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CONFIDENTIAL1
~ ~~33

Addendum

Deal Approval Sheets



Finance Committee Meeting
May 1, 2000

  Committee Members I

X90.


=XH003-01234

Endless possibilities.

  Mr. Herbert S. Winokur, Jr., Chairman
Mr. Robert A Belfer
  Mr. Norman P. Blake, Jr.
Mr. Ronnie C Chan
E0004401920 Mr. Paulo V. Ferraz Pereira
  Mr. Jerome J. Meyer
Mr. Frank Savage
Mr. John A. Urquhart








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Strategic Transactions

m


EXH003-01235



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  Enron Transaction Appri

I Summ

Strategic Transactions



Board of Directors Meeting:

TODAY'S DATE:

May 2, 2000

April 21, 2000

Tab
No.	Region/
Business	Investment
Class	Date
Approved	Transaction Name	Transaction
Size	Approval
Authority*	Net Amount
S-1	EBS	Conforming	31-Mar-00	AHI	$ 56,850,000	ENE-CEO/COO	$ 56,850,000
S-2	EBS	Conforming	17-Mar-00	BellSouth PoP Deployment	$ 6,025,000	ENE-OOC	$ 6,025,000
S-3	Europe	Conforming	14-A r-00	Condensing Turbine	$ 11,000,000	ENE-OOC	$ 11,000,000
S-4	Caribbean	Conforming	14-Apr-00	EcoElectrica-Workin Capital	$ 11,750,000	ENE-OOC	$ 11,750,000
S-5	Enron Global LNG	Conforming	12-A r-00	Elba Island LNG Terminal	$ 66,100,000	ENE-CEO/COO	$ 66,100,000
S-6	EES	Conforming g	16-Feb-00	Georgia Arm	$ 68,100,000	ENE-CEO/COO	$ 68,100,000
S-7	ENA	Conforming	31-Jan-00	Hurricane	$ 21,000,000	ENE-CEO/COO	$ 21,000,000
S-8	EE&CC	Nonconformin	02-Feb-00	Jertovec Pre-NTP	$ 10,000,000	ENE-OOC	$ 10,000,000
S-9	ENA	Conforming	16-Mar-00	Mariner - Pluto II	$ 26,019,000	ENE-CEO/COO	$ 26,019,000
S-10	EES	Conforming	08-Feb-00	MDW	$ 55,600,000	ENE-CEO/COO	$ 55,600,000
S-11	EES	Nonconformity	07-A r-00	Mercury (including addendum)	$ 29,200,000	ENE-CEO/COO	$ 29,200,000
S-12	EGF	Conformity	31-Mar-00	Nowa Sarz na Equity Purchase	$ 10,630,000	ENE-OOC	$ 10,630,000
S-13	ENA	Conforming	28-Mar-00	Powder River III	$ 18,744,000	ENE-OOC	$ 18,744,000
S-14	India	Conforming	29-Mar-00	Property Acquisition	$ 40,000,000	ENE-CEO/COO	$ 40,000,000
S-15	ESA/EBS	Nonconformity	10-Mar-00	South America Fiber Optic Network	$ 10,054,000	ENE-CEO/COO	$ 10,054,000
S-16	ESA	Conforming	07-A r-00	Transredes II	$ 5,000,000	ENE-OOC	$ 5,000,000
Total Funded Capital Approved: $ 446,072,000 $ 446,072,000


  w~.. .. ....i.. ....J 4- +l 4,drrnurinn fr,ncarfinn 1rnntraet nnvatinnl

Tab	Region/	Investment	Date	Transaction Name	Transaction	Approval	Net Amount
No.	Business	Class	A roved		Size	Authority*	
S-17	EEL	Conforming	1-Mar-00	NP TPL Deal	$ -	ENE-OOC	$ -


* Approved under authority granted at the August 1999 Board meeting. Included for information purposes only.

E0004401922


EXH003-01236


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S-1

E0004401923

EXH003-01237


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ENRON RISK ASSESSMENT AND CONTROL

DEAL APPROVAL SHEEr4

DEAL NAME: - AHI Date DASH Completed: 3/29/2000
Counterparty: WarpSpeed. RAC Analyst: Chulley Bogle
Business Unit: Enron Broadband Services Investment Type: Acquisition
Business Unit Originator: Mark Russ Capital Funding Source(s): Balance Sheet
OPublic Private Expected Closing Date: 4/21/2000
DMerchant Strategic Expected Funding Date: 4/4/2000
  Conforming DNonconforming Board Approval: OPending DReceived ODenied IEN/A

RAC Recommendation: (]Proceed with Transaction DReturns below Capital Price DDo not Proceed
APPROVAL AMOUNT REQUESTED
  Capital Commitment $56.85MM (Equity portion varies with ENE share price until Board approval is received)'

EXPOSURE SUMMARY

Equity $47.69 MM (635,718 shares@$75, current value)
Cash 9.16 MM
Total $56.85 MM

DEAL DESCRIPTION

  EBS proposes to acquirel00% of WarpSpeed Communications, a company based in Northern California, for $56.85MM. (See
exposure summary)

  WarpSpeed has developed software that, inter alia, allows real time switching of T-1 circuits. Having done extensive due
diligence the EBS engineering team, consisting of Dorn Hetzel, VP Network Engineering and Operations, David Easterby,
Larry Ciscon and David Berberian, is confident that this software can be adapted in a timely manner, and used as the platform
for its bandwidth trading software. This would accelerate EBS' automation of bandwidth provisioning at the DS3 level and
above.

The alternative to acquiring WarpSpeed would be to use the platform being developed internally. The EBS engineering team
acknowledges, however, that while that product would be adequate for the promised April 30 launch, it would need further
development for additional functionality, extensibility and scalability features that are critical to the next versions of switching
control software. Over the last 3 years, WarpSpeed has developed a robust code base which EBS' engineering team believes
can provide these features more quickly and with greater capacity to evolve with market trends.

Founded in 1997, WarpSpeed is able to provide broadband connectivity on demand. It achieves this by combining the cost-
effectiveness and flexibility of Virtual Private Networks (VPNs), with the Quality of Service (QoS)'and security of leased
lines, This service has spawned a new class.of broadband services called Dynamic Private Networks. The company currently
has 54 employees, forty-five (45) of whom are engineers, experienced in developing connection management and switching
software.

TRANSACTION SOURCES AND USES OF FUNDS
  Sources Uses
Cash $9.16MM General Corporate purposes $47.69MM
Enron Equity $47.69MM Debt Repayment $9.16MM
Total $56.85MM $56.85MM -

  RETURN SUMMARY

  WarpSpeed's business can be broken down into three separate areas of value:

Acquisition Cost	$ 56,850,000
1) Existing Code Base	$ (12,000,000)
2) Incremental Benefit of "Buy vs. Hire"	$ (24,300,000)
Strategic Premium without T1 Business	$ 20,550,000
3) Value of the T1 Business	$ (7,000,000)
Strategic Premium	$ 13,550,000



E0004401924

=XH003-01238


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RAC Deal Approval Sheet

1) The Code Base - $12 MM

Deal Name: AHI,

Ownership of the code base, whether through acquisition or building in-house, is imperative to the success of EBS. The code
base will serve as the platform from which EBS will launch its bandwidth-trading product. The engineering team has
estimated the cost of developing the Code Base at $12MM: the time required is estimated at 20-man years. The estimate is
based on the current pay scale for software engineers. This is expected to rise in the short term. The cost of any delay, while
difficult to quantify, may be several times the actual cost of the code, due to the importance of time to market.

Additionally, the following factors need to be considered under a build scenario:

 Time to market would be significantly increased. That would have negative implicationsfor Enron's share price.
 The existing WarpSpeed team is uniquely skilled; being knowledgeable in both telecom and software engineering
 Recruiting the number of engineers needed would require 6-18 months

2) "Buy vs. Hire": An experienced team of engineers and managers - $ 24.3 MM

As part of the package, EBS will also acquire the WarpSpeed management team and engineers. This engineering team
possesses a rare combination of telecom and software skills that would bring a lot of value to EBS. EBS requires software-
engineering talent and, without this acquisition, would need to rent or hire the talent to ensure the accelerated development of
the EIN. The estimated recruiting time for 45 engineers of this caliber is about 12 months, on average per engineer. The
estimated cost of renting during this period is $28.8MM. Incremental analysis of "rent vs, buy" and "hire vs. buy" shows that
"buying" saves approximately $24.3MM on a present value basis. Savings for "buying vs. renting" are even greater.

- 3) The existing TI business - $ 7 MM

WarpSpeed is currently engaged in the business of providing switched nationwide T1 service on demand. This service connects
customers, by local access T1 circuits, to WarpSpeed's network of DS3s, which is currently leased from AT&T. This enables
the establishment of connections, between the customers designated points of origination and termination, for the specific time
requested by the customer. The technology is based on a unique and highly scalable on-line transaction processing
architecture. Customers are charged based on the minutes used, in addition to a monthly charge for'local TI access, which is a
pass through to the local loop service provider.

The T1 business could either be added to EBS' slate of product offerings or discontinued. EBS management believes that there
is a potential market for this product and is reviewing the business plan. This business has been estimated by EBS, to be
potentially worth $7MM.

Strategic Premium

The strategic premium can be justified based on the fact that EBS will be acquiring an experienced team of multi-skilled
engineers, who are accustomed to working each other. In addition, EBS will, by acquiring WarpSpeed, reduce the time
required for software development by some 20-man years.

CASH FLOW SUMMARY

  EBS will be required to deliver, at closing, the 635,718 shares and $9.159MM for repayment of WarpSpeed debt.

EXIT STRATEGY

This is a strategic acquisition. No exit is anticipated.

Ec004401925

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Page 2

=XH003-01239


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RAC Deal Approval Sheet

RISK MATRIX

Deal Name: AHI

DESCRIPTION	MITIGATION/COMMENTS
Retaining Talent	Retention of management and engineering talent is crucial to the
	success of the acquisition. EBS enlisted outside consultants to
	evaluate the Northern CA market, with a view towards ensuring
	that compensation, including bonus and long-term incentives, is
	market competitive. Of the 45 engineers whose salaries were
	reviewed by the consultants, 27 were deemed to have market or
	better compensation.
	Additionally:
	 Two of the three members of the management team will be
	given 3-year contracts. The other member, due to family
	commitments, has requested, and will be given, a two year
	consulting contract.
	 The entire WarpSpeed team will be offered a Cash and Enron
	stock option retention package, in addition to standard
	competitive compensation packages.
	 The sales and marketing team may be retained depending on its
	ability to fit within the EBS organization.
Team Integration	An integration plan has been designed to keep the existing team in
	place to capitalize on the established product development
	structure.
	Reporting to Kevin Hannon, the WarpSpeed team will be kept in
	California, and will initially be focused on the delivery of the BW
	Manager switch. This will provide direction, and allow the team to
	add value in the near term.
Value Based on Enron Share Price	The purchase price has been set according to a fixed number of
	Enron shares. To the extent that Enron's share price increases
	before authorization of the new shares, EBS will be paying more
	for this acquisition.
Limit on Indemnities	An escrow account provides protection for any breaches of
	indemnities. This escrow account consists of 10% of the purchase
	price in Enron shares and will be released one year after the
	acquisition. No recourse for Enron exists beyond the one-year
	escrow account.
T1 Business	EBS will need to decide whether to deploy resources to
	expand/continue this business or to close it down. EBS Enterprise
	Services team is meeting with WarpSpeed management this week
	to examine this issue. If the decision is made to discontinue the
	business, the exposure is expected to be less than $2MM.

E0004401926

  Qt`,ECP.1`d? .^,P,$4PMDC".L`IrDE
v Dcalo`,".flP,priood_0300`,D^.SH_^.HI_l0.do

ps oP. 3

=XH003-01240


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RAC Deal Approval Sheet

Deal Name: AHI

KEY SUCCESS FACTORS

	NA	Poor Excellent
Core Business		X
-Strategic Fit		x
Upside Potential		X
Management	x	
Risk Mitigation*		X

The risks of transaction are not fully mitigated. However, buying WarpSpeed significantly reduces the
operational/developmental risks of EBS going forward.

OTHER RAC COMMENTS:

Over a 3-year period, equity investors, mainly venture capitalists, had invested $35mm into WarpSpeed.

Enron Corp will be granting registration rights in connection with the issuance of.Enron common stock for this transaction.

  APPROVALS
Commercial
Commercial
Technical
Technical
Legal
  Accounting
RAC Management
Commercial Management
Enron Capital Management
ENE Management

Name

Mark Russ

Rich DiMichele
John Griebling
Dorn Hetzel
Kristina Mordaunt

Todd Lindholm
Rick Buy/Dave Gorte "5Gi`7cIn-A,,~ .
Joe Hirko/Ken Rice/Kevin Hannon

Andy Fastow/ Jeff McMahon
Jeffrey Skilling/Joe Sutton ? o-O

Signature

  Date

ECO04401927

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Page 4

EXH003-01241


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RAC Deal Approval Sheet

Deal Name: AHI

KEY SUCCESS FACTORS

	NA	Poor Excellent
Core Business		x
Strategic Fit		x
Upside Potential		x
Management	x	
Risk Mitigation*		x

*Buying WarpSpeed reduces the operational/developmental risks of EBS going forward.
OTHER RAC COMMENTS:

Over a 3-year period, equity investors, mainly venture capitalists, had invested $35mm into WarpSpeed.

Enron Corp will be granting registration rights in connection with the issuance of Enron common stock for this transaction.

  APPROVALS
Commercial
Commercial
Technical
Technical
Legal
  Accounting
RAC Management
Commercial Management
Enron Capital Management
ENE Management

Name	natu	Date
Mark Russ	C -	~- 0 O
'Rich DiMichele	&	
John Griebling		
Dorn Hetzel		
Kristina Mordaunt		
Todd Lindholm		0,0

Rick Buy/Dave Gorte
Joe Hirko/Ken Rice/Kevin Hannon
Andy Fastow/ Jeff McMahon
Jeffrey Skilling/Joe Sutton

E0004401928

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=XH003-01242

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3


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r

	NA	Poor Exteilent
(.=t Business-		X
Strata 'c Fir		x
Upside PC "al		x
Mina etnent	~	
Risk Miei erion		x

KEY SUCCESS FACTORS 2

'Buying W arpSpeed redueas the operadoul/developmental risks of EBS going forward.
OTE13M RAC COMMENTS:

Over a 3-year period, equity investors, mainly venttut capitsllau, had invested 335=n into WarpSpeed.

E=n Corp will be granting regietradon rights in connection with the issuance of Earott c=m= stock for this tranaactioa.

APPROVALS
Cotnmerciel
Comtarcial
Technical
Technical
Legal
Accouutag
RAC Maztagemeat
Canm z'rcial Management
Enron Capital Maaagemeai
ENE Manageatent

  Name
Ma k RV 63
Rich DiMichele

Signature

Date . -

C_1TFMPOA SH_AHl_12.dw

  John Griebliag
Dora Haul
Mauna Mordaunt
Todd Lindholm
Rick Buy/Dave Gvrte
Joe Hitko/Ken Ric"evin Hannon

Andy Fasrow/ Jet!McMahon
Jetliey Skillina/Joe Sutton

Page 4

E0004401929

  ~r d O
42 /

=XH003-01243


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i4'AK.) i. 2U00 i 1 ! I'M
RAC Deal Approval Sheet

tiVKUN (Uvi ilid i vA iuI

Deal Name: AHI

ilv. ivv)

KEY SUCCESS FACTORS

	NA	Poor Excellent
_.
Core Business		x
Strategic Fit		x
Upside Potential		x
Management	x	
Risk Mitigation*		x

*Buying WarpSpecd reduces the operational/developmental risks of EBS going forward.

OTHER RAC COMMENTS:

Over a 3-year period, equity investors, mainly venture capitalists, had invested $35mm into WarpSpeed.

Enron Corp will be granting registration rights in connection with the issuance of Enron common stock for this transaction. 1

APPROVALS	Name	Signature Date
Commercial	Mark Russ	
Commercial	Rich DiMichele	
Technical	John Griebling	
Technical	Dorn Hetzel	'y o7J
Legal	Kristina Mordaunt	
Accounting	Todd Lindholm	
RAC Management	Rick Buy/Dave Gorte	
Commercial Management	Joe Hirko/Ken Rice/Kevin Hannon	
Enron Capital Management	Andy Fastow/ Jeff McMahon	
ENE Management	Jeffrey Skilling/Joe Sutton	

E0004401930

C;\TEM P\OAS H_A H I_ 13,doc Page 4


EXH003-01244

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

1 IO
  IMIKKJ
  WAR. 31.2000 3;01PMM RI - HIRKOWflCATIONS
i AACDwlAppN.Ug
is

IAX N0, 5035318668 NO 1014 2 1
?NO. 10125 1?. 25

DesaL M AIU

  SUCCISS FACTORS

	NA	ow
core wimu		R
		
14e tf~l		
		
ilk tloo		i

`9vyla4 WMVSpesasd'oml the oper%doMMYdevelopmeetal Asks e(DS doing M..d.
OTMM MC COMM>iDraj

Over a 3-rev period,' *.4%lb InyottorR m ij .e m wpltilitt0, Md lavestad $33ssm feoe WypypOed
boron "*Ill be drsntka ceaissss lei d4h , is oMscdco whh Jw ii uan s of Hams coma n asset f Oils
  arsooccoa,

Al'PROVAJL	Now
Coma rlal
Coasnr.nsl.J	_ Rar ~ .r
iets dldkioio

?etitaksl	D
..~._
Jebe tilled
r.ow~el	Dom Hacse)
	
A,ccountlni	
?odd Li.dhota+ ~_
RAC Mr..gsmsa	Rich I uy/Dsvg Code
C,mmereiol Ma, i4crosttt	lot ItxkdK d Rke V4o-..) e1
P A Capital Masagament	Md` y F&No'w/ Jeff msHa am
@ 4E Msrussimal	l.y Skull )ae Sutton

Ds




  '111~ .01

CMTWMASH_.N)_)A,daa Pi i1

E0004401931


EXH003-01245


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RAC Deal Approval Sheet

Deal Name: AHI

KEY SUCCESS FACTORS

	NA	Poor Excellent
Core Business		X
Strategic Fit		x
Upside Potential		x
Management	x	
Risk Mitigation		x

OTHER RAC COMMENTS:

Over a 3-year period, equity investors, mainly venture capitalists, had invested $35mm into WarpSpeed.

Enron Corp will be granting registration rights in connection with the issuance of Enron common stock for this transaction.

APPROVALS	Name	Signature Date
Commercial	Mark Russ	
Commercial	Rich DiMichele	
Technical	John Griebling	
Technical	Dorn Hetzel	~.
	t
d
i
M
K
i	l'~
Legal	aun
or
na
r
st	
Accounting	Todd Lindholm	
RAC Management	Rick Buy/Dave Gorte	
Commercial Management	Joe Hirko/Ken Rice/Kevin Hannon	
Enron Capital Management	Andy Fastow/ Jeff McMahon	
ENE Management	Jeffrey Skilling/Joe Sutton	
		E0004401932
C:\TEMP\DASH AHI l0.doc		Page 4
EXH003-01246		


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cO  3~iHd 1)t101 *:*



RAC Deal Approval Sheet Deal Name: AM
Global finance Summary (addendum to DASD
1. Transaction Summary

.1v. V J V, I . V

  Amount (8000)
Total DetillProjoct Capital Commitment S56.SSOMM
Ltsa: Ficancings -0-
Less: Syndications -0-
Net Enron Investment $56.850MM
2. Inveatraent terms and pricing:  Markr_t O Above Market O Below Market

  Describe (if necessary): The investment is being rrade usia Enron shares and cash. To the extant that Enron share prices
A, U
  vary, the cost of the investment will change. boo 0

3. Financing (emus end pricing:
Describe (if necessary):

4. Legal or practical Uquidity restrictions:
Restricted

  Describe (if necessary):

a] Market O Above Market 0 Below Market

0 Unrestricted O Legally Restricted IR Practically

5. Any recourse to Enron (other than investment;  Recourse 0 No Recourse
Describe (if any): Fnron Corp wil] be granting registr i on rights in cormectian with the- tssuance of Enron common stock.

6a. Business unit intent to sy'ndicatt::  Nonc 0 Partial 0 All
Describe (if necessary):

6b. Intended Enron hold period: This is a strategic investment.

6c, Likely Syndication Market: 0 Industry/Strategic Partner O Direct Private Equity
Q Capital Markets 0 JEM 1
  0 JEDI 2 0 Ftuterco
O LJM 1 or 2 O Candor
0 Other: O Margaux

Global Flsa+tace epresen vta c.

6d, Is this a JEW 2 "Qualified Investment"? 0 Yes
R tS .. - -

C.\TEM PID AS H _AH ( 10.doe

KHO03-01247

Signature

 No

(} JREn1Ct- M . LAW ye7.
- Name (Printed)

E0004401933


Date

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S-2

E0004401934

EXH003-01248


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ENRON RISK ASSESSMENT AND CONTROL
DEAL APPROVAL SHEET

DEAL NAME: BellSouth PoP Deployment	Date DASH Completed: March 17, 2000
Counterparty: BellSouth Telecommunications, Inc.	RAC Analyst: David Crews
Business Unit: ECI	Investment Type: Capital Expenditure
Business Unit Originator: Nate Alvord	Capital Funding Source(s): Balance Sheet
OPublic [F]Private	Expected Closing Date: March 17, 2000
OMerchant Strategic	Expected Funding Date: April 15, 2000
!]Conforming ONonconforming	Board Approval: OPending DReceived ODenied IN/A
RAC Recommendation: !]Proceed with Transaction DReturns below Capital Price ODo not Proceed
APPROVAL AMOUNT REQUESTED	
Capital Commitment Year 1	up to $ 2.275 million
Year 2	up to $ 3.750 million
Total	up to $ 6.025 million
EXPOSURE SUMMARY	
1) Enron Firm Commitment	Per Location Total
Signing Bonus	$ 250,000
Tier 1 DSL Payment (3 locations)	
Year 1	$200,000 $ 600,000
Year 2	$250,000 $ 750,000
Total-Enron Firm Commitment	$1,6009000

2) Enron Commitment based only on Bell South option
  Tier 1 Dedicated Lines - Year 1 $ 60,000 $ 180,000
Tier 1 Dial up - Year 1 $ 40,000 $ 120,000
Tier 1 Dedicated Lines and Dial up - Year 2 $250,000 $ 750,000
Total - Enron Commitment based on Bell South Option $1,050,000
Total Enron Obligation $2,650,000

3) Enron Options

  Tier 2 - DSL Payments (9 locations)
  Year 1 $ 90,000 $ 810,000
Year 2 $125,000 $1,125,000
Total Enron Options $1,935,000

4) Bell South Contingent Puts

  Tier 2 Dedicated Lines - Year 1 $ 20,000 $ 180,000
Tier 2 Dial up - Year 1 $ 15,000 $ 135,000
Tier 2 Dedicated Lines and Dial up - Year 2 $ 125,000 $ 1,125,000
Total - Bell South Contingent Puts $1,440,000

Maximum Potential Enron Exposure

DEAL DESCRIPTION

E0004401935 $6,025,000

Enron would pay up to $6.025 million to BellSouth for the right to locate Enron equipment in BellSouth facilities in 12 priority
locations with access to 15 markets over a 2 year period. Enron is obligated to pay for the three Tier I locations (Atlanta,
Miami, New Orleans) for 2 years if Bell South performs under the contract. If Bell South provides access to their dedicated
and dial up customers, Enron is obligated to pay for these customers as described in the Exposure Summary. Approximately
50% of Bell South's DSL lines are in these three markets, which makes these locations the priority for this investment.

Enron has the option to locate in the Tier 2 cities (Nashville, Birmingham, Baton Rouge, Charlotte, Orlando, Jacksonville,.
Louisville, Memphis, and Raleigh), but is under no obligation to do so. Only. Orlando is on Enron's current network. The
value of these sites will depend on how quickly Enron can incorporate them into the network. Once Enron commits to a Tier 2
location, Bell South has the option of providing access to their dedicated and dial up customers for the payments described
above.

Enron will pay an additional bonus of $250,000 if the agreement is signed on or prior to March 16, 2000. Half of this signing
bonus is refundable if Bell South terminates the agreement after the 3 month Atlanta location beta test period.

As of December 31,1999, Bell South had 30,000 DSL subscribers, demand for 4,000 DSL lines per week, and was
prnvisinning 1,4UU USI, lines per week. Bell south is targeting a goal of 1,200 DSL lines pro day through morn effective

XH003-01249

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

provisioning techniques including self installation for a 12/31/00 target of at least 200,000. Bell South estimates that they
currently have between 50,000 and 70,000 dedicated circuits and 750,000 narrowband customers.

TRANSACTION SOURCES AND USES OF FUNDS
  Sources Uses
Enron Equity $ 6,025,000 Tier 1 Sites 2,400,000
Tier 2 Sites 3,375,000
  Bonus Payment 250,000
Total $ 6,025,000 6,025,000

RETURN SUMMARY
These payments would provide quick access to the customer base of BellSouth, which has a fast-growing pool of DSL
subscribers. It is not possible to justify this investment based on Enron's current level of content. This investment provides an
option that is valuable in attracting content and provides increased revenue as new content is contracted. Two methods have
been used to put this into context.

1) An alternative approach to fixed payments for collocation had been a 10% revenue share. Under that arrangement, Enron
would need to generate $28 million from the Tier 1 sites and $34 million, if all Tier 2 sites are deployed, over the next two
years to justify the payment made. The ability to recognize this revenue will be impacted by the speed of deployment into the
POPS.

2) To justify the colocation in the Tier 1 locations, Enron would need the Bell South customers (DSL, dedicated line, dial-up)
to spend an average of 21 minutes per month watching Enron content (assuming equipment is fully depreciated over 2 years,
26 minutes during the first term, and 16 minutes during the second term). This would compare to the US West deal which
would require 26 minutes per month of Enron content for year 1. The assumptions for this analysis are broad but have been
added to try and put the upfront payment amount into context.

CASH FLOW SUMMARY

Year One:
$250,000 bonus payment March 16, 2000 (payable within 30 days of March 16 execution date)
$300,000 (x3) priority sites $300,000 per each Tier 1 site deployed for DSL, dedicated lines, and dial up
$125,000 (x9) other priority sites $125,000 per each Tier 2 site deployed for DSL, dedicated lines, and dial up

Year Two:
$500,000 (x3) priority sites $500,000 per each Tier 1 site renewed for DSL, dedicated lines, and dial up
$250,000 (x3) other priority sites $250,000 per each Tier 2 site renewed for DSL, dedicated lines, and dial up

If the Tier 1 sites are not deployed one year after execution of the agreement, through no fault of BellSouth, Enron is obligated
to make full payment ($1.15 million less amounts already paid) but retains the right to deploy in the sites for the remaining term
of the deal.

EXIT STRATEGY

The agreement lasts for two years, but there is no obligation to service or pay for Tier 2 locations in either year.

E0004401936



C:\TEMP\-5182598.doc

Page 2

XH003-01250

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

RISK MATRIX (Maximum 5)

DESCRIPTION	MITIGATION/COMMENTS
Content Delivery	Enron needs to be able to deliver ePowered content for 23 minutes
	average to all the DSL customers to recover the costs of colocating.
	Currently, EBS does not have enough content to recover this cost.
	The added reach should help EBS' marketing for additional
	content.
Applications	Enron is obligated to give Bell South 30 days written notice of new
	applications streamed by Enron (specifically interactive
	applications). If Bell South determines that such application will
	materially adversely affect its network, service or customers, the
	parties will try to negotiate a solution. If a solution is not
	negotiated, Bell South has the right to block that application or all
	applications.
Access to Network	The Tier 1 sites (Atlanta, Miami/South Florida, New Orleans) are
	on Enron's current network. If Enron fails to make all three Tier 1
	locations commercially operational within 9 months of the
	effective, through no fault of Bell `South, the agreement terminates
	12 months after the Atlanta location becomes commercially
	operational, with full payment for Year One Tier One locations
	payable.
	Of the Tier 2 sites, only Orlando is on Enron's current network. To
	obtain value from these sites, they will need to be connected to the
	Enron network through either satelliteor fiber networks. EBS will
	have to pay the full fixed payment for a partial year of deployment
	Enron is not obligated to make payments relating to Tier 2 sites.
Test Period	During the first 3 months of the Agreement, Bell South will beta
	test at its Atlanta location, and may conclude that the agreement
	should be terminated. In the event this happens, Bell South will
	refund $125,000 of the signing bonus and Enron will remove its
	equipment.
Renewal	The parties agree to work toward mutually agreeable compensation
	for Bell South in year two, but the agreement automatically renews
	for a second year with Bell South's compensation per location
	renewed as specified in the agreement. Enron is not obligated to
	bring u an of the Tier 2 locations during the first year.

OTHER RAC COMMENTS:
The economics for deployment at a Tier 2 site will vary dramatically with the time remaining under the contract. The contract
structure may cause a delay in deployment in these sites, or a separate negotiation outside of this contract.

APPROVALS
Commercial Mgmt.
Commercial Mgmt.
Regional Mgmt.
Legal
Accounting
RAC Management
Enron Capital Management
ENE Management
C:\TEMP\ -5182598.doc

  Name
Nate Alvord
David Cox
Joe Hirko/ Ken Rice

Signature

Date



Kristina Mordaunt
Tod Lindholm
Rick Buy/ David Gorte
Andy Fastow/Jeff McMahon

Jeff Skilling/Joe Sutton

ECO04401937


  Page 3

XH003-01251


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Page 19 of 151
=============


RISK MATRIX (Maximum 5)

DESCRIPTION	MITIGATION/COMMENTS
Content Delivery	Enron needs to be able to deliver ePowered content for 23 minutes
	average to all the DSL customers to recover the costs of colocating.
	Currently, EBS does not have enough content to recover this cost.
	The added reach should help EBS' marketing for additional
	content.
Applications	Enron is obligated to give Bell South 30 days written.notice of new
Oy\e	p icatio If Bell South determines that such application will

u~	materially dversely affect its network, service or customers, the
parties will try to negotiate a solution. If a solution is not
	negotiated, Bell South has the right to block that application or all
~~	applications.
Access to Netwo G	The Tier 1 sites (Atlanta, Miami/South Florida, New Orleans) are
on Enron's current network. If Enron fails to make all three Tier 1
	locations commercially operational within 9 months of the
	effective, through no fault of Bell South, the agreement terminates
	12 months after the Atlanta location becomes commercially
	operational, with full payment for Year One Tier One locations
	payable.
	Of the Tier 2 sites, only Orlando is on Enron's current network. To
	obtain value from these sites, they will need to be connected to the
	Enron network through either satellite or fiber networks. EBS will
	have to pay the full fixed payment for a partial year of deployment
	Enron is not obligated to make payments relating to Tier 2 sites.
Test Period (,'1 r1	Bell South will beta test at its Atlanta location, and may conclude
that the agreement should be terminated. In the event this happens,
Bell South will refund $125,000 of the signing bonus and Enron
	will remove its equipment.
Renewal	The parties agree to work toward mutually agreeable compensation
	for Bell South in year two, but the agreement automatically renews
	for a second year with Bell South's compensation per location
	renewed as specified in the agreement. Enron is not obligated to
	bring u any of the Tier 2 locations during the first year.


OTHER RAC COMMENTS:
The economics for deployment at a Tier 2 site will vary dramatically with the time remaining under the contract. The contract
structure may cause a delay in deployment in these sites, or a separate negotiation outside of this contract.

