Bcf (	Rolling 12-Month)	$7.5 MM
* UK Electricity	UK Electricity Equivalents	35 Twh		15 Twh (	ollin 12-Month)	$10 MM
Nordic Electricity	Nordic Electricity Equivalents	20 Twh		0 Twh (	EZollin J 12-Month)	$5 MM
Continental Electricity	Continental Electricity Equivalents	20 Twh		..0 Twh (	Rolling , 12-Month)	$4 MM
Australian Electricity	Electricity Equivalents	3 Twh		6 Twh (	ollin 12-Month)	$3 MM
Japanese Electricity	Japanese Electricity Equivalents	4 Twh		4 Twh (	,ollin 12-Month)	$4 MM
Southern Cone Natural Gas	Natural Gas Equivalents	35 Bcf		20 Bcf (	ollin T 12-Month)	$2 MM
Southern Cone Electricity	Electricity Equivalents	3.5 Twh		a.5 Twh (	Rolling 12-Month)	$5 MM
Financial Instruments						$3 MM
Interest Rate	USD Notional Equivalent @
AA Libor	$100,000 / by _	U	SD 50,0	0 / by (<= 2 years)	$3 MM (combined
Interest Rate/FX)
Foreign Current	USD Spot Rate Notional Equivalents	$100 MM			N/A	
Equity Trading	Market Value in USD	$100 MM			N/A	$6 MM
Debt Trading	Market Value in USD	$250 MM			N/A	$2 MM
Enron Broadband Services	N/A	N/A			N/A	$2 MM
Enron Energy Services	N/A	N/A			N/A	$5 MM
MERCHANT PORTFOLIO	Market Value in USD	N/A			N/A	N/A
CAPITAL PORTFOLIO			$10 MM
Enron Companies	Market Value in USD	$300 MM			N/A	
Other	S&P Equivalents	$200 MM			N/A	
						

- See Temporary Limits - Appendix III

XH005-01178 vp--- - A. 70


E000440 )739


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:XH005-0117


ENRON CORP.		i
I Appendix II
RISK MANAGEMENT POLICY		
Prolxietar) anLI Confidential		
INTERIM POLICY LISTING:		
Commodity Group	Benchmark Position	Net Open Position	Maturity / G	ap Risk	~..imit	VaR Limit	Expiration Limit
		Limit					
Lumber	Board Feet	22 Mil Board Feet	22 Mil	Board Fe	t	$0.25 MM	11/01/00
Enron Credit	Maximum Exposure in USD	$100 MM		"/A		$1 MM	2/10/01
Colombia Electricity	Colombia Electricity Equivalents	0.5 Twh	0.75 Twh (Ro	lling 12	Month)	$0.45 MM	11/01/00
Steel Trading	Hot Rolled Coil Steel Equivalents	100,000 MT	200,(	00 MT		$1 MM	3/01/01
Advertising Swaps	Cost per Point (CPP) Equivalents	782 CPP	78	CPP		$1 MM	12/01/00
Livestock Trading	Future Contract Equivalents	1,000 Contracts	1,000	'ontracts	',	$0.75 MM	10/01/00
Live Cattle Futures	(1 Contract = 40,000 lbs.)						
Lean Hogs Futures	(I Contract= 40,000 lbs.)						
Feeder Cattle Futures	(I Contract = 50,000 lbs.)						
Frozen Pork Bellies Futures	(I Contract = 40,000 lbs.)						
Grain Trading	Future Contract Equivalents	1,000 Contracts	1,000	Contracts	/	$0.5 MM	10/01/00
Corn Futures	(l Contract= 5,000 bushels)						
Soybean Futures	(1 Contract = 5,000 bushels)						
Wheat Futures	(l Contract = 5,000 bushels)			_			
Soft Commodities	Future Contract Equivalents	2,000 Contracts	2,000	Contracts	,'	$0.75 MM	10/01/00
Sugar Futures	(I Contract = 112,000 lbs.)						
Coffee Futures	(I Contract = 37,500 lbs.)						
Cocoa Futures	(I Contract = 22,046 lbs. Or 10 MT)						
INTERIM POLICY REQUIREMENTS FOR NEW COMMODITY GROUP:		
i
a) Approval by the President and the Chief Risk Officer of Enron Corp.		
b) Reported to the Enron's Board at the next Board meeting		
c) Does not increase the applicable Portfolio limit (see Appendix I)		
d) Position and P&L become a part of the daily reporting requirements		
e) Monthly review with Senior Risk Manager and Chief Risk Officer of Enron Corp.		
f) Does not exceed limits in New Commodity Group Parameters, as listed below		
New Commodity Group Parameters:		
Maximum Net Open Positions: 1OBCF Equivalents		
Maximum Time/Product Spread Position: 20BCF Equivalents		
Maximum Daily Loss Limit: $500,000		
Maximum VaR $1 MM E00044	)2740	
Maximum Term of Interim Policy 6 Months		
a 71		


