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Enron Transaction Approval

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
M-1	EBS	Conforming	17-Apr-00	Avid II (1)	$ 5,000,000	ENE-OOC	$ 5,000,000
M-2	EE&CC	Conforming	07-Mar-00	EECC Genesis- Power/GE Turbines	$ 72,580,000	ENE-CEO/COO	$ 72,580,000
M-3	EE&CC	Conforming	17-Mar-00	Extension of Demar Liquidity	$ 18,100,000	ENE-OOC	$ 18,100,000
M-4	ENA	Conforming	14-Feb-00	Linden Six	$ 48,040,000	ENE-CEO/COO	$ 24,020,000
M-5	ENA	Conforming	19-Mar-00	Mariner Energy LLC	$ 31,000,000	ENE-CEO/COO	$ 31,000,000
M-6	ENA	Conforming	22-Dec-99	Mission Coal Financing	$ 24,300,000	ENE-OOC	$ 24,300,000
M-7	ENA	Conforming	31-Jan-00	Motown (including addendum)	$ 57,500,000	ENE-CEO/COO	$ 12,500,000
M-8	Europe	Conforming	10-Feb-00	Octagon	$ 18,400,000	ENE-OOC	$ 18,400,000
M-9	Europe	Conforming	25-Feb-00	OPET	$ 10,035,000	ENE-OOC	$ 10,035,000
M-10	ENA	Nonconforming	28-Mar-00	OS Integration Holdings Limited	$ 11,200,000	ENE-CEO/COO	$ 11,200,000
M-11	ENA	Conforming	08-Mar-00	Project Buffalo (2)	$ 1,520,000	ENE-OOC	$ 1,520,000
M-12	ENA	Conforming	23-Mar-00	Sapphire/Independent (3)	$ 2,919,000	ENE-OOC	$ 2,919,000
M-13	ENA	Conforming	12-Apr-00	Whiskey	$ 16,400,000	ENE-OOC	$ 16,400,000
Total Funded Capital Approved: $ 316,994,000 $ 247,974,000

Commodity

Tab
No.	Region/
Business	Investment
Class	Date
Approved	Transaction Name	Transaction
Size	Approval
Authority*	Net Amount
M-14	Europe	Conforming	19-Feb-00	CEZ	$ 6,900,000	ENE-OOC	$ 6,900,000
M-15	EES	Conforming	07-Feb-00	Zeppelin	$ 37,100,000	ENE-CEO/COO	$ 37,100,000
Total Commodities $ 44,000,000 $ 44,000,000

Divestitures

Tab
No.	Region/
Business	Investment
Class	Date
Approved	Transaction Name	Transaction
Size	Approval
Authority*	Net Amount
M-16	ENA	Conforming	09-Feb-00	Calder	$ 10,800,000	ENE-OOC	$ 6,480,000
M-17	ENA	Conforming	17-Feb-00	First World Divestiture	$ 129,100,000	ENE-CEO/COO	$ 129,100,000
M-18	ENA	Conforming	07-Feb-00	Hubble	$ 11,400,000	ENE-OOC	$ 5,700,000
M-19	ENA	Conforming	10-Feb-00	Merlin	$ 324,200,000	ENE-CEO/COO	$ 242,800,000
Total Commodities $ 475,500,000 $ 384,080,000

Approved under authority granted at the August 1999 Board meeting. Included for information purposes only.
(1) Total Exposure after this transaction is $10.0 MM.
(2) Total Exposure after this transaction is $21.6 MM. 044020'71
(3) Total Exposure after this transaction is $7.6 MM. ECO

ant Transactions

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M-1

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ENRON RISK ASSESSMENT AND CONTROL
DEAL APPROVAL SHEET

DEAL NAME: Avici II Date DASH Completed: April 6, 2000
Counterparty: Avici Systems Inc. RAC Analyst: David Crews
Business Unit: EBS Investment Type: Equity
Business Unit Originator: Steven Sheldon Capital Funding Source(s): Balance Sheet
OPublic Private Expected Closing Date: April 14,2000
OMerchant Strategic Expected Funding Date: April 14,2000
!]Conforming ONonconforming Board Approval: DPending OReceived ODenied IN/A
RAC Recommendation: [EProceed with Transaction OReturns below Capital Price ODo not Proceed

APPROVAL AMOUNT REQUESTED
Capital Commitment $5.0 million

EXPOSURE SUMMARY
  This transaction: $5.0 million
Total Avici $10.0 million
Total Fund $460 million

The total fund exposure is the amount invested in the EBS Venture Capital Fund to date.

DEAL DESCRIPTION

Enron would make an additional minority investment of $5 million in Avici. On September 30,1999, Enron invested $5
million in Avici at $8.35/share. Avici is allowing early purchasers of its equipment to acquire additional equity at
$15.00/share. Williams and AT&T are expected to buy equity in this round. This new investment would give the company a
post money valuation of $750 million.