APPROVALS
Commercial Mgmt.
Commercial Mgmt.
Regional Mgmt.
Legal
Accounting
RAC Management
Enron Capital Management
ENE Management
C:ITEMP\DASH BellSouth.doc



  Name Signature
Nate Alvord
David Cox
Joe Hirko/ Ken Rice
Kristina Mordaunt
Tod Lindholm
Rick Buy/ David Gorte
Andy Fastow/Jeff McMahon
Jeff Skilling/Joe Sutton

E0004401938

Page 3

Date

XH003-01252

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

wine. 1 / LVUV i 1 v ynm

'-n wiN

RISK MATRLY (Maximum 5)



-1003-01253

DESCRIPTION	NIITIGATION/COMMENTS
Content Delivery	Enron needs to be able to deliver cPowered content for 23 minutes
	average to all the DSL customers to recover the costs of eoloeating.
	Currently, EBS does not have enough content to recover this cost.
	The added reach should help EBS' marketing for additional
	content.
Applications	Enron is obligated to give Bell South 30 days written notice of new
	applications streamed by Enron (specifically interactive
	applications). If Bell South determines that such application will
	materially adversely affect its network, service or customers, the
	parties will try to negotiate a solution. If a solution is not
	negotiated, Bell South has the right to block that application or all
	applications.
Access to Network	The Tier I sites (Atlanta, Miami/South Florida, New Orleans) are
	on Enron's current network. If Enron fails to make all three.Tier 1
	locations commercially operational within 9 months of the
	effective, through no fault of Bell South, the agreement terminates
	12 months after the Atlanta location becomes commercially
	operational, with full payment for Year One Tier One locations
	payable.
	Of the Tier 2 sites, only Orlando is on Enron's current network. To
	obtain value from these sites, they will need to be connected to the
	Enron network through either satellite or fiber networks. EBS will
	have to pay the full fixed payment for a partial year of deployment
	Enron is not obligated to make payments relating to Tier 2 sites.
Test Period	During the first 3 months. of the Agreement, Bell South will beta
	test at its Atlanta location, and may conclude that the agreement
	should be terminated. In the event this happens, Bell South will
	refund $125,000 of the signing bonus and Enron will remove its
	e ui ent.
Renewal	The parries agree to work toward mutually agreeable compensation
	for Bell South in year two, but the agreement automatically renews
	for a second year with Bell South's compensation per location
	renewed as specified in the agreement. Enron is not obligated to
	brie u an of the,Tier 2 locations during the first year.

OTHER RAC CON UNTS:
The economics for deployment at a Tier 2 site will vary dramatically with the time remaining under the contact. The contract
structure may cause a delay in deployment in these sites, or a separate negotiation outside of this contract.

  I Date
APPROVALS Name S
  '"
Commercial Mgmt. ,{ h a
Commercial Mg=t. David Cox
Regional Mgmt. Joe Hirko/ Ken Rice 3 ~ 7 ~aG
Legal Kristin Mordaunt
Accounting Tod Lindholm
RAC Management Rick Buy/ David Gorte
Enron Capital Management Andy Fastow/JeffMcMahon
ENE Management Jeff Skilling/Joe Sutton

C:'TEMflDASH_Bel South.doe Page 3
  E0004401939
MAR 1.'r ;'b00 1,1:21 iG0?833~~i~t? PAGE. 02


=============
Page 21 of 151
=============

FRU`'I

R

  n . =utru 14-..54 r rw tN Q1 =eKIJHllrHl!L G 2t2~i TO 9130134@953z, P. 05-'

SK MATRIX (Maximurrt 5)
~
_
DESCRIPTION ~	
MITLGATlON/COMMENTS
Content Delivery	1 Gnron needs to be able to deliver ePowered content fir 23 minutes
	average to all the DSL customers to recover the costs of celoeatirg.
i	CttrreotII, EBS does not have enough content to recover this cost.
	Tie added reach should help EBS' marketing for -additional
__	content.
Appll:ations	Enron It obligated to give Bell. South 30 days written notice of new
	applications streamed by Enron (specifically interactive
	applications). 1f Bell South deterriines that ouch application will
	materially adversely a!lhet its netwmxk, service or custotners, the
	partial will ny to negotiate a solution. If a solution is not
	nt godated, Bell South has the right to block that application or all
_
Access to Netwcd	a lirstiotts:
The Tier I sites (Atlaatr., MiaimiSouth Florida. New Crleans) are
	on luau's current: oetwork. If Enron Us to matte a!1 three Tier 1
	locations commercially operalonol within 9 months of the
	etTective, through ro fault of Boll South. the agree] nt terminates
	12 months pier the Atlanta location becomes commercially
	operational, with full 'meat for Year One Tier One locations
	ptp+able.
	Of the Tier 2 sites, only Orlando is on Enron's current nezwrork. To
	obtain value frog. these sits, they will need to be connected to the
	Enron network through either sateUlte or fibs networks. EBS will
	have to pay the full fixed payment for a partial yew of doployraent
	E=on is not obdigarsd to make payments relating to Tier 2 sites.
Test Period	During the first 3 atoms of the A emoa:, Boll South will beta
	teat at Its Atlanta location, and nay conclude tat the agree=nt
	should be terminated. Ia the event.this happens, Bell South will
	refund 9125,000 of the sigrsdtg bonus and Eamroa will remove its
_ .	equipment. - -

Renewal	_
he parties agree to work toward rat tuatly agreeable compensation
,
	for Bell South in year two, but the agreement autoln; tioaiiy renews
	a second year with Bell South's compensation per location l
ft
	n:newed as specified in the tgrtomettt. Boron is not obligated to '
	b*r tip anY of the Ttar 2 lodctines durin the first year.

OTHER RAC COMdWNTSt	
711 economics for deployment at a Tier 2 site will vary dramatically with the tint icmainino raider the cotrtract. The Contract
structure may cause a deLsy In deploy-alent in these sites, or a separate negotiation outside of this acnrract.
APPROVALS	Name Signature Data
Commercial Mgmt.	Nate Alvord ,
Commercial Mgmt.	Dzvvid CC:tC >
Regional Mgrat	Joe H'srkowr Ken Rice
Legal	Kristisa Mordaunt
Accounting	Tod Lindholm
PAC Managtvnant	--Rick BW David Gorta
Eaton Capital Management	Andy Fastowfiefi'McMnhon
ENE lfuangerneat	Jeff Skihins)Joe Sutton
C:~TE1+iP1~9162595! dac	Pies 3


  E0004401940
MAR 17 2000 15:09 fnGE..03
XH003-01254


=============
Page 22 of 151
=============


  MAR 17 2000 15:46'FR ECI NETWORK SERVICES 713 646 B514 TO 918502652263

RISK MATRIX (Maximum 5)

P. 05/06

DESCRIPTION	MITIGATION/COMMENTS
Content Delivery	Enron needs to be able to deliver ePowered content for 23 minutes
	average to all the DSL customers to recover the costs of co locating.
	Currently, EBS does not have enough content to recover this cost.
	The added reach should help EBS' marketing for additional
	content
Applications	Enron is obligated to give Bell South 30 days written notice of new
	applications streamed by Enron (specifically interactive
	applications). if Bell South determines that such application will
	materially adversely affect its network, service or customers, the
	parties will try to negotiate a solution. If a solution is not
	negotiated, Bell South has the right to block that application or all
	applications.
Access to Network	The Tier I sites (Atlanta, Miami/South Florida, New Orleans) are
	on Enron's current network. If Enron fails to make all three Tier 1I
	locations commercially operational within 9 months of the
	effective, through no fault of Bell South, the agreement terminates
	12 months after the Atlanta location becomes commercially
	operational, with full payment for Year One Tier One locations
	payable.
	Of the Tier 2 sites, only Orlando is on Enron's currant network To
	obtain value from these sites, they will need to be connected to the
	Enron network through either satellite or fiber networks. EBS will
	have to pay the full fixed payment for a partial year of deployment
	Enron is not obligated to make payments relating to Tier 2 silos.
Test Period	During the first 3 months of the Agreement, Bell South will beta
	test at its Atlanta location, and may conclude that the agreement
	should be terminated. In the event this happens, Bell South will
	refund $125,000 of the signing bonus and Enron will remove its
	ui ment.
Renewal	The parties agree to work toward mutually agreeable compensation
	for Bell South in year two, but the agreement automatically renews
	for a second year with Bell South's compensation per location
	renewed as specified in the agreement. Enron is not obligated to
	
1 an of te Tier 2 locations during the first year.
brirtr u-



	
OTHER RAC COMMENTS:	.
The. economics for deployment at a Tier 2 site will vary dramatically with the time remaining under the contract. The contract
structure may cause a delay in deployment in these sites, or a separate negotiation outside of this contract.
APPROVALS	Name Signature Date
Commercial Mgmt,	Nate Alvord
Commercial Mgmt.	David Cox - J 1 ~_~'C)
Regional Mgmt.	Joe Hirk / Ken Rice w
Legal	Kristina Mordaunt
Accounting	Tod Lindholm
RAC Management	Rick Bud/ David GortE
Enron Capital Management	Andy Fastow/Jew ahon ~_
ENE Management	Jeff Skilling/Joe Sutton
	EC004401941
3
C iTEMP\-sltl2s96.aoe	pB,r

OOB.' TM %I t'TC4 9t-9 Tl'0J. :wu e5.7T 000E-LT ZJUW

H003-01255

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

Global Finance Summary (addendum to DASH)
1. Transaction Summary

  Total Deal/Project Capital Commitment
Less: Financings
  Less: Syndications
Net Enron Investment

2. Investment terms and pricing:
Describe (if necessary):

3. Financing terms and pricing:
Describe (if necessary):

4. Legal or practical liquidity restrictions:
Restricted

  Amount ($000)
$ 6,025
  -0-
-0-
$ 6,025
El Market 0 Above Market O Below Market

0 Market O Above Market O Below Market

O Unrestricted O Legally Restricted t] Practically

  Describe (if necessary): Capital expenditure on a 2 year asset

5.	Any recourse to Enron (other than investment):	0 Recourse	1 l No Recourse
	Describe (if any):		
6a.	Business unit intent to syndicate:	i l None O Partial	O All
	Describe (if necessary):		
6b.	Intended Enron hold period: 2-year term		
6c.	Likely Syndication Market: O In	dustry/Strategic Partner O Direct Private Equity
		O Capital Markets	O JEDI 1
		O JEDI 2	O Enserco
		O LJM 1 or 2	O Condor
		O Other:	O Margaux
6d.	Is this a JEDI 2 "Qualified Investment"?	O Yes 1F No	


Global Finance Representative: i~ ' Larry Lawyer f 0~
igna re Name rm e e
C:\TEMP\-5182598.doc Page 4



E0004401942

=XH003-01256

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

man. I /. LVVU" I I VUIIYI L. IC RU I'

RISK MATRLX (Maximum 5 )

DESCRIPTION	MITIGATION/COMritENTS
Content Delivery	Enron needs to be able to deliver cPttwered content for 23 minutes
	average to all the DSL customers to recover the costs of eolocating.
	Currently, EBS does not have enough' content to recover this cost.
	The added reach should help EBS' marketing for additional
	content.
Applications	Enron is obligated to give Bell South 30 days written notice ofnew
	applications streamed by Enron (specifically interactive
	applications). If Bell South determines that such application will
	materially adversely affect its network, service or customers, the
	parties will try to negotiate a solution. If a solution is not
	negotiated, Bell South has the right to block that application or all
	a lications.
Access to Network	The Tier 1 sites (Atlanta, Miami/Sourh Florida, New Orleans) are
	on Enron's current network. If Enron fails to make all three Tier 1
ops commercially operational within 9 months of the
	effective, through no fault of Bell South. The agreement terminates
	.12 months after the Atlanta location becomes commercially
	operational, with full payment for Year One Tier One locations
	payable.
	Of the Tier 2 sites, only Orlando is on Enron's current network. To
	obtain value from these sites, they will need to be connected to the
	Eaton network through either satellite or fiber networks. EBS will
	have to pay the full fixed payment for a partial year of deployment
	Enron is not obligated to make payments relating to Tier 2 sites.
Test Period	During the first 3 months of the Aereement, Bell South will beta
	test at its Atlanta location, and may conclude that the agreement
	should be terminated. In the event this happens, Bell South will
	refund $125,000 of the signing bonus and Enron will remove its
	equipment ra- w,~ I be o-f"e- ~t $i2s`cck~ ,.
Renewal	The parties agree to work toward mutually agreeable compensation
	for Bell South in year two, but the agreement automatically renews
	for a second year with Bell South's compensation per location
	renewed as specified in the agreement. Enron is not obligated to
	brie u an of the,Tier 2 locations during the first y year.

  OTBERRAC COMV LENTS:
  The economics for deployment at a Tier 2 site will vary dramatically with the time remaining under the contract. The contract
structure may cause a delay in deployment in these sites, or a separate negotiation outside of this contract.

  APPROVALS Name Slg Date
Commercial Mgtsrt. .r h e
  Commercial Mgmt. David Cox
  Regional Mgmt. Joe Hirko/ Ken Rice '3117 /o )070Z~ G
  Legal Kristin Mordaunt
Accounting Tod Lindholm
  RAC Management Rick Buy/ David Gorte
Enron Capital Management Andy Fastow/JeffMcMahon
ENE Management Jeff Skilling/Joe Sutton
  C:\TEMP\DASH BellSouth doe Page 3
E0004401943

  MAR 17 2000 13:12 13039374440 PAGE A7

KHO03-01257

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

S-3

E0004401944

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

ENRON RISK ASSESSMENT AND CONTROL
DEAL APPROVAL SHEET



DEAL NAIN E: Condensing Turbine	Date DASH Completed: 07/04/00
Counterpany: ETOL- Wilton Power Station	RAC Analyst: Moises Vdoi / Renata Frankova
Business Unit: UK Origination	Investment Type: Capital Expenditure
Business Unit Originator: Matthew Scrimshaw	Capital Funding Source(s): Balance Sheet
Public (]Private	Expected Closing Date: Q2 2000
OMerchant Strategic	Expected Funding Date: Q2' 2000
(]Conforming ONonconforming	Board Approval: Mending ![1 Received ODenied ON/A
RAC Recommendation: 91 Proceed with Transaction	OReturns below Capital Price ODo not Proceed

APPROVAL AMOUNT REQUESTED

Atnot t: Up to S I 1 M (6.9M)

  ose. To increase the Wilton Power Station's steam condensing and electrical generation capacity.

Requirements: 1) The transaction's NPV will be recalculated at the time of closing of the transaction with an updated
power curve.
  2) ABB to submit a foundation study and revised consolidated bidding document (including milestone
program) before the contract is signed.

EXPOSURE SUMMARY
Commodity Exposure:	NA
Associated Guarantees:	NA
Existing Exposure:	579.5 M (ETOL investment value)
This transactioru	S 11.0 M
Total:	$ 90.5 M

DEAL DESCRIPTION

Enron Capital & Trade Resources (ECTRL), on behalf of Enron Teeside Operations Limited (ETOL), plans to invest
$1 IM at the Wilton Power Station to increase its steam condensing and electrical generation capacity. The project
involves the re-commissioning of a low-pressure turbo alternator (Secondary 4) as a fully condensing machine.

The fully condensing machine will generate up to 34 MW of additional power, which will be sold to internal customers
(ICI Chlorchems, 1C1 Olefines, and Dupont Melanar) at the Wilton site. This Lurge, integrated petrochemical and
manufacturing site depends on ETOL for the supply of utilities, with Wilton Power Station providing power and steam at
intermediate and low pressures.

Currently, customers at the Wilton site need approximately 70 MW in excess of what the Wilton Power Station can
produce. With the implementation of Secondary 4, the power plant will increase its capacity by 34 MW, therefore
reducing the amount of energy being imported from the g id. In addition, this investment will enable the Wilton Power
Station to operate with more flexibility. It will allow up to 34 MW of additional power to be generated even if steam
demand from internal customers decreases. This is possible since any excess steam not used by the chemical plants will
be used to n .m Secondary 4. On the other hand, during extreme surges of steam demand, the turbine will run using steam
from alternative sources that are delivered to the ETOL site.

Third party conractdrs will manage re-commissioning of the turbine. The condensing turbine will be owned and
operated by Enron Teeside Operations Limited (ETOL). I3`CTRL will provide the capital required for the project and
receive the revenues from the electricity sold to internal customers at the ETOL site under the Capacity Toiling
Agreement (CIA) between ECTRL and ETOL.

The Wilton boilers (spare boiler capacity) and TPL will supply the steam for the condensing turbine, with a maximum
capacity of 175 tones of steam per hour. Under the Steam Site Services Agreement (SSSA), ETOL has the right to use
684 tones of steam per hour from TPL. Currently, ETOL receives a credit calculated at the start of the month for any
steam they do not use. Therefore any TPL steam used in the condensing turbine will reduce the credit and this has been
reflected as a cost in the project economics.

  E0004401945

H003-01259

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

RAC Deni Approval Sheet Deal Name Condensing Turbine
TRANSACTION SOURCES AND USES OF FUNDS ('000s)
  Sources Uses
Enron Balance Sheet 511,000 Capex $11,000
Total S11,000 Total $11,000

RETURN SUMMARY (`000s)

	PV @	Cumulative
Return Cornponenta:	Capitol Price	IRR
Cash Outflows	($9,707)	-
Fees	-	-
lntenned. Cash Flows	$10,106	14.79%
Terminal Value		
Total NTV	5414	14.73%

  TRR Distribution
12.0%
  Expected
10.0%
  8.0%
6.()%
4.0% F
  95
0.0 %

  C' Sq `~ N C T ~ 4G v. ~~'S
  x n n r ~ K ry m r c~ r,
I= .. r-4 ,n C

Capital Price Components
Risk free rate (%): 6.20
Equity/Credit premium (%):
Country Premium (%): -
Transaction-Specific (%): 7.40*
RAC CAPITAL PRICE: 13.60%
6.7.b for gcncrul ETOL risk (aa per pricing at
  tin time of acquisition) + 0.7% for eonstractiou risk

CASH FLOW SUMMARY

  20, 000, 000 Cash Flow Summary

  5,15,000,000 '
510,000,000 .

55,000,000
$0

S(S.000.000)

9 10 11

  S(1(),000,000) Years
505.000,000) -
  kir^f Uut floes - Q Ougo in g
  -.. -Expected cumulanvc cash tlov.s -*r Cumulative P5
~-71- Cumulative P95

TRANSACTION' UPSIDES/OPTIONALITY
The project greatly increases the optionality of the plant, with potential upsides from the leverage of the increased security
of supply, and upsides from new business opportunities. The project also fits in well with future growth strategies of the
Wilton power station.

 Enhanced plant operation: The optionality provided by the new turbine improves the operational flexibility and
ciliciency of the plant. It also enhances the security of supply for steam customers, since the steam used in the

S:,Underwriung\Prolcets tPre-Approvai)MActive\Condcnsing Turbin Priced0400\Does1D?SII100400.doc Page
2

  E0004401946





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RAC Deal Approval Sheet Deal Name: Condensing Turbine
condensing turbine is immediately available for site usage when one of the chemical plants suddenly needs additional
steam. The improved security of supply can be leveraged in future steam contract negotiations.
   1\4w Business opportunities: The security of supply improves the long-term competitive advantage of the Wilton Site.
'!here is also an option value associated with the project from III' steam sale opportunities to existing customers. For
example, DuPont requires HP steam to be available at all times. With Secondary 4 in place, this can be achieved
quicker than if the boilers at the Wilton site had to suddenly be ramped up, thus increasing the output to meet the I-]P
steam demands of DuPont.
   Asset develmmment and growth yrwezv: The turbine is a key building block for future asset strategies, such as the re-
comnissioning of a mothballed coal boiler (relevant should site steam demand increase), as well as plans to re-power
the station with a set of gas turbines. Overall, signing up new customers is more beneficial to ETOL even though an
increase in steam demand by itself has a negative impact on the project economics.



EXIT STRATEGY
Nia

RISK MATRIX (Main 5 Risks Only)

Steam Demand		On-site steam demand may place restrictions on the
		operation of Secondary 4. if steam demand increases, less
		spare steam capacity is available to be used in Secondary 4
		since the meeting of steam demand requirements from the
		Wilton site. is a priority. In that case, the remaining
		(supplemental) volume necessary for running Secondary 4
		would be purchased from TPL, thus incurring an additional
		cost.
		On the other hand, on a deterministic case, if steam
		demand falls by 10% beyond current levels (389te%hr), the
		value of the project increases by approximately 2M.
		The future volume of on-site steam demand has a fair
		amount of uncertainty. However, in the absence of new
		chemical plant expansion there is a general expectation by .
		the FTOL team that it will slowly decrease, based on
		historical data from the chemical plants. Therefore, all
		things being equal it is likely that there will be excess
		steam to run. Secondary 4.
		Installation of the condensing turbine will also reduce the
		volume of excess steam being vented through the venting
		and heat exchange capabilities. Instead of venting excess
		steam, it will be used to operate Secondary 4. This is
		particularly valuable as current venting licenses may be
		withdrawn in the future by environmental agencies.
Electricity Demand		Risk that on-site demand is not sufficient to absorb
		additional 34 MW. The Wilton site is currently importing
		70 MW front the grid to satisfy on-site demand. The new
		equipment will replace up to 34 MW of the imported
		electricity.
		ETOL does not currently have a license to export powerr to
		the grid if a significant decrease in demand occurs.
		However, the ETOL team believes it is unlikely that the
		electricity demand will decrease below the generation
		capacity of the Wilton Power Station (including the
		additional 34MW). For such an event to happen (which
		would imply an economic loss to the project), several
		industrial customers would have to shut down, at one time,
		for an extended period.

Sit?adcr'x'riting\Projtots (Pre-Approval)l4ctive\C(ridensingTutbinc\Nricedtl%lO\floo\DASHlOO4Ot).duc Pig:
3

  t E0004401947

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RAC Deal Approval Sheet

Deal Name: Condensing Turbine

Cost Overruns /Delays	Risk that it is not possible to convert Secondary 4 to a condensing
	set meeting the required performance criteria, within a reasonable
	cost, currently estimated at $11 M. This risk is more significant
	than one would incur in a greenfield project for example because of
	the number of interfaces with other existing systems in the plant.
	in order to reduce this risk ETOL will sign a fixed price contract
	with ABB under which some risks will be transferred to them.
Availability
-	Risk that the availability of 97% assumed in the economics of the
	model is rot achieved. Provisions for maintenance has been
	estimated to be 2 weeks per year when the turbine is not running.
	Other planned maintenance will tale place during off.-peal: hours.
	Maintenance time has been aligned to that of the boilers in order to
	maximize the overall efficiency of the site.
Commodity Risk	Risk that power pool prices decrease down to the cost of marginal.
	fuel (gas or FIFO) reducing the margin from condensing generation.
	The potter desk will hedge this risk on its book at the time of
	closine of this transaction.

KEY SUCCESS FACTORS

NA l Pour Escellcut j
Core
chless		X
gi
SrrateQic Fit		X
Upside Potential		X
ManaLement	X	
Risk Mitigation		X

OTHER RAC COMMENTS:

The valuation model.used for the analysis of this deal (the Watershed model) involves the use of rainbow options to
calculate the least expensive fuel, when Secondary 4 will be turned on or off etc. Given that tie use of rainbow option
valuation incorporates the volatility of fuel and electricity prices it wouldn't be correct to further simulate these variables
using Monte Carlo simulation. Thus, the only variables that were subject to Monte Carlo simulation were future steam
demand and cstimated capital costs, two main risks in this transaction.

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:on Power Station
Steam is generated by the three
boilers and used to run the different NaL Gas I Oil Nat. Gas 1 Oil Coal 1 Oil
turbines at different pressures. 1n
addition, steam may be purchased No g No 7 No.S
from TPL under the Steam Site Goiter Fbiler
Service Agreement to nut Goiter
Secondary 4.

IP slreom from TPL

  Excess steam hom site
at intennediotc pressure

Three genorators)Groducing 120MW

Inlermedlagpressure steam (IP) to Willon site
30 hMW (Proposed investment)

LP stream from TPL

  Excess steam from site
at low pressuro

42

  Ltnv pressuje steam (LP) to Willon site

E0004401949

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RAC Deal Approval Sheet
Global Finance Summary (addendum to DASH)
1. Transaction Summary

  Total DealIProject Capital Commitment
Less: Financings
  Less: Syndication
Net Baron Tnvestmettt

2. Investment terms and pricing:
Describe (if necessary):

3. Financing terms and pricing:
Describe (if necessary):

4. Legal or practical liquidity restrictions:
Restricted

  Describe (if necessary):

G market

Deal Name: Condensing Turbine

  Amount ($000)
11.000
  -0-
-0-
511,000
O .Above Market 0 Below Market

0 Market 3 Above Market 0 Below Market
rj4.

  1
O Unrestricted 0 Legally Restricted Practically

5. Any recourse to Enron (Other than investment): 0 Recourse a No
Recourse

  Describe (if an)): &i-hosc,% Srtr NNaEA.



H003-01264

Ga. Business unit intent to syndicate: one 0 Partial 0 All
Describe (if necessary):

6b. Intended Enron hold period:

6c. Likely Syndication Market: 0 IndustryiStrategic Partner 12 Direct Private Equity
0 Capital Markets 0 JEDI I
  ^/A 0 JEDI 2 a Enserco
0 LJM 1 or 2 0 Condor
0 Other: 3 Margaux
6d. Is this a TEDI 2 "Qualified investment"? 0 Yes t'No

Global Finance Representative:
  Signature Name (Printed) ate
S:\tlnderw'ri;ing'Proj=ets (PrcApproval)\Activt:<4indcn.cing Turbine\Pricedo40OU7ocs`DASH10040Q.doc Wage
6

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RAC Deal Approval Sbcet
APPROVALS
Business Originator
Regional Mgrnt.
Legal
RAC Management

Enron Global Finance

ENE Management

C:17LP+ff 4061553.doc

	Deal Name: Condensing Turbine
Name	Signature Date
Matthew Scrimshaw	i0~ OO
Mark rrevert	~-an
Michael Brown	
Dave Gorte	
Steve Young	tZ oa
Jeff Mc\Mahon	
Paul Chivers	l 2 f o
Joe Sutton	i

Page 5

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AAC Deal Approval Sheet

APPROVALS	Name
Business Origginator	Matthew Scrimshaw
Regianal Mgnt,	Mark Frcvert
Legal	~^ Michael Brown
RAG ManageiTicnc	Dave Gate

Enron Global Finance

ENE Management

  Steve Young
Jeff McMa] an
Paul Chivers
lot Sutton

C:bYindawnkTEMp\DASH 100400.6

  Deal Name: C mdcneing Turbiuc
lgnature Date
  i 2 j4-/ 00

ra.c 5

  ECO04401952

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S-4

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ENRON RISK ASSESSMENT AND CONTROL
DEAL APPROVAL SHEET

DEAL NAME: EcoElectrica-Working Capital	Date DASH Completed: 13-April 2000
Counterparty: EcoElectrica, L.P.	RAC Analyst: Daniella Caxneiro
Business Unit: Enron Caribbean Basin	Investment Type: Working Capital Facility
Business Unit Originator: Daniel Castagnola	Capital Funding Source(s): Balance Sheet
Public MPrivate	Expected Closing Date: 13 April 2000
Merchant [K7 Strategic	Expected Funding Date: 13 April 2000
!]Conforming 0Nonconforming	Board Approval: OPending DReceived DDenied ]N/A

RAG Recommendation: Proceed with Transaction DReturns below Capital Price DDo not Proceed

APPROVAL AMOUNT REQUESTED

Working Capital Facility
The Caribbean Basin Region is requesting approval to provide a short-term, $9.00 MM Working Capital Facility to Enron's
47.5% owned investment, EcoElectrica, L.P (the "Project"). The proceeds will be used to provide liquidity to cover expenses
of the Project for a period of not more than 12 months.

Enron Guarantee
Enron as sponsor of the Project is also requesting a $2.75 MM guarantee in order to release cash deposits held by Bank of
America securing an irrevocable stand by letter of credit entered into by the Project, as security for the payment for LPG to its
supplier. Mission Edison will provide a similar guarantee. The Guarantee is expected to expire in August 2000 when the
Project's facility begins running on LNG.

EXPOSURE SUMMARY

Working Capital Facility $9.00. MM
Enron Guarantee $2.75 MM
Total $11.75 MM

*This is incremental to the existing 533.5MMinitial equity investment in EcoElectrica, and the subsequent 595.0MMequity investment to unwind the "Churchill" FASB 125
transaction.
DEAL DESCRIPTION

Working Capital Facility
Enron Caribbean Basin wishes to provide the Project with a short-term working capital facility to pay for ongoing expenses
during the initial operating period, not expected to exceed 12 months. The facility will be an unsecured subordinated loan to
the Project, however, senior to all existing subordinated debt at the Project. This is senior to Enron's other positions in
EcoElectrica. The maturity will not exceed 12 months from the closing date, and the pricing is expected to be PRIME +
200bps with a default interest rate to include an additional 2%.

Summary of Key Terms:
 Tenor: up to 12 months.
 Security: Unsecured loan.
 Interest rate: Unsecured rate is a floating rate equal to PRIME plus a margin of 2.00% p.a.
 Default interest rate: 2.00% p.a. over and above the unsecured rate.
 Payment Schedule: Based on EcoElectrica's cash availability.
 Seniority: Proposed Working Capital Facility will be senior to Sub-notes Payable to Enron and Mission Edison, and GE
Preferred investment. Will be subordinated to senior debt.

ENE Guarantee
On July 1,1999 the Project established a $5.5 MM Irrevocable Standby Letter of Credit (the "LC") in favor of its current fuel
supplier, Dynegy Global Liquids, as security for the payment of liquefied propane gas pursuant to a contract entered into on
March 21, 1999. The LC, established with Bank of America N.T. & S.A. ("BOA"), is 100% cash collateralized, and the
owners, Enron and Mission Edison, desire to place corporate guarantees in lieu of the cash deposit held as collateral (50%
each). The $5.5 MM cash deposit will be released by BoA to the Project and used as additional working capital. The LC
expires on June 28, 2000, but will be extended until August 30, 2000, at which time Enron's guarantee will have also expired.



  4. E0004401954

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RAC Deal Approval Sheet

Deal Name: EcoElectrica -Working Capital

Working Capital Facility & Guarantee

  Sources Uses
Enron Balance Sheet $9.OOMM EcoElectrica, L.P. (operating $11.75MM
  expenses)
Enron Balance Sheet $2.75MM
Total $11.75MM Total $11.75MM

RETURN SUMMARY

Working Capital
RAC's capital price for the working capital facility is PRIME + 50bps, or 9.50% p.a. as of today. Based upon RAC's analysis
of the proposed working capital facility, RAC rates it the equivalent of a "BB"P'Ba2" or "E-7" risk.

The comparative analysis below indicates that Enron will be charging above market rates (prime + 200bps) for the working
capital facility requested. Net available cash flows for 2000 are based on the deterministic model provided by the deal team for
the analysis of the Churchill Unwind' transaction (DASH 30 March 2000).

  Senior Debt
Existing W/C Facility
  Proposed W/C Facility
Notes Payable
GE Preferred Investment

Net Available Cash Flows before proposed W/C Facility repayment
Interest payment on W/C Facility
Principal payment of W/C Facility
  Net Available Cash Flows after proposed W/C Facility repayment

  2000
26,186
  (855)
(9,000)
16,331

ENE Guarantee:
The RAC capital price for the ENE guarantee is 2.00%. This guarantee is also considered to be a "BB" /"Ba2" or "E-7" risk.
Enron, however, will not charge a guarantee fee to the project, since Mission Edison, the other 50% equity holder in
EcoElectrica, is putting up a guarantee in its ratable share of $2.75MM in the project at no cost. Therefore, there is no
economic detriment to Enron in not assessing a fee on the $2.75 MM ENE Guarantee.

ENE Guarantee

APPROVALS
Regional Originator
Region Management
Region Legal
RAC Management
Enron Capital Management
Office of the Chairman

Name

Daniel Castagnola

Avg. Int. Rates %DebtiTotal Cap

7.94%	70.87%
8.95%	3.53%
11.0%	1.06%
12.55%	4.01%
9.00%	12.34%

Avg. Int. Rates %Debt/Total Cap
2.00% 0.32%-

David Haug
Coralina Rivera or Ned Crady
Rick Buy or Dave Gorte
Andy Fastow or Jeff McMahon

Joe Sutton

  Si ature
1
  1401

  Date
Y/ Do



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t

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RAC Deal Approval Sheet Deal Name: EcoElectrica -Working Capital

Working Capital Facility & Guarantee

  Sources Uses
Enron Balance Sheet $9.00MM EcoElectrica, L.P. (operating $11.75MM
  expenses)
Enron Balance Sheet $2.75MM
Total $11.75MM Total $11.75MM

RETURN SUMMARY

Working Capital
RAC's capital price for the working capital facility is PRIME + 50bps, or 9.50% p.a. as of today. Based upon RAC's analysis
of the proposed working capital facility, RAC rates it the equivalent of a "BB"P'Ba2" or "E-7" risk.