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I

  ENRON CORP.
  RISK MANAGEMENT POLICY
Proprietary and Conlidentiul

TEMPORARY POLICY LISTING:

Appendix III

Commodity Group	Benchmark Position	Net Open Position Limit	Maturity /	sap Ris	Limit	VaR Limit	Expiration Date
DISCRETIONARY VaR						$25 MM	
NA Cross Commodity Trading						$5 MM	12/31/00
EUROPEAN NATURAL GAS	UK NBP Gas Equivalents	260 Bcf	90 Bcf (Roll	ing 12	onth)	$7.5 MM	12/31/00
UK ELECTRICITY	UK Electricity Equivalents	85 Twh	15 Twh (Ro	lin 12-	onth)	$18 MM	12/31/00

DISCRETIONARY VaR - ALLOCATION POLICY:

  Discretionary VaR: $25 million

  Discretionary VaR will be allocated under the following guidelines:

  a) Approval by the President and the Chief Risk Officer of Enron Corp.
b) Reported to the Enron's Board of Directors at the next Board meeting
  c) Does not exceed VaR limits in the existing Commodity Groups by more than 100%
d) Does not impact the respective Commodity Group position limits
  e) Loss Notification requirements will apply at the new Value-at-Risk level going forward
f) Requestor must provide a justification/explanation for a limit increase
  g) Remains in effect for a period designated by the Chief Risk Officer

E0004402741

  O:~LRM.CK'f1M'Itlll_M(N.ICYWAky ?IMNMIOIIMMIAiky Allm d!Ax 72
XH005-01180 vV~ u


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Agenda Item 5b

E0004402742

:XH005-01181


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Transaction Approv

E0004402743

73

  process


  4~+&Oo
Finance Committee Meeting

EXH005-01182


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/'Al

Summary of Policy Chan





e


Added $20MM approval authority for Wholesale

C


  $25MM a proval authority for CRO ac.; del gated by the OOC
Adde
  C(

Updated Region / Business Group Heads for rec Pnt reorganizations
or changes in assignments





,tI

E0004402744

74


  ;


  CID
441~ >0
Finance Committee Meeting

:XH005-01183


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Enron Corp. Transaction Approval

Revised 10-7-00

  RISK
ASSESSMENT DEAL S
  & CONTROL MM
(RAC)

APPROVING
UNIT

REGION/BUSINESS
GROUP HEADS
  WHOLESALE OOC
END-OUC/CRO '
EWE-CEO/COO

  ENE-6(
  D

  i
i

----W
  i
  i
t
i
i

(>$500,000)		REVIEW							i
i
	A								t
i				
2			GLOBAL FUNCTIONS	i
				<			GROUP HEAD	
								t
~						<
25*			`GENE OOC/CRO'",	----h
t			GLOBAL FUNCTIONS						' '5	t
										