Avici Systems Inc. is a private company involved in developing and producing terabit routers. Terabit routers are the next
generation of router technology. Avici currently has a product that has several technical advantages (speed, scalability, and
interoperability) over its competitors.

TRANSACTION SOURCES AND USES OF FUNDS
Sources
  Third Party Equity $35,000,000
Enron Equity $5,000,000
Total $40,000,000

Uses

General Corporate Purposes $40,000,000
$40,000,000

RETURN SUMMARY

Enron would invest alongside existing and new investors, Williams (confid.) and Bowman, at a valuation approximately twice
the valuation of Enron's initial investment. This increase in value is supported by discussions that the company has had with
investment banks (Morgan Stanley and CSFB) about pricing for their IPO and estimated trading ranges. The bankers' view for
pricing is $1.2 to $1.5 billion with an estimated trading range of $3.2 to $4.8 billion.

Bowman Capital will lead the round with an investment of $10 to $20 million to become a new financial investor in the
company. This investment supports the market pricing of this round.

The current venture capital round would value the company at $750 million post-money. Comparable companies, similar
product and the same or earlier stage of development, have been sold in June 1999 (Nexabit for $900 million, Netcore for $575
million). Another company, Juniper, went public last June at $5.5 billion and has a market cap of approximately $34 billion.

CASH FLOW SUMMARY

No cash flows are expected until Exit.

-11

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TRANSACTION UPSIDES/OPTIONALITY

In addition to the large potential returns, Enron hopes to benefit by better understanding the technology involved and its
potential use in the Enron network.

EXIT STRATEGY

Avici is in the process of choosing an investment bank between Morgan Stanley and CS First Boston. Both have strong
reputations in internet/equipment IPOs. The company's anticipated target date is July, 2000. If this date slips into August, the
IPO may be delayed until the fall.

Enron will be subject to an additional lockup of up to six months post-IPO.

RISK MATRIX (Maximum 5)

DESCRIPTION	MITIGATION/COMMENTS
Competition	Large companies (Cisco, Nortel, Lucent) with manufacturing
	abilities, strong marketing arms, and multiple products have
	historically dominated the router business. Avici has a better
	technical product than other providers of routers but does not
	currently have these other strengths to make a strong ongoing
	business.
	While Juniper Communications has been incredibly successful in
	turning one product into a company, its sustainability has not been
	proven. Avici will face difficult competition from larger entities
	with broader product lines if it remains an independent company.
	Avici management understands the market and is willing to
	consider selling out to a larger telecom infrastructure company but
	is currently building the additional capabilities necessary to
	compete as an independent company.
Internet Growth	The company's success depends on the continued exponential
	growth of the internet. To sustain this growth, the infrastructure of
	the internet will require high-speed routers, such as this company
	provides.
Company Growth	The company has projected revenues of $2.5 million for 1999 with
	$70 million anticipated for 2000, with approximately 100% annual
	growth for the next several years. This growth is based on an
	extensive marketing, sales, and manufacturing operation, which is
	in the process of being put in place.
Cisco Relationship	Enron currently has a strategic relationship with, and buys its
	current routers from, Cisco. This investment, through the Venture
	Capital Fund, is not seen by the commercial groups to be
	unmanageable.

E0004402074

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KEY SUCCESS FACTORS

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

OTHER RAC COMMENTS:

1) Nortel was an early initial investor in Avici and currently owns approximately 18% of the company. With their acquisition
of Bay Networks, a potential competitor with Avici, Nortel has resigned from the Board but will maintain their equity stake.

2) As part of the initial equity purchase, Enron has the right to participate in a Technology Advisory Committee for the next
three years. This will provide additional opportunities to learn about this part of the industry.

APPROVALS
Commercial Mgmt.
Regional Mgmt.

  Name
Kevin Garland

  Signature

  Date
7-6c

Legal
Accounting
RAC Management
Enron Capital Management
ENE Management

Joe Hirko/ Ken Rice/Kevin
Hannon

Kristina Mordaunt
Tod Lindholm

Rick Buy/ David Gorte
Andy Fastow/Jeff McMahon
Jeff Skilling


.4 //3/00

EOO04402075

(:\TFTAP\T1ACF1 A"jrj7fin91.d'

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ENRON RISK ASSESSMENT AND CONTROL

ECI PORTFOLIO CHECKLIST

DEAL NAME: Avici II RAC Analyst: David Crews
Counterparty: Avici Systems, Inc. Investment Type: Equity
Business Unit: Enron Broadband Services
Business Unit Originator: Kevin Garland

BUSINESS

	NA	Poor	Fair	Good	VGood	Excellent
Management Experience - High Growth				X		
-
Management Experience - Knowledge						X
-
Size of Market					X	
Value Proposition					X	
Business Model						X
Assets					X	

1) Management Experience - High Growth
  Comments: The management of this company has not built a company before and not one with the projected growth
of this company. Management has built a strong technical product that is relied on to drive the growth.