The comparative analysis below indicates that Enron will be charging above market rates (prime + 200bps) for the working
capital facility requested. Net available cash flows for 2000 are based on the deterministic model provided by the deal team for
the analysis of the Churchill Unwind transaction (DASH 30 March 2000).

Avg. Int. Rates %Debt/Total Cap

  Senior Debt 7.94% 70.87%
Existing W/C Facility 8.95% 3.53%
  Proposed WIG Facility 11.0% 1.06%
Notes Payable 12.55% 4.01%
GE Preferred Investment 9.00% 12.34%

  2000
Net Available Cash Flows before proposed WIC Facility repayment 26,186
Interest payment on W/C Facility (855)
Principal payment of W/C Facility (9,000)
  Net Available Cash Flows after proposed W/C Facility repayment 16,331
ENE Guarantee:
  The RAC capital price for the ENE guarantee is 2.00%. This guarantee is also considered to be a "BB"P'Ba2" or "E-7" risk.
Enron, however, will not charge a guarantee fee to the project, since Mission Edison, the other 50% equity holder in
EcoElectrica, is putting up a guarantee in its ratable share of $2.75MM in the project at no cost. Therefore, there is no
economic detriment to Enron in not assessing a fee on the $2.75 MM ENE Guarantee.
  Avg. Int. Rates %DebuTotal Cap
ENE Guarantee 2.00% 0.32%

  APPROVALS Name gn ture Da
Regional Originator Daniel Castagnola,Q .,~ Q0
Region Management David Haug
  Region Legal Coralina Rivera or Ned Crady
RAC Management Rick Buy or Dave Gorte
  Enron Capital Management Andy Fastow or Jeff McMahon
Office of the Chairman Joe Sutton

C:\My Documents\Ecoelectrica DA1 f Ecotlecuica WorkingCapita1Facility_o41300-'715pm.doc

ECO04401956

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RAC Deal Approval Sheet

Deal Name: EcoElectrica _Working Capital

Working Capital Facility & Guarantee

  Sources Uses
Enron Balance Sheet $9.00MM EcoElectrica, L.P. (operating $11.75MM
  expenses)
Enron Balance Sheet $2.75MM
Total $11.75MM Total $11.75MM

RETURN SUMMARY

Working Capital
RAC's capital price for the working capital facility is PRIME + 50bps, or 9.50% p.a. as of today. Based upon RAC's analysis
of the proposed working capital facility, RAC rates it the equivalent of a "BB"/"Ba2" or "E-7" risk.

The comparative analysis below indicates that Enron will be charging above market rates (prime + 200bps) for the working
capital facility requested. Net available cash flows for 2000 are based on the deterministic model provided by the deal team for
the analysis of the Churchill Unwind transaction (DASH 30 March 2000).

  Senior Debt
Existing W/C Facility
  Proposed W/C Facility
Notes Payable
GE Preferred Investment

Net Available Cash Flows before proposed WIC Facility repayment
Interest payment on W/C Facility
Principal payment of WIC Facility
Net Available Cash Flows after proposed WIC Facility repayment

  2000
26,186
  (855)
(9,000)

16,331

ENE Guarantee:
The RAC capital price for the ENE guarantee is 2.00%. This guarantee is also considered to be a..'BB"P'Ba2" or "E-7" risk.
Enron, however, will not charge a guarantee fee to the project, since Mission Edison, the other 50% equity holder in
EcoElectrica, is putting up a guarantee in its ratable share of $2.75MM in the project at no cost. Therefore, there is no
economic detriment to Enron in not assessing a fee on the $2.75 MM ENE Guarantee.

APPROVALS
Regional Originator
Region Management
Region Legal
RAC Management
Enron Capital Management
Office of the Chairman

  Avg. Int. Rates %Debt/Total Cap
ENE Guarantee 2.00% 0.32%

  Name Signature Date
Daniel Castagnola
David Haug
Coralina Rivera or Ned Crady

Rick Buy or Dave Gorte
Andy Fastow or Jeff McMahon

Joe Sutton

C:\MyDocuments\Ecoelectrica\DASH EcoElectrica_WorkingCapitalFaciliry 041300-715pm.doc Page 2
  E0004401957



Avg. Int. Rates %Debt/Total Cap

7.94%	70.87%
8.95%	3.53%
11.0%	1.06%
12.55%	4.01%
9.00%	12.34%

=XH003-01271


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RAC Deal Approval Sheet Deal Name: EcoElectrica -Working Capital
  Global Finance Summary (addendum to DASH)
1. Transaction Summary

Total Deal/Project Capital Commitment
Less: Financings
Less: Syndications
Net Enron Investment

  Amount ($000)
$11.75
  -0-
-0-
$11.75

2. Investment terms and pricing: U Market 1] Above Market 0 Below Market
Describe (if necessary):

3. Financing terms and pricing:
Describe (if necessary):

4. Legal or practical liquidity restrictions:
Restricted

  Describe (if necessary):

5. Any recourse to Enron (other than investment):
Describe (if any):

O Market 0 Above Market 0 Below. Market
1] Unrestricted U Legally Restricted 0 Practically

[] Recourse O No Recourse

6a. Business unit intent to syndicate: 1] None 0 Partial O All
Describe (if necessary): Due to the short-term nature of the commitments, syndication is not expected.

6b. Intended Enron hold period:
Guarantee: 6 months
  Working capital facility: 12 months

6c. Likely Syndication Market:

0 Industry/Strategic Partner
0 Capital Markets
0 JEDI 2
0LJM1or2
l] Other:

0 Direct Private Equity
O JEDI 1
  0 Enserco
0 Condor
O Margaux

6d. Is this a JEDI 2 "Qualified Investment"? 0 Yes 1] No
4,2e
Global Finance Representative:
  ~~
Signature Name (Printed) Date

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S-5

m

0
0
.p
P
0
C0
01

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lVl-~,^Iat //W"\
  ENRON RISK ASSESSMENT AND CONTROL g g,
DEAL APPROVAL SHEET

  DEAL NAME: Elba Island LNG Terminal Date DASH Completed: April I1, 2000
Counterparty: El Paso Corp./El Paso Merchant Energy RAC Analyst: Farhad Ahad
  Business Unit: Enron Global LNG/CALMS Investment Type: Equity/Demand Charge
Business Unit Originator: Doug Rotenberg Capital Funding Source(s): Balance Sheet
DPublic Private Expected Closing Date: April 12, 2000
  OMe+-chant ]Strategic - Expected Funding Date: Elba Island - October 2003
!Conforming ONonconforming Board Approval: OPending DReceived ODenied EN/A
RAC Recommendation: OProceed with Transaction ]Returns below Capital Price ODo not Proceed

APPROVAL AMOUNT REQUESTED
The Enron Global LNG Group is requesting approval to enter into a 17-year LNG terminal capacity arrangement at a cost of
$11.7MM-S 13.1NWyear with El Paso Merchant Energy (EMS) which holds 100% of the capacity of the Elba Island (Georgia) LNG
terminal ("EIT"). Enron Global LNG'ss payment and obligations under the capacity agreement are to be guaranteed by Enron Corp.

Present Value of Expected Capacity Payments, Capital Price @ 17% 566.1 million ($2002)

FINANCIAL EXPOSURE SUMMARY

This Transaction: Nominal: $210.0 million; Discounted @ 17%: $66.1 million (52002)

DEAL DESCRIPTION
The Enron Global LNG group (ELNG) has an option for LNG terrninalling capacity and an option to sell 62 TBtu per year of natural
gas produced from LNG to El Paso Energy or its affiliates at the EIT for a seventeen year period commencing in the first quarter of
2002. The strike price for gas sold under this option is Henry Hub plus $0.02M fbtu. This contract/option has an exit provision,
which gives ELNG the right to walk away at no cost, provided this option is exercised no later than April 12, 2000. In exchange for
the right to sell this quantity of regassified natural gas, Enron pays El Paso a base fee for cost of service for 62 TBtu at the EIT of
approximately $12 million per year and variable fees based upon throughput expected to approximate $6 million per year. Base fees
escalate each year, reaching approximately $13 million in 2018, the last full year of this contract. Enron is committing to pay demand
charges at EIT but is under no obligation to deliver LNG. EME is committing to take LNG (and pay for if not taken) properly
nominated by ELNG. EIME's obligations are secured by El Paso Corp.

The rationale for ELNG exercising this option and entering into this LNG terminalling agreement is to use the EIT for its own projects
on a long-term basis (Jose, Venezuela LNG project), to sell Enron's rights to a third party for that entity's project (e.g., LNG projects
from Trinidad, Algeria, or Nigeria), or to operate the EIT as a merchant facility and purchase LNG from a third party and sell it to
EMI and/or arrange short-, medium-, or long-term trades with third parties using the EIT and EME as the offtaker.

The EIT LNG facility was constructed by Sonat and was operational between 1977-1980, but it has been closed since 1980 as
deregulation in the industry and lower than projected U.S. natural gas prices made this terminal uneconomic. The writedowns of the
EIT (original cost basis $400MM) and the level of U.S. natural gas prices prevailing currently and projected on a forward basis have
improved the economics of the terminal and thus re-commissioning of EIT is scheduled by 412002. The proposed ELNG agreement
represents 36% of the EIT capacity and 60% of the output of the lose LNG facility. British Gas has control of the remaining 64% and
will pay approximately $20 million annually for this capacity to support its Trinidad LNG project.

ELNG has the right to sell regassified LNG to El Paso at Henry Hub + $0.02 in a market that following the reactivation of the EII' will
trade at approximately Henry Hub less $0.05. ELNG can either deliver LNG when the option is in the money, firm up delivery if a
higher price is offered or divert LNG volumes to higher value markets.
TRANSACTION SOURCES AND USES OF FUNDS ($000)

Uses for 17-year life of contract: nominal $210.0 million; PV @ 17%, $66.1 million ($2002)
Source of Funding: Enron Balance Sheet

G~Ca,vne.,Gav~l.I~mwWambrr6~0h5 N~ ~ 2C11,enU~y. Jet

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RAC Deal Approval Sheet Deal Name: Elba Island LNG Terminal
RETURN SUMMARY - (Merchant Analysis)
Discount Rate Components Capital Price
Risk-free rate 6.S4%
Equity Premium 5.02%
Transaction premiu_m_ 5.14%
RAC Capital Price (All-in) 17.00%*

Probabilistic DCF Cumulative PV @ Capital
by Component (3' Party Shin)' fl R Price
Cash Outflows + Outstanding NA ($63,960)
Ongoing Cash Flows _ NA $61,259
Total NA ($2.701)

The capital price for this project was determined assuming it is equivalent to the market equity return for a merchant power plant in
the U.S.

  Cash Flow Summary
$100,000 Curl Ongoing
$50,000 D Fees
s0 Outflows
5(50.000) Cumulative P95
$(100,000) ---.--Terminal Value
5(150,000) Cumulative PS
  S(200,000) -s-- Expected cumulative cash flows
$(250,000) --f- Elapsed
1 3 5 7 9 11 13 15 17 19
Years

The origination team and RAC agreed upon and constructed a model to define the expected merchant risk/returns of ELNG's
proposed terminal capacity commitment to ElT. This merchant analysis assumes no dedicated ELNG source of LNG supply (i.e., the
Jose Project or third party long-term contract) to utilize the EIT. The origination team developed a merchant LNG analysis (global
supply/demand balance, economics to producer/buyer, attached) that suggests in the five year time horizon from the reactivation of the
EIT that there is adequate excess LNG supply to acquire LNG volumes and economically utilize ELNG's terminal capacity.
Following the initial five year time horizon, three outcomes were modeled on a probabilistic basis, (1) ELNG's rights are sold.
assigned or otherwise conveyed to a third party with ELNG's obligation effectively being: terminated (probability 20%), (2) ELNG
pays full terminal charges for years 6 to 17 of the contract and does not deliver a single cargo of LNG to EIT (probability 20%), (3)
ELNG acquires merchant cargoes year to year with the volume available driven by a probabilistic analysis of the forward U.S..gas
price curve, i.e., the higher the gas prices the more attractive the EIT capacity to the LNG producer (probability 60%). See
Attachment I for the returns projected under each scenario on a deterministic basis. Zero cargoes were assumed to be available below
S1.90/MMBtu with the volume scaling up to 12 cargoes (two thirds ELNG's entitlement of the EIT) at S3.40JMMBtu.

TRANSACTION UPSIDES/OPTIONALITY - INTEGRATION WITH GLOBAL LNG STRATEGY

An upside of the ETT to ELNG is that it creates a market for up to 60 percent of the proposed lose (Venezuela) LNG project's output.
If Ertron elects to exit the EIT, the offtake represented by EIT could be replaced, however, it will likely cause a delay of 6 to 12
months. ELNG is developing several high value markets in Puerto Rico and the Dominican Republic, working with E=n Europe to
supply the ARCOS power plant (1200MW) in Southern Spain. working with Union Fenosa on an LNG regas/LNG sale into Spain and
the Dominican Republic and further liquid markets may open from time to time. The contract structure of Jose LNG provides for a 19
month window commencing September 2000 (with a total financial exposure of 54MM) to complete the execution and financing of
the project and back-to-back the deals.

ELNG has the right to elect a Redelivery Option and convert the sale into a sell/buy with a redelivery to ELNG of regassified LNG at
the tailgate of EIT. With such election, ELNG can effectively make regassified LNG available to ENA (or directly to a third party)
for medium or long-term sales. The benefit of this option is expected to be $0.05/MMBtu to $0.15/IvIMBtu, provided a pipeline is
built from the EIT to either the Carolinas or Florida. The current gas sales agreement with El Paso for the BIT provides a price of plus
$0.GZ%1NMtu basis to Henry Hub, a premium to ENA's estimate of the market price of gas at the EIT today of negarive
$0.0SIMMB to basis to Henry Hub.

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RAC Deal Approval Sheet Deal Name: Elba Island LNG Terminal

This investment is a strategic fit and a catalyst for growth for the Caribbean and the Atlantic LNG businesses. The EIT market is
unique and complementary to ELNG's other potential markets. The flexibility provided by EL.NG's arrangement with EME is
unmatched in the global LNG marketplace. With ELNG's put/demand charge structure with EIRE, ELNG can offer demand charge
structures to third parties that no other suppler can provide in a market that is extremely wary of long-term take or pay commitments.

The project may be able to utilizc shipments from the Hoegh Galleon (formerly; Mystic Lady), which Enron has on a 17-year charter
commencing late this year. Other possible uses of the Hoegh Galleon are supplying LNG to the Metgas Project in India. Availability
of the Hoegh Galleon for shipments to the EIT serves to mitigate a material risk of this investment, and assuming it is used in
connection with the EIT for the full term of its charter, this increases the NPV by approximately $11 million.

Further, GPG is working with Southern Natural Gas on a new pipeline to Florida which may be included as part of our joint Florida
operations (Citrus). This pipeline could add, to the extent capacity is taken by ENA or it's customers, to ENA is marketing ability in
this key gas demand area.

EXIT STRATEGY

This contractual obligation is self-liquidating at the conclusion of its seventeen-year term. The planned business strategy is to (1)
utilize the EIT capacity and gas sales option with. El Paso as the anchor buyer for the Jose LNG project (in which case the payment
obligation will be to the account of a project company, with the Enron Corp. guaranty remaining in place), (2) to sell, assign, or
subcontract the EIT capacity to a third party with long-term LNG supply and/or transportation, or (3) utilize the EIT capacity and gas
sales option in a merchant operation (economics described herein). There is no assurance that either alternatives (1) or (2) will be
available to Enron at present.

RISK MATRIX

Description Of Risk	Miti tion/Comments
 Natural gas price variability and	 The contract sales prices to El Paso are based upon pricing
volatility in the U.S market	indices commonly used in the natural gas industry in the U.S.
 Low natural gas prices in the local	As a consequence, both the pricing variability and volatility
U.S. market in particular and/or in	can be limited through the use of a variety of price hedging
the U.S. market in general may	instruments.
make merchant LNG importation	 Enron could utilize a swap for the first five years of this
into the U.S. uneconomic (Henry	transaction: No swap or other hedging agreements are
Hub prices below approximately	currently in place. In the absence of a long-term LNG supply
$1.90fMmbtu, assuming current	contract, it is not advisable to hedge fully the EIT natural gas
LNG prices and shipping costs,	price exposure for the term of the EIT contractual obligation.
may make this investment	
uneconomic).	
Constraints on LNG Merchant	 The Enron-controlled Hoegh Galleon is presently the only
Shipping Capacity	available merchant LNG tanker. It should be noted that
	Enron has other projects that may be better uses of the Hoegh
	Galleon, such as Metgas. Value created in the other projects
	will offset the loss of the Hoegh Galleon's value to Enron
	value at Elba. Other LNG tankers are available seasonally
	for merchant service today (see attached Merchant LNG
	Analysis) as are tankers under the control of LNGsuppliers.
	The high cost of LNG tankers and the inability to finance
	these ships for merchant service makes a large fleet of such
	tankers unlikely.

C:mnnen'QwW mouWaenrr~,~0n$N. I:OOma i,, oc



:XH003-01276

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RUC Deal Approval Sheet Deal Name: Elba Island LNG Terminal
RISK MATRIX (Continued)

Descri tion O Rial:	I MitigationJComments
 Other existing or future LNG	 A risk exists that other LNG terminals may offer more
terminals may be more attractive	attractive economics than the EIT. The Cove Point, MD
locations for merchant LNG	terminal may be re-commissioned by Columbia
shipments than the BIT, reducing	Energy/Nisource in the same timeframe as the BIT. Once a
throughput at the EIT even if U.S.	baseload supply of 500,000 MMBtulday is secured, this
gas prices support LNG	facility may begin to attract merchant volumes away from
importation.	EIT. The model for this invesrrnent assumes a 20%
	probability that there is no throughput at the EIT because of
	either low U.S. natural gas prices or more competitive LNG
	terminals.
 Customer's Failure to Take	 El Paso has a firm obligation to purchase and receive all
	volumes confirmed and delivered by Enron. backed by a
	100% take-or-pay commitment and a parent guaranty from
	the El Paso Energy Corporation BBBJBaa2 .
 Scheduling Risk- Annual Program	 Enron has full take-or-pay rights for volumes Enron has
 Scheduling Risk - Operational	available for delivery that cannot be scheduled (due to a
Problems	failure or El Paso) once the LNG Terminal is reactivated.
	The terminal is fairly tight with Enron and BG product.
	There is a risk that all of Enron's entitlement cannot be
	scheduled or delivered. Enron must plan adequate shipping
	and access to a liquid market in Puerto Rico or Lake Charles
	(an open access facility) to mitigate this schedule risk at Elba
	Island.
	 Enron's right to its scheduled Arrival Windows at the LNG
	Terminal is absolute. In the event o f any operational
	problem experienced by Enron (e.g. shipping delays), the
	opportunity loss is limited to the affected Arrival Windows.
	Business interruption insurance will be secured for such
	situations. Operational problems at the LNG Terminal itself
	will, under Southern LNG's tariff, be generally characterized
	as "force majeure". Other operational problems will not
	relieve El Paso of its obligations.
	 A substantial lack of scheduling capacity over three years
	gives Enron the right to cancel the contract.
 Failure of LNG Supply	 Enron plans to secure protection through alternate supply
 Failure to Deliver LNG	locations.
 Failure to Obtain LNG Shipping	 Enron has "force majeure" protection for ship failure.
after Scheduling Delivery at the	 Enron has no firm delivery obligation and its cover exposure
BIT.	is limited to cargoes of LNG that have been confirmed at the
	time any problem occurs. This will be a maximum of two
	cargoes.
	 Enron has the right to supply domestic replacement gas to
	cover. Cover is capped at 500% of Henry Hub. Typical
	replacement gas should be less than $0.1OIMMBtu
	 Enron will make its own ship charter arrangements and is
	negotiating the utilization of British Gas's spare ship
	capacity dedicated to the Trinidad-Elba trade.
	 Enron can purchase and deliver LNG on an "ex-ship" basis.
 Regulatory Risks and Related	 Enron's access -to the Elba Island terminal regulator (FERC)
Concerns (Cost Overruns)	is indirect, since El Paso is Southern LNG's customer.
	Although Enron has agreed to limited protest rights around
	the reactivation of the LNG Terminal, it can breach this
	obligation by actively protesting with the FERC, but at the
	loss of its Rate Moratorium.
	 En on has the right to protest costs overruns (above a certain
	minimum at the FERC. The British Gas consortium will



!:.!

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PL-kC Deal Approval Sheet Deal Name: Elba Island LNG Terminal
also be a potentially strong protesror as well.
   Enron's exposure to vaporizer improvement costs is capped.
Also, Enron will control the construction and installation of
the nitrogen treating facilities.
  In addition, Enron can rely on the FERC to take a more
active roll in judging the prudency of cost overruns in light
of recent initiatives in this specific area.

KEY SUCCESS FACTORS

  NA Poor Excellent
Core Business I I X
Strategic Fit I I X
Upside Potential X
Management X I
Risk Mitigation I X

  OTHER RAC COMMENTS:

In the absence of a dedicated LNG supply contract and related LNG tanker shipping contract from Jose LNG project or a third party,
this is considered a relatively speculative contractual investment with an assumed 20% probability of no revenue generation to offset
the base terminalling fee after five years of operation. Other investments in other LNG terminals, particularly the Cove Point,
Maryland LNG terminal, may provide (when nearly fully utilized) more attractive economics for merchant LNG importation.
However. with a successful conclusion of the lose LNG project or robust growth of the Atlantic LNG trade, the EIT contractual
investment on a project or merchant basis may produce returns exceeding its capital price.

APPROVALS
Regional Mgmt.
Tax
Legal
RAC Management
Enron Capital Management
ENE Management
Originator
Other

Name

David Haug
Keith Gerken

Nancy Corbet

Rick Buy/David Gorte
Andy Fastow/Jeff McMahon
Jeffrey Skilling
Doug Rotenberg
  jZtGK ~-E2GSi~Ks~
7OS,e 5v-s7Ot)



a~La~awa~ee~aat.Mos~avlamM ~t0~tw ~ s~anwine.ae

5

  ate
~- o0
  ao

Y t w
4 i of

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  RAC Deal Approval Sheet

ATTACHMENT I.
Three Scenarios for ELT for 17-year term of the contract.

Deal Name: Elba Island LNG Terminal

	Deterministic	
Scenario	PV @ 1717c	Explanation .
1. 5 years of full merchant	$23 million	The lack of liquid markets and the relative excess of global LNG supply
utilization, then		provides for economic utilization of this terminal capacity for the initial five-
conveyance of the		years. With excess capacity in Algeria and expansions in Nigeria, Algeria and
terminal capacity		Trinidad, it is assumed that this capacity would be attractive as a baseload
payment obligation to a		market or as a "balancing" market due to the demand charge/put structure.
third party (probability		
20%)		
2. 5 years of full merchant	$2 million	The five year global LNG supply excess holds but thereafter no LNG and
utilization, then payment		transportation capacity is available (on economic terms to both parties) to be
of terminal capacity		utilized at the EIT terminal. Only likely with sustained (years 6 to 17) low gas
charges for years 6 to 17		prices (below 51.90(MMBtu). wide and sustained price differential between
(probability 20%)		U.S. and European gas prices, or lack of availability of LNG tankers.
3. 5 years of full merchant	$24 million	The five-year global LNG supply excess holds but thereafter LNG is only
utilization, then		available under certain U.S. gas price environments. LNG tanker availability is
utilization driven by the		assumed if U.S. natural gas prices arc sufficient.
U.S. gas price		
environment with no		
volumes available below		
$1.90IMMBtu and 12		
cargoes available at		
$3.40IMMBtu and higher		
(probability 60%)		

Hence, from the deterministic Base Case the first five years' value is $23 million, and the values for the remainder of the term for
Options 1, 2 and 3 are $0, ($21 million), and $1 million, respectively. The expected probabilitistic PV is lower than any of these
factors due to the probabilistic modeling of the possibility of uneconomic operations in the first five years and thereafter.

a~~~~~+outaa~a,rs~a.~sw+noa~a:~y.~

6

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r Global Finance Summary (addendum to DASH)
1. Transaction Summary

Total Deal/Project Capital Commitment
Less: Financings
Less: Syndications
Net Enron Investment

Amount ($000)
$210,000
  -0-
-0-
$210,000

2. Investment terms and pricing:
Describe (if necessary):

21 Market 0 Above Market 0 Below Market

3. Financing terms and pricing: 0 Market 0 Above Market 0 Below Market
Describe (if necessary):

4. Legal or practical liquidity restrictions: 0 Unrestricted 0 Legally Restricted  Practically
Restricted

  Describe (if necessary): Permission is required by El Paso.

5. Any recourse to Enron (other than investment): El Recourse 0 No Recourse
Describe (if any):

  This performance guarantee will be offset by LNG sales.

6a. Business unit intent to syndicate: i] None 0 Partial 0 All
Describe (if necessary):

6b. Intended Enron hold period:

This guarantee is NOT a capital lease. Enron is required to have this guarantee for a period of 17 years.

6c. Likely Syndication Market: 0 Industry/Strategic Partner 0 Direct Private Equity
0 Capital Markets 0 JEDI 1
  0 JEDI 2 0 Enserco
0 LJM I or 2 0 Condor
 Other: 0 Margaux
6d. Is this a JEDI 2 "Qualified Investment"? O Yes  No


  ~A~.i:! Gas c...n i4 ' 0 0
Global Finance Representative:
  Signature` Name (Printed) Date


E0004401966

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ENRON RISK ASSESSMENT AND CONTROL

IDEAL APPROVAL SHEET

DEAL NAME: Georgia Army	Date DASH Completed: February 11, 2000
Counterparty: U.S. Military	RAC Analyst: Kate Lucas
Business Unit: EES	Investment Type: Structured Credit
Business Unit Originator: John Carr	Capital Funding Source(s): Balance Sheet
Public Private	Expected Closing Date: June 30, 2000
Merchant OStrategic	Expected Funding Date: 3`d Quarter 2000
Conforming GNonconforming	Board Approval: OPending Received ODenied ON/A
RAC Recommendation: Proceed with Transaction	Returns below Capital Price ODo not Proceed

APPROVAL AMOUNT REQUESTED

Capital Commitment $ 68.1 million
Bid Bond Amount N/A

EXPOSURE SUMMARY

This transaction: $ 68.1 million
Total $ 68.1 million

DEAL DESCRIPTION

Enron Federal Solutions, Inc. ("EFSI") proposes to enter into a 50-year contract with the U.S. Military Defense Energy Support
Center ("DESC") wherein EFSI will take ownership of the electric, gas, water, and wastewater systems at four military
installations in the State of Georgia. These installations are Fort McPherson, Fort Gillem, Fort Stewart, and Hunter Army
Airfield.

EFSI will take ownership of these assets at no charge, and will instead commit $68.1 million in capital to be drawn over the
next two years for improvement projects. These projects include the following services: (1) project identification, (2) design,
(3) financing, (4) construction of energy infrastructure, and (5) O&M services on energy assets. EFSI has entered into teaming
agreements with Black & Veatch, an engineering firm, to subcontract the operations and maintenance tasks under the contract.

The deal is structured such that this capital and any interest payments are recovered over the next 20 years. Each month for the
50-year duration of the contract, the government will pay EFSI a fixed monthly sum for operations and maintenance, indexed
to the government's indexes for labor and materials. The subcontractor has also agreed to fix its fees, adjusted at these same
indexes. At the end of the 50-year contract, the military bases will take ownership of the utility systems.

The capital costs for this project will be recovered. at an interest rate of 275 by above treasury bonds over the course of 20
years. The remaining 30 years of the contract, the government will pay a fee reflective of the O&M costs, plus a margin of
12.8%

TRANSACTION SOURCES AND USES OF FUNDS ($ thousands)
  Sources Uses
Enron Equity $68,100 Improvement Projects $68,100

Total $68,100 $68,100

RETURN SUMMARY

  PV @ Cumulative
Return Components: Capital Price IRR
Cash Outflows (capital draws)' ($ 52,675) -
Acct mgmt/billing services ($ 1,260) -
Cash Flows (Capital) $ 69,853 15.62%
Cash Flows (O&M) $ 3,373 -
Total NPV $ 19,292 15.62 96 1

Capital Price Components
Risk free rate (%): 6.51%
Equity/Credit premium* (%): 0.75%
Transaction-Specific" (%): 2.00%

RAC CAPITAL PRICE: 9.26

E-Rating

t Not equal to the nominal $68.1 million because it is drawn over the course of two years.
* Spread of U.S. Government Agencies over U.S. Treasuries
** Includes Subcontractor Performance Risk



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RAC Deal Approval Sheet

Deal Name: Georgia Army

TRANSACTION UPSIDES/OPTIONALITY

The government has indicated that at the end of the project time frame, the contractor could be awarded an extension to
continue operations indefinitely.

EXIT STRATEGY

Not applicable to a strategic investment.

RISK MATRIX

DESCRIPTION	MITIGATION/COMMENTS
Previous issues with prospective subcontractor	
 Enron has had some dissatisfaction with Black	 This situation will need to be worked out before EFSI can enter
& Veatch in the past with respect to power	into this relationship with Black & Veatch. If our relationship
projects. The Enron Office of the Chairman	with Black & Veatch does not improve, EFSI will need to find
has suspended any new projects with Black &	a different subcontractor. This would require price re-
Veatch until this situation is resolved to	negotiation, which is likely to shrink EFSI's margins on this
Enron's satisfaction.	deal.
Performance Risk	
 As part of the bid process, EFSI has submitted	 EFSI has locked in prices with the subcontractor before
cost and timing estimates to the government.	entering into the contract with the government. As such, cost
EFSI has based its fees to the government	overruns will be passed through directly to the subcontractor,
according to these estimates. Therefore cost	with a 10% risk premium built into the price.
overruns would hurt EFSI's margins on the	 Enron has conducted joint due diligence with Black & Veatch
project.	with respect to the condition 'of the systems. Cost estimates
 Given that Enron has been dissatisfied with	from Black & Veatch are based on this assessment of the
Black & Veatch in the past, it is possible that	condition of the utility equipment at the installations.
they will not perform to standards suitable to	 EFSI's commitment to using -Black & Veatch as the O&M
EFSI.	subcontractor is only for one year. In the event that EFSI is
 In the event that there are significant utility	dissatisfied with the performance of Black & Veatch, the
outages, the government may elect to reduce	contract can be renegotiated or terminated at this time.
its payment to EFSI for the month in which	 EFSI will need to negotiate with Black & Veatch that any
these outages occur.	reductions in the tariff paid by the government to EFSI as a
	result of poor performance on the part of Black & Veatch will
	be deducted from payments made to Black & Veatch by EFSI.
Termination Risk	
 As with other government contracts, this	 EFSI intends to include a "make whole" provision in the
agreement includes a "termination for	contract, ensuring that the government would reimburse for
convenience" clause.	costs incurred in the event the termination option is exercised.
	 The government's liability will be only EFSI's unrecovered
	capital investment at the point of termination plus any
	reasonable documented costs the contractor incurs as a result of
	contract termination.
	No termination schedule has as of yet been provided to RAC.
	This schedule will be provided to the government at signing.

C:\TEMP\DASH-georgia_army 02012000.doc

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MAI

C Deal Approval Sheet Deal Name: Georgia Arm
Syndication Risk
   Though the counterparty is an agency of the U.S. government,
the financing is imbedded in the transaction and, as such, may
be difficult to syndicate on terms favorable to EESO. As noted
above, this transaction is considered to be strategic, mitigating,
to some degree, the importance of this consideration. The deal
fee paid by the government includes a 12.18% margin over the
mid desk price and financing at 275 by above the relevant
maturity treasury bond.