			< 75*					
								
							
			75+			ENE-BOD		----t
					
			< 10*			ENE-OOC/CRO!.',''	- - - -Pi
							i
	NON-CONFORMING			<25*			ENE-CEO/COO	----P~
i
i		25+			ENE-BOD	- - - -~~

Deal Approval Sheet With All Signatures				i
~- --------------------------------	----	-------	---------------	------
Transaction * Deal Approval Sheets will be distributed to the ENE-BOD (Finance	,ommitt	e) after ap	proval.	
** As delegated by the ENE-OOC, the ENE-CRO has approval authority.				4
75	EC0'	4402745	Finance Commie meeting

rocess

ORIGINATING				< 5		
						
ENTITY	TRANSACTION					

Request for:		REVIEW					< 20*		
		
INVESTMENT			REGION/ BUSINESS			
*		
Capital Expenditure		
VALUATION				< 25		10
or		
PRICING	Conforming			< 75*		
Risk Adjusted							7	
Capital		PORTFOLIO				75+		10

:XH005-01184


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Approval Process for Originated Contractual
Transactions

Revised 10-7-00

ORIGINATION
AND
STRUCTURING
GROUPS
ORIGINATED
TRANSACTION*

  *Characteristics:
-Non-standard documentation
*Deal results in violation of
existing limits

RISK
ASSESSMENT
  & CONTROL
(RAC)
COMMODITY VaR
POSITION RISK

  CAPITAL $
INVESTMENT
(IF ANY)
  RISK RAC TRANSACTION
A )JUST ID APPROVAL
RESERVE 'APITA PROCESS
CREDIT
  RISK
PV8 SAVINGS
GUARANTEE

  E00044 2746
76
  Finance Committee Meeting

:XH005-01185


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  0
Ice* &

Transaction
Approval Process

DEFINITIONS Revised 10-7-00

REGION/BUSINESS	Jim Bannantine - South America Rebecca McDonald - Asia/Africa
GROUP HEADS	Sanjay Bhatnagar - India Jeff McMahon - EIM
	Diomedes Christodoulou - South America Lou Pal - EES
	Dave Delainey - North America Ken Rice - EBS
	Andy Fastow - EGF Jeff Sherrick - EGEP
	Kevin Hannon - EBS John Sherriff - Europe
	Stan Horton - GPG Greg Whalley - Enron Net Works
	Mike McConnell - EGM Tom White - EES
GLOBAL FUNCTIONS	Larry Izzo - EE&CC
GROUP HEAD	
WHOLESALE OOC	Chairman of Wholesale Operations
	Approval defined as Mark Frevert
ENE-OOC	Enron Corp. Office of Chair
	Approval defined as Ken Lay, Jeff Skilling or Joe Sutton
ENE CEO ~_	Enron Corp. Chief Risk Officer
	Approval defined as Rick Buy
ENE-CEO or COO	Ken Lay or Jeff Skilling
ENE-BOD	Enron Corp. Board of Directors
	Executive Committee between Board Meetings
DEAL	Capital Expenditure
	Net to Enron
	Funding Vehicle exposure included in Enron exposure
RAC	Risk Assessment and Control Group at Enron
	Chief Risk Officer, responsible for RAC activities
Capital Expenditure	All major corporate commitments by Enron and any of its subsidiaries
	Acquisitions/Divestitures (Merchant Asset Divestitures exceeding $500 MM and Strategic
	Assets Divestitures exceeding $200 MM require Board Approval)
	Disposal of Assets
	Providing a guarantee of obligations of unaffiliated third parties
	Providing debt, subordinated debt, equity or partnership capital
	A commodity or financial position that results in an exposure outside of Board Approved
	Limits
Risk Adjusted Capital	The aggregation of exposure in a transaction that results from commodity positions, credit
	and guaranties; such exposure translated to an equivalent amount of capital
Conforming	Routine non-budgeted Capital Expenditure within the general business lines of Enron
	Capital Expenditure made in an industry where Enron has established expertise
	Capital Expenditure made in a country where Enron has established a local presence and
	is currently conducting business
	RAC Group will determine if Conforming
Non-Conforming	Capital Expenditure outside the general business lines of Enron
	Capital Expenditure in an industry where Enron has little or no expertise
	Capital Expenditure made in a country where Enron has no local expertise
	Capital Expenditure made in a country where the overall exposure to the country is
	excessive
	Capital Expenditure made to an entity or within an industry that would result in excessive
	exposure to that entity or industry
	RAC Group will determine if Non-Conforming
	EREC (Enron Renewable Energy Corp.) transactions are deemed Non-Conforming
Merchant Portfolio Limit	The sum of all Merchant transactions less any syndicated amounts
	The numerical limit is set forth in the most recent Enron Risk Management and Trading
	Policy