2) Management Experience - Knowledge
  Comments: Avici is an engineering focused company. They have developed a strong technical product. Of the
company employees 110 out of 140 are engineers.

3) Size of Market

  Comments: Routers form a significant part of the internet backbone hardware. Router growth will increase at the
same speed as use of the internet. The current infrastructure is based on slower routers than Avici's product and is not
expected to be able to support the increase in internet traffic. The market for terabit routers is estimated to be $1.5
billion per year by 2003 by Ryan Hankin Kent, an industry consulting firm

4) Value Proposition
  Comments: Gross margins for these routers are expected to be 60% which is consistent with CSFB estimates for
Juniper. The anticipated growth in demand is approximately 100% per year after 2000 which should prevent margins
from collapsing in the near term

5) Business Model
  Comments: The scalability of Avici's routers allow a network to be scaled easily based on traffic, in a simpler
manner, and at a reduced cost. Avici uses a base unit with modules. As demand increases, additional modules are
added. By the time a new base unit needs to be added, the Avici router can handle 8 to 10 times the initial demand

6) Assets
  Comments:. The company has completed some testing and is currently finishing its testing with other carriers. The
product's technical design and current state of development are expected to hold significant value to an established
telecommunications hardware company

PORTFOLIO

Market Cost Public % Time to IPO Time to Exit

Content					
Origination (3)	12 million	12 million	0%	2" /4 Q 2000	2" 02001
Hosting					
Facilitators	3 million	3 million	0%	2" Q 2000	4 Q 2000
Network					
Hardware 2	13 million	13 million	0%	2" Q 2000	4 Q 2000
Software	3 million	3 million	0%	4 2000	2" Q 2001
Infrastructure to	.5 million t	' 6 million	0%	3` Q 2000	1st Q 2001
Services	million	'1,0 million	0%	2"_'__Q_200	

Total

  C:1TEA4P'DASH_Avici2 final.doc

$million $6 million

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M-2

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ENRON RISK ASSESSMENT AND CONTROL

DEAL APPROVAL SHEET

DEAL NAME: EECC Genesis Power/GE Turbines	Date DASH Completed: 3/21/00
Counterparty: GE Capital Corp.	RAC Analyst: Josephine Lin
Business Unit: Enron Engineering & Construction Co.	Investment Type: Equity
Business Unit Originator: Dick Westfahl	Capital Funding Source(s): Balance Sheet
OPublic []Private	Expected Closing Date: 03/15/00
[]Merchant 0Strategic	Expected Funding Date: 04/15/00
!Conforming ONonconforming	Board Approval: []Pending OReceived ODenied ON/A
RAC Recommendation: ElProceed with Transaction	OReturns below Capital Price ODo not Proceed

APPROVAL AMOUNT REQUESTED

Enron Engineering and Construction Company, Inc. ("EECC") requests approval to make payments towards the purchase of
four 7FA turbines and two 185 MW STG Steam turbines from General Electric Company, Inc. ("GE"). The total purchase price
for the turbines is $190.26 million; however, initial approval is being sought for EECC to make the installment payments
payable to GE for the period of February 2000 through November 2000. Prior to November.2000, if EECC has not sold the
turbines to GenPower, LLC ("Genpower"), EECC will seek approval to make the remaining payments to GE. The approval
request is based on the maximum capital at risk in November 2000 whereby GenPower does not purchase the turbines from,
EECC and EECC cannot utilize the turbines in a project of its own, EECC elects to cancel the turbine purchase resulting in
GE's assessment of a termination penalty of $72.58 million; the expected amount of capital at risk is considerly lower than this
maximum amount (approximately $19.5 million).

The turbines are earmarked for use in two U.S. merchant power projects being developed by GenPower. In the unlikely event
that GenPower is unable to timely arrange adequate project financing for the power plants, an EECC subsidiary orWestdeutsche
Landesbank ("West LB"), through an off-balance sheet structure, will receive title for these turbines via an assignment
approved by GE. EECC has a high level of confidence that if GenPower cannot arrange satisfactory project financing for these
projects, the 7FA turbines can be utilized in one of the many third party power construction projects being pursued by EECC
and its affiliate at this time given the turbines advantageous delivery schedule in the third quarter of 2001.

Capital Commitment $72.58 million *

EXPOSURE SUMMARY ($000,000's)

This Transaction	72.58
Remaining Pmt. Obligation to GE	117.68
Power Island 9FA Turbines	313.00 ,
7FA & Steam Turbine	90.00
Total EECC Turbine Exposure	593.26
Total Enron Affiliate Turbine Exposure	570.00
Grand Total Enron Turbine Exposure	$1,163.26 **

* In addition, certain ENE guarantees will be
required to support the off-balance sheet
financing of the turbines.