KEY SUCCESS FACTORS

	NA	Poor Excellent
Core Business		X
Strategic Fit		X
Upside Potential	X	
Management	X	
Risk Mitigation		x

C:\TEMP\DASH-georgia army_02012000.doc

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RAC Deal Approval Sheet

Deal Name: Georgia Army

OTHER RAC COMMENTS:

The current teaming agreement with Black & Veatch has prohibited Enron from entering into talks or negotiations with backup
subcontractors. Therefore, if Enron is dissatisfied with Black & Veatch's performance, a new subcontractor contract would
need to be negotiated. It is uncertain whether terms as favorable as those negotiated with Black & Veatch would be reached
with another subcontractor, however the deal team believes it may be possible to contract with other areas of Enron.

As the costs and revenues are fixed over the life of the contract and therefore known to a reasonable degree of certainty, RAC
did not perform a probabilistic simulation of the transaction financial model.

APPROVALS

Legal
EES CEO

RAC Management
Enron Global Finance
ENE Management
ENE Management

Name

Vicki Sharp
Lou Pai

David Gorte/Rick Buy
Andy Fastow/Jeff McMahon
Joseph Sutton
Jeffrey Skilling

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RAC Deal Approval Sheet

Deal Name: Georgia Bases -- Hunter, Stewart,
McPherson, Gillem (Federal Government)

Global Finance Summary (addendum to DASH)

1. Transaction Summary

Total Deal/Project Capital Commitment
Less: Financings
Less: Syndications
Net Enron Investment

2. Investment terms and pricing:
Describe (if necessary):

  Amount ($000)
$68,100
  -0-
-0-

  $68,100

O Market ZAbove Market O Below Market

U.S. Agency credit priced at above current market spreads. The financing rate will be fixed at the 20-year
Treasury rate existing on the date of closing plus 2.75%. We expect to sell the receivable at a rate approximately
equal to average life Treasurys plus 1.90%.

3. Financing terms and pricing:

Describe (if necessary):

4. Legal or practical licuidity restrictions:
Describe (if necessary):

5. Any recourse to Enron (other than investment):
Describe (if any):

6a. Business unit intent to syndicate:
Describe (if necessary):

6b. Intended Enron hold period:

6c. Likely Syndication Market:

O Industry/Strategic Partner
O Capital Markets
O JED12
OLJM1or2
O Other:

O Below Market

0 Practically Restricted

I /No Recourse

Cd3 All

O Direct Private Equity
O JEDI 1
O Enserco
Q Condor
0 Margaux

6d. Is this a JEDI 2 "Qualified Investment"? 0 Yes eN o

  LAAA f /3rzA 7-T
Global Finance Representative:
  Signature Name (Printed) ate



XHO03-01286

O Market 0 Above Market

  Unrestricted O Legally Restricted

O Recourse

O None O Partial

Intend to sell on or about the date of contract award.

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S-7



m

  C)
0
0
.r,
0
C0
w

EXH003-01287


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ENRON RISK ASSESSMENT AND CONTROL
DEAL APPROVAL SHEET

	
DEAL NAME: Hurricane	Date DASH Completed: 1/28/00
Counterparty: Texaco	RAC Analyst: Tyrell Harrison / Jeff Soo
Business Unit: ENA Gas Assets	Investment Type: Equity
Business Unit Originator: Greg Sharp/Harold Bertram	Capital Funding Source(s): Balance Sheet
OPublic OPrivate	Expected Closing Date: 1/00
DMerchant Strategic	Expected Funding Date: N/A
MConforming ONonconforming	Board Approval: Pending DReceived DDenied ON/A
RAC Recommendation: ]Proceed with Transaction DRetums below Capital Price DDo not Proceed
APPROVAL AMOUNT REQUESTED	
Capital Commitment $225,500M	
Bid Bond Amount NA	

EXPOSURE SUMMARY
  This transaction: $21,000M
Total $21,000M

DEAL DESCRIPTION
ENA is proposing to form a NewCo with initial assets consisting of ENA's LRC (Louisiana Resources Pipeline Co. and
Louisiana Gas Pipeline), Napoleonville storage facility and related contracts and Texaco's Bridgeline pipeline, Sorrento
storage facility and related contracts. In order to maintain trading capabilities, ENA will keep 150 MMcfd of firm
transportation capacity on LRC and 2.5 Bcf of storage capacity at Napoleonville. Entering into NewCo with Texaco is
preferable to an outright sale since extensive discussions/negotiations with potential acquirers has led Enron to believe that a
sale of LRC/Napoleonville would result in less value to Enron.

Since LRC is captive to one supply area at Stingray/Sea Robin on the West side of the Mississippi corridor, Enron has been
unable to benefit from long-term sale opportunities that are typically found on the East side. However, by forming a joint
venture with Texaco's Bridgeline pipeline, Enron would be able to participate in these long-term marketing opportunities. and
realize trading profits from basis blowouts in the area. Increased electric load is expected to result in greater price and volume
volatility, which should yield attractive trading profits. NewCo would be one of the largest gas suppliers in Southeastern
Louisiana and would have an opportunity to optimize the combined gas supply and sales portfolio. Further, ENA expects to
avoid significant capital expenditures that would have been necessary during the next several years to maintain the
competitiveness of LRC.

The transaction is envisioned as a combination of Texaco's marketing franchise and ENA's trading/risk management and
financial engineering strengths. Staffing for NewCo will be sourced from each company's respective strengths (i.e., marketers
from Texaco and traders from Enron), with employees assigned to work for NewCo but continuing to be employed by their
respective employers.

Economics of NewCo will be 60/40 TI/ENE, but control will be shared 50/50. As shown below, the GP of NewCo will be a
50/50-controlled LLC. Bridgeline will be kept as a subsidiary of NewCo in order to, amoung other things, isolate historical
liabilities of the business. LRC will be merged into NewCo. Separately, ENA will enter into contractual arrangements for 150
MMcfd of firm pipeline capacity and 2.5 Bcf of storage in order to maintain existing trading opportunities.



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RAC Deal Approval Sheet		Deal Name: Hurricane	
TRANSACTION SOURCES AND USES OF FUNDS		
	Sources		Uses
Existing Pipeline	$204,500	Formation of NewCo Assets	$225,500
Assets			
Equity Injection	$21,000		
Total	$225,500		$225,500
			
RETURN SUMMARY'			
	PV @ Cumulative		
Return Components:	Capital Price IRR	Capital Price Components	
Cash Outflows	(20,596) -	Risk free rate (%):	6.72%
Fees	$0 -	Equity/Credit premium (%):	5.02%
Intermed. Cash Flows	$55,597 -	Country Premium (%):	-
Terminal Value	$7,147 -	Transaction-Specific (%):	-0.74%
	Total NPV	$42,148 NA			RAC CAPITAL PRICE:	11.00%	
							
E-Rating	N/A	Relative upside ratio	0.994

1: The returns and capital price are presented on an unlevered basis.

10.0%
9.0%
8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
I
  1.0%
0.0%
i

NPV @ Risk-Free Rate
Adjusted for Sovereign Premium

P5

10
  2 r n n n n L-: 1000 00 00 02 00 00 00 2M 00 N - `L O v1 O\ 7 00 M n N
.p M oo \0 M 00 vi M O 00 ~n en O 00
44 N N M IT r \0 r- 00. 00
  4A 44 6v 69 64 44 614 64 64 49 64 69
  64 64 64

* The graph above reflects the incremental NPV from entering into the NewCo structure versus maintaining the
current LRC structure.

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RAC Deal Approval Sheet

Deal Name: Hurricane

Cash Flow Summary

  $100,000
$80,000 -
$60,000
$40,000 ("'a
  $20,000
$- ,
$(20,000)0 2.0 3.0 4.0 5.0 6.0 7.0 8.0
$(40,000)
  Years

o Terminal Value
Ongoing
Fmm Fees
 Outflows
-.- Cumulative P95
--?IE- Cumwlative P5
-,- Expected cumulative cash flows

Average Life = 6.3 years

CASH FLOW SUMMARY

Weighted average life: 6.3 years

TRANSACTION UPSIDES/OPTIONALITY - N/A

EXIT STRATEGY - N/A

RISK MATRIX

DESCRIPTION	MITIGATION/COMMENTS
Discovery Pipeline Volumes	There is a risk that the low-cost supply volumes from the. Discovery
	pipeline may not be realized over the life of the project.
	Engineering estimates anticipate a large portion of the total gas
	supply will be available from Discovery. If such volumes did not
	materialize, the NewCo would be forced to obtain gas from a more
	expensive source.
Synergy Realization	Cost savings are expected to be achieved under the NewCo
	structure primarily through outsourcing and associated personnel
	reductions. The expected percentage cost savings are
	approximately 16% of the combined stand-alone levels.
Trading Margins	ENA Gas Trading expects to make a margin trading around the
	information and capacity on the existing pipeline assets 'in addition
	to the new assets from Texaco. Any decrease would negatively
	impact the existing LRC structure as well as the proposed NewCo
	structure. The magnitude of the impact would be greater on the
	NewCo due to larger volumes.
O&M / G&A Overruns	The potential for O&M and/or G&A cost overruns is present in the
	current LRC structure and the NewCo structure. Identical
	percentage overruns would have a more detrimental effect for the
	NewCo due to its larger size.
	

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RAC Deal Approval Sheet Deal Name: Hurricane

KEY SUCCESS FACTORS

	NA	Poor Excellent
Core Business		X
Strategic Fit		x
Upside Potential		X
Management		X
Risk Mitigation		x

OTHER RAC COMMENTS:
 The most significant value driver in the deal is the synergies expected to be achieved by the combined entity. The analysis
of the expected synergies was performed by Robert Morgan of HPL Engineering. The simulation reflected the potential
that these cost saving might not materialize.
 The margins assumed to be made from financial and physical trading were taken at face value from the Gas Trading
Desks.
 Based on operational assumptions provided by the deal team, ENA's portion of the NewCo EBITDA is expected to be
approximately $11 MM greater than the estimated stand-alone LRC EBITDA on an annual basis. It should be noted that
the expected stand-alone LRC operations without trading are cash flow negative in each year.
 The RAC analysis compared the stand-alone case versus the proposed NewCo structure and did not examine the
alternative of an asset sale.
 Using the information provided by the deal team, the RAC analysis did not detect a scenario where the stand-alone case
would be more NPV beneficial than the proposed NewCo structure.
 The capital price does not reflect a premium associated with risk associated with achieving synergies from combining the
two companies. RAC has assumed that between ENA and Texaco, that these synergies are realizable.

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RAC Deal Approval Sheet Deal Name: Hurricane

  Global Finance Summary

1. Transaction Summary

  Total Deal/Project Capital Commitment
Less: Financings
  Less: Syndications
Net Enron Investment

2. Investment terms and pricing:
Describe (if necessary):

  Amount ($000)
$21,000
  -0-
-0-
$21,000
X Market Above Market Below Market

3. Financing terms and pricing: X Market Above Market Below Market


  Describe (if necessary):

4. Legal or practical liquidity restrictions:
Restricted

  Describe (if necessary):
  There are control limits on selling an interest.

5. Any recourse to Enron (other than investment):
Describe (if any):

6a. Business unit intent to syndicate:
Describe (if necessary):

6b. Intended Enron hold period:

6c. Likely Syndication Market:

6d. Is this a JEDI 2 "Qualified Investment"?

Unrestricted X Legally Restricted Practically

Recourse

X None

Partial

All

X No Recourse

0 Industry/Strategic Partner 0 Direct Private Equity

0 Capital Markets	0 JEDI 1
O JEDI 2	0 Enserco
O LJM I or 2	O Condor
0 Other:	O Margaux

D:\StfiaLFroma;mb\CorpDcUIu~ikane\Da;y Hurricane 013100.doc


=XH003-01292

Yes X No

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RAC Deal Approval Sheet Deal Name: Hurricane

Global Finance Representative: TOE- b F- F Kf- R--- !2/f 160
Si a Name (Printed) Date

APPROVALS
Originator
Originator
Originator
Originator
Legal
Tax
RAC Management
Enron Capital Management
ENA Management
ENE Management

  Name
Harold Bertram /
Tim Detmering
Brian Redmond
Greg Sharp
Mark Haedicke r)"
Jordan Mintz
Rick Buy /David Gorte
Andy Fastow/Jeff McMahon
Cliff Baxter

  Date
131 m
/ 3/ o0

  >r t o0
~,3 ou

Jeffrey Skilling

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ENRON RISK ASSESSMENT AND CONTROL
DEAL APPROVAL SHEET



DEAL NAME: Jcrtovec Pre-NTP	Date DASH Completed: 2 February 2000
Counterpane: F.E&:CC	RAC.Analyst: Otto von Schwerin
Business Unit: Central Europe Origination	Investment Type: Equity.
Business Unit Originator: Rob Soeldner	Capital Funding Source(s): Balance Sheet
OPublic SPrivate	Expected Closing Date: 3 February 2000
Merchant Strategic	Expected Funding Date: QIIQ2 2000
OConforming ONonconforming	Board Approval: OPending. OReceived ODenied EN/A
RAC Reconunendation: Proceed with Transaction	ORetums below Capital Price ODo not Proceed

APPROVAL AMOUNT REQUESTED

Capital Commitment: Management approval is sought for up to S10 million toward the cost of anticipated Pre-Notice-To-
Proceed (NTP) work and cancellation charges over a 5-month period from Engineering Release (kick-off) until Financial Close
(signing of the loan agreements - dry close).
Another separate DASH will be prepared and submitted before Financial Close to seek approval for the overall Jertovec
Proj cot.

Bid Bond Amount: N/A

EXPOSURE SUMMARY
N/A

DEAL DESCRIPTION
This is an interim DASH to seek approval in order to proceed wit Engineering Release. Pre-NTP wore is e:cpect<d to
continue for up to 14 months. A complete DASH detailing the Project will be presented to management and the Board before
Financial Close (expected within the next 5 months). In the unlikely event that the team faces delays in reaching Financial
Close, another interim DASH Tray bccorr_c necessary to authorize additional expenditures/exposures.

The Jertovec project involves the construction, ownership and operation of a nct 240 MW natural gas- and number 2 fuel oil-
fired combined cycle power plant at Jertovec, about 50 km north-east of Zagreb in Croatia. It will be developed and initially
100% owned by l;lek:rana Jcrtovec d.o.o and Elektrana Jertovec 2 d.o.o, two wholly owned subsidiaries of Enron Corp. The
Jertovec plant, which is expected to have a capital cost of $201 million (incl. development cost, interest during contraction,
fees, cte.), will be the first completely independent power project in Croatia. Hrvatska Elcktroprivreda ("REP"), the Croatian
Electric Power Authority, has entered into a 20-year Capacity and Tolling Agreement (CTA) with the project company. HEP is
responsible for supplying fuel and taking power from the plant in return for a fixed capacity payment. At the end o f the
contract, the power plant will be transferred back to HEP for DM 1. The CTA was signed on 23 June 1999. The CTA is
conditional upon obtaining adequate financing for the Project on terms acceptable to Enron. The financing team is in advanced
discussions with potential lenders (led by EBRD and Dresdner Kleinwort Benson) regarding project financing, but negotiations
have not yet been completed.

The project benefits from a 30 month exclusion from import duty starting from I January 2000. In order to avoid delays in
construction which might jeopardise this ,-it is now necessary to: (i) proceed with Engineering Release to complete the design
required to obtain Building Permit; and (ii) sign Letters of Intent'vith various vendors for procurement of the equipment. This
gives rise to monetary commitments (costs incurred by.CE&CC - the EPC contractor - and various third parties as well as
cancellation charges under the LOTs), which EEL would have to honour if negotiations with lenders or contractors fall through
and the deal fails to reach Financial Close. The table below gives a detailed description of the expected cumulative maximum
costs/cancellation charges (including external costs incurred directly by EEL),. over a 5-month period. By the end of that
period, outstanding issues should have been resolved and a DASH submitted for approval of the project as a whole.

Month oftcr
Engineering
Relaase	Cumulative EE&CC
Costs ('000)	Cuntulutlve 3
parry Cancel lat'on
Charges (000)	Cumulative EEL
external Engineering
related Development
Costs ('000)	Cumulative EEL external
non-Engineering related
Development Costs
'000)	Total ('000)'
1	$650	SO	S360	$400	S1,410.
2	$1,310	SO	$450	$800	53,060
3	$2,650 I	SO I	S680	$1,200	S4,530
4	$4.350	SO	$910	51,600	$6,860
5	S5,260	51,580	$1,140.	S2,000	$9,980

"Cancellation can occur at any time and would therefore reduce the overall exposure. Figures are rounded and represent
estimates of maximum-e- ,osare.

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RAC Deal Approval Sheet Deal Name: Jertovec Pre-NTP



TRANSACTION SOURCES ANDUSES OF FUNDS
  Sources ('0001 Uses '000
Enron Balance Sheet 510,000 5-Month Pre-NTP Costs and $10,000
Cancellation Charges
  Total $10,000 Total $10,000

CASE FLOW SUMMARY
Enron's ROE for thu overall Jertovec project is currently expected to reach approximately 29%. This value will. be re:vned and
a full RAROC analysis performed for approval of the project as a whole.

TRANSACTION UPSIDES/OPTIONALITY
N/A

EXIT STRATEGY
N/A

RISK MATRIX (,Vain 4 Risks Only)

The key risk on the S lOm exposure would be that Enron is notable or willing to proceed with the Jertovec project. The table
below outlines some of the key issues that might arise before Financial Closing. The risks of the Jertovec project itself will be
assessed as part of the overall project DASH to be submitted to management and the Board prior to closing.

DESCRIPTION	MITIGATION/COMMENTS
Political Climate	President Tudjman (who died last month) was a firm supporter of
	the Jertovec project, and there is now concern about the new
	government's stance.
	Following the January 3"t elections and the change in parliamentary
	control from the HDZ (formerly under President Tudjman) to a
	coalition government of center-left-wing parties, the political
	situation is still in a state of flux.
	The new government has publicly stated it will be open to foreign
	investment and will work hard at improving democratic
	proceedings, international relationships and reversing the isolation
	Croatia has been in.
REP Contract Frustration	HEP cooperation is still needed in the following areas to reach
	Financial Close:
	 HEP needs to enter into a direct agreement with the lenders
	which could be contentious and time-consuming;
	 Lenders have requested information from HEP regarding grid
	studies, market projections, etc. to become comfortable with
	HEP credit exposure, which is amajor project risk for both die
	banks and Enron. HEP has thus far not been able to provide all
	the. information. REP is under an obligation under the CTA to
	"co-operate" with Enron's efforts to negotiate a financing
	agreement, but such support cannot be guaranteed;
	 Three further site agreements need to be negotiated between
	REP and Enron; and
	 PTEP must not object to the revised company  structure.

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  F C Deal Approval Sheet



Deal Name: Jertovec Pre-NTP

EPC Contractor Changes and Issues	The preferred EPC contractor is currently EE&CC, but contract
	negotiations are still on-going. Enron is also working on a sell-
	down structure whereby the equity purchaser would have full
	discretion over selection of the EPC contractor (in order to avoid
	accounting issues related to revenue recognition). If the EPC
	contractor were changed, Enron could be liable for costs incurred
	up to that point and cancellation charges. It would also most likely
	introduce delays in the construction schedule.
	It should be noted that Enron is also working to close out a number
	of local consent issues that relate to emissions, noise and
	easements; a resolution to which will be sou t prior to D n, Close.
Terms of Financing not favourable	Although EGF believes that remaining_issues on financing can be
	resolved, negotiations with the lenders are still at a relatively early
	stage. The main issues are:
	 The current draft of the EPC contract contains issues raised by
	the lenders which still need to be resolved. Negotiations with
	EE&CC are still ongoing;
	 The leaders need to reach a direct agreement with HEP on a
	number of issues;
	 The deal structure has generally been accepted by the leaders
	but there are some areas where the banks are seeking additional
	comfort. The lenders also want confirmation that HEP is aware
	of and does not object to the structure, which has not yet been
	discussed with them; and
	 The coverage ratios are tighter following depreciation of the
	Euro against the S, which is likely to lead to a less beneficial
	debt structure.

KEY SUCCESS FACTORS

	NA	Poor Excellent
Core Business	X	
Strategic Fit	x	
Upside potential	x	-
Manaaement	X	
Risk Mitigation	x	

OTHER RAC COMMENTS:
N/A

APPROVALS Name Signature Date

Business Unit Originator

Business Unit Originator
Engineering Technical Services
RAC Management

RAC Management
Enron Capital Management
Enron Capital Management
Legal

Rob Soeldner

Eric Shaw
John Chappell
David Gore
Steve Young
Jeff McMahon
Paul Chivers
Michael Brown

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  'C Deal Approval Sheet

  %'. Business Unit Mgmt.
Business Unit Mgmt.
ENE Management

Deal Na

Fred Kelly
John Sherriff __

Mark Frevert

Joe Sutton



S!\UndemTiring'a-ProjccuVxdveVertovcc~0ASH\Prc-NTP DASH 02022000.doc

E0004401984


KHO03-01298

tae: Jertovcc Prc-NTP

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RAC Deal Approval Sheet Deal Name: Jertovec Pre-NTP
Global Finance Summary (addendum to DASH)

  1. Transaction Summary

Total Deal/Project Capital Conunitment
Less: Fina.ncings
Less: Syndications
Net Enron Investment

2. Investment terms and pricing:
Describe (if necessary): N/14

3. Financing terms and pricing:
Describe (il-nccessary): /V/A,

  Amount (S)
S 10,000,000
  -0-
-0-

  S 10,000,000
O Market 0 Above Market 0 Below Market

O Market O Above Market O Below Market

4. Legal or practical liquidity restrictions: 0 Unrestricted 0 Legally Restricted 0 Practically
Restricted

  Describe (if necessary):

S. Any recourse to Enron (other than investment): lRRecourse O No Recourse
Describe (if any): rv477t< /QECav<t6 T ~CA4 1 F 4 t_ r'4 S


6a. Business unit intent to syndicate: 3 PiOnd 0 Partial O AU
Describe (if necessary): j!rxtw,7e jNJa-s TNt6 7-
  Paae za-

6b. Intended Enron hold period:

6c. Likely Syndication Market:
1/'4a FZ t" PIZ 7-

6d. Ts this a JEDI 2 "Qualified Investment"?

O Tndustry/ rategic Partner
Capital Markets
O JEDI 2
  OLJ:'IIor2
O Other:

OYes

0 Direct Private Equity
O JEDI 1
  O Enserco
0 Condor
O Margaux

Q-<0


Clobal Finance Representative: / 4 / - G- Ckvve ( Z ;- u -
Signature Name (Printed) Date

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ENRON- RISK ASSESSMENT AND CONTROL
DEAL APPROVAL SHEET

DEAL NAME: Mariner - Pluto II	Date DASH Completed 3/8/00
Counterparty: Mariner Energy Inc. /Burlington Resources	RAC Analyst: Farhad Ahad.
Business Unit: Enron Field Services	Investmertt Type: Equity
Business Unit Originator:	Capital Funding Source(s): Balance Sheet
OPublic Private	Expected Closing Date: 3/8/00
OMerchant Strategic	Expected Funding Date: 3/8/00
OConforming ONonconforming	Board Approval: OPending DReceived ODenied ON/A
RAC Recommendation: Proceed with Transaction OReturns below Capital Price ODo not Proceed

APPROVAL AMOUNT REQUESTED
$26.019 million

EXPOSURE SUMMARY
  This transaction: $26.019 million
Total $26.019 million

DEAL DESCRIPTION

Enron Field Services proposes to repurchase the Pluto gathering system debt ($25,277,276) and equity ($741,277 from LJM for
$26,018,553.

During 1999, ECT Producer Finance provided capital ($24MM) to Mariner for the construction of a gathering system pipeline.
This 31 mile pipeline was laid in the Gulf of Mexico between Mississippi Canyon Block 717 and South Pass Block 89 to bring
gas and liquids production from Mariner's Pluto discovery to market. Construction has been completed and the field is now on
production.

A copy of the approved DASH for the original transaction is attached. Terms are substantially the same and economics haven't
been recalculated. Initial rates exceed projections and could improve returns for the pipeline. As anticipated, Burlington
Resources bought into the gas field, taking a 55% interest and thereby enhancing the credit quality of the pipeline financing.

TRANSACTION SOURCES AND USES OF FUNDS
Sources
  Enron Balance Sheet $26.019 million Repurchase Pluto PL

RETURN AND CASH FLOW SUMMARY
Cash flows:

		Cumulative	PV at Capital
Description	As of date	IRR	Price (10.16%)
Cash outflows	03/08/2000	n-a	$26.019 million
Cash inflows	03/08/2000	11.10%	$26.376 million
Net cash flow	03/08/2000	11.10%	$0.358 million

Uses
$26.019 million

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RAC Deal Approval Sheet

Cost of capital calculation:

Deal Name: Northern Header LLC

	Discount For
Description	Rate Asset Type
Risk-free rate	6.46%
Equity premium	5.42%
Other	-1.32*
RAC Capital price	10.16% Strategic

IRR Distribution

50.0%
45.0%
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0% 0.0% 8e ~e a s s s a Q s s s a r- a
  N c t~ cn O o ~T cn Ol~ v00 Ci ON V1 00 Q O M 1O C~ N <Y n O
  r- 00 00 00 00 O\ C\ C' O O O O r N

*Weighted average improvement in the cost of capital as cost of $25.28 million debt improved to 9.73%. (LJM's $0.74 million
equity stake is discounted at 25%.)

O:\ECM\RAAP\$LIBRARY\Ect\Mariner_Pluto\DASHPluto-Il_03082000.doc

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Global Finance Summary (addendum to DASH)

1. Transaction Summary

Total Deal/Project Capital Commitment
Less: Financings
Less: Syndications
Net Enron Investment

2. Investment terms and pricing:

Pluto 2-

  Amount ($000)
$26,000
  0
0

  $26,000

  Market 0 Above Market 0 Below Market

Describe (if necessary): Investment is a repurchase from LJM2 of the debt and equity securities of MEGS, LLC
associated with the Pluto project. Purchase price is par plus accrued interest.

3. Financing terms and pricing:

'Market 0 Above Market 0 Below Market

  Describe (if necessary): Debt ($25.26 million) is priced at a 9.75% effective annual yield. Equity ($740,000) is
priced at a 25% effective annual yield. The debt yield is consistent with a blend of the Burlington and Mariner credit
spreads.

4. Legal or practical liquidity restrictions: &Unrestricted 0 Legally Restricted 0 Practically Restricted

Describe (if necessary): There are no restrictions on the syndication of the debt securities. While the equity can
be sold down to non-affiliates, a complete sell down of the equity would likely require Burlington and Mariner
consents. The most likely scenario would be a sale of MEGS to Burlington.

5. Any recourse to Enron (other than investment): 0 Recourse @ 'No Recourse

Describe (if any):

6a. Business unit intent to syndicate: None 0 Partial 0 All

  Curren ere are no plans to syndicat If necessary, the Burlington share (55% of the
Describe (if necessary): 40
  NPV) of the project could be readily syndicate a anner s are is significantly less liquid at this time. As the
project continues to perform and the reserves are validated and reclassified as proved, producing, it is much more
likely the Mariner share could be syndicated as an asset based financing with little reliance on Mariner's credit.

6b. Intended Enron hold period: '
  Maturity. The average life of the project is 2.5 years with( final maturity to nine years Due to the accelerated payback
schedule, the exposure to Pluto decreases rapidly.

6c. Likely Syndication Market:

0 Industry/Strategic Partner
0 Capital Markets
0 JEDI 2
0 LJM 1 or 2
Q'Other: SQNkc

  6d. Is this a JEDI 2 "Qualified Investment"? 0 Yes

0 Direct Private Equity
0 JEDI'1
0 Enserco
0 Condor
0 Margaux

  'No


Global Finance Representative: 0. a," Joseph M Defter 3-/-1loan ignature Name (Printed) Date

.J

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RAC Deal Approval Sheet

APPROVALS
ENA Originator
ENA Commercial
Transactions Group

ENA Regional Mgmt.
Legal
RAC Management
Enron F '{"E
ENE Management

Name

Deal Name: Northern Header LLC

7z) P)Zll"Yb

Ray Bowen
Cliff Baxter or Greg Whalley
Mark Haedicke

Rick Buy or David Gorte
Andy Fastow/Jeff McMahon
Jeffrey Skilling or Joe Sutton

  Date
3/3/


  - ~ O

  EGG' lckmeO~~,ia~r-l~.
,C,kt u~JQ~,;s i~wesl~+e~ M#k e4fE PA wi
  ro

C:\My Documents\Documents\DASH\Pluto-ll.doc

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DEAL APPROVAL SHEET

DEAL NAME:	Mariner-Pluto	Date DASH Completed:	5/20/99
Counterparty:	Mariner Energy Inc.	RAC Analyst:	Bill McKone/Martin O'Leary
Business Unit:	ECT-Producer Finance	Investment Type:	Equity
Business Unit Originator:	Brad Dunn	Capital Funding Source(s):	Balance Sheet
DPublic ElPrivate		Expected Closing Date:	10/99
Merchant Strategic		Expected Funding Date:	10/99
(Conforming ONonconforming		Board Approval: DPending	D Received D Denied l l N/A

DEAL DESCRIPTION

Enron Capital & Trade Resources Corp. proposes to purchase Mariner Energy's Pluto gathering pipeline for $24 million. This
gathering line is a 31 mile, 8 inch, pipeline that will connect Mariner's subsea production facility located in the Mississippi
Canyon Block 717 to a Marathon platform located in South Pass Block 89.

Mariner and their working interest partners will build the line, establish flow, and then sell the pipeline to ECT. This is expected
to occur on October 1, 1999.

ECT will enter into a gathering agreement with Mariner, and their working interest partners, to gather gas from the well head to
the Marathon platform for a fee of $0.2575/MMBTU plus all operating costs for the first 86 BCF and 5.9 MBO and
$0.05/MMBTU plus all operating costs for all additional volumes.

Mariner and their working interest partners will guarantee throughput of 86 BCF and 5.9 MBO according to a minimum monthly
volume schedule. These guaranteed payments will give ECT a minimum of a 15.0% ROR assuming that ECT transports only the
guaranteed volumes through the gathering line The guarantee will be a general corporate obligation which will rank pari passu
with the company's 10.5% Sr. Subordinated Notes. These notes are currently trading at 13.5%. Mariner will use most of the
proceeds of this sale to repay the $25 MM Sr. Unsecured WC line This working capital facility is currently priced at LIBOR
250 basis points. _~
  r S r~ l '~ ~~ c~.o 5 O.
ECT will enter into an operating agreement with Mariner to operate the gathering line for the life of the MC 717 unit. At the end
of the economic life of the unit, Mariner will abandon the line and cover all costs exceeding $500,000. If ECT does not want to
abandon the line at this time ECT will assume all future abandonment liability. ,

Burlington Resources has verbally agreed to take a 63% BPO WI in the Pluto project which will reduce to a 49% APO WI. They
are doing additional due diligence and should sign definitive documents sometime in June. Burlington Resources is an S&P A-
credit, which should improve the credit quality of this investment.