E0004402747

n

KHO05-01186


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Agenda Item 5(b)
TRANSACTION APPROVAL PROCESS
  (Suggested Form of Resolutions)

  WHEREAS, the Board of Directors of the
October 12, 1998 adopting the Enron Corp.
"Transaction Approval Process") which provide
approval of Capital Expenditures (as defined in
minutes) and (ii) a process for prior transactions
reviewed for performance and results; and

Company approved resolutions on
Transaction Approval Process (the
  for (i) a process for review and
the revised policy attached to these
involving Capital Expenditures to be

  _ WHEREAS, the Board of Directors of the Company approvedd amendments to
the ransactionprova rocess a mee i g - ,
1999, February 7t and 8t', 2000 and May 2, 2000;

  WHEREAS, it would be in the best interest of the Company to amend the
definitional provisions of the Transaction Approval Process in order to reflect the recent
changes in assignments and reorganization of Enron Corp. into regional business units
and global functions and to reflect amendments to both Approving Units and approval
limits with respect to Deal Size;

  NOW THEREFORE BE IT RESOLVED, that the Company revise the
Transaction Approval Process to that attached to these minutes and as set forth in
these resolutions;

  RESOLVED FURTHER, that the revised Transaction Approval Process is
adopted and approved, that a copy of the revised policy be attached to the minutes as
Exhibit A, and that the persons, officers and Approving Units identified therein shall
perform the responsibilities as specified; for the purposes of this policy a certification by
the President, the Chief Financial Officer, the Treasurer, the Chief Risk Officer (or his or
her designee), or any Senior Vice President to the effect that this policy has been
complied with in connection with any transaction involving Capital Expenditures shall be
conclusive evidence of compliance and may be relied upon by all persons interested in
or participating in such transaction, including (without limitation) the officers signing
transactional documents on behalf of the Company and attorneys issuing legal opinions
with respect to the transaction;

  RESOLVED FURTHER, that the revised Transaction Approval Process shall not
apply to the approval process for guarantees except as to those guaranteeing the
obligations of unaffiliated third parties. The approval process for all other guarantees
shall continue as described in the Company's existing "Policy for Approval of
Guarantees, Letters of Credit, Letters of Indemnity, and Other Support Arrangements",
and shall be reviewed by the Finance Group and the Risk Assessment and Control
Group;

E0004402748

TAP resolution 100600.doc

C


  ~~O
rinanoo Committoo M"'

<1-1005-01187


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RESOLVED FURTHER, that the Chairman of the Board and Chief Executive
Officer, the President and Chief Operating Officer, the Vice Chairman, the Executive
Vice President and Chief Risk Officer, the Executive Vice President and Chief Financial
Officer, the Vice President, Finance and Treasurer, any Vice President of the Company,
or any other person authorized by the Board to act on behalf of the Company be, and
each of them hereby is, authorized and empowered to negotiate, enter into, execute,
and deliver on behalf of the Company any agreements and documentation in
connection with any transaction involving Capital Expenditures which has been
approved in accordance with the revised Transaction Approval Process and as the
officers executing such agreements shall approve, such approval to be conclusively
evidenced by such execution; and

  RESOLVED FURTH , t at a ac ions ere o ore n - -- - -
Board and Chief Executive Officer, the President and Chief Operating Officer, the Vice
Chairman, the Executive Vice P esi e Chief 'sk Officer, the Executive Vice
  President and Chief Financial Officer, the Vice President, Finance and Treasurer or any
Vice President, in the name and on behalf of the Company, related to or in connection
with transactions of the type contemplated by the new review process attached to these
minutes but which originated prior to these resolutions, including, without limitation, the
execution and delivery of any instruments or other documents as any such officer shall
have deemed necessary, proper, or advisable, are hereby adopted, ratified, confirmed,
and approved in all respects.