**Refer to Exhibit I for detail on Enron's long
turbine position.

DEAL DESCRIPTION

EECC proposes to purchase four 7FA turbines and two 185 MW Steam Turbines (the "Equipment") to fulfill its expected
demand for turbines to be utilized in a project to be constructed by an EECC affiliate. The EECC affiliate expects to construct
two merchant plant projects in Dell, Arkansas and McAdams, Mississippi (the "Projects") being developed by GenPower.
GenPower currently owns the rights to the delivery slots (July through October, 2001) for these turbines via its Turbine
Purchase Agreement with GE; GenPower's first installment payment under the agreement was due in February, 2000.
However, GenPower has not closed on the project financing for the merchant power plants and therefore does not have the
ability to make the payments to GE under their contract. As such, GenPower, GE and EECC have negotiated to assign
GenPower's purchase rights to these turbines to EECC or an EECC designee (West LB). Refer to Exhibit II for EECC's
Termination Payment Schedule for the turbines.

As compensation for agreeing to purchase the turbines from GE and committing to GenPower to utilize the turbines in the
company's Arkansas and Mississippi projects if financing is arranged by October 31, 2000, EECC's affiliate, National Energy
Production Corporation ("NEPCO"), will obtain the exclusive right to negotiate with GenPower for turnkey EPC contracts for
the projects through May 31, 2000. The total construction value of the two projects is estimated to be in the range of $425
million to $450 million. NEPCO anticipates negotiating a Lump Sum contract price on an open book basis at cost, plus 1%

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RAC Deal Approval Sheet Deal Name: EECC Genesis Power/ GE Turbines
contingency plus a 6% fee, resulting in an imbedded EPC profit in the range of $24 million to $30 million. The deterministic
IRR for EECC's expected scenario where NEPCO obtains both EPC contracts with the expected margins is 186%.

If NEPCO and GenPower cannot reach agreement on the terms of the EPC contract by the end of May 2000, GenPower may
pursue negotiations with other third party contractors. In this scenario, EECC may, at its sole discretion, cease to make
payments for the steam turbines only at this point. Upon the earlier of October 31, 2000 or upon achievement of financial close
of the project financing utilizing a third party EPC contractor other than NEPCO, GenPower may purchase the rights to the
turbines from EECC for a price equal to all deposits and progress payments made by EECC to GE to date plus interest on such
payments accruing at a rate of 10% per annum plus one million dollars per turbine. The deterministic IRR for this scenario is
97%.

If, after October 31, 2000, GenPower has (i) not achieved financial closure and (ii) provided to NEPCO an effective Notice to
Proceed under executed EPC contracts for the projects, or executed mutually acceptable EPC contractss for other GenPower
sites under development, EECC has the right to utilize the turbines at its sole discretion. Assuming EECC or its affiliate
contracts for a project that can utilize the gas turbines reasonably within the same time frame as the GenPower projects, the
deterministic IRR for this scenario is 110%.; This assumes the steam turbines are cancelled in June 2000, resulting in a $6.2
million termination payment to GE.

In the event GenPower does not reach financial close on these projects by October 31, 2000, NEPCO/EECC are confident that
the "F" class turbines can be placed in one of five other projects for which EPC contracts are being negotiated (refer to Exhibit
III for details on these projects). The strong demand for "F" class turbines is expected to exceed market availability until third
quarter, 2003. As such, the availability of these turbines in the third quarter of 2001 makes them valuable assets to EECC;
owning the rights to the turbines is expected to give rise to opportunities to participate in other domestic and international
projects if the turbines are not used in the GenPower projects.

This particular "F" model is in high demand presently, due to its low Nitrogen Oxide ("NOx") emission capabilities. It is a
multi-use gas turbine that can be used in peaking or combined cycle mode and can be retrofitted for various special purpose
applications and is comparable with various steam turbine sizes. Other parties approaching GE today, in particular for the "7F"
class turbines can expect to wait until the second quarter of 2003 for delivery of equipment.

The total purchase price of these assets is proposed to be funded through an off-balance sheet arrangement with West LB, one
of Enron's tier one lenders. By having West LB purchase these assets, the debt associated with these assets, subject to the
concurrence of Arthur Andersen, will not be recorded on Enron's balance sheet. The West LB arrangement will grant Enron a
continuous fixed price purchase option for these assets. Certain guarantees from Enron Corp. to West LB are integral elements
of this structure and the approval of these Enron guarantees are requested as part of this DASH. The financing structure, if
obtained, will maintain maximum accounting flexibility, minimize the funding cost while keeping the turbines secured through
a parent guarantee for the purchase price provided by Enron.