ASSOCIATED GUARANTIES

None

TRANSACTION SOURCES AND USES OF FUNDS
Sources

Enron Equity $24,000
Total $24,000

  Uses
Capital Expenditure $24,000

  $24,000

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RAU Leal Approval Sheet

.veal ivame: iviariner-riuto

SUMMARY		
Equity		
	$$000)	
Capital Commitment:	$24,000	
Bid Bond Amount:	N/A	
	PV @	Cumulative
Return Components:	Capital Price	IRR
Cash Outflows	($22,217)	N/A
Fees	$0	N/A
Intermed. Cash Flows	$22,774	17.34%
Terminal Value	$0	17.34%
	Total NPV	$564	17.34%

EXISTING EXPOSURE

Weighted Average Life (yrs.): 2.913

  Capital Price Components
Risk free rate (%): 5.22%
Equity/Credit premium (%): 2.97%
Country Premium (%): 0%
Other (%): 7.31%
RAC CAPITAL PRICE: 55.5%
  /~ Mltt :'ce
~rC. r.S by`

On a fully diluted basis, Enron owns 86.5% of Mariner. Equity and debt investments are summarized below:

Date	Amount	Description
March, 1996	$95,000,000	Equity
April, 1998	$28,207,000	Equity
September, 1998	$10,000,000	Convertible Bridge
October, 1998	$15,000,000	Convertible Bridge
January, 1999	$10,000,000	Non-Convertible Bridge
February, 1999	$8,000,000	Non-Convertible Bridge
March, 1999	$7,000,000	Non-Convertible Bridge
April 6, 1999	$25,000.000	Working Capital Facility
TOTAL	$198,207,000	


The $24 million investment in this project will be used by Mariner Energy to pay down the bridge loan that was dispersed in the
first quarter of 19993 ~jty ', r0'f ~ ~ qty dp 5 D Ya Sot> docurtn~ri~5r

  NPV @ Risk-Free Rate
Adjusted for Sovereign Premium
600%

50.0%
40.0%
30.0% -
20.0% 10.0%

  0.0%
  c'^. GD N r- N L^ - vl O h O '7 C C
~O N C N N 00 v1 00 7 - n C O 'O M
n 'O 'D r` 00 00 Ci O O N N c^. 7 '~?
  'ct V V'f Vn . , h V1 , V1 V7
69 ER 69 ~T 64 b3 fA 69 69 69 Y7 69 64 69 69 69

C:\7EMP\Final_DAS H. doc

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RAC Deal Approval Sheet

NON-HEDGABLE (IDIOSYNCRATIC) RISKS

Deal Name: Mariner-Pluto

RISK	DESCRIPTION	MITIGATION/COMMENTS
Reserves	The Pluto project may contain less	ECT is guaranteed minimum monthly
	reserves than Mariner estimates.	payments, regardless  of whether
		Mariner produces less than planned.
		However, Enron engineers estimate
		an average cumulative production of
		73 BCF while Mariner guarantees 86
		BCF of cumulative transport volume.
		This leaves ECT exposed to Mariner
		credit risk for the difference between
		guaranteed volumes and actual
		transported volumes.
Abandonment Risk	Enron, as owner of pipeline, will be	If ECT elects to abandon the
	liable for costs associated with	gathering line at the end of the
	abandonment. Abandonment	contract term, Mariner is responsible
	requirements in deepwater GOM	for any abandonment costs in excess
	are not well established	of $500,000
		If ECT continues to use the gathering
		line, ECT will be solely responsible
		for abandonment
		Abandonment requirements are
		anticipated to only include purging
		and plugging costs.
Construction Risk	There is a possibility that Mariner	The purchase of this pipeline is
	may be unable to complete	contingent upon the successful
	construction of the gathering line	completion of construction and flow
	and get the well on production by	of gas. Mariner would be
	November 1999 which could result	responsible for all cost overruns.
	in the loss of Mariner's lease on gas	
	field related to this project.	
Operating Risk	There is the possibility that	Catastrophic risk insurance will be
	unforseen events could shut down	carried to counter this potential
	operations for extended periods of	economic loss. The $500,000
	time.	deductible per event has been
		modeled along with a probability of
		occurrence estimated to be 2% per
		year.
Regulatory and	Pluto is subject to safety and	Mariner will be responsible for
Environmental Risk	environmental regulation by the	compliance and.the related cost of all
	Department of the Interior's	MMS requirements
	Minerals Management Service	ECT will carry the appropriate
	(MMS)	amount of insurance above that
		required of Mariner

C.UEMP\Final DASH.doc E0004401993 page 3

EXH003-01307

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

,`AL heal approval Jneet

HEDGABLE OR MARKET RISKS

,neat tvame: .mariner-r.uLw

Foreign Exchange	The functional currency of the transaction is US Dollar and all revenues and costs are denominated
Risk	in US Dollars.
Interest Rate Risk	Although the transaction is classified as equity, the valuation bears interest rate risk associated with
	the RAC capital price, since the transaction is classified as Merchant and the discount rate will be re-
	determined quarterly.
	No interest rate hedges have been included in the valuation model.
Equity Risk	Equity market risk for this transaction is reflected as part of the discount rate. The terminal value
	was assumed to be the abandonment costs. No market risk hedges have been included as part of the
	valuation model.
Credit Risk	The pipeline gathering revenue stream is guaranteed by Mariner Energy. Given that Resource
	Evaluation expects contracted volumes to exceed production, the gathering pipeline will be exposed
	to Mariner Credit risk. Mariner's credit rating is B-. This risk was modeled using the implied
	default probabilities.
	Mariner anticipates selling down of 2/3 interest to Burlington Resources, an A- credit, in near term
	offers credit enhancement, and potentially provides Mariner with access to additional capital
	No credit hedges have been incorporated into the valuation model.
Inflation Risk	The equity investment bears inflation risk because the contract calls for fixed payments over the next
	9 years which implies that the real value of the payments could decline as a result of an unexpected
	increase in inflation.
Commodity Risk	The project is indirectly exposed to commodity risk because our counterparty's primary source of
	revenue is derived from commodity gas sales. This exposure has been incorporated through
	counter art risk.

OTHER RAC COMMENTS:

SYNDICATION (ECM):

  o _,,-Immediately syndicatable at current capital price
Syndication within one year at current capital price
  o Not syndicatable at current capital price
o N/A

  APPROVALS: Nan}e ignature
RAC Management Rick Buy
  ff
Enron Capital Management Andy Fastow/Jeff McMahon
S S +YH't
Business Unit Originator Brad Dunn
Engineering Management Monte Gleason

ECT Legal ?F77 r Bar6arc Gray
Business Unit Mgmt W. Craig Childers l rJ2,~_~

Portfolio Manager Jere Overdyke
ENE Management Ken Rice
ENE Management Jeffrey Skilling

C:ITEMP1Fnat_DASH.doc

Page 4

E0004401994

Date

  7Z ~'
~ Z"2 Q
s'1t45

EXH003-01308


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

S-10

m

0
0
0
(0
0

EXH003-01309

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

ENRON RISK ASSESSMENT AND CONTROL

DEAL APPROVAL SHEET

DEAL NAME: MDW	Date DASH Completed: February 8, 2000
Counterparty: U.S. Military District of Washington	RAC Analyst: Kate Lucas
Business Unit: EES	Investment Type: Structured Credit
Business Unit Originator: Dean Tarbet / Charlie Thompson	Capital Funding Source(s): Balance Sheet
OPublic OPrivate	Expected Closing Date: October 30, 2000
Merchant OStrategic	Expected Funding Date: 4th Quarter 2000
Conforming ONonconforming	Board Approval: E3Pending Received Denied O N/A
RAC Recommendation: OProceed With Transaction DReturns below Capital Price ODo not Proceed
APPROVAL AMOUNT REQUESTED	
Capital Commitment $ 55.6 million	
Bid Bond Amount N/A	

EXPOSURE SUMMARY
  This transaction: $ 55.6 million
Total $ 55.6 million

DEAL DESCRIPTION

Enron Federal Solutions, Inc. ("EFSI") proposes to enter into a 15-year privatization contract with the Defense Energy Support
Center ("DESC"), wherein it will take ownership of the electric, water/wastewater, and natural gas systems at five military
installations in the Maryland, Virginia, and Washington, D.C. area. The installations included in this deal are Fort Meade, Fort
McNair, Fort Myer, Fort Belvoir, and A.P. Hill.

EFSI will commit $55.6 million for identification, development, and implementation of projects related to this privatization.
EFSI has entered into teaming agreements with ABB and Black & Veatch, an engineering firm, to subcontract the operations
and maintenance tasks under the contract. Both firms have been engaged to perform an initial engineering audit of the
infrastructure at the installations.

EFSI will draw the capital for these projects over a two-year period of time, and will be paid a fixed monthly amount by the
government. The terms of the government's payback period will be 15 years, the duration of the contract.

TRANSACTION SOURCES AND USES OF FUNDS
  Sources Uses
Enron Equity $55,600 Energy projects $55,600

  Total $55,600 $55,600

RETURN SUMMARY

	PV @	Cumulative
Return Components:	Capital Price	IRR
Cash Outflows (capital draws)t	($45,695)	
-
Acct mgmt/billing services	($ 1,613)	-
Cash Flows (Capital)	$ 57,343	16.12%
Cash Flows (O&M)	$ 4,145	-
Total NPV	$ 14,180	16.12%

E-Rating

Capital Price Components
Risk free rate (%): 6.70%
Equity/Credit premium* (%): 0.69%
Transaction-Specific" (%): 2.00%

RAC CAPITAL PRICE: 9.39%1

  ' Not equal to the nominal $55.6 million because it is drawn over the course of two years.
* Spread of U.S. Government Agencies over U.S. Treasuries
  "* Includes Subcontractor Performance Risk

:XH003-01310 -

E0004401996

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

RAC Deal Approval Sheet

Deal Name: MDW

TRANSACTION UPSIDES/OPTIONALITY

The government has indicated that there is the potential for additional capital improvement projects beyond the 2-year capital
improvement plan.

EXIT STRATEGY

Not applicable to a strategic investment.

RISK MATRIX

DESCRIPTION	MITIGATION/COMMENTS
Previous issues with prospective subcontractor	
 Enron has had some dissatisfaction with Black	 This situation will need to be worked out before EFSI can enter
& Veatch in the past with respect to power	into this relationship with Black & Veatch. If our relationship
projects.	with Black & Veatch does not improve, EFSI will need to find
	a different subcontractor. This would require price re-
	negotiation, which is likely to shrink EFSI's margins on this
	deal.
Performance Risk	
 As part of the bid process, EFSI has submitted	 EFSI has locked in prices with the subcontractor before
cost and timing estimates to the government.	entering into the contract with the government. As such, cost
EFSI has based its fees to the government	overruns will be passed through directly to the subcontractor,
according to these estimates. Therefore cost	with a 7% risk premium built into the price for Black & Veatch
overruns would hurt EFSI's margins on the	and one of 5% built in for ABB.
project.	 Enron has conducted joint due diligence with Black & Veatch
 Given that Enron has been dissatisfied with	and ABB with respect to the
, condition of the systems. Cost
Black & Veatch in the past, it is possible that	.
estimates from Black & Veatch and ABB are based on this
they will not perform to standards suitable to	assessment of the condition of the utility equipment at the
EFSL	installations.
 In the event that there are significant utility	 EFSI's commitment to using Black & Veatch and ABB as the
outages, the government may elect to reduce	O&M subcontractors is only for one year. In the event that
its payment to EFSI for the month in which	EFSI is dissatisfied with their performance, the contract can be
these outages occur.	renegotiated or terminated at this time.
	 EFSI will need to negotiate with both Black & Veatch and
	ABB that any reductions in the tariff paid by the government to
	EFSI as a result of poor performance on the part of either
	subcontractor will be deducted from payments made by EFSI
	to Black & Veatch and/or ABB.
Termination Risk	
 As with other government contracts, this	 EFSI intends to include a "make whole" provision in the
agreement includes a "termination for	contract, ensuring that the government would reimburse for
convenience" clause.	costs incurred in the event the termination option is exercised.
	 The government's liability will be only EFSI's unrecovered
	capital investment at the point of termination plus any
	reasonable documented costs the contractor incurs as a result of
	contract termination.
	 No termination schedule has as of yet been provided to RAC.
	This schedule will be provided to the government at signing.

O:\ECM\ tAAP\$OPNDEAL\E Ei S' iD* ,DASH_-MDW O2072000.doc

E0004401997

Page 2



EXH003-01311

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

RA

=XH003-01312

C Deal Approval Sheet Deal Name: MD W
Syndication Risk
   Though the counterparty is an agency of the U.S. government,
the financing is imbedded in the transaction and, as such, may
be difficult to syndicate on terms favorable to EESO. As noted
above, this transaction is considered to be strategic, mitigating,
to some degree, the importance of this consideration. The deal
fee paid by the government includes a 8.42% margin over the
mid desk price and financing at 275 by above treasury bills.

KEY SUCCESS FACTORS

	NA	Poor Excellent
Core Business		X
Strategic Fit		x
Upside Potential	X	
Management	x	
Risk Mitigation		x

0:1ECM\ RAAP\$OPNDEAL\E-E Sn`viD ADASH_iviDW 02072000.doc

  Page 3
E0004401998

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

RAC Deal Approval Sheet

Deal Name: MDW

OTHER RAC COMMENTS:
RAC did not perform an analysis of the transaction financial model using probabilistic scenarios.

APPROVALS
Legal
EES CEO
RAC Management
Enron Global Finance
ENE Management

O:IECMrRAAP1$OPNDEAU& B -Sir viDW\DASri iDW 02072000.doc



  Name Signature
Vicki Sharp
Lou Pai

David Gorte/Rick
And Fasto Jeff McMaho
Jeffrey Skilling/Joseph Sutton

E0004401999

Date

2 S /00

Page 4

EXH003-01313


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


  RAC Deal Approval Sheet

Deal Name: MDW

OTHER RAC COMMENTS:
RAC did not perform an analysis of the transaction financial model using probabilistic scenarios.

APPROVALS
Legal
EES CEO
RAC Management
Enron Global Finance
ENE Management

Name

Vicki Sharp
Lou Pai
David Gorte
Andy Fastow/Jeff McMahon
Jeffrey Skilling/Joseph Sutton

  Signature
r

  77

  Date

E0004402000

C\TEMP\DASH_MDW 02072000.doc



Page 4

EXH003-01314

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

RAC Deal Approval Sheet

Deal Name: Military District of Washington

Global Finance Summary (addendum to DASH)

1. Transaction Summary

Total Deal/Project Capital Commitment
Less: Financings
Less: Syndications
Net Enron Investment

  Amount ($000)
$55,600
  -0-
-0-
$55,600

2. Investment terms and pricing:
Describe (if. necessary):

O Market QAbove Market 0 Below Market

U.S. Agency credit priced at above current market spreads. The financing rate will be fixed at the 15-year
Treasury rate existing on the date of closing plus 2.75%. We expect to sell the receivable at a rate equal to
average life Treasurys plus 1.80%.

3. Financing terms and pricing:

Describe (if necessary):

4. Legal or practical liquidity restrictions:
Describe (if necessary):

5. Any recourse to Enron (other than investment):
Describe (if any):

6a. Business unit intent to syndicate:
Describe (if necessary):

6b. Intended Enron hold period:

6c. Likely Syndication Market:

O Industry/Strategic Partner
C~Capital Markets
O JEDI 2
OLJM1or2
0 Other:

0 Below Market

0 Practically Restricted

a No Recourse

&AII

0 Direct Private Equity
O JEDI 1
0 Enserco
Q Condor
O Margaux

6d. Is this a JEDI 2 "Qualified Investment" 0 Yes 'No
Global Finance Representative: '~ Z-'~ ~
  Aignature Name (Printed) Date

E0004402001

0 Market 0 Above Market

  Unrestricted 0 Legally Restricted
0 Recourse

0 None 0 Partial

Intend to sell on or about the date of contract award.


EXH003-01315

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

S-11

E0004402002

EXH003-01316

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

i

ENRON RISK ASSESSMENT AND CONTROL
DEAL APPROVAL SHEET
Addendum to DASH Signed March 22, 2000
Project Mercury

  The valuation and purchase price for Project Mercury have changed since the
original DASH was signed due to:

 movement in the commodity market;
 the exclusion of certain Value Added Services commodity contracts from the
transaction;
 a refinement in the valuation of the impact associated with the recently
adopted PG&E General Rate Case;
 the elimination of the assumed release in prudency currently on Mercury's
books from the deal economics.

Based upon this revaluation, the negotiated purchase price of $22mm has changed to
$20mm, resulting in a net decrease in expected NPV of $.5mm.

Value changes to Mercury (amounts in millions)




KHO03-01317

	Commodity movement and PG&E Rate Case	5.8	
	ru ency Revaluation	-8.3	
	Purchase rice Reduction	.	
	Change in Deal		

			1
J	
APPROVALS	Name	Signature	e
EES Corp. Development	Mark Muller/ Jimmie Williams		a
EES Commodity Mgmt.	Dennis Benevides		(o ~V0
Legal	Vicki Sharp		'rs `7 /.
			
Regional Management	Lou Pai		
Enron Gov. Affairs	Steve Kean/Jim Steffes		/.,
RAC Management	David Gorte	v	w p~
Enron Capital Management	Andy Fastow/Jeff McMahon	AU, d	
7
ENE Management	Jeffrey Skilling/Joe Sutton	C,	t~ 7 w

E0004402003

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

Approval of Acquisition of PG&E Energy Services Corporation

  In accordance with 2.04 of the Amended and Restated Limited Liability Company
Agreement of Enron Energy Services, LLC, ("EES"), dated as of December 31, 1997, Enron
Corp., In its sole discretion, approves of the expansion of the business of EES in connection with
its acquisition of PG&E Energy Services. Corporation ("Services"), a California corporation, to
include existing Services' commodity contracts and customers.

J:\legal\pinder\1999\corres\apprvl.ltr

E0004402004

:XH003-01318


  Operating Officer
Enron Corp.

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

L_

CA Retail Customer Mark
Wood GRC Decision

Shared Savings
Early Outs
Lesser of Options''
Rate Cap. *
Missing Info.
Hydro Credit Adj.
CA Retail Customer Mtm

MA Commodity
Gas Book
Credit Reserve Place Holder
Supply Hedge Value
Total Est. MtM

PG&E Rate Alloc. Redesign @ 75%
Consumption @ .18%
Consumption @ .25%
Price Prudency @ $.35/Mwh
June 1 Close Date (Two Month Liq)
Total Est. MtM

Purchase Price

Deal NPV

Mercury Commodity Reconciliation

4/4/2000	3/20/2000	414 less
	(original DASH)	3/20
(1,739,811)	(882,390)	(857,4`21)
	(6,435,000)	6,435,000
(342,734)	(342,734)	-
(150,000)	(150,000)	-
(459,000)	(459,000)	-
(906,000)	(592,000)	(314,000)
(3,597,545)	(8,861,124)	5,263, 579
(587,000)	(587,000)	-
(2,854,345)	(2,854,345)	-
(500,000)	(500,000)	-
35,196,680	34,710,384	486,296
27,657,790	21,907,915	5,749,875
6,674,750	6,674,750	-
(1, 800, 000)		(1,800,000)
-	3,692,694	(3,692,694)
(560,000)	2,260,219	(2,820,219)
2,974,048 -	2,974,048	-
$ 34,946,588	$ 37,509,627	$ (2,563,038)
(20,000,000)	(22,000,000)	2,000,000
$ 14,946,588	$ 15,509,627	$ (563,038)

EOO04402005

=XH003-01319

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

ENRON RISK ASSESSMENT AND CONTROL

DEAL APPROVAL SHEET

  2000
A Mercury Date Completed: arc 22,
Counterparty: Quantum Ventures RAC Analyst: Vlady Gorny
Business Unit: EES Investment Type: Equity
Business Unit Originator: Mark Muller Capital Funding Source(s): Balance Sheet
Public xjPrivate Expected Closing Date: June 2000
E3Merchant jStrategic Expected Funding Date: June 2000
  Conforming px Nonconforming Board Approval: Pending DReceived ODenied pN/A
Recommendation: px rocee wit ransaction p eturns below Capital rice E3Do not Proceed

APPROVAL REQUESTED

Enron Energy Services Operations (EESO) is seeking approval to acquire certain assets of PG&E Energy Services
("Mercury"), EESO's largest competitor, through a purchase of 100% of the stock of Quantum Ventures, a wholly-owned
subsidiary of PG&E. The assets purchased include the retail power and gas books, billing systems and working capital -
largely customer receivables.

EXPOSURE SUMMARY

Cash Payment	$20.0 million	(for retail power and gas books and the billing systems)
Credit Exposure	$ 4.0 million	(counterparty accounts receivable, including the benefit of PG&E
		guarantee and wholesale/retail credit risks)
Market Risk - Power	$ 4.5 million	(Overnight VaR of $1.3 million and liquidation period of 12 days)
- Gas	$ 0.7 million	(Overnight VaR of $0.3 million and liquidation period of 5 days)

Total "Risk Adjusted Capital" $29.2 million

DEAL DESCRIPTION

  Strategy: EESO will purchase the contracts and the related billing system from its largest competitor in the California, as
PG&E Energy Services exits this market. Quantum Ventures' personnel (approximately 30 people) associated with the
billing system will be initially retained by EESO.

  Structure: $20.0 million will be paid up front for the purchase of the power and gas commodity books. $80.0 million will
be paid up front for the related working capital, which is 100% guaranteed by PG&E Corp. After 180 days, any
uncollected accounts receivable will be repurchased at their original face amount, guaranteed by PG&E.

  Commodity Portfolios: Transaction creates a Net Open Power position of 3.3 million Mwhs - Short and Gas position of.
3 Bcf- Short (Retail Electricity Load of 8.5 million Mwhs - Short and Retail Natural Gas Load of 15 Bcf- Short), mainly
in California. The power positions extend through the end of 2003 and gas positions extend through 2001.

RETURN SUMMARY

Deal Valuation: $35.0 million
Bid Amount: <$20.0 million

Deal NPV: $15.0 million

TRANSACTION SOURCES AND USES OF FUNDS

  Sources Uses
EESO Balance Sheet $I0G,7660 Power Commodity Book $20,U00

  Working Capital $80,000
Total* -$100,066-

*7here is a working capital true up that will adjust the final purchase price. The anticipated final purchase price range is $90 - 100 million.

E0004402006



EXH003-01320


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RAC Deal Approval Sheet

TRANSACTION UPSIDE/OPTIONALITY

Deal Name: Mercury

Potential upside may be realized on the IT/Billing system and renewal/extension of retail customer contracts. The billing
system is in balance (accurate) for the California market. EESO may be able to leverage this capability into its existing
outsource agreement with Computer Science Corporation.

RISK MATRIX

DESCRIPTION		MITIGATION/COMMENTS
Regulatory Risk:		
 Exposure to changes and redesigns of PG&E's		Monitor closely PG&E rate cases, evaluate the CTC roll-off
unbundled tariffs and T&D tariffs, CTC roll-off		date on an on-going basis. Given low valuation of PG&E
date, duration of the CTC rebate period and PG&E		hydro generation, EES will consider acquiring hydro assets
Hydro generation valuation.		to manage the existing retail portfolio.
 Transaction requires FERC Approval under Section		Transaction will not close until FERC approval is obtained.
203 of the Federal Power Act.		
Market Risk:		
 Exposure to wholesale power and gas prices,		Hedge majority of the wholesale exposure through the
ancillary service prices and intra-day load volatility.		respective desks.
Credit Risk:		
 MTM exposure related to retail and wholesale		Credit reserve has been factored into the valuation of the
power and gas portfolios.		deal for both the MTM exposure and A/R.
 Inability to collect customers' accounts receivable		PG&E (A2/A) provides a full guarantee on the A/R for the
in the normal course of business (beyond 180 day		180 day period.
closing).		The reserve level and guarantee mitigate the credit risk
		since a proper due diligence on clients, financials and
		contracts could not be performed for confidentiality
		reasons.
Legal Risk:_		
 Due diligence has been limited due to Mercury		Where full due diligence was not conducted, EESO is
confidentiality concerns.		relying on seller's representations with related sellers
 FERC approval and HRS filing are required.		indemnity extending for 18 months for full amount of base
 Under the state anti-slamming rules, notice and		purchase price.
opportunity to cancel service must be given to		Approval on an expedited basis is expected. Obtaining
certain customers.		approval is a condition for closing.
 The target has on-going liabilities related to		These customers represent nominal value.
excluded liabilities transferred out of the company		EESO is obtaining a Quantum indemnity for such liabilities
prior to close.		and a PG&E Guarantee.
Enron Corp. guarantee.		
IT/ Billing System:		
 The IT/Billing Systems are not directly compatible		EESO is attempting to hire key Mercury staff to promote
w/EESO software and hardware, some time will be		systems integration.
required to make the adjustment.		90 day overlap for integration.

KEY SUCCESS FACTORS

	Poor	Fair	Good	Very Good	Excellent
Core Business	-	-	-	-	X
Strategic Fit	-	-	-	-	X
Upside Potential	-	-	X	-	-
Risk Mitigation	-	-	X	-	-

J cor aI Developme_n_t\C__, xpneviR N \Mercury\Dash\Mercury DASH 4.6. l.doc

E0004402007

Page 2

=XH003-01321

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

RAC Deal Approval Sheet

Deal Name: Mercury

OTHER RAC COMMENTS:

 The valuation of the deal incorporates assumptions that are not captured in the Exposure Summary: changes and rate
allocation redesigns of PG&E unbundled utility tariffs, regulated T&D tariffs and CTC related issues. These are typical
risks assumed in EESO transactions.

  The amount of PG&E's stranded costs depends on the valuation of PG&E's hydro generation. The valuation of the deal
assumes that the assets will be valued at $2.9 billion (current book value of $1.2 billion). In the event that the hydro
generation is valued at $2.0 billion - about 5% or less probability, the deal NPV will decrease by approximately $10
million.

 The due diligence to be performed by Enron personnel on the historical load data provided by PG&E. If the valuation is
materially affected, the purchase price will be adjusted.

J:\Corporate Development\CorpDev\B Neff\Mercury\Dash\Mercury DASH 4.6.1.doc



  Page 3
ECO04402008

EXH003-01322

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

RAC Deal Approval Sheet Deal Name: Mercury

APPROVALS
EES Corp. Development
EES Commodity Mgmt.
Legal
Regional Management
Enron Gov. Affairs
RAC Management
Enron Capital Management
ENE Management

  Name Signature
Mark Muller/ Jimmie Williams
Dennis Benevides
Vicki Sharp
Lou Pai
Steve Kean/Jim Steffes
David Gorte
Andy Fastow/Jeff McMahon
Jeffrey Skilling/Joe Sutton

J.ra ?Ark :Development\CnmDev\B Neff\Mercury\Dash\Mercury DASH 4.6.1.doc

11 ~j

ECO04402009

  Date

Page 4

XH003-01323

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

RAC Deal Approval Sheet

   Global Finance Summary (addendum to DASH)
1. Transaction Summary

Total. Deal/Project Capital Commitment
Less: Financings
Less: Syndications
Net Enron Investment

2. Investment terms and pricing:
Describe (if necessary):

3. Financing terms and pricing:
Describe (if necessary):

Deal Name: Mercury

  Amount ($000)
too/ O'V

  -0-
~07, t7'Og

  O Market 0 Above Market 0 Below Market
0 Market O Above Market 0 Below Market

4. Legal or practical liquidity restrictions: 0 Unrestricted 0 Legally Restricted 0 Practically Restricted
Describe (if necessary):

5. Any recourse to Enron (other than investment): 0 Recourse O No Recourse
Describe (if any):

6a. Business unit intent to syndicate:
Describe (if necessary):

6b. Intended Enron hold period:

6c. Likely Syndication Market:

0 None 0 Partial

0 Industry/Strategic Partner
O Capital Markets
O JEDI 2
  O LJM I or 2
0 Other:

  0 All

0 Direct Private Equity -
O JEDI I
  0 Enserco
0 Condor
0 Margaux

  y~
rJJa -IV,( *4



6d. Is this a JEDI 2 "Qualified Investment"? 0 Yes No
Global Finance Representative: F~_ 1A Larry Derrett
  ature Name (Printed) Date

J,1 p.mts.Development\C9rpDev\63.N?t\Merciuy\Dash\Mercury.DAS.N 4.6.1.E -Page 5

E0004402010


EXH003-01324

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

ENRON RISK ASSESSMENT AND CONTROL
DEAL APPROVAL SHEET

DEAL NAME: Mercury	Date DASH Completed: March 22, 2000
Counterparty: Quantum Ventures	RAC Analyst:
Business Unit: EES	Investment Type: Equity
Business Unit Originator: Mark Muller	Capital Funding Source(s): Balance Sheet
DPublic !]Private	Expected Closing Date: June 2000
Merchant Strategic	Expected Funding Date: June 2000
DConforming ONonconforming	Board Approval: Wending DReceived DDenied DN/A
RAC Recommendation: OProceed with Transaction DReturns below Capital Price DDo not Proceed

APPROVAL REQUESTED

EESO is seeking approval to acquire PG&E Energy Services ("Mercury"), EESO's.largest competitor, through a 100% stock
purchase from Quantum Ventures. The assets purchased include the retail power and gas books, billing systems, and working
capital.

EXPOSURE SUMMARY

Cash Payment $22.0 million
Credit Exposure $ 4.0 million (includes A/R and retail book exposure)
Market Risk -Power $ 4.5 million (Overnight VaR of $1.3 million and liquidation period of 12 days)
- Gas $ 0.7 million (Overnight VaR of $0.3 million and liquidation period of 5 days)

Total "Risk Adjusted Capital" $31.2 million

RETURN SUMMARY

Deal Valuation: $37.5 million
Bid Amount: <$22.0 million>

Deal NPV: $15.5 million

OTHER RAC COMMENTS:

 Valuation of the deal incorporates assumptions that are not captured in the Exposure Summary: changes and rate allocation
redesigns of PG&E unbundled utility tariffs, regulated T&D tariffs and CTC related issues.

 Amount of PG&E's stranded costs depends on the valuation of PG&E's hydro generation. The valuation of the deal
assumes that the assets will be valued at $2.9 billion (current book value of $1.2 billion). In the event that the hydro
generation is valued at $2.0 billion - about 5% or less probability, the deal NPV will decrease by -$10 million.

 Due diligence to be performed on the historical load data provided by PG&E.

DEAL DESCRIPTION

 Strategy: EESO will purchase its largest competitor in the California market and a billing system.

 Structure: $22.0 million will be paid upfront for the purchase of the power and gas commodity books. $78.0 million will
be paid up front for the related working capitaL which is 100% guaranteed by PG&E Corp. After 180 days, any
uncollected accounts receivable will be sold back to seller, guaranteed by. PG&E Corp.

 Commodity Portfolios: Transaction creates a Net Open Power position of 3.3 million Mwhs - Short and Gas position of
3 Bcf - Short (Electricity Load of 8.5 million Mwhs - Short and Natural Gas Load of 15 Bcf - Short), mainly in.
California. The power positions extend through the end of 2003 and gas positions extend through 2001.

E0004402011

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=XH003-01325


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RAC.Deal Approval Sheet

Deal Name: Mercury

  TRANSACTION SOURCES AND USES OF FUNDS

  Sources Uses
EESO Balance Sheet $100,000 Power Commodity Book $22,000

  Working Capital $78,000
Totals $100,000 $100,000
*There is a working capital true up that will adjust the final purchase price. The anticipated final purchase price range is $90- 100 million.

TRANSACTION UPSIDE/OPTIONALITY

Potential upside may be realized on the IT/Billing system and renewal/extension of retail customer contracts. The billing
system is in balance (accurate) for the California market. EESO may be able to leverage this capability into its existing
outsource agreement with Computer Science Corporation.

RISK MATRIX

DESCRIPTION		MITIGATION/COMMENTS
Regulatory Risk:		
 Exposure to changes and redesigns of PG&E's		Monitor closely PG&E rate cases, evaluate the CTC roll-off
unbundled tariffs and T&D tariffs, CTC roll-off		date on an on-going basis. Given low valuation of PG&E
date, duration of the CTC rebate period and PG&E		hydro generation, EES will consider acquiring hydro assets
Hydro generation valuation.		to manage the existing retail portfolio.
 Transaction requires FERC Approval under Section		Transaction will not close until FERC approval is obtained.
203 of the Federal Power Act.		
Market Risk:		
 Exposure to wholesale power and gas prices,		Hedge majority of the wholesale exposure through the
ancillary service prices and intra-day load volatility.		respective desks.
Credit Risk:		
 MTM exposure related to retail and wholesale		Credit reserve has been factored into the valuation of the
power and gas portfolios		deal.
 Inability to collect customers' accounts receivable		
in the normal course of business.		
IT/ Billing System:		
 The IT/Billing Systems are not directly compatible		EESO is attempting to hire key Mercury staff to promote
w/EESO software and hardware, some time will be		systems integration.
required to make the adjustment.		90 day overlap for integration.
Legal Risk:		
 Due diligence has been limited due to Mercury		Where full due diligence was not conducted EESO, is
confidentiality concerns.		relying on seller's representations with related sellers
		indemnity extending for 18 months for full amount of base
		purchase price.
 FERC approval and HSR filing are required.		Approval on an expedited basis is expected
		Receipt of approval is a condition for closing
 Under state anti-slamming rules, notice and		These customers represent nominal value.
opportunity to cancel service must be given to		
certain customers.		
 The target has ongoing liabilities related to		EESO is obtaining a Quantum indemnity for such liabilities
excluded liabilities transferred out of the company		and a PG&E Guarantee.
prior to close.		
 Enron Corp. guarantee.		Language to come if necessary.