Z


  E000
  4402749 ~.
TAP resolution 100600.doc ~Q

finance uommmee ninatI

KHO05-01188


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0
  N
N
O
O
O
U
W

5c

EXH005-01189


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AGENDA ITEM NO. 5c
EQUITY DERIVATIVES AUTHORIZATION

  WHEREAS, the Company desires to enter into and has
entered into equity derivative transactions from time to time
relating to the Common Stock of the Company, including, but
not limited to swap transactions, forward sales and/or
purchases, and options (the "ENE Equity Derivatives
Transactions"), which are or may be in addition to obligations
or contingent obligations to issue shares of Common Stock of
the Company relating to project financings; and

  NOW, THEREFORE, IT IS RESOLVED, that the
Company be, and it hereby is, authorized to enter into ENE
Equity Derivative Transactions from time to time, subject to - G
the limitations contained in these resolutions, and on such
terms as are approved by the Chairman of the Board, the
President, the Vice Chairman, any Vice President, any
Managing Director, the Chief Financial Officer, the Treasurer, "I
or any Deputy Treasurer of the Company (each an
"Authorized Officer") and that such transactions heretofore
entered into on behalf of the Company are ratified and
approved;

  RESOLVED FURTHER, that the Company is
authorized and directed to execute and deliver any
agreements evidencing or relating to ENE Equity Derivative
Transaction(s) and to observe and perform in full all of the
obligations, conditions, covenants, and other terms set forth in
or contemplated by any agreements relating thereto as the
same may be amended from time to time;

  RESOLVED FURTHER, that each Authorized Officer
be, and each such officer hereby is, authorized in the name
and on behalf of the Company to take or cause to be taken
such action as such officer may deem necessary or desirable
in connection with the performance by the Company of its
obligations under any agreement, document, or instrument
contemplated by these resolutions to which the Company is or
will become a party;

E0004402751



  c







0
00


  Finannn Cnmmittan Meath

KHO05-01190


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RESOLVED FURTHER, that each Authorized Officer
be, and each of them hereby is, authorized in the name and
on behalf of the Company, under its corporate seal or
otherwise, to negotiate, execute, deliver, amend, perform, and
consummate such agreements, instruments, or documents,
however designated, as such officer may deem necessary or
desirable to carry out the purpose and intent of the resolutions
herein, in such form(s) as shall be approved by the officer
executing the same, such approval to be conclusively
evidenced by the execution thereof by such officer;

  RESOLVED FURTHER, that the maximum number o
shares of Company Common Stock for which ENE Equity
time shall not exceed 50 million shares;

  RESOLVED FURTHER, that up to an aggregate of 20
million shares of Company Common Stock are hereby
authorized to be issued pursuant to ENE Equity Derivatives
Transactions and up to an aggregate of 20 million shares of
Company Common Stock are hereby authorized to be
reacquired pursuant to ENE Equity Derivatives Transactions;
  T
co

  RESOLVED FURTHER, that an aggregate of 20 million
shares of Company Common Stock are hereby reserved for
issuance in settlement of any or all of the ENE Equity
Derivatives Transactions referred to above in the event the
Company elects to make settlement in shares of Company
Common Stock;

  RESOLVED FURTHER, that the Company is
authorized to issue such shares of Common Stock of the
Company in settlement of ENE Equity Derivatives
Transactions, as deemed appropriate, and to offer and sell
any such shares delivered in settlement of any ENE Equity
Derivatives Transaction and that upon any such issuance in
accordance with the terms of the subject ENE Equity
Derivatives Transaction, such shares of Common Stock shall
be validly issued, fully paid and non-assessable;

  RESOLVED FURTHER, that if registration of shares of
the Company's Common Stock is appropriate in connection
with any ENE Equity Derivative Transaction, the officers of the

  E0004402752

  r,nance uommluee Ivleol

KH005-01191


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Company be, and they hereby are, authorized and directed,
for and in the name and on behalf of the Company, to cause
to be prepared, executed, and filed with the Securities and
Exchange Commission (the "Commission") one or more
Registration Statements and/or post-effective amendments to
previously filed Registration Statements, including exhibits
thereto (collectively, the "Registration Statement"), and such
amendments and post-effective amendments to any
Registration Statement or supplements to the Prospectuses
constituting a part thereof, relating to the registration under
the Securities Act of 1933 of the Common Stock of the
Company relating to the ENE Equity Derivative ransaction s
whenever same are appropriate; and the proper officers of the
Registration Statement to be executed and filed in such form
as the officers executing such Registration Statement shall
approve, such approval to be conclusively evidenced by such
execution;