TRANSACTION SOURCES AND USES OF FUNDS

  Sources Uses
Enron Balance Sheet $72.58 Capital Expenditure $72.58
Total $72.58 $72.58

RETURN SUMMARY (Based on the full turbine cost of $190.26 million)

	PV @	Cumulative
Return Components:	Capital	IRR %
	Price ($000s)	
Cash Outflows	($262,977)	N/A
Fees		N/A
EPC Contract CF*	$228,914	81.82%
Turbine CF*	$57,228	20.45%
Total NPV	$23,166	102.27%

Capital Price Components

Risk free rate (%): 6.30%
Country Premium (%): 0.00%
Equity Premium (%): 5.02%
Project/Liquidity Premium (%): 8.68%

RAC CAPITAL PRICE: 20.00 %

*The return summary is based on RAC estimates of probabilistic outcomes on four different scenarios.

Page 2



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RAC Deal Approval Sheet


Deal Name: EECC Genesis Power/ GE Turbines


45
0%		IRR Distribution	
.
40.0%			
35.0%			
30.0%			
25.0%			
20.0%			
15.0%			
10.0%			
5.0%	P5		cted
0.0%			
	e	o	o o a
O
V	M 1.J'
V V	01 O U1 N CT
V' V 7 V M	~O M O
M M M
00
r	M 00
v) N	.. b
' N 7 I1 G	
N

TRANSACTION UPSIDES/OPTIONALITY - GenPower has delivery slot options for an additional three identical 7FA/
185 MW STG turbine packages. The first slot is March 2002, the second slot is March 2003, and the third slot is March 2004.
Completing this transaction allows Enron an opportunity to negotiate deals similar to the above, or negotiate the assignment of
these turbines outright to Enron which could be used as a marketing lever for EECC /NEPCO third party projects or Enron
developed projects.

EXIT STRATEGY (Merchant investments only)
In the event the proposed projects do not transpire, EECC intends to use the Equipment for other anticipated projects such as
the NESCO, SUMAS or COGENTRIX projects. Refer to Exhibit III for the project details.

RISK MATRIX

DESCRIPTION	MITIGATION/COMMENTS
Long position in 60 HZ Turbine Market	GenPower is actively negotiating with Credit Suisse First Boston
(North/South America)	("CSFB") on the terms for the interim construction financing for
Risk that GenPower does not achieve financial	three plants (McAdams, Dell EW Frankfurt). CSFB participated in
closure on projects and Enron retains ownership of	the similar financing of a 540 MW plant developed by GenPower
turbines.	and GE in 1998. GenPower also has a draft Tolling Agreement
	with Coral Energy,LLC, a subsidiary of Royal Dutch Shell, to
	provide the fuel and market the power from the three plants.
	Although GenPower anticipates financial close to take place in June
	2000, it would appear this is an aggressive time frame given the
	early stage of negotiations for the construction financing and key
	project agreements. As such, there is a moderately high risk that the
	projects will not be financed and EECC will have to utilize the
	turbines in one of its own construction projects.
	Enron's construction businesses are confident that the gas turbines
	can be deployed on a future construction project as these turbines
	are a common size used on many North American and South
	American power projects. These turbines could probably be
	utilized on one of several projects that NEPCO is bidding or
	negotiating such as the NESCO, SUMAS or COGENTRIX
	projects. However, placing the steam turbines will be more
	difficult than placing the gas turbines since they are used only on
	combined cycle projects.

Page 3

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RAC Deal Approval Sheet

Deal Name: EECC Genesis Power/ GE Turbines

Potential Termination Payments on Steam	It is expected that the terms and conditions for these acquisitions of
Turbines	turbines will be consistent with other recent acquisitions from GE.
	EECC will have the right to cancel the turbine contract based on a
	cancellation cost payment schedule. Cancellation costs escalate
	monthly during the 25-month construction schedule. Termination
	charges payable to GE for the period of February through
	November 2000 equal 31% ($59.4 million) of the total contract
	value assuming the steam turbines are cancelled in June 2000. The
	termination payment in June 2000 for the steam turbines is $6.2
	million increasing to $19.5 million in November 2000. The total
	termination payments in November 2000 for all turbines is $72.58
	million. If the termination notice for the steam turbines is not given
	until after October 31, 2000, the final date that GenPower can elect
	to purchase the turbines from EECC, this $19.5 million termination
	penalty would apply.
	The existing Letter of Intent between EECC and GenPower does
	not specifically address GenPower's obligation to reimburse EECC
	for termination charges paid to GE in conjunction with these
	turbines. As a condition of proceeding with this transaction, EECC
	will require GenPower to agree to amend the Letter of Intent to
	obligate GenPower to pay such charges. Even with these
	amendments, EECC will only have recourse against GenPower for
	these termination fees if GenPower elects to pay the contractual
	"Assignment Purchase Price" for the turbines prior to October 31,
	2000 included in which will be reimbursement of any termination
	charges EECC has incurred. If GenPower is not successful in
	arranging financing, EECC will have to offset any termination
	charges incurred against future EPC profits from other projects.
Financing risk	It is EECC's intent to pursue an off balance sheet financing
	structure with West LB for the turbine purchase. Arthur Andersen
	("AA"), Enron's independent accountants, must review the
	structure and concur with the off balance sheet treatment of the
	turbine financing. If AA cannot complete their review within the
	proposed three week closing timeframe and GE will not agree to
	extend the closing date, or if AA does not concur with the off-
	balance sheet treatment for the turbine financing, the turbines will
	have to be financed on Enron's balance sheet. Tthe fully funded
	obligation will total $190.26 million; it should be noted, however,
	that upon a sale of the turbines to GenPower or another third party,
	both the turbines and the related debt will move off Enron's balance
	sheet.
Assignment	It is expected that the terms and conditions for these acquisitions of
Risk that EECC will not be able to use the turbines	turbines, including transfer and assignment rights, will be
if the current projects do not close.	consistent with other recent acquisitions from GE. EECC will
	negotiate with GE to use the turbines on other Enron projects and to
	resell the turbines to another user in the event that Enron is unable
	to utilize the turbines in a project. EECC will require the right to
	assign the warranties to any projects that Enron owns or builds.