\\eeshou-fs2\common$\Corporate Development\CorpDev\B Neft\Mercui\Mercury _DASH,$_2,2_3. P,~ge 2
  ECO04402012



  S
EXH003-01326


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RAC Deal Approval Sheet Deal Name: Mercury
KEY SUCCESS FACTORS

	Poor	Fair	Good:	Very Good	Excellent
Core Business	-	-	-		X
Strategic Fit	-		-	-	X
Upside Potential	-	-	X		-
Risk Mitigation	-	-	X	-	-

E0004402013

\\eeshou-fs2\common$\Corporate Development\CorpDev\B Neff\Mercury\Mercury DASH 3_22_3.doc page 3

u

EXH003-01327


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RAC Deal Approval Sheet

APPROVALS
EES Corp. Development
EES Commodity Mgmt.
Legal
Regional Management
Enron Gov. Affairs
RAC Management
Enron Capital Management
ENE Management

  Name
Mark Muller/ Jimmie Williams

Dennis Benevides

Vicki Sharp
Lou Pai
Steve Kean/Jim Steffes

David Gorte R. f, u;
Andy Fastow/Jeff McMahon
Jeffrey Skilling/Joe Sutton

Deal Name: Mercury

  S' a re Date
3 e
3 2z 00
3 z

  Zc
  3 a~

EOO04402014

r .r7

=XH003-01328

C:ITEMF Dash2.doc

Page 3




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

r

S-12

E0004402015


EXH003-01329


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ENRON RISK ASSESSMENT AND. CONTROL

DEAL APPROVAL SHEET

DEAL NAME: Nowa Sarzyna Equity Purchase Date DASH Completed: 30 March 2000
Counterparty: LJM2 RAC Analyst: Olivier Herbelot
Business Unit: EGF Investment Type: Equity
Business Unit Originator: Anne Edgley Capital Funding Source(s): Balance Sheet
OPublic Private Expected Closing Date: 31 March 2000
OMerchant Strategic Expected Funding Date: 31 March 2000
]Conforming ONonconforming Board Approval: OPending DReceived DDenied N/A

APPROVAL AMOUNT REQUESTED

Capital Commitment: .$10.63 million to purchase from LJM2 a 25% indirect equity in the Nowa Sarzyna Facility ("ENS")
Bid Bond Amount: N/A

EXPOSURE SUMMARY

Commodity Exposure: N/A
Associated Guaranties/Contractual Obligations: N/A
Existing Exposure: $ 4.65 million (25% of equity in ENS - cost basis)

  Total $15.28 million
DEAL DESCRIPTION

Purchase of additional 25% indirect equity in ENS, a gas fired heat and power station in SouthEastem Poland with a generating
capacity of 116MW and thermal generating capacity of 70MW. Power will be sold to the Polish Grid Company under a 20
year Power Delivery Agreement. The price of energy and capacity is expressed in Zlotys but indexed to the USD every 6
months for the previous 6 months. The Polish Oil and Gas Company (a state-owned integrated monopoly that controls the
entire gas sector in Poland) will supply natural gas to ENS under a 20 year Fuel Supply Agreement. The fixed and variable
price of fuel is passed through the power and steam sales agreements. ENS has agreed to sell low and high pressure steam to
Organika (state owned chemical company) under a 20 year steam sales agreement. This agreement represents approximately
90% of the facility's total thermal output, with ENS negotiating to sell the remaining 10% of thermal energy to the City of
Nowa Sarzyna for residential heating purposes.

Enron originally owned 100% of the equity in ENS but sold 75% of it in December 1999 to LJM2 for $30 million. At the time,
Enron Europe committed to making reasonable and best efforts to sell LJM2's equity interests to a "qualified" third party buyer
or to Margaux (provided that Margaux was launched by 31 March 2000, which won't be the case).

RETURN SUMMARY			
	PV @ Cumulative		
Return Components:	Capital Price IRR	Capital Price Components	
Cash Outflows	(10.6) -	Risk free rate (%):	6.2%
Fees	- -	Equity/Credit premium (%):	
Intermed. Cash Flows	7.8	Country Premium (%):	1.4%
Terminal Value	2.0	Transaction-Specific (%):	5.7%
Total NPV	(0.8) 12.5%			RAC CAPITAL PRICE:	13.3%	

Note: Those figures correspond to RAC's best current estimate but a zero NPV would be within the margin of error at this
stage.

EXIT STRATEGY

Whilst Enron will continue to hold indirectly 50% of ENS, approximately 60% of the value of the asset will be raised as debt
through the Margaux structure and certain risks related to the operations of the plant (reduction in availability due to equipment
failure and increase in heat rate) will be passed to the debt holders. The Margaux structure does not limit our ability to sell the
asset to a third party.

E0004402016

XHO03-01330


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RAC Deal Approval Sheet Deal Name: Nowa Sarzyna Equity Purchase
RISK MATRIX (Main 5 Risks Only)

DESCRIPTION	MITIGATION/COMMENTS
Plant Completion Delays	The plant was originally scheduled for completion in December
	1999. Final tests before anticipated completion were carried out on
	14 February 2000. Investigations are ongoing to determine why an
	oil pump stopped working during the test, which required plant shut
	down. As a result, a replacement rotor has been ordered for the
	damaged rotor, however, it is being determined if the damaged
	rotor, after servicing, can be used until the new rotor arrives.
	Subject to insurer's agreement, EE&CC is hoping to get the plant
	into commercial operation by May 2000. Delay in start up
	insurance is expected to cover the L/Ds that could become payable
	under the gas supply and power/steam sales agreements as well as
	possible debt service requirements (the total of which could reach
	up to $37 million if the plant is commissioned with a year delay).
	The project company would however have to cover the first month
	of L/D's and interest, resulting in a potential negative cash flow of
	$6 million, as modeled in the return calculation reported above.
Tariff Regulation	Due to recent changes in regulations, ENS had to submit for
	approval to the regulatory authority a cap on the power tariff which
	will be in place for the remainder of 2000. This cap is Zloty
	212.96/MWh (equivalent to 5.3 c/kWh), 6% higher than the initial
	tariff for the year. Therefore, ENS will only be able to pass through
	Zloty/USD devaluation for up to 6% before Enron's returns are
	affected.
	At this stage, it is expected that a new cap will be negotiated each
	year with the regulator on the basis of cost justifications provided
	b ENS.
Other Risks	The remain the same as per DASH dated 10 May 1999.

KEY SUCCESS FACTORS

	NA	Poor Excellent
Core Business		X
Strategic Fit		X
Upside Potential		X
Management		
Risk Mitigation		X

OTHER RAC COMMENTS:		
APPROVALS	Name	Signature Date
Business Originator	Anne Edgley	
Regional Mgmt.	Mark Frevert	
Legal	Michael Brown	
RAC Management	Dave Gorte	C L?~` ~3 //00
	Steve Young	
Enron Global Finance	Jeff McMahon	
	Paul Chivers	ECO04402017
ENE Management	Joe Sutton	
C:\TEMP\NS DASH 29-03-2000.doc		Page 2



(H003-01331

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

31:03 ou rill ly:ou taa Ul/ly/vlr/l - -- -

RAC Deal Approval Sheet	Deal Name: Nowa Sarz	yna Equity Purchase	
			
APPROVALS	Name	Signature	Date
Business Originator	Anne Edgley	L	I  c 3  o-zz.
			
Regional M
-nit.	Mark Frevert		
.			
Legal	Michael Brown		
			
RAC Management	Dave Gorte		

Enron Global Finance

ENE Management

Steve Young
Jeff McMahon
Paul Chivers
Joe Sutton _ _

S:\Undcrwriting\a-ProjcctAActivc\NowaSa,zina\NS DASH 29-03-2000.doc E0004402018

3~o cw
71.03 m,Q
31_3

Page 3

KHO03-01332


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

31.03 '00 FRI 19:4.4 FAX 01719707251 (,K,%1 l;NxU1\ nuxurn _
  MRR 31-2800 13:04 ENRON 713 646 5930 P.02/A2

  Steve YQ=g 3 l~
En n Global Finance DeEMeMahon
  Paul Cbi'+ers -T ~-- ?t.v3DO
ENE Mznagem(=t lea Sun an

PAC Deal Apprw ul Shut beat Numc: Nowa Sarzytm Equity Purchase
APPROVALS Name Signature Date
)Business Originator A.nn- E gl y _ J . Zr ! -' czz
Xcgienal Mart Mark Frevtrt
Legal micheet Brown
RAC Maflagement Dave Gotte



p " rl t T07~

S:1Unde~rain iPts~eevlnedvelNCraSvziw~NS VA A 24.03-2000.dae

Page 3

E0004402019 TOTAL P.O2

  31!f.3 "DO FRI 1413:, [TX.'RT NO 0776] 7.1002
XH003-01333

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

RAC Deal Approval Sheet Deal Name: Nowa Sarzyna Equity Purchase
Global Finance Summary (addendum to DASH)

1. Transaction Summary

  Total Deal/Project Capital Commitment
Less: Financings
  Less: Syndications



  Amount ($000)
$10,000
  -0-
-0-

  Net Enron Investment $10,000
2. Investment terms and pricing: 0 Market 0 Above Market 0 Below Market

  Describe (if necessary):

v

:XH003-01334

3. Financing terms and pricing:
Describe (if necessary):

4. Legal or practical liquidity restrictions:
Restricted

  Describe (if necessary):

0 Market  0 Above Market 0 Below Market

5. Any recourse to Enron (other than investment):
Describe (if any):

6a. Business unit intent to syndicate:
Describe (if necessary):

6b. Intended Enron hold period:

6c. Likely Syndication Market:

6d. Is this a JEDI 2 "Qualified Investment"?

0 Yes

U No

Global Finance Representative:
  Signature Name (Printed)
C:\TEMP\NS DASH 29-03-2000.doc E0004402020 Page 3

0 Capital Markets	U JEDI 1
0 JEDI 2	0 Enserco
0 LJM 1 or 2	0 Condor
0 Other:	0 Margaux

0 Unrestricted 0 Legally Restricted 0 Practically

0 Recourse 0 No Recourse

  0 None 0 Partial 0 All

U Industry/Strategic Partner U Direct Private Equity

Date

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

V1, 'IV I'll  L' 10 ..J U r 3 1 U l i ii l l! l .: J l ..1.:. a.....,.. .. ~ .,....,.

n/y ' 00 FRI 16:56 FAX 020 7783 8020 ENRON EtTROPE Z004
RAC Deal Approval Shact Desk Name. Nows Sarzye. Equity Purcaasc _
ApPYtOYALS Name etnatun Date
Business Originator Antie Ed lc a3. aO
  rt r o"
Re aionzi ft gmt. Mark Frave
  I .F, ,' Michael gown
  RAC M{3r.t;betu~n: Dave Gorte -
Steve Young
  Enraa Global Finance JeffMcMahon ~ ~
  Paul Cklvors y-7. OO
ENE M,nagement Joe Sutton



8wbaer+rteinBa~Prok~Vta~reWcwassrzftu~NS DAs}; 29.o3.20ae.dcc

E0004402021

F.Ye 3

<n/ +7n.: Lj c.RI. nniLc.isn 9n7.97-92t9ln )

I:i1UH AdVd NML(HSV

CH003-01335

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

S-13

m
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0
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O
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N

EXH003-01336


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ENRON RISK ASSESSMENT AND. CONTROL

DEAL APPROVAL SHEET

  DEAL NAME: Powder River III Date DASH Completed: 20 March 2000
RAC Analyst: Daniella Carneiro
  Business Unit: Enron Midstream Services/Enron North America Investment Type: Equity
  Business Unit Originator: Brian Bierbach Capital Funding Source(s): Balance Sheet
Public !]Private Expected Closing Date: O1 April 2000
DMerchant OStrategic Expected Funding Date: 01 June 2000
  Conforming DNonconforming Board Approval: DPending Received E3Denied EN/A
RAC Recommendation: M Proceed with Transaction Returns below Capital Price DDo not Proceed
APPROVAL AMOUNT REQUESTED
Capital Commitment $22.5MM'
Bid Bond Amount NA

' P95 of simulated cash outflows. P5 of simulated cash outflows is $15.6MM

EXPOSURE SUMMARY
  This transaction: $18.7MM
Total $18.7MM'

2 Mean of simulated cash outflows (P50). Expected returns are based on outflows of $18.7MM.
DEAL DESCRIPTION

Enron North America is seeking approval for $22.5MM (P95) of capital expenditures to develop five coal bed methane
gathering systems in the Powder River Basin of Wyoming. At this time, no partners are contemplated in this venture. These
systems would gather gas from coal bed methane (CBM) wells and deliver it into the Ft. Union Pipeline (1/3 owned by Enron).
ENA has already negotiated gathering and compressing rates over the life of the reserves (8-10 year period), which are
incremental to the rates ENA will earn when it flows the gas through Ft. Union. ENA has negotiated an outsourcing agreement
with Hanover Compression for the operation and maintenance of the gathering system and will pay a variable charge per Mcf.
ENA will make capital expenditures on an incremental basis, as test ,wells exhibit enough volume to economically justify
installation/expansion of the gathering systems infrastructure. This ability to delay much of the investment until after the
producers have proved up their property provides significant risk mitigation.

The proposed deal is supported by higher than expected volumes (25%) metered on the Powder River II project.

TRANSACTION SOURCES AND USES OF FUNDS ('000)
  Sources Uses
Enron Equity $18,744 * Capital Expenditures $18,744
Total $18,744 $18,744
Mean of simulated cash outflows (P50)

RETURN SUMMARY ('000)

	PV @	Cumulative
Return Components:	Capital Price	IRR
Cash Outflows	($18,744)	
Fees	$0	-
Intermed. Cash Flows	$17,991	17.05%
Terminal Value	$1,645	22.34%
Total NPV	$893	22.341/6

Capital Price Components
Risk free rate (%): - 6.63%
Equity/Credit premium (%): 5.02%
Industry Segment Adjustment: 0%
Project/Liquidity Premium (%): 7.85%
RAC CAPITAL PRICE: 19.500/0


E-Rating 7 Relative upside ratio* 1.52

* See RAC Comments Section for explanation



E0004402023

=XH003-01337


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RAC Deal Approval Sheet

Deal Name: Powder River III


14
0%		IRR Distribution	
.		Expected		
12.0%				
10.0%				
8.0%				
6.0%				
			5	
4.0%				
2.0%				
0%
0				
.			
	o e~	e e o e ei o	0 0 0
O
O	N
N	In oo
r~ N o0 O v	10 M O
O vi O
O

'?	00

M	
Vi M O V so
N ' - N M	
o C
tt 'O N

  Cash Flow Summary
$50,000
$40,000
$30,000
$20,000
$10,000
$0+--m ~-~
$(10,000)-a
$(20,000)
  00)
$(300

  Terminal Value
Ongoing
Fees
  Outflows
A--Cumulative P95
-~ -Cumulative P5
-m- Expected cumulative cash flows


  Years

CASH FLOW SUMMARY

Weighted average life: 3.2 years



RISK MATRIX

DESCRIPTION	MITIGATION/COMMENTS
Gas Volumes	 ENA will make capital expenditures on an incremental basis,
 Ultimate Recovery Per Well	as test wells exhibit enough volume to economically justify
 Number of Wells	installation/expansion of the gathering systems infrastructure.
	 Per-producer EUR volumes were estimated by RAC Resources
	Valuation
Competing Gathering Lines	 Competition for gathering rights could drive rates down and
	could reduce volumes available to ENA. Negotiations are
	substantially completed with multiple producers covering the
	acreage dedications assumed in the base-case analysis.
Drilling Rates	 The rate at which the producers develop their property affects
	the timing of project cash flows. Basin activity is currently
	very high. Producers' plans were incorporated into the base-
	case analysis; however, if activity slows, gathering system
	Ca Ex will be reduced or delayed commensurately.

C:\TEMP\DASH Powder River III 0300.doc E0004402024 Page 2

H003-01338

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

RA

C Deal Approval meet ueai name: rowuer icrver iii
Cost Control Enron Midstream Services (Denver Office) will manage
 CapEx operating and capital expenditures. Hannover Compressor, an
 OpEx experienced operator in the Basin, will operate the Gathering
  and Compression system. Compression is a major portion of
total expenditures. Hannover has agreed to install screw
compressors (but not the reciprocating units) on a flat fee basis
and charge a standard volumetric rate for compression.

KEY SUCCESS FACTORS

	Yes/
NA	Poor Excellent
Core Business	Yes	X
Strategic Fit	Yes	X
Upside Potential	Yes	X
Management	Yes	X
Risk Mitigation	Yes	X

OTHER RAC COMMENTS:

Relative Upside Ratio: The variance of returns on the right side of a distribution divided by the variance of returns on the left
side of the same distribution. A normal distribution would have a relative upside ratio of 1 since the sides are perfectly
symmetrical. Ratios greater than 1 have more upside than downside.

APPROVALS

Business Unit Originator

Business Unit Management

RAC Management
ENA CTG
ECM Management
ENA Legal
ENA Management
ENE Management

Name

Brian Bierbach

Brian Redmond

David Gorte/Rick Buy
Ray Bowen f ~Or.aG,n
Andy Fastow/Jeff McMahon
Mark Haedicke
  J C. C 1ti
Jeff Sk ~W o-'

  Date
3fzdCso
3

  3a~r~

312 JOD
3'Ziot

E0004402025

C:1TE M'r \--O O 113 8 3. d o c

Page 3

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  RAC Deal Approval Sheet Deal Name: Powder River III
  Global Finance Summary

1. Transaction Summary

  Total Deal/Project Capital Commitment
Less: Financing
  Less: Syndication's
Net Enron Investment

2. Investment terms and pricing:
Describe (if necessary):

3. Financing terms and pricing:
Describe (if necessary):

4. Legal or practical liquidity restrictions:
Restricted

  Describe (if necessary):

5. Any recourse to Enron (other than investment):
Describe (if any):

6a. Business unit intent to syndicate:
Describe (if necessary):

6b. Intended Enron hold period:

6c. Likely Syndication Market:

[] Market 0 Above Market 0 Below Market

0 Market 0 Above Market 0 Below Market IN/A

0 Recourse El No Recourse

0 Partial 0 All

0 Industry/Strategic Partner 0 Direct Private Equity

0 Capital Markets	0 JEDI 1
0 JEDI 2	0 Enserco
0 LJM 1 or 2	0 Condor
0 Other:	0 Margaux

6d. Is this a JEDI 2 "Qualified Investment"? U Yes
Global Finance Representative:
  ature

C:\TEMP\-0034984. doc

  E0004402026
XH003-01340

  Amount ($000)
$22,533
  -0-
-0-
$22,533

0 Unrestricted 0 Legally Restricted 0 Practically

El None

Strategic Investment

  1l No
Joe Deffner

Name

Page 4

3-2/-o0
Date


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E0004402027

EXH003-01341


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ENRON RISK ASSESSMENT AND CONTROL
DEAL APPROVAL SHEET

=7

DEAL NAME: Property Acquisition	Date DASH Completed: 03/29/00
Counterparty: Wockhardt, Ltd.	RAC Analyst: Jin Guo
Business Unit: Enron India	Investment Type: Equity
Business Unit Originator: P Sreekumar	Capital Funding Source(s): Balance Sheet
OPublic IMPrivate	Expected Closing Date: 03/31/00
DMerchant E lStrategic	Expected Funding Date: 03/31/00
OConforming DNonconforming	Board Approval: OPending DReceived DDenied ]N/A
RAC Recommendation: []Proceed with Transaction DReturns below Capital Price DDo not Proceed

APPROVAL AMOUNT REQUESTED
Enron India requests approval up to $40 million for purchase and buildout/furnishing of 138,000 Sq.Ft. of office space in
Mumbai, India. In addition, approval of an Enron Corp. guarantee of Indian Rupee-denominated bonds in the equivalent of
$40,000,000 as of the issue date is requested.

EXPOSURE SUMMARY

Indian Rupee equivalent of up to US$ 40 million

DEAL SUMMARY

Enron India seeks to purchase, via an 80-year lease arrangement, five floors consisting of 138,000 square feet in a newly
constructed eight-story office building in Mumbai, India. The region seeks to consolidate its existing businesses, which
currently occupy approximately 50,000 square feet of office space, and its communication operation's new data center, which
with related operations is expected to require approximately 58,000 square feet, into a single facility.

TRANSACTION SOURCES AND USES OF FUNDS

Sources ($Thousands)	Uses ($Thousands)
Balance Sheet - Dollar Denominated (expected	40,000	Acquisition of 138,000 Sq.Ft.	32,000
to be refinanced through an Indian Rs.-		of office space	
denominated Enron-guaranteed bond)			
		Buildout of acquired space	8.000
			40,000

RETURN SUMMARY

	PV @	Cumulative
Return Components:	Capital Price	IRR
Cash Outflows	-	NA
Fees	-	-100%
Intermed. Cash Flows	$3,206	-
Terminal Value	-	-
Total NPV	$3,206	-



14
0%	NPV @ Risk-Free Rate
Adjusted for Sovereign Premium
.
12.0%			
10.0%			
8.0%			
6.0%	PS	g	
4.0%			
2.0%			
0
0%			
.
n	V	N 0 C t, 'n fV O 00
o		o 0 00 00 00 00 00 00 n
N	to	N
l '0 P 00 O, O
64	H	_
69 K 69 69 64 69 u9 sA v9

Capital Price Components	
Risk free rate (%):	6.86%
Equity/Credit premium (%):	5.02%
Country Premium (%):	0.00%
Transaction-Specific (%):	2.12%
RAC CAPITAL PRICE:	14.00%

Notes: Due to multiple cash inflows and outflows in different
years, the chart for NPV at Risk-Free Rate is showed instead
of IRR Distribution Chart.

E0004402028 Page 1

XH003-01342


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RAC Deal Approval Sheet

  Cash Flow Summary
  $10,000 Terminal Value
$8,000 I smum Ongoing
$6,000 Fees
$4,000  Outflows
$2,000 --*-Cumulative P95
  $0 .-Cumulative P5
  S(2,000) --a-Expected cumulative cash flows
0.8 1.8 2.8 3.8 4.8 5.8 6.8 7.8 8.8 9.8
  Years

DEAL DESCRIPTION

Enron India recommends the purchase of 138,000 square feet of office space to house its four affiliates: Dabhol Power
Company (DPC), Enron Global Exploration and Production (EGEP), Enron India Private Limited (EIPL) and MetGas. At
present, these entities are in office space spread throughout Mumbai. The total cumulative area taken on lease as office space
by these four companies is approximately 50,000 Square Feet (Sq.Ft.). While EIPL is situated in South Mumbai, the other three
are located in different locations in the suburban area of Mumbai at a distance of 15-25 kms from EIPL's office. The
decentralized offices have the following disadvantages for Enron's Indian Operations:

 Co-ordination problem between the various affiliates and significant travel time between offices
 Large aggregate cash outflow in the form of rent
 No hedge of future office rent or asset creation for Enron.
 In-efficient ways of acquiring property for the expansion needs of each of the affiliates
 Difficult to enhance "One Enron" concept with employees located at multiple locations

In addition, establishing a data center in Mumbai, an important part of the Communications Business Strategy of Enron India,
will require large permanent space for servers and associated infrastructure. This further prompts consideration of ownership of
permanent office space.

With an aim to eliminate the above listed disadvantages, Enron India proposes to purchase, via an eighty-year lease, office
space in a central location in Mumbai and move all of Enron's Indian affiliates into the same building. The office location
recommended, after market research, is a building in the Bandra-Kurla Complex, which is currently owned by Wockhardt,
Limited. The Bandra Kurla Complex (BKC) is becoming the preferred location for office space due to its central location in
Mumbai as well as low property rates and it's proximity to the domestic and international airports. Reputable companies like
ICICI, Citibank, Unit Trust of India, and IL&FS have relocated from South Mumbai to BKC.

The building is an eight-story building. EIPL proposes to acquire a total Built Up Area (BUA) of 138,000 sq. ft. consisting of
the basement and five floors. The building will also have a parking space for about 100 cars (exclusive for Enron). Enron also
has the option of having the building named after itself (e.g.: "Enron Towers").

The total area of 138,000 Sq.Ft. will be divided between the various affiliates based on their forecasted requirements.
Additionally, plans include a cafeteria, gymnasium and a common lobby on the ground floor of the building.

Enron Global Exploration and Production has indicated interest in this space but has not yet committed to this space. This
business unit is presently conducting internal evaluations and discussions with partners. Should they forego the allotted space,
extra space will be rented to third parties. The space existing and proposed space allocation between the various affiliates is
indicated below:

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RAC Deal Approval Sheet
  Space Allocation Table

Company	Area (Square eet
	Existing	Propose
__
a o Power Company		F41 M7
Global
_		,
Enron India Private DU
.	11,	18,160
(Communications)		
et as		,
ae y o y	0	16,
Total	,	,

EIPL proposes to acquire the property by issuing Rupee denominated bonds. The Indian Rupee bond issue, estimated to be
US$ 40 million, will be backed by the corporate guarantee of Enron Corp.

The purchase will be in the form of an 80-year sublease from Wockhardt Limited. EIPL will hold the property in its own name
and sign a "Shared Services Agreement" with each of the Enron affiliates. The Rupee bonds issued by EIPL will be serviced by
cash flow from rents received from affiliates, as well as from the terminal value of the building.

RISK MATRIX (Maximum 5)

DESCRIPTION	MITIGXTIONiCOMMENTS
Risk that space requirements for nron s n ian	a existing space ease by a Enron units, plus the propose
Operations are Insufficient	Communication's unit data center, total less than 80% of the space
	to be purchased. The Indian business units presently pay pro-forma
Risk all Enron units in India do not relocate to	annual lease payments of $3.4 million, compared to $4.2 million
purchased Building	under the proposed purchase, albeit for significantly more square
	footage. These risks are mitigated by the growing nature of
	Enron's Indian operations and would be further mitigated by
	EGEP's commitment to lease space in this building. Moreover,
	should Enron not be able to fill all its available space in the
	building, leasing unused space of one-half floor or more to others,
	while not a core business can significantly mitigate this risk.
Residual Value is is building value will	Commercial real estate values in um ai were volatile during the
decline during ownership period.	1990s, increasing significantly in 1991-1995 and declining
	significantly in 1995-1998, before a recent period of moderate
	appreciation. This risk is mitigated by the assumed fifteen-year
	holding period for this building and by the fact that the economics
	remain acceptable even assuming no price appreciation in the
	residual value of the building. The expected returns from this
	investment are widely scattered because of the large expected
	variation in the terminal value.
Currency is Political s	e currency risk o this investment is largely hedged through the
	planned financing of local currency denominated bonds. Some
	currency risk will occur from the purchase date until the bonds are
	issued.
	The investment also carries the normal political risks of
	.investments in India: expropriation, inconvertibility of sales
	proceeds, political violence, etc. The ownership of the building
	increases these risks relative to Enron's present tenant status.

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EXHIBIT II

Projected Cashflow & Running NPV

In Thousands

Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Projected Average Cashflow 62 (217) (52) 104 767 866 967 1,051 1,086 1,098 1,140 1,183 1,073 1,095 1,158
15 Year Running NPV@14% 62 (128) (168) (98) 356 806 1,247 1,667 2,048 2,385 2,693 2,972 3,195 3,395 3,579
Projected NPV@14%* 3,579

Notes: The NPV in Exhibit II is slightly different from that in DASH. The NPV in DASH
is the average of probabilistic NPV and the NPV in Exhibit II is the NPV from the probabilistic average cash flows.

m
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RAC Deal Approval Sheet

EXHIBIT I

PURCHASE ECONOMICS

The total acquisition cost of the 138,000 sq. ft. BUA for bare walls (without buildout / furnishing) is Rs. 1400 MM (US$ 32
MM). Buildout/furnishing is estimated at around Rs. 350 MM (US$ 8 MM). Total acquisition cost is itemized below:
  Building Acquisition Cost

Item	s	Equivalent
US$ MM
-
Building Cost	1250	2TT
Stamp Duty/Other Charges		
3.4
ut ou units g	350	8.0
Total Acquisition Cost		
40.0

Present lease agreements show Enron affiliates are paying rent which varies from Rs. 188/sq. ft./month (EIPL) to Rs. 81/sq.
ft./month (MetGas). There is a security deposit, 11.5% of annual rent.

Rent of Rs. 110/sq. ft./month, (not including furnishings) is proposed by EIPL. Proposed rent verses existing rent is shown in
the table below. An existing + expansion comparison, considers leasing other space at prevailing market rates.

Comparison of Rent Expense

Per Annum	Existing	Existing + Expansion*	Proposed
Parameter ---->	q t	Effective
Rent
(Rs/SF/M)	Annual Kent
(US$ MM)	q t	Effective
Rent
(Rs/SF/M)	Annual Rent
(US$ MM)	q t	Effective
Rent **
(Rs/SF/M)	Annual Rent
(US$ MM)
Communications	-	-	-	58,100	120	1.90	58,100	110	1.74
DPC	9,220	86	0.22	15,912	86	0.37	15,912	110	0.48
Enron Global
ENP	22,553	92	0.57	32,423	92	0.81	32,423	110	0.97
MetGas	6,051	81	0.13	11,365	99	0.31	11,365	110	0.34
EIPL	11,685	188	0.60	20,640	168	0.95	20,640	110	0.62
Total	49,509	107	1.52	138,440	115	4.34	138,440	110	4.15

(* It is assume that nron 1 sates rent out new property at t e same location as they are present y occupying
(** Fumishing/buildout charges to be recovered separately)

The above table shows the rent expense including expansion to be US$ 4.34 MM per annum to be in excess of the proposed
EIPL proposed rent of US$ 4.15 MM per annum.

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Global Finance Summary (addendum to DASH)

1. Transaction Summary

  Amount ($000)
Total Deal/Project Capital Commitment $40,000
Less: Financings -0-
Less: Syndications -0-
Net Enron Investment $40,000

2. Investment terms and pricing: X Market U Above Market 0 Below Market
Describe (if necessary):This is an acquisition of a first-class building in Bombay to house all of Enron's current and
future Indian businesses.

3. Financing terms and pricing: XU Market U Above Market 0 Below Market
Describe (if necessary): The purchase price and buildout will be financed via a rupee denominated bond offering in
the Indian financial markets with a guarantee from Enron Corp. Expected interest rate is in the range of 11 % to 13%
for five years fixed rate.

4. Legal or practical liquidity restrictions: U Unrestricted U Legally Restricted X0 Practically Restricted
Describe (if necessary): Since this is real estate, it's liquidity is dictated by the relative strength of the real estate
market in Bombay at the time we try to sell it or sublease it. There are no legal restrictions to prevent a sale or
sublease.

5. Any recourse to Enron (other than investment): XU Recourse U No Recourse
Describe (if any): As described above, the financing will be guaranteed by Enron.

6a. Business unit intent to syndicate: XU None 0 Partial U All
Describe (if necessary): Not Applicable

6b. Intended Enron hold period: Until we outgrow the office space.

6c. Likely Syndication Market: N/A U Industry/Strategic Partner U Direct Private Equity
U Capital Markets 0 JEDI I
  U JEDI 2 U Enserco
U LJM I or 2 0 Condor
U Other: 0 Margaux

6d. Is this a JEDI 2 "Qualified Investment"?