  RESOLVED FURTHER, that the officers of the
Company be, and they hereby are, authorized and directed to
file such amendments or supplements to the Registration
Statement(s) referred to above, and to take any or all other
action or to do or cause to be done any or all other things as
may appear to them to be necessary or advisable in order to
cause such Registration Statement(s), as amended, to
become effective and otherwise to effect the registration
under the Securities Act of 1933 of the appropriate amount of
Common Stock of the Company relating to an ENE Equity
Derivative Transaction which are covered by such
Registration Statement;

  RESOLVED FURTHER, that if it is deemed necessary
or advisable by the officers of the Company that the Common
Stock issuable upon settlement of an ENE Equity Derivative
Transaction be qualified or registered for sale under the
applicable Blue Sky Laws or securities acts of any jurisdiction,
or that a filing be made in any jurisdiction to secure or obtain
an exemption from qualification or registration, the officers of
the Company are each authorized to perform on behalf of the
Company any and all such acts as any one or more of them
may deem necessary or advisable in order to comply with
such laws of such jurisdiction, and in connection therewith, to
E0004402753

  Finance Committee meet,,

XH005-01192

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

execute and file all requisite papers and instruments and to
make any and all payments of filing, registration or other fees,
costs and expenses, and to take any and all further action in
connection with the foregoing which any one or more of them
shall deem necessary or advisable;

  RESOLVED FURTHER, that if the officers of the
Company determine that it is desirable for the Company to do
so, the Company may make application to the New York
Stock Exchange, Inc. and one or more other national
securities exchanges for listing of the Company Common
--Stock - to e issue in -connection wi e _
  Derivatives Transactions; that the Chairman of the Board, the
  Vice airman o the R and the President, any Executive nr
  Senior Vice President, any Vice President, the Treasurer or
any Deputy Treasurer of the Company be, and they hereby
are, authorized and directed to execute and deliver any
applications, documents, or agreements, to take any and all
actions, to appear before such exchanges if necessary, to
appoint any banking or other institution as an agent of the
Company for any purpose, and to do so or cause to be done
any and all things as may appear to them to be necessary or
  desirable in order to effect such listing; 0

  RESOLVED FURTHER, that the execution by any
officer of the Company of any papers and instruments or the
performance by any one or more of them of any act in
connection with the foregoing resolutions shall conclusively
establish their authority therefore from the Company and the
approval and ratification by the Company of the papers and
instruments so executed and the actions so taken;

  RESOLVED FURTHER, that the actions of the officers
and employees of the Company acting under the supervision
of the officers heretofore taken on behalf of the Company in
connection with the above resolutions and the actions
contemplated thereby, are, in all respects, confirmed and
ratified, and the officers of the Company, together or
individually, may take any and all action and do any and all
things, or direct the taking of such action or the doing of such
things by employees of the Company acting under the
supervision of the officer(s) as may be deemed by any of
them to be necessary or advisable to effectuate the ENE

  E0004402754 rl a,, t con,n,fucc Moot

XH005-01193


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Equity Derivatives Transactions, and the taking of any and all
such actions and the performance of any and all such things
in connection with the foregoing shall conclusively establish
their authority from the Company and the approval and
ratification by the Company; and

  RESOLVED FURTHER, that the proper officers of the
Company and its counsel be, and each of them hereby is,
authorized, empowered, and directed (any one of them acting
alone) to take any and all such further action, to amend,
execute, and deliver all such further instruments and
documents, for and in the name and on e a o- the
Company, under its corporate seal or otherwise, and to pay all
such expenses as in their discretiGn appear te-be nee6GG-`Y,
proper, or advisable to carry into effect the purposes and
intentions of this and each of the foregoing resolutions.

I*
co


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Agenda Item 6

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Other Busine

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Adjourn

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