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RAC Deal Approval Sheet

KEY SUCCESS FACTORS

Deal Name: EECC Genesis Power/ GE Turbines

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

OTHER RAC COMMENTS:

RAC Underwriting recommends approval of EECC's request to purchase the gas turbines and increase Enron Corp.'s long
position in turbines. This recommendation is based on the high demand in the market for the "F" class turbines with
availability in this advantageous delivery timeframe of the second and third quarters of 2001. However, the two 185 MW STG
steam turbines are not in high demand; EECC's downside risk is that GenPower and EECC cannot reach agreement on the EPC
contract negotiations giving rise to GenPower's right to negotiate with third party contractors. EECC's first available
opportunity to cancel the steam turbines, at it's sole discretion, will be June 2000 potentially resulting in the payout of a
termination payment of $6.2 million to GE and EECC may have reason to not terminate these steam turbines until final
negotiations with GenPower have concluded on or before October 31, 2000, potentially increasing this payment to $19.5
million. EECC is actively negotiating with GE to reduce or eliminate the termination charges in the first five months of the
turbine purchase contract but there is no guaranty the termination fees will be reduced.

EECC will not have recourse against GenPower for the termination payments paid to GE in the scenario where GenPower
cannot arrange financing by October 31, 2000 and EECC must obtain another EPC project to utilize the gas turbines. In this
scenario, the termination payment will negatively impact EECC's return on the EPC contracted project in which the gas
turbines are placed. However, EECC and its affiliate NEPCO are confident that an EPC project with an equivalent or greater
profit margin than the proposed EPC contract with GenPower is attainable assuming one or more of the EPC projects being
negotiated (Exhibit III) reaches closure as projected.

It should be noted that while the expected return on this transaction considerably exceeds the capital price, this transaction (i)
adds to Enron's long turbine position, albeit with largely with highly desireable 7FA gas turbines (but also with less desirable
steam turbines), (ii) the range of expected returns on this investment is broad, with a significant percentage of negative IRR
results as well as 100%+ IRR outcomes, and (iii) there is a greater probability than in other turbine purchases that this
acquisition will be financed on Enron's balance sheet.

APPROVALS

Regional Mgmt.

Legal
RAC Management
  c4 fpm Fvt
Enron

ENE Management

ENE Management

Larry Izzo

Name

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


  b 7!,nom fr 9 t ~~ -

  vtilik
F



Date



(j /`14rth 3,p~7.f



E0004402082

Page 5

XH003-01396



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Page 13 of 142
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RAC Deal Approval Sheet Deal Name: EECC Genesis Power/ GE Turbines
  Global Finance Summary (addendum to DASH)

Transaction Summary

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

2. Investment terms and pricing:

Describe (if necessary): N/A

3. Financing terms and pricing:

  Amount ($000)
$72.583
  -0-
-0-
$72.583

  Q Market Q Above Market 0 Below Market
0 Market 0 Above Market 0 Below Market

Describe (if necessary): Initial pricing discussion with West LB indicated that they would proceed with the Genesis
turbine transaction using the same pricing as the previous deals since we are now working on the financing structure to
reduce West LB's holdings under the various turbine projects:

Rate: Libor + 62.5 bps - Enron's 364 day funded revolver price plus 7.5 bps
Upfront Fee: $50,000 inclusive of legal

However, this pricing has not been approved by West LB's senior management. On the Brazil turbine financing still under
negotiations, the upfront fee is approximately $200,000.

4. Legal or practical liquidity restrictions:
Restricted

Describe (if necessary):

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

Describe (if any): Enron parent guaranty to West LB.