0 Yes

XU No

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Global Finance Representative: William Ll Gathmann 0

Signature Name (Printed) Date

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INTEROFFICE MEMORANDUM

To: Joe Sutton

From: Dave Gorte; %-7
Date: March 29, 2000

Re: Property Acquisition/India Building Purchase DASH

This memorandum will confirm that I have received a voice mail from Jeff McMahon indicating his approval of the
above transaction. He will sign this DASH upon his return on Friday.

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RAG Deal Approval Sheet
KEY SUCCESS FACTORS

		-Poor Excellent
Core Business		x
Strategic it		
Upside Potential		x
Management		
s Mitigation		

OTHER RAC COMMENTS:

The economics of this investment are driven significantly by the residual value of the property. Commercial real estate values
in India have been volatile; as a result, the projected returns for this investment are widely dispersed.

APPROVALS
Region Originator
Region Legal
Region Management
RAC Management
ENE Management
ENE Management
Enron Capital Management

  Name
P Sreekumar

Sandeep Katwala

Sanjay Bhatnagar/Wade Cline
Rick Buy/Dave Gorte
Joe Sutton
Ken Lay/Jeff Skilling

Andy Fastow/Jeff McMahon

Signature



Date

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SO '39dd

it:80 OOOZ 6z bdw

RAC Deal Approval Sheet
KEY SUCCESS FACTORS

	NA	Poor Excellent
Core Business		X
Strategic Fit		x
Upside Potential		X
Mana anent	X	
Risk Mitigation		X

OTHER RAC COMvfNTS:

hhc economics of this investment are driven significantly by the residual value of the property. Commercial real estate values
in India have been volatile; as a result, the projected returns for this investment are widely dispersed.

APPROVALS
Region Originator
Region Legal
Region Management
I,AC Management
ENE Management
GENE Management
Enron Capital Management

Name

P Sreekumar

Sandeep Katwala
Sanjay Bhatnagar/Wade Cline
Rick Buy/Dave Gorte
Joe Sutton

Ken Lay/Jeff Skilling
Andy Fastow/Jeff McMahon

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25 3 ;gyp

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ENRON RISK ASSESSMENT AND CONTROL

DEAL APPROVAL SHEET

DEAL NAME: South America Fiber Optic Network Date DASH Completed: 01 March 2000
Counterparry: TB G - Tramportadora Bra silcira RAC Analyst: Daniella Carnciro / Juan Samudio
  Gasoduto Bolivia - Brasil S.A. investment Type: Equity
Business Unit: ESA (50%) / EBS (50%) Capital Funding Source(s): Balance Sheet
Business Unit Originator: Pravin Jain Expected Closing Date: 03 March 2000
QPublic EPrivate Expected Funding Date: TDD
OMerchant Strategic Board Approval: Pending OReceived ODenied EN/A
OConforming ENonconforming _
RAC Recommendation: Proceed with'rransacrion DReturns below Capital Price ODo not Procecd

APPROVAL AMOUNT REQUESTED
Capital Comrnitmcr,t SS 10,054

EXPOSURE SUMMARY
  This transaction: S10,054
Total S 10,054

  Actual construction on the Right of Way is estimated to cost an additional S51MM if multiple subduct conduits arc installed
(allows up to three expansions), and S43NIM if single-subduct conduits are used (option for one expansion only).

DEAL DESCRIPTION

Eaton South America and Broadband Serrices propose to spend 310MM for the purchase of a non-exclusive perfected use of
Rights of Way ("ROW") :long a 987-kilometer seginent of the pipeline from Catnpinas to Porto Alegrc from TBG-Transportadora
Brasilc-.ra Gasodute Bolivia-Brasil S.A Population along this route is over 6.6 million (4% of Brazilian population) and accounts for 8.7%
of the Brazilian total purchasing power. A proposed fiber swop would extend the network mach over an additional 950km, connecting the
original network to the prime cities of Sao Paulo, Rio do Janciro and Bclo Horizontc. Population in the swapped route exceeds 22.1 million
(I 3"/o of population), and accounts for 27.2% of the country's purchasing power. The purchase of the ROW is subject to two conditions
precedent: (a) Resolution of a 189krn ROW gap, and (b) Obtaining licensing from ANP and ArATEL.

The ROW will not provide rnvcnucs directly, but will clazify Enron's and Petrobri s' position in the market and will provide
several commercial options going forward.

Enron's Position
By purchasing the ROW Enron will have demonstrated willingness to build along the proposed route. With the resolution of
the ROW gap and by obtaining regulatory approval, Enron will become a more credible seller of fiber in the marketplace. It
will become more economical for firms to purchase fibers from Enron than to spread the fixed cost of ROW and construction
of a network themselves.

Petrobrit' Position /
As a condition precedent to the sale, Enron must obtain ROW along 189km owned by Petrobras rather than the pipeline, or
along a satisfactory alternate route (i.e. highways, railroads). Pctrobris owns a 51% stake in TEG and has delayed negotiations
as it tries to dccidc its own future role in the telecom market in Brazil. The Deal Team can leverage Enron's purchase of
ROW to put additional commercial pressure on Peuobris with the potential for legal/regulatory pressure to follow.
Cornmcrcial Options
  1. Sell fiber to a third party. The break-even S909/km (based on a $43vLV1 constnrction cost) for 48 fibers supports
deal offcred to Intelig at Sl,180/km.
  2. Sell fibers to EBS for developing their network
   The favorable conclusion of a proposed strategic swap with Intelig will give Eoron valuublc miicagc for
increased network reach which in turn could provide a South America platform for EIN, broadband interrncdiatiott and
content delivery Serviccs.
  3. Option to increase the number of fibers based on demand up to three times, and up to 216 fibers per expansion.

  Capital Estimated
Investment Description of Investment Timing
S 1 0,054,000 TBG Pipeline use of ROW - Campinas - Porto Alegre Current

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RaC Deal Approval Sheet Deal Name: South America Fiber Optic Network

  TRA.rSACTION SOURCES AND USES OF FUNDS
  Sources Uses
50% ESA/ 50% EBS Equity $10,054 Capital Expenditure (ROW) $10,054
Total $10,054 $10,054

RETURN SUvi ARY

	PV (	Cumulative
" Reiurr. Components:	Capital Price	IRR
Cash Outflows	(S38,385)	N/A
Fees	$0	-100.00%
Tntcrmcd. Cash Flows	$39,154	28.62%
Tcrrniral Value	$0	28.62%
Total NPV	S769 28.62%~

E-Rating

9

Capital Price Components	
Risk free ratc (%):	6.39%
Equity/Credit premium (%):	5.02%
Country Premium (%):	5.80%
Transaction-Specific (%):	11.79%
RAC CAPITAL PRICE:	26.00"/0

Relative upside ratio

2.253

' Note: Cash flows reflect the probability that the Build and Expansion options are exercised, which will be treated as
separate rra)tsactions.

			IRR Dis tribution	
35.0%	r
PS				
J tl io					
25.0%					
					
15.0%					
10.0%		F5			
5.0%				F95	
					
0.0%				
	o	e o 0 0	0 0 0 0	0 0 0 o c o 0
	p	v-i ' oo	r t~ - t0	O h O' v oo c~ h
	O	r~ N C v1	N eo .- -	a7 c O r` ri O 'C
	O	N V N
r r	n ~n so -
.-.	._ V c+ e N C'
-- - N N N N

Cash flowSuututary

5400,000 _T Elapsed
  I -e-- Expec tedc''tuative csh
ScQO,000 I _ ~~-
  f --e--C=uativc C5
+G^dative P95
5200,000 i ,
  I +Outflaw~
4100,000 ly 0 f

  l t c 4 1 7 A tee 'w 1t; L 1.1,~~a n l to `0 `J; `t S7 1w} ^1] n C~/ ^A V 4I -"~T=und Vzlw
S;10U,0U0) J ..
  Months

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RAC Deal Approval Sheet Deal Name: South America Fiber Optic Network

CAPITAL EXPENDITURE CHART

':,APITAt. EXPENDITURE CHART

Capital
Expenditure

$51 MM

S10MM

Time

A - Inibal Investment. ROW Purchsse
9 = Investment in Network Construction  based on timing of first pre sales
C = Investment n Network Expansion - based on subsequt:nt pre-sales

 Note: Flexlolury of up to rnree 216tioer expansions.

  SACTION UPSIDES/OPTIONALITIES
TR.

Expansion
 Multiple subducu allow the option to install additional fibers in conduit based on pre-sales. There is significant
  value in this option as the investment in the purchase and installation of each set of 48 fibers costs approximately
$9M_M, while the deal team estimates the 48 fibers could be sold for as much as S 117MM. This probability has
been included in the model :nd causes the tail.

II. Swap
  A proposed swap transaction with lntelig would extend the reach of the fiber network from 1,220km to 2,1701en,
and connect the prime cities of the Brazilian South/Southeast region. The cities connected by the network after
the swap transaction account for 18% of the Brazilian population of 1 63 million, and 36% of the country's
purchasing power.
   Having access to these prime cities would provide EMS with a strategic benefit in constructing its network.

III. Segment II - Extend Network from Southeast Brazil to Chile.
  There is an opportunity to extend the network reach from the Southeastern Brazil to Santiago, Chile. The Project
would build the second segment from Porto Alegre to Buenos Aires. The Deal'Team is currently negotiating with
railroad concessionaires for this route segment. National Grid, Williams Communication and Trans Canada have
formed a joint, venture to build from Buenos Aires to Santiago. This joint venture has been in negotiations with
the Deal Team to swap fibers on the two routes.

EXIT STRATEGY
  e Sell off fiber network at break even price; or cap losses at $10MM (initial ROW investment).

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RAC Deal Approval Sheet Deal Nanic: South America Fiber Optic Network

RISK MATRIX

DESCRIPTION	MITIGATION/COMMENTS
Price Risk	Pricing assumptions significantly impact the project's returns. The
	model range of 31,200 to $2,000 fiber/km per 48-fiber packet is a
	RAC estimate based on Deal Team proposals. An Anchor Tenant
	contract at $1,180 fiber/km has been offered, which helps define the
	low end. The Deal Team has other proposals in front of customers
	at prices up to $5,000 fiber/km for fiber sales of 4 to 6 fibers.
	This number has been discounted due to:
	 Open Access (see below) will put significant downward
	pressure on prices.
	 Current proposals arc theoretical in nature and do not reflect
	actual commitments.
	 The need to sign up customers quickly to demonstrate
	commitment to the project and the need for multiple
	trausactious for the sale of all 43 fibers will influence ricin .
Fiber Build by Competitors	There are a number of companies interested in building networks in
	SouthJSouthwest Brazil. These companies arc either potential
	customers or competitors. I
	 Embratel and Incelig have the need for fiber that justifies strong
	capital corrunitment to the development of routes in this area.
	They arc currently not building fiber for sale, preferring to i
	swap with existing players, in an apparent attempt to keep new
	players out of the market. Tf this strategy changes, they would
	become formidable competitors.
	 With the purchase of the ROW Baron will have shown
	comrnianent to a fiber build which will help attract customers.
	If another credible player enters the market and shows stronger
	commitment (purchase ROW and commit to build), then
	customers may gravitate to them.
	 Under the TBG Shareholders Agreement, any TBG i
	Shareholder has the right to use TEG's ROW provided that fair
	compensation is paid and such compensation is approved by
	TBG's board of directors. Also, recent legislation prevents
	ROW owners (pipelines, highways, etc) from denying ROW to
	qualified interested parties (qualified by ANATEL) provided
	that a fair price is paid.
	 Potential players in the market: Embratel, Intel.ig, AES, and
	Williams.
Open Access	Unde- current legislation, Enron may be forced to sell unused
	capacity at "fair market" prices as defined by ANATEL I
	(Brazilian Telecom Regulatory Agency). This legislation is
	new (November 1999) and has not burn interpreted by
	ANATEL yet. The concept of fair market is just now being
	introduced in the Brazilian telecom market and may
	significantly impact on the potential upside of this transaction. I
Public Notice	Under recent legislation, TBG will probably have to issue a
	public notice of the availability of the ROW, making ROW
	available for purchase to other investors. The notice may I
	include technical information, pricing and time periods for
	obtaining the ROW. Ultimately, the entire agreement may be
	made available to the public _

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:RKC
vMAR. H). 2000 9:03A(I 66EC(- pi

RAC Dcn1 Approval Shat Deal Name: South Arnerkn Fiber OptitlNetwork

VC, 0921 i 0006

Other Re~u story Rinks -	Th 9nzii telecom some ij xMderbomh rspi1 rcculxtory, thane
and nvw tcgulatiolu or untmueen apphcauotu of wing
to ationceautdWee set eeonom;c
189km ROW Cep	On* of tba coaditiod.i protxdeat in the ptt:paaed agremertt 11 a
	szdsfictury tohttioa !ar the 1.89-Womatet ppt as tlto roast. Same
	of tat. selationa may lachdc;
	 rurzhuing use of rigtta of may dir.otly$nrn Pctzobzht,
	 Ptttttuuiag Cights of way dizcaly Eora tsioony nuttteritis of
	railwZy concee>ionairtr, or pir..bwice coodulr &orrt otLcr
	partlts fcr tt4 tcatioai (Eunmar tt cxittSuo t(r z eaadutt
	not~k that rata pareUal to the'TBC, )CD W).
	 inttig Fins the gxQs with rot railroad rigiln of may,
	A (tdi914v alts artveri otway,

)EY SUCCESS PACTOIZS

	NA	Poor ~YC.uaa!
Cots Ba es9		x
S ;.Flt		x
U ide Pot 1		
Mangy amcnt		
Risk Mfd 7rinn		

OTBER PAC C01YVMENTS:

This lz a irpecuL dyc tavcstincat that may result in the loss of the ititzal iavoctma>! it the trurkct for i s dots nae dealop oY
another more iggr e r ve player decide; to build, if the msrkct dots develop, shit Fnvosmrnt btt{ rmbcddud optioaa m ezgmd
capoclry, which would si tfesnlfy irerstse returns.

  .Lay c oa rpuc ion e]Dng the XOW (without s 100% at the cirlml caverad ttxvur1h p-.alia) would tcquitt a DESK
My :n1: of fiber ro PBS would tcT.ire s scppzh DASR. I

AP 'RO Y..L9
NsmP
RAC Managomenr
Rrrmn Capiitxl Ma.attgemt 1
Burlaeoc t.lnit Originator
Lcg31(ESA)
Legal (EBS)
Suiiness Unit (Kcryzaontant (ESA)
'Burinw Unit Meaatemce:C(23A)
Duslnas Uttlt Mmzgetttestt ("E13 S)
1:3udiaud Unit Mxr agcutcat (FMS)
tE 1 taaag meat

e;\Wtn~C, +TnMo41Ena14O c

  tnr.

i y d GoYte
left ldc.Mehoa
PMVjp J110
Robert George
Krls dim Mnrdaao t
rim $t w=ont
IN Ki>rhkill
Joe Ekko
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  $Iiiott
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RAC Deal Approval Sheet

r

Other R gulatory Risks	The Brazilian telecom sector is undergoing rapid regulatory change
and new rcgulati.ons or unforeseen applications of existing
reculations could affect project economics.
t 89km ROW Gap	One of the conditions precedent in the proposed agreement is a
	satisfactory solution for the 189-kilometer gaps on the route. Some
	of the solutions may include:
	 Purchasing use of rights of way directly from Petrobras.
	 Purchasing tights of way directly from highway authorities or
	railway concessionaires, or purchasing conduit from other
	parties for gap sections (Barramar is constructing a conduit
	network that runs parallel to the TBG ROW).
	 Intelig bridging the gaps with its railroad rights of way.
	 Acquiring individual altemative ri hts of way.

KEY SUCCESS FACTORS

	NA	Poor Excellent
Core Business		x
Strategic Fit		x I
Upside Potential		x
Management	x	
Risk ,-litigation		x

OTHER RAC COMMENTS:

Deal Name: South America Fiber Optic Network

This is a speculative investment that may result in the loss of the initial investment if the market for fiber does not develop or
another more aggressive prayer decides to build. If the market does develop, this investment has embedded options to expand
capacity, which would significantly increase returns.

  Any construction along the ROW (without a 100% of the capital covered through pre-sales) would require a DASH.
Any sale of f.ber to EBS would regwrc a separate DASH.

APPROVALS:			
N acne	Signature		Pate
RAC :Management	David Gorte		
Enrw Capital Management	Jeff McMahoa		
Business Unit Originator	Pravin Jain		
Legal (ESA)	Robert George		
Legal (EEiS) ..-	Kristina Mordaunt		
Business Unit Management (ESA)	Jim Bannantine	_	
Business Unit Ivianagement (ESA)	Joe Kisbkill		
Business Unit Management (EBS)	Joe Hirko		
Business Unit Management (IBS)	Steve Llliott		
F.NE Management	Jeff Shilling		



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I<:l( I kul \ppl.w.- [ S1u. t Dcul Natttc: StlutlL Amerit:a Fiber optic tit ct~urk

  r i111Cr [fit"'Ul;ttury lti..ks 7 he Rrttrili'm tclcct7i i sector to ttudt:1guing, r; pk! rl't:Lllalttr' CIT.U z. '
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  ,

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  1. Transaction Summary

  Total DeaVProject Capital Commitment
Less: Financing
  Less: Syndication's
Net Enron Investment

  2. Investment terms and pricing:
Describe (if necessary):

3. Financing terms and pricing:
Describe (if necessary):

  Amount ($000)
$10,054
  -0-
-0-

  $10,054
El Market 0 Above Market 0 Below Market

0 Market 0 Above Market 0 Below Market UN/A

  4. Legal or practical liquidity restrictions: 0 Unrestricted 0 Legally Restricted E l Practically
Restricted

  Describe (if necessary): Purchasing a non-exclusive Right-of-Way

  5. Any recourse to Enron (other than investment): 0 Recourse 21 No Recourse
Describe (if any):

6a. Business unit intent to syndicate:
Describe (if necessary):

  6b. Intended Enron hold period:

6c. Likely Syndication Market:

t] None 0 Partial 0 All

Strategic Investment

0 Industry/Strategic Partner 0 Direct Private Equity

0 Capital Markets	0 JEDI 1
0 JEDI 2	0 Enserco
0 LJM 1 or 2	0 Condor
0 Other:	0 Margaux


6d. Is this a JEDI 2 "Qualified Investment"? 0 Yes MR No

Global Finance Representative: ~AWRC--r1cc m. yet 3j, ~60
Signature Name Date

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S-16

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ENRON RISK ASSESSMENT AND CONTROL

DEAL APPROVAL SHEET

DEAL NAME: Transredes II	Date DASH Completed: 04/05/00
Counterparty: Transredes S.A. ("TRSA")	RAC Analyst: Derek Mo
Business Unit: Enron South America	Investment Type: Secured Working Capital Loan
Business Unit Originator: Peter Weidler	Capital Funding Source(s): Balance Sheet
OPublic OPrivate	Expected Closing Date: April 2000
DMerchant (]Strategic	Expected Funding Date: April 2000
DConforming ONonconforming	Board Approval: OPending OReceived ODenied EN/A
RAC Recommendation: (EProceed with Transaction OReturns below Capital Price ODo not Proceed
APPROVAL AMOUNT REQUESTED	
Capital Commitment US$5.0MM	
Bid Bond Amount NA	

EXPOSURE SUMMARY
  This transaction: US$ 5.000MM
Original investment: US$131.750MM
Total US$136.750MM

DEAL DESCRIPTION
Transredes S.A. ("TRSA") is in the business of transporting natural gas and hydrocarbon liquids in Bolivia. Enron and Shell
each owns 25% of TRSA, while Bolivian pension funds own 34% and current and former employees own the remaining 16%
of TRSA. TRSA owns 51% of GasTransBoliviano ("GTB"), which is the Bolivian portion of the Bolivia-to-Brazil Pipeline.
TRSA also owns approximately 25% of the Cuiaba Integrated Project.

TRSA's cash liquidity position has been depleted as a result of the following events: E0004402048
1. Delays in Cuiaba Project Financing
2. A recent oil spill from one of Transredes' liquids pipelines and subsequent delays in insurance proceeds (the insurance
company is currently disputing its obligation to pay).
3. Delay in buildup of anticipated gas demand in Brazil which has had an impact on transportation volumes and subsequent
cashflow.

Additionally, TRSA's plans to cover this shortfall with proceeds from a recapitalization of the company in early 2000 have not
materialized due to delays in establishing a new tariff regime prior to the legally required date of May 2001.

Concurrently, with regards to the Cuiaba Project Financing, TRSA is being asked by the Project Lenders, OPIC and CAF, to
provide a stand-by Letter of Credit or an investment grade guarantee for potential future project cost over-runs and liquidity
support.

During March 2000, TRSA was able to obtain US$10MM from Banco Nacional de Bolivia (BNB) and US$8.75MM from the
monetization of future subordinated debt payments from GTB. Notwithstanding, TRSA's forecasts that its cash position will
turn negative as of April 3, 2000. Total cash shortfalls between April 2000 and May 2001 amount to US$125MM including
commitments for Cuiaba.

Enron is currently pursuing two paths in regards to a permanent solution to the TRSA situation. The first path is the purchase
of a portion or all of TRSA's interest in the Cuiaba Project. If this is determined to be the preferred course of action, then upon
successful execution by Enron of a purchase of all or a portion of TRSA's interest in the Cuiaba project, the proceeds of said
purchase would be utilized first to repay all outstanding borrowed amounts from this Facility as well as the balance of
defaulted cash calls on Cuiaba. Transredes currently has US$84MM invested in Cuiaba and has defaulted on approximately
US$18MM of cash calls. The second path is an expansion of the Facility secured by TRSA's interest in GTB. If it is
determined that an expansion of this Facility is desired, it is contemplated that Enron and Shell would loan no more than a total
of US$70MM against the GTB interest. The remainder of any needed funds would be obtained from issuance of bonds in the
local market or the sale of assets. Analysis will be complete within two weeks and a recommendation will be forthcoming
during the month of April.

  At this time, Enron South America requests authorization to provide a 14-month US$5.0MM Revolving Credit Facility funded
in the form of two separate loans of US$2.5MM each. The first loan of US$2.5MM will take place at the beginning of April
2000 with the second loan taking place around the middle of April 2000 after review of TRSA's cash position and progress
made on the Cuiaba purchase. Enron is not obligated to provide the second loan of US$2.5MM. Shell will also provide an
identical loan under a common terms agreement with Enron. The Enron & Shell loans will be secured by 100% of TRSA's
Shareholder Capital Interest in GTB with both Enron & Shell sharing the collateral proratably. Shell executive management
=' hag inrlirnted itc ciippnrt fnr the prnpncnl nnrl will he nhtnining execuaive cnmmittee proposal by March 30, 2000.

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RAC Deal Approval Sheet

Deal Name: Transredes II

Summary of Key Terms:
 Tenor: 12 month facility with option by Enron to extend for 2 additional months.
 Security: Security interest in 100% of TRSA's Capital Interest (definition includes Capital Commitment, Shares and
Subordinated Loans) in Gas TransBoliviano S.A. ("GTB"). There will be a period of 60 days during which time all
required regulatory and government approvals will be obtained to permit perfection of the security interest. In the event
perfection is not obtained, Enron has the option to 1) ask TRSA to deliver other security for the loan to be approved by the
Lender, 2) continue the Facility as an unsecured loan with a corresponding adjustment to the interest rate, or 3) accelerate
the loan and declare the loan due and payable.
 Structuring fee: 0.50% of the Facility Amount paid upfront to Enron upon delivering each advance of US$2,500,000 to
the Facility.
 Commitment fee: 0.50% p.a. for each commitment of US$2,500,000 calculated on the undrawn but available portion of
the. Facility.
 Interest rate: Secured rate is a floating rate equal to 1 month LIBOR plus a margin of 5.00% p.a. to be applied to the
drawn portion of the Facility. Unsecured rate is a floating rate equal to 1 month LIBOR plus a margin of 7.00% p.a. to be
applied to the drawn portion of the Facility.
 Default interest rate: 2.00% p.a. over and above the appropriate and applicable Interest rate above.
 Mandatory Prepayments: Upon successful execution of a purchase of all or a portion of TRSA's interest in the Cuiaba
Project, the proceeds of said purchase must be utilized first to repay all outstanding borrowed amounts from this facility.
Upon repayment of the borrowed amounts from the Cuiaba Project, Enron's commitment shall be terminated and Enron
will have no further obligation to lend to TRSA under this Agreement.

TRANSACTION SOURCES AND USES OF FUNDS ('000)
  Sources Uses
Enron 1" Credit Facility $2,500
  Enron 2"d Credit Facility $2,500 Working Capital Advances $5,000
Total $5,000 Total $5,000

RETURN SUMMARY

Below is a comparison of the debt spread, commitment and upfront fees that Enron will charge Transredes versus what other
counterparties are currently charging to Transredes. The comparison indicates that Enron is charging Transredes market rates.

Debt Spreads (Over LIBOR):

Senior	2.79%
ECA	2.25%
OPIC	4%
Average Spread	3%
Proposed Enron	5%
Spread	

Commitment Fees:
Senior
ECA
OPIC
Average Commitment Fee
Proposed Enron Fee

	Upfront Fees:	
1.00%	Senior	1.50%
0.30%	ECA	0.50%
0.50%	OPIC	1.50%
0.60%	Average Upfront Fee	1.17%
0.50%	Proposed Enron Fee	0.50%

Summarized below is Transredes' projected total debt and EBITD through 2004. EBITDA projections represent deterministic
values that were presented by the deal team. RAC has not performed a probabilistic analysis to confirm or derive EBITDA
values. The increase in Year 2001 EBITDA reflects the deal team's anticipation of a tariff rate increase. However, the event of
a tariff rate increase is uncertain. Total debt over EBITDA is also calculated below. Note that total debt is always less than
EBITDA multiplied by a factor of 5 indicating that Transredes should have sufficient debt coverage.

	1999	2000	2001	2002	2003	2004
New Debt		$205,283	$408,410	$521,020	$538,800	$480,180
Old Debt	$12,088	$23,541	$22,696	$21,850	$19,184	$16,700
Total	$12,088	$228,824	$431,106	$542,870	$557,984	$496,880
EBITDA	$69,527	$77,954	$218,408	$113,545	$116,520	$127,662
Total Debt/EBITDA	.17	2.94	1.97	4.78	4.79	3.89

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RAC Deal Approval Sheet

Deal Name: Transredes II

CASH FLOW SUMMARY

Cash flow summary is not included, as this is a short-term bridge loan of 14 months. Additional funding is required for balance
of 2000; an updated model will be done at that time when those funds are required.

TRANSACTION UPSIDES/OPTIONALITY

NA

EXIT STRATEGY

Refinanced after tariff is reset/increased. If there are no tariff increases, sale of interest in Cuiaba project will occur.

RISK MATRIX (Maximum 5)

DESCRIPTION	MITIGATION/COMMENTS
Tariff reset not favorable for attracting long-term	Capitalization/privatization agreement provides for tariffs
financing.	calculations based on cost of service, debt service, 12.5% return on
	equity, and deferred accounts.
Cuiaba Funding Delayed or unsuccessful financial	Enron pursuing a purchase of all or a portion of TRSA's interest in
closing.	Cuiaba.
Inability to perfect security interest in collateral.	Interest rate adjusted to reflect market based rates for unsecured
	loans.

KEY SUCCESS FACTORS

	NA	Poor Excellent
Core Business		X
Strategic Fit		X
U side/O tionalit		X
Management	X	
Risk Mitigation		X

OTHER RAC COMMENTS:

This is a short-term bridge loan that is being funded to permit Enron to further evaluate its options with respect to this
investment; this loan is being extended in parallel with an identical loan from Shell. A full RAC assessment of this investment
will occur prior to further investments in Transredes.

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ENRON RISE; ASSESSMENT AND CONTROL

DEAL APPROVAL SHEET

  DEAL NAME: South America Fiber Optic Network Date DASH Completed: 01 March 2000
Counterparry: TBG - Transportadora Brasilcira RAC Analyst: Daniella Carnciro / Juan Samudio
  Gasoduto Bolivia - Brazil S.A. Investment Type: Equity
Business Unit: ESA (50%) I EBS (50%) Capital Funding Source(s): Balance Sheet
Business Unit Originator: Pravin Jain Expected Closing Date: 03 March 2000
OPublic MPrivate Expected Funding Date: TBD
G1Merchant Strategic oard Approval: UPending DReceived DDenied EN/A
OConforminn ONoncon.forming

R.AC Recommendation: (]Proceed with Transaction ORcttuns below Capital Price DDo not Proceed

APPROVAL AMOUNT REQUESTED
Capital Commitment $10,054

EXPOSURE SUN&fARY
  This tansaction: $10,054
Total $10,054*

  Actual construction on the Right of Way is estimated to cost an additional $51MM if multiple subduct conduits arc installcd
(allows up to three expansions), and $43NIM if single-subduct conduits are used (option for one expansion only).

DEAL DESCRIPTION

Enron South America and Broadband Services propose to spend $10MM for the purchase of a non-exclusive perfected use of
Rights of Way ("ROW") along a 987-kilometer segment of the pipeline from Catnpinas to Porto Alegre front TBG-'lransportadora
Brasilcra Gtsoduto So livia-Brasil S.A Population along this route is over 6.6 million (4% of Brazilian population) and accounts for 8.7%
of the Brazilian total purchasing power. A proposed fiber swap would extend the network reach over an additional 950km, connecting the
original network to the prime cities of Sao Paulo, Rio do Janciro and Bclo Horizonte. Population in the swapped route exceeds 22.1 million
(13% of population), and accounts for 27.2% of the country's purchasing power. The purchase of the ROW is subject to two conditions
precedent: (a) Resolution of a 1391an ROW gap, and (b) Obtaining licensing from ANP and AN ATEL.

The ROW will not provide revenues dircetly, but will clarify Enron's and Pctrcbri s' position in the market and will provide
several commercial options going forward.

Enron's Position
By purchasing the ROW Enron will have demonstrated willingness to build along the proposed route. With the resolution of
the ROW gap and by obtaining regulatory approval, Enron will become a more credible seller of fiber in the marketplace. It
will become more economical for firms to purchase fibers from Enron than to spread the fixed cost of ROW and construction
of a network themselves.

Pet~brds' Position
As a condition precedent to the sale, Enron must obtain ROW along 189km owned by Petrobris rather than the pipeline, or
along a satisfactory alternate route (i.e. highways, railroads). Pctrobras owns a 51% stake in TBG and has delayed negotiations
as it tries to dccid.c its own future role in the telecom market in Brazil. The Deal Team can leverage Enron's purchase of
ROW to put additional commercial pressure on Petrobris with the potential for legallregulatory pressure to follow.

Commercial Options
  1. Sell fiber to a third parry. The break-even 3909A an (based on a $43 'v vI constriction cost) for 48 fibers supports
deal offered to Intelig at $1, I80/km.
  2. Sell fibers to EBS for developing their network
  The favorable conclusion of a proposed strategic swap with Intelig will give Enron valuable mileage for
increased network reach which in turn could provide a South America platform for BIN, broadband intermcdiation and
content delivery Services.
  3. Option to increase the number of fibers based on demand up to three times, and up to 216 fibers per expansion.

  Capital _ Estimated
Investment Description of Investment Tlmina

$ 10,054,000 TBG Pipeline use of ROW - Campinas - Pogo Alegre Current

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RAC Deal Approval Sheet Deal Name: South America. Fiber Optic Network

TRANSACTION SOURCES AND USES OF FUNDS
  Sources Uses
50% ESA/ 50% EBS Equity $10,054 Capital Expenditure (ROW) $10,054
Total $10,054 $10,054


RETURN SUMMARY

	PV C.	Cumulative		
* Return Components:	Capital Price	IRR	Capital Price Components	
Cash Outflows	($38,385)	N/A	Risk free rate (%):	6.39%
Fees	$0	-100.00%	Equity/Credit premium (%):	5.02%
Intcrmcd. Cash Flows	$39,154	28.62%	Country Premium (%):	5.80%
Terminal Value	$0	28.62%	Transaction-Specific (%):	11.79%
	Total NPV	S769 28.62%	RAC CAPITAL PRICE:	26.00%
				
E-Rating	9		Relative upside ratio	2.253
Note: Cash flows reflecr th	e probability tha	t the Build and Expansion options are exercised, which will be treated as
separate transactions.				