6a. Business unit intent to syndicate:

Describe (if necessary):

6b. Intended Enron hold period: N/A

  6c. Likely Syndication Market:
C -QA- Car) k
  a Ss r i ~-VuA
cc9'43
TIJ~S~-U~

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

Global Finance Representative:

X Unrestricted 0 Legally Restricted
X Recourse

X None 0 Partial

Q Practically
0 No Recourse
0 All /

0 Industry/Strategic Partner 0 Direct Private Equity

0 Capital Markets	Q JEDI 1
0 JEDI 2	0 Enserco
* LJM 1 or 2	Q Condor
X Other: Banks	0 Margaux

-~Uj

Q Yes



E0004402083

Page 7



X No

EXH003-01397


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Page 14 of 142
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RAC Deal Approval Sheet Deal Name: EECC Genesis Power/ GE Turbines

TABLE OF EXHIBITS

EXHIBIT 1 Enron's Long Turbine Position
EXHIBIT II Turbine Termination Payment Schedule
EXHIBIT III Potential EPC Projects

EOO04402084

Page 6

wJ

EXH003-01398


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Page 15 of 142
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I! L

  EXHIBIT I
ENRON'S LONG TURBINE POSITION

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Confidential I March 2000 5:15 pm F.Kenye-6207
					
Item	Turbine
(Scope/ Cycle)	Delivery Date(s)	Total
MW
ISO	Total Capex
Commitment
$MM	Possible Project Site
					
	ENA				

1	
1 X West 501 D5A Simple Cycle	_
May 30, 2000	
122	
$24	
ENA - Electrocities, N. Carolina
(Remove from "long" list soon when
Electrocities confirmed
					
2	24 X GE LM6000	July2000 thru
April 2001	1,164	$335	Qty 2 - ENA/Electrocities
Qty 1 - ENA/Las Vegas Co-Gen
Qty 18 - ENA Other
Qty 3 - ESA Possibly
					
r3	1 _X GE 7FA Simple Cycle
(Cogen Tech Machine)	Aug 2000	156	$35	ENA - East Cost Power - Linden 6
Confirm GE Re-Structuring
Enron Partial Owner
					
4	1 X GE 7FA Simple Cycle
(Cogen Tech Machine)	Aug-Sept 2000	156	$35	ENA -Mid West (Peoples)
- One of the three orig Cogen Tech
Machines
					-
5	1 X GE 7FA Combined Cycle
(CogenTech Machine;
STG not ordered yet)	Oct 2000	171	$31	ENA - Vitro
					
6	2 X Used ABB11N1 Simple Cycle	Avail Now	166	$26	- Enron Canada Sarnia Peaker Proj
Sarnia DASH was in process
					
7	2_X Used GEC Fr 6B	Avail Now	60	13	Available
-	- -		1,995	$499	-
		- - --			
	CALME				
8	97 Pwr Barges (Philip GE Fr 68)	Avail Now	270	.___.$72	APACHI - Lagos
		_			
	EECC				
_
9	2 X GE 7FA Comb Cycle
(plus one steam turbine;
old Naco machines)	Qty 1 - Aug 2001
Qty 1 - Sept 2001
STG - Sept 2001	480

__	$90	- ENA - Several Florida Projects
- NESCO
					
10	1 X Siemens V94.2 + 1 Toshiba STG
+ HRSG
50 hz application	Nov 2001	240	$64	Croatia
- Siemens (et all) released
- Initial DASH (wl cancellation risk
signed)
EEL has t
					
11	3 X 9FA STAG Power Islands
Combined Cycle
50 hz application	Qty 1 - Oct 2001
Qty 1 - Nov 2001
Qty 1 - Dec 2001	

780		EEL - Spain Arcos
(Remv from "long" list when firm)
___I249
		_	1,500	$402	
					
					
	Total (Long		3.765	$973	

Page 1

GenPower-DASH-Exhibits

EXH003-01399


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Page 16 of 142
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EXHIBIT II (A)

EECC
Termination Schedules
  McAdams Site

								Cumulative
Month	Termination	GT I	GT 1 $$S	GT2	GT 2 $$$	Stm I	Stm 1 $$$	$$$
								
Feb-00	Signed LOC	7.50%	$2,760,281	7.50%	$2,760,281	7.50%	$1,614,189	$7,134,750
Feb-00		8.77%	$3,227,688	8.77%	$3,227,688	8.77%	$1,887,525	$8,342,901
Mar-00		10.40%	$3,827,589	10.40%	$3,827,589	10.40%	$2,238,342	$9,893,520
Apr-00		10.80%	$3,974,804	10.80%	$3,974,804	10.80%	$2,324,432	$10,274,040
May-00		11.10%	$4,085,215	11.10%	$4,085,215	11.10%	$2,389,000	$10,559,430
Jun-00		14.80%	$5,446,954	14.80%	$5,446,954	14.80%	$3,185,333	$14,079,240
Jul-00		20.00%	$7,360,748	20.00%	$7,360,748	20.00%	$4,304,504	$19,026,000
Aug-00		30.00%	$11,041,122	30.00%	$11,041,122	24.00%	$5,165,405	$27,247,649
Sep-00		32.00%	$11,777,197	32.00%	$11,777,197	29.00%	$6,241,531	$29,795,924
Oct-00		34.00%	$12,513,272	34.00%	$12,513,272	40.00%	$8,609,008	$33,635,551
Nov-00		36.00%	$13,249,346	36.00%	$13,249,346	51.00%	$10,976,485	$37,475,178
Dec-00		38.00%	$13,985,421	40.00%	$14,721,496	59.00%	$12,698,287	$41,405,204
Jan-01		40.00%	$14,721,496	40.00%	$14,721,496	70.00%	$15,065,764	$44,508,756
Feb-01		40.00%	$14,721,496	40.00%	$14,721,496	80.00%	$17,218,016	$46,661,008
Mar-01		40.00%	$14,721,496	40.00%	$14,721,496	83.00%	$17,863,692	$47,306,684
Apr-01		40.00%	$14,721,496	40.00%	$14,721,496	87.00%	$18,724,592	$48,167,584
May-01		40.00%	$14,721,496	40.00%	$14,721,496	93.00%	$20,015,944	$49,458,936
Jun-01		40.00%	$14,721,496	40.00%	$14,721,496	95.00%	$20,446,394	$49,889,386
Jul-01	Gas 1 Shipment	100.00%	$36,803,740	40.00%	$14,721,496	98.00%	$21,092,070	$72,617,306
Aug-01	Gas 2 / Steam Shipment	100.00%	$36,803,740	100.00%	$36,803,740	100.00%	$21,522,520	$95,130,000
Sep-01	30 Days After Shipment	100.00%	$36,803,740	100.00%	$36,803,740	100.00%	$21,522,520	$95,130,000

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EXH003-01400


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Page 17 of 142
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EXHIBIT 11 (B)

EECC
Termination Schedules
  Dell Site

								Cumulative
Month	Termination	GT I	GT 1 $$$	GT2	GT 2 SS$	Stm I	Stm I $$$	$$$
Feb-00	Signed LOC	7.50%	$2,760,281	7.50%	$2,760,281	7.50%	$1,614,189	$7,134,750
Feb-00		8.77%	$3,227,688	8.77%	$3,227,688	8.77%	$1,887,525	$8,342,901
Mar-00		10.40%	$3,827,589	10.40%	$3,827,589	10.40%	$2,238,342	$9,893,520
Apr-00		10.80%	$3,974,804	10.80%	$3,974,804	10.80%	$2,324,432	$10,274,040
May-00		11.10%	$4,085,215	11.10%	$4,085,215	11.10%	$2,389,000	$10,559,430
Jun-00		14.80%	$5,446,954	14.80%	$5,446,954	14.80%	$3,185,333	$14,079,240
Jul-00		20.00%	$7,360,748	20.00%	$7,360,748	20.00%	$4,304,504	$19,026,000
Aug-00		30.00%	$11,041,122	30.00%	$11,041,122	24.00%	$5,165,405	$27,247,649
Sep-00		32.00%	$11,777,197	32.00%	$11,777,197	29.00%	$6,241,531	$29,795,924
Oct-00		34.00%	$12,513,272	34.00%	$12,513,272	36.00%	$7,748,107	$32,774,650
Nov-00		36.00%	$13,249,346	36.00%	$13,249,346	40.00%	$8,609,008	$35,107,701
Dec-00		38.00%	$13,985,421	40.00%	$14,721,496	51.00%	$10,976,485	$39,683,402
Jan-01		40.00%	$14,721,496	40.00%	$14,721,496	59.00%	$12,698,287	$42,141,279
Feb-01		40.00%	$14,721,496	40.00%	$14,721,496	70.00%	$15,065,764	$44,508,756
Mar-01		40.00%	$14,721,496	40.00%	$14,721,496	80.00%	$17,218,016	$46,661,008
Apr-01		40.00%	$14,721,496	40.00%	$14,721,496	83.00%	$17,863,692	$47,306,684
May-01		40.00%	$14,721,496	40.00%	$14,721,496	87.00%	$18,724,592	$48,167,584
Jun-01		40.00%	$14,721,496	40.00%	$14,721,496	93.00%	$20,015,944	$49,458,936
Jul-01		40.00%	$14,721,496	40.00%	$14,721,496	95.00%	$20,446,394	$49,889,386
Aug-01		40.00%	$14,721,496	40.00%	$14,721,496	98.00%	$21,092,070	$50,535,062
Sep-01	GT 1 - STM Shipment	100.00%	$36,803,740	40.00%	$14,721,496	100.00%	$21,522,520	$73,047,756
Oct-01	GT 2 Shipment	100.00%	$36,803,740	100.00%	$36,803,740	100.00%	$21,522.520	$95,130,000
Nov-01	30 Days After Shipment	100.00%	$36,803,740	100.00%	$36,803,740	100.00%	$21,522,520	$95,130,000

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=XH003-01401


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Page 18 of 142
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EXHIBIT III