			IRR Dis tribution	
....-
35.0%	PS				
30.0%					
25.0%					
20.0%					
15.0%					
10.0%		P5			
5.0%				P95	
					
0.0%				
	e	o o e	o o o \	\ \ p c o 0
	D vt
O V	O of D
.D a0	v o - V
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	O en
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Q N	N W v1 -- a0
P'1 v7 00 .~	v O r ,i O .C.
C` N N N N

Cash [lowSuuttuary


  $400,000
sc00,C00
5200,000
5100,000

so
0(100,000)

Months

Average Life =1.7 years

i -rte Elapsed
I--a Expectedc=u,Itive cull flow
f --~-CL .native P5
  1 Cir:dative P95
-+-0utflowi
-+~-fees
i Ongoing
-TecainalVale:

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RAC Deal Approval Sheet Deal Name: South America Fiber Optic Network

CAPITAL EXPENDITURE CHART

~APITAJ EXPENDITURE CHART

Capital
Expenditure

$51MM

$10MM

Time

 mote: Flexibilry or up to tnree 216-Tiber expansions.

TRANSACTION UPSIDES/OPTIONALITIES

lixpansion
Multiple subducts allow the option to install additional fibers in conduit based on pre-sales. There is signif cant
valuc in this option as the investment in the purchase and installation of each set of 48 fibers costs approximately
394M, while the deal team estimates the 48 fibers could be sold for as much as $117MM. This probability has
been included in the model <nd causes the tail.

II. Swap
   A proposed swap transaction with lntelig would extend the rcach of the fiber network from 1,220kni to 2,1701en,
and connect the prime cities of the Brazilian South/Southeast region, The cities connected by the network after
the swap transaction account for 18% of the Brazilian population of 163 million, and 36% of the country's
purchasing power.
   Having access to these prime cities would provide EBS with a strategic benefit in constructing its network.

III. Segment II - Extend Network from Southeast Brazil to Chile.
  There is an opportunity to extend the network rcach from the Southeastern Brazil to Santiago, Chile. The Project
would build the second segment from Porto Ale.gre to Buenos Aires. The Deal Team is currently negotiating with
railroad concessionaires for this route segment. National Grid, William Communication and Trans Canada have
formed a joint venture to build from Buenos Aircs to Santiago. This joint venture has been in negotiations with
the Deal Team to swap fibers on the two routes.

EXIT STRATEGY
   Sell off fibcr network at break even price; or cap losses at S10MM (initial ROW investment).

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  A - InitiaI Investment. ROW Purchase
  9 = Invesirticht in Network Construction . based on timing of first pre-sales
C = Investment n NetworK Expansion . based on subsequent pre sales


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RAC Deal Approval Sheet Deal Nanic: South America Fiber Optic Network

RISK MATRIX

DESCRIPTION	MITIGATION/COMMENTS
Price Risk	Pricing assumptions significantly impact the project's returns. The
	model range of $1,200 to $2,000 fiber/km per 48-fiber packet is a
	RAC estimate based on Deal Team proposals. An Anchor Tenant
	contract at $1,180 fiber/km has been offered, which helps define the
	low end. The Deal Team has other proposals in front of customers
	at prices up to $5,000 fiber/km for fiber sales of 4 to 6 fibers.
	This number has been discounted due to:
	 Open Access (see below) will put significant downward
	pressure on prices.
	 Current proposals arc theoretical in nature and do not reflect
	actual commitments.
	 The need to sign up customers quickly to demonstrate
	commitment to the project and the need for multiple
	transactions for the sale of all 48 fibers will influence ricin .
Fiber Build by Competitors	There are a number of companies interested in building networks in
	South/Southwest Brazil. These companies arc either potential
	customers or competitors.
	 Embratel and Intelig have the need for fiber that justifies strong
	capital corrunitment to the development of routes in this area. j
	They arc currently not building fiber for salt, preferring to i
	swap with existing players, in an apparent attempt to keep new
	players out of the market. Tf this strategy changes, they would
	become formidable competitors.
	With the purchase of the ROW L'nron will have shown
	commitment to a fiber build which will help attract customers.
	If another credible player enters the market and shows stronger
	commitment (purchase ROW and conceit to build), then
	customers may gravitate to them.
	 Under the TBG Shareholders Agreement, any TBG
	Shareholder has the right to use TBG's ROW provided that fair
	compensation is paid and such compensation is approved by
	TBG's board of directors. Also, recent legislation prevents
	ROW owners (pipelines, highways, etc) from denying ROW to
	qualified interested parties (qualified by ANATEL) provided
	that a fair price is paid.
	 Potential players in the market: Emmbratel, Intelig, AES, and
	W illiams.
Open Access	 Under current legislation, Enron may be forced to sell unused
	capacity at "fair market" prices as defined by ANATEL
	(Brazilian Telecom Regulatory Agency). This legislation is
	new (November 1999) and has not been interpreted by
	ANATEL yet. The concept of fair market is just now being
	introduced in the Brazilian telecom market and may '
	significantly impact on the potential upside of this transaction.
Public Notice	 Under recent legislation, TBG will probably have to issue a
	public notice of the availability of the ROW, malting ROW I
	available for purchase to other investors. The notice may
	include technical information, pricing and time periods for
	obtaining the ROW. Ultimately, the entire agreement may be
	made available to the public

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v0 MAR, (l). 2000 9.03WAA 6SECI - P, :RKC

tAC Deal Approval Sheet

Des! Name: South Americn Fiber OpticNetrt+ork

NC, 0921 ' i i:oee

Other	The Brazil tekeozri f.atat is tmdergoinr, ttpi,l. tcgulatsary thanbe
rod new tcgu ariort or untonseen applicatioar of a3etircg
t dazig CAU(2 iffert set a omi
1B9(onROW Cap	Otei of the coaduiow pcaxdent in the prepn.ed agrs.mertt Lr o
	satisficivty tola[ke tar d at 129-kilometat Spa as the roatc. Same
	of the sgttrticaa may lrclzdc;
	 rurchbcfng use of rig~tb of way dirvotly$orrt Pctrobrlu,
	 Purchasing debts of way dice* Flaw hfEb"y auti etitis or
	railway cnnte>caiot,tirtr, or purcboslnz conduit from otLcr
	pardtJ fcr Ifs tcatiotsr (Harr=%Ar !r rnnsuvotttiC a coahttit
	ootwk thre tapu pare t1a I to the TSC XO W),
	+ Lntelig brid&rsrs the ffspc with ro railroad nighty of may,
	A tndivfdn ahtmattve 7thft of way,

XEY SUCCESS)FACTOI s

	NA	Poor ~Ye.Uan!
Cot? r", esa		x
S ACFt		X
rJ !de Poc !		
Maria oiztent		
Risk Mfd 7tinn		

OTBER P .AC COMMENTS:

This ii a ypeculsuvc iavcsrmeat that ruby :esuh in the loss of the initial itavectmcat if the mrrkct for GUT do" not de Clop or
another mare aggress ivo plcyer decides to build, if the mukel dots de~tlop, thi invoscouat btt cmhcddud optioaa to eacgmd
capeity, which would sil,`aiIIesnt1y itx rttse retixms.

 AMY coat4-tfrcon tS2ong the >,OW (wit}sout a 100% ox the c+rha! coverad tttseu;I;gz6-ar-iaa) wodl4 tcgUitt % DAS!L
 Ahy sntc of fiber to PBS would require .1 epttats DASH. I

APVROVa1.9:
RAC M..nagnmcnr
EX-Ton Capital M-twoeMMI
Buc$tscc Unit Originator
Legal (ESA)
Le&o! (EBS)
Busi.aess Unit kzwaorl+cnt (,ESA)
Dwinam Unit M"emaat (.9M)
buxloars Unit M'anageirent (ESS)
3b,6=44 Uuit Mxnagutrat (EMS)
ENE ManagClI%ent

Ct'r9rRicwR\T)9.1 D4.IlUt1240.&c

  tnr

DI'Vid Colic
Jeff MrAhhoa
Praviu Jain
Robot George
Krtstitu Metziaaot
Tim 9t:IIhnatine
Jot: KiYhkill
Toe Fiirko .
Steve $tliott
J f $killiug





'3111

  $

J

E0004402055

J


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

RAC Deal Approval Sheet

Deal Name: South America Fiber Optic Network

Other Regulatory Risks	The Brazilian telecom sector is undergoing rapid regulatory change
and new regulations or unforeseen applications of existing
regulations could affect project economics.
189km ROW Gap	One of the conditions precedent in the proposed agreement is a
	satisfactory solution for the 189-kilometer gaps on the route. Some
	of the solutions may include:
	 Purchasing use of rights of way directly from Petrobras.
	 Purchasing rights of way directly from highway authorities or
	railway concessionaires, or purchasing conduit from other
	patties for gap sections (Barramar is constructing a conduit
	network that runs parallel to the TBG ROW).
	 lntelig bridging the gaps with its railroad rights of way.
	 Acquiring individual alternative TiZhts of way.

KEY SUCCESS FACTORS

	NA	Poor Excellent
Core Business		X
strategic Fit		
Upside Potential		x
Management	
x	
Risk Mitigation		X

OTHER RAC COMMENTS:

This is a speculative investment that may result in the loss of the initial investment if the market for fiber does not develop or
another more aggressive player decides to build. If the market does develop, this investment has embedded options to expand
capacity, which would significantly increase returns.

 Any construction along the ROW (without a 100% of the capital covered through pre-sales) would require a DASH.
 Any sale of fiber to EBS would require a separate DASH.

APPROVALS:

Name Signature hate
RAC Management David Gorte
Earon Capital Management Jeff McMahon
Business Unit Originator Pravin Jain
Legal (ESA) Robert George ~~
Legal (EBS) Kristina Mordaunt 1 3
Business Unit Management (ESA) Jim Bannantine
Busincss Unit Management (LISA) Joe Kishkill
Business Unit Management (EBS) ]oc Hirko
Business Unit Management (liBS) Steve Elliott
ENE Management Jeff Sldlling

C' \windows\TF.MP\-000424U.dcc

Page 5

E0004402056

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C %urt
U. \( I)wl 'lpptu~ltl lhta Ut:al NacfC: tit)llllt.'Amerit.u F'ihcr Optic tiv

  r. thci [;I;;'ulawry Itieks I he Rravilian tclt:c:cHn batnor is t111(1Ci;yt:in,~ rapid rtt;ulatil clTat:_t. ;
l:ul Ilt`\V r at:(Ii:nt5 nr unt;~re cc n al P t aiiuI1' I . C.r?:;i:t:
tt gulatiuni could afrccc pr(ti~t_tctultnmtc;-
  !;< ;t m I:OW U;Ip.........._ -~ Or c of ilia ctlnditimi.,; prcccdcnt in lhr ;)n>hla:.ccF ;t,rc Wren !, ..
,alislti(:cu:y tint for the tFO-kil(amct t on the lout(-
  U t1i suluuilns may include:
   ('ur~haitta:ric ut riLill: u1 \\'::y tlirt_t:lIv ! t u l't rlullr:c.
 Purchasing r.LLTD of \v;;y diro.1ty From 16--dmay
  r_it\ts; Cttltccssiunaires. rtr rurclI ;iI , ctxtllui: li(nr :+:!,::l
aJltttdt
  ItATllcti fur gap KCtliatts (f.Jrt'al1ti11 1c . (;nltiU'1tt:1i11;; ;:
utatvnrk tlt:t rurt:c parallel to the `(1$(i IZO\" I.
   I:v~lir hiiti i the 611P.; \,"it!' ifs




t 1lsul( [_~~IC.ntial
  ! S.
lalt;l'sCC................

;)):41-A" 1:.\(' ('Oi\l'lEN'IS:

  ltlal lvt: I vv,,1(11.,11 1h41 tiuiy (CiIIII 11) 1111. 1i);N (?i II:: Mittal
  p(ilyCr decides to I:a/ild. II'lltt: ni ikct lIt>c. rlc'n:hip. this it:\~',;rtttnl hn;:
II. t. dell 1vU.lIL.I sii.(nilic;uttly incrca:,a r~tuIIo.

 ('. . ('t t:V.ll'tlCllUll a1U110, the ROW (WllhUltl U IUO t)I t11C tullit7I l'ttt'crctI +.hruugil }::1:iakrS) l1ta:!:I !'t;.1U:1: .: 1):\.-I l
tihcr to F:Citi wntll;l rcyuir: ttseparalr f).'\'-Il.

		
"..tn.	tit _tlll((il'C	1)utt.
.i.I:Ij11t111CIll.	I)avld (;ill IC	
t..i :tl ?~1.utayl rttr+>l	tell 14lcmahun	
1!.r,:nsa !.111:1 OrlLtl wor	It I':IVllt !:tilt	
		
	IZuhcri (./Ct,r~V	
		

:! ,, i.'l:it IVI:an l:ntt'nt (liS\t	
lilts Lialli mtinc	j.i
~~ - - tJ'>j"_ (1(
`
+:: !u(:,. ! 'nmt ;' 1unl rrnl nl (L 1\ I	1tlc K ishkill	
		
i:u : !i ., i lttt btalt:ticntenl i L''13~)	Jut I ltrklt	
!oil %larla-vntcnt (E S)	Steve lrlliull	
! '1:1;1as;atwnl	It fl' St:i)liii	


.. ...! I Nil' tine ,

  E0004402457

H003-01371

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


1. Transaction Summary

  Total Deal/Project Capital Commitment
Less: Financing
  Less: Syndication's
Net Enron Investment

2. Investment terms and pricing:
Describe (if necessary):

3. Financing terms and pricing:
Describe (if necessary):

  Amount ($000)
$10,054
  -0-
-0-
$10,054
(91 Market 0 Above Market 0 Below Market

M Market 0 Above Market 0 Below Market ON/A

4. Legal or practical liquidity restrictions: 0 Unrestricted 0 Legally Restricted t] Practically
Restricted

  Describe (if necessary): Purchasing a non-exclusive Right-of-Way

5. Any recourse to Enron (other than investment): 0 Recourse El No Recourse
Describe (if any):

6a. Business unit intent to syndicate: M None O Partial 0 All
Describe (if necessary):

6b. Intended Enron hold period: Strategic Investment

6c. Likely Syndication Market: 0 Industry/Strategic Partner 0 Direct Private Equity
O Capital Markets 0 JEDI 1
  O JEDI 2 0 Enserco
O LJM I or 2 O Condor
0 Other: 0 Margaux

6d. Is this a JEDI 2 "Qualified Investment"? 0 Yes 0 No

Global Finance Representative: L~4,N- CC' /^A - LAtjyt)(_ 31, ~60
Signature Name Date

E0004402058


XH003-01372

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

03/03%00 MON 13:50 FAX ENRON DO BRASIL gjuut
MAR 31 2i:i 13:41 FR ENRON INTL ECUN ANRLY?13 :545 t:t t' lu yk~117>1 1e~l ~b~ r. tu~i uo

  RAC Deal Approval Sheet Deal Name: Saving Priva a Zysn

APPROVALS
Region Originator
CEO - ESA
CEO-ESA
Region Legal
PAC Management
/s.YV&\ Vaj/i1Gl l,aa&I45l:11lCll\
Office of the C}+~

Name	SiP atur I ste
Peter Weidler	
Jim Bannantinc	
Diomedes Chtistodoulo	
Randy Young	__
Dave Garte	_
Z%11LLl/ ru vw UL ocll MUMdavu	
Jeffrey Skifing	-
Joe Sutton	

\\E1-NTCOMMOI\G COMMON\Commonls? rc\Trnn:rcdcs\TRSADASH\DASHTRS43-3I-00,doc F/s' 4

APR 03 2000 11,52 PAGE. 01
E0004402059

(H003-01373


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

04/04 '00 11:36 FA.T 02077834479 PARK-ST LONDON Lgjooz
31 ' Mar 00 17:25 ENRON LEGAL DEPARTMENT 55 11 55031351 pa6
MAR 31 2000 14:13 FR ENRON INTL ECCN P R'_Y713 345 6057 TO 9011551155031351 P.05.e6

RAC Deal Approval Sheet

APPROVALS
Region Orig+natot
CEO - ESA
CEO - ESA
Region Legal
RAC Menaganenr
Enron Capital 114anngciu i
OEficc of the Chaiztnan

  Name
Peter Wcidlcr

Jim Bann=tsne
Diomedcs Christ oulo
Randy Young
Dave Gone
Andy Fastow or Jeff McMahon
Jeffrey Stilling
Joe Sunon

Deal Naine: Saving Private Ryan

  Date
33icx7

  ~ ov
'1'b au

~~et-T17CUt~{NOt~ CtSMMON~Cotrmronb>_netiTrs~aedct~TR~q DASHZASH TRSA 3.31-00 CoC

;;::R 04 2020 ^OJO:35

Pace 4

020??8344?9 PpG=,P~

E0004402060

FXH3-01374

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

RAC Deal Approval Sheet

Global Finance Summary (addendum to DASH)

1. Transaction Summary

Total Deal/Project Capital Commitment
Less: Financings
Less: Syndications
Net Enron Investment

2. Investment terms and pricing: Market
Describe (if necessary):

3. Financing terms and pricing: Market
Describe (if necessary):

  Amount ($000)
$5,000
  -0-
-0-
$5,000

0 Above Market O Below Market

0 Above Market 0 Below Market

  Based on local borrowing comparables (BNB Facility).

4. Legal or practical liquidity restrictions: ;~ Tnrestricted 0 Legally Restricted Practically Restricted
Describe (if necessary): ~'

5. Any recourse to Enron (other than investment): 0 Recourse )XNo Recourse
Describe (if any):

6a. Business unit intent to syndicate: None 0 Partial 0 All
Describe (if necessary):

Inefficient to syndicate this small of an exposure.

6b. Intended Enron hold period:

Expected term of 3 months to allow sufficient time for negotiation and closure of Cuiaba purchase and sale. Potential term
of 14 months if unsuccessful.

6c. Likely Syndication Market:

6d. Is this a JEDI 2 "Qualified Investment"? O Yes ;KNo

Global Finance Representative: 3 r (c't'l S(.~l /1 r~ 3131 /oo
Signature Name (Printed) Date

E0004402061

\\EI-NTCOMMOI\G COMMON\Common\sa rac\Transredes\TRSA DASH\DASH TRSA 3-31-00.doc

0 Industry/Strategic Partner
0 Capital Markets
0 JEDI 2
0LJM1or2
0 Other:

Deal Name: Saving Private Ryan

0 Direct Private Equity
0 JEDI 1
  0 Enserco
Condor
0 Margaux

Page 5

XH003-01375

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

S-17

m
n
0
0
-p
0
N
0
0)
N

EXH003-01376

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

ENRON RISK ASSESSMENT AND CONTROL
DEAL APPROVAL SHEET

DEAL NAME: NP TPL DEAL Date DASH Completed: [31st March 2000]
Counterparty: National Power RAC Analyst: Jitendra Patel
Business Unit: Enron Europe Limited (EEL) Description: Contract Novation
Business Unit Originator: Rob Bayley / Denis Bajolle Capital Funding Source(s): n/a
  Expected Closing Date: [end of April'00]
Expected Funding Date: [None]
  Board Approval: Pending OReceived ODenied l]N/A

RAC Recommendation: (]Proceed with Transaction ODo not Proceed

APPROVAL REQUESTED

 Receive 506 MM cash payable by National Power Plc.

 Take over a loss-making power purchase agreement with Teesside Power Ltd. from Midlands Electricity
  [Net present value (461) MM], but controlled by NP; (requiring Enron Corp. performance guarantee of up to 600
million - to be negotiated).

 Enter into a financial power swap priced significantly away from Enron's current UK power forward price curve
[Net present value (28) MM], (requiring an Enron Corp. performance guarantee for 40 million).

DEAL DESCRIPTION

Midlands Electricity has a long term power purchase agreement ("PPA") with Teesside Power Ltd. ("TPL") for 500 MW at
prices substantially above current prices. Midland is one of four Regional Electricity Companies who contracted in 1991 with
TPL to purchase power under long-term PPA's.

In 1999, National Power purchased Midlands' supply business and therefore became liable for this PPA, which has substantial
negative present value to the holder. National Power has announced its intention to demerge itself into a domestic U.K.
vertically-integrated electricity company and an international power development business. In preparation for the demerger,
National Power approached Enron to execute the following transactions:

 Novate the Midlands TPL PPA to Enron;
 Enron and National Power will enter into a new long-term 407 MW baseload contract for differences "CFD" in which
Enron receives a fixed low price in exchange for UK power pool prices ("PPP");
 National Power will transfer to Enron 506 MM cash upon novation of the out-of-the-money TPL contract and the new
below-market CFD.

Cash Consideration

  Enron
(supported by Enron
Corp guarantee)
  407 MW Firm

National
Power

Baseload Sale

500MW PPA
(Run-of-plant)

Novation to Enron

TPL

E0004402063

=XH003-01377


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RAC Deal Approval Sheet

Deal Name: NP TPL Deal

Both the TPL PPA and the new sale to National Power have the same term (terminate 31 March 2008).

National Power's intent is not to materially alter their power position but to replace "non-firm" power revenue from TPL with
receipts based on firm power from Enron.

STRATEGIC RATIONALE

Rationale behind Enron appetite for the deal:
 16m accrual earnings creates a slightly short power and indexation position and gives us the option to get long if power
prices start to rise.
 Receive 506m of cash upfront.
 Replaces a PPA holder whose interest may not be aligned with TPL and its shareholders (Enron 42.5%)
 Moves Enron closer to being able to restructure TPL.
 Helps to mitigate Enron's guarantee exposure to TPL default.
Hedge for NETA.

Rationale behind NP appetite for the deal:
 Following the sale of Drax, Eggborough and Killinghome, NP is cash rich. They are prepared to use cash to resolve an
off-market PPA.
 By exchanging the PPA against the CfD, they exchange a hard to manage, non tradable physical contract for a financial
CfD which can be hedged easily in the market. Also, since NP (domestic) will be using accrual accounting, by entering
into a CfD agreement to buy power below market, 17/MWh in a 19/MWh market (i.e. prepaying for power), they will
be able to pass that CfD to their supply business and recognise good earnings over time.
 Finally, by crystallising the 500m losses in the PPA, NP will be able to take a current tax deduction which may be carried
forward and used to offset tax on future profits as they arise.

POSITION/EXPOSURE SUMMARY

The PPA

The price in the PPA with TPL into which Enron will step into is a function of the following published indices:

 industrial power prices ("Energy Trends - Elec"), opens a 2.2 TWh short position;
 industrial heavy fuel oil prices ("Energy Trends - HFO"), opens a 894,779 mt short position;
 the UK producer price index ("PPI"), opens a 87.1 mm short position;
 the UK Department of Energy cost of fossil fuels index ("COF ), opens a small illiquid short position;

in return for Pool Purchase Price ("PPP") receipts on 500 MW capacity with 60% Load Factor.

Also, a short natural gas position of around 12 Bcf arising from rejected Enrici tolling capacity.

The CFD

Enron receives 17/MWh in return for PPP on 407 MW baseload capacity

Each of these positions will be hedged with the appropriate MTM trading books.

The impact on the UK Power book arises from the net position from the PPA with TPL and the new CFD with NP as above,
and is summarized as follows:

E0004402064

Page 2

EXH003-01378

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

RAC Deal Approval Sheet Deal Name: NP TPL Deal

  Longer Liquidation Horizon - VCR
Proposed Deal 1-Day VAR ($mm) Position (TWh) 10-day 30-day 60-day
ET ELEC 0.6 -2.2 1.9 3.3 4.6

:.PPA + CFD	0.5	-5.1	1.7	2.9	4.1
					
RESULTING NET POSITION	1.1	-7.3	3.4	5.8	83
					
CURRENT - UK POWER BOOK	6.7	-24.5	21.3	37.0	52.6
CURRENT + DEAL	7.7	31.8	24.6	42.8	60.7
CURRENT + DEAL + PROJECT REPEAT	15.2	.81.7	49.7	86.5	122.7
			
'LIMIT,	85 0 .~. ,		

The analysis includes the effect of Project Repeat, since this is pending, yet to be booked. Due to the depth of the UK power
portfolio and the relative liquidity of the near term market, it is expected that the power position in this deal could be closed out
sooner than 10 days.

The only component of this transaction that is truly illiquid is the COF position. Using HFO as a proxy the position is
equivalent to short 488,000 mt.

RETURN SUMMARY

Expected P&L

P&,	PV MI)!_A
Capacity Charge:	-470.19
TPL Grid Charges:	-33.74
ICI Rejection (10% of CFD):	-1.47
Enrici Rejection:	-7.60
Share of IG:	7.71
Share of Ancillary Services:	2.11
EC MTM (On MinGen Volume):	50.82
PPA Gross Value:	-452.37

Adjustment for Index, Plant and NETA Risk:	-12.50
PPA Net Value:	-464.87
SPPA	3.50
PPA + SPPA Net Value:	-461.37
NP CFD:	-28.76
Cash Payment:	506.00
Net P&L Accrued Pre-tax:	15.8
Value of 75 by ENE COF (Accrued):	13.57
Total Value:	29.4

Expected Return Analysis - Not applicable since all earnings are on accruals basis.

E0004402065 Page 3

EXH003-01379

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

RAC Deal Approval Sheet

Deal Name: NP TPL Deal

ACCOUNTING ISSUES

Because the PPA transfers a large portion of plant operating risk to the PPA holder and Enron operates the plant, it will be
accounted for as an operating lease of a portion of the plant for U.S. GAAP purposes. Thus, any imbedded value in the
transaction will be recognized on an accrual basis over the remaining term of the PPA.

LEGAL ISSUES

This deal does not present any special legal risks.

The agreement with National Power will be binding on Enron with Enron Corp. approval or other internal approvals. It will
however be subject to third party consents/approvals which Enron and National Power will use reasonable efforts to obtain.

RISK MATRIX

As a counterpart to the Midlands PPA, Enron will be exposed to the following risks:

DESCRIPTION	MITIGATION/COMMENTS
Commodity Risk	Enron will be exposed to the following residual commodity positions:
	Energy Trends Electricity (specifically the basis risk between ET-Elec and PPP)
	Energy Trends HFO (specifically the basis risk between ET-HFO and crude oil)
	PPI (net of some existing offsetting positions in the inflation book)
	Cost of Fossil Fuel Index
Credit Risk	The existing PPA is considerably out-of-the-money to Enron, hence the negligible credit reserve on
	this contract.
	Similarly we have risk on Npower under the CFD. NPower is a newly formed subsidiary of National
	Power PLC which is rated A- by S&P. Our exposure to NPower will be protected by a parent company
	guarantee and proposed documentation will include MAC clauses covering for downgrade, change of
	ownership etc.
Operating Risk	Plant Risk
	The power received under the PPA's is subject to plant availability, output variations due to
	temperature and steam exported to ETOL. Performance risk exists on TPL but given its' approx. 42%
	ownership by Enron and the fact that we operate the plant we consider this negligible.
	Operating Profile
	As the PPA's are based on the run-of-the-plant, Enron as buyer will not know how it's minimum
	purchase obligation will be produced throughout the year. The value of power produced depends on
	whether supplementary power purchase agreements ("SPPA") are in place and the way TPL elects to
	run the plant to produce minimum volumes.
	Grid Costs
	The PPA valuation is based on a forecast of future grid connection expenses. Actual future costs may
	vary. This has been mitigated by a carve out clause in the agreement with National Power.
	Transmission Losses
	The National Grid Company's proposed treatment of transmission losses will penalize generators in
	the North of England. As proposed, TPL's offtakers will be responsible for transmission loss payments
	(i.e. the offtakers will receive less than 100% of TPL's output). This has been mitigated by a carve out
	clause in the agreement with National Power.
Tax Risk	There is a risk that 480m of the 506m upfront receipt of cash will be subject to immediate US
	taxation at 35% (in addition to UK tax at 30%). This would result in an additional tax expense of
	168m. This is an absolute tax expense as no tax credit can be taken. There are a number of defences
	strategies each of which would need to fail before the exposure crystallises.
Regulatory	Under the TPL PPA's, new laws or regulations imposed on TPL that result in a quantifiable increase in
	generation costs is passed through to the offtakers. This has been mitigated by a carve out clause in the
	agreement with National Power.
NETA	Included in the UK New Electricity Trading Arrangements ("NETA") is the concept of daily
	balancing. To the extent that TPL fails to balance its position in the UK pool, costs will likely be
	asst :c to the offtakers, including Enron as holder of the PPA.

Page 4

E0004402066

:XH003-01380

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

31/03 '00 21:42 FAX 0171 970 7660 ENRON GAS TRADING 1J004

31/03 '00 PRI 18:48 FAX 020 7783 8027

ENRON CAPITAL AND TRAD$

t00

RAC Deal Approval Sheet

Dexi Name: NP TPL Deal

BUSINESS UNIT APPROVALS;	
	Name	Sl n urn Date
	Rub Baylcy / Danis BeJollc	Q G
Structuring London	Data $urbo	
PAC Landvn	Steve Young	~l a
Business Unit Managsment	P4 hard Lewis	s /cj
Financial & Trading Support	Fernley Dyson	~ 03 ~]
Lvgsl London	Pxui Slmuns	` 0 00
Txansaodon Support	Phillip Lord	o 3 Alb
Earou CapI 1 Mpbagemortt	Paul Chivers	3 f ~3. u
Tax London _	Jim Sandt	_
+ .
Tax Landau	Rod Sc en	'3) 0I 04

E0004402067 Pap 6

  Z01Z0t Z1 =A1. QO/1mj 4n797P7t,5'Ln ~1P 1310H mtld N!'iUQHSbr

Mno_71 _, fPp 1 1 A  177 t719 71 Q7rr 7r-r-I1 C41 7 P.04

EXH003-01381

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

20'd

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07, ~ L IaLluG- LL-Cow

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Z9 L O-OOHX-

CO e MIQYiLL St%9 .II02IKa 099L 0L6 TLTO IVA 6Z:Rl 00, CO/T


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

31/03 '00 18:29 FAX 0171 970 7660 ENRON GAS TRADING 2004

E0004402069

RAC Deal Approval Sheet

APPROVALS:

APPROVALS Name Signature
Chief Accounting Officer Rick Causey

Deal Name; NP TPL Deal

  Date

Page 5

  P171 97c 7660 91% 13.04
EXH003-01383

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

RAC Deal Approval Sheet Deal Name: NP TPL Deal

DEAL DEFINITIONS

Bid Bond A letter of credit or surety bond delivered at the time of submission of a bid. It guarantees
that if the bidder is awarded the project that is the subject of the bid, the bidder will execute
the relevant project documents in accordance with the terms of the bidder's bid.

Deal Description short written summary of the investment.

Deal Name Unique name for an investment/deal usually defined by Capital Pricing director or
Business Unit Originator.

Deal Risk Premium (%) Premium for a deal derived by a comparison of the transaction volatility of returns to
historical sector volatility of returns; additionally incorporates any other adjustments for
risks specific to the transaction. Premium could be negative if the transaction exhibits less
risk than is reflected in the unadjusted capital price.

Capital Commitment ($M) Expected present value of cash outflows in the transaction.

Expected IRR (%) the discount rate at which the net present value of the expected cash flows would be equal
to zero. This measures the expected return of the transaction but does not incorporate a
measure of risk.

NPV @ Capital Price ($M) Net Present Value at the Capital Price discount rate.

Risk-Free Rate (%) the rate derived by weighting Treasury curve rates by the expected cash flows in the
corresponding periods.

Type of Investment Specific type of investment. For example, VPP, LP, loan, equity, alliance, debt,
derivatives, refinance, and physical sales. Sometimes referred to as Instrument Type.
Value at Risk ($M) The loss in value over a specified period of time (quarterly, daily, etc.) which will be
  exceeded with a certain probability. Evaluated based on market comparables.

E 0004402070

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XH003-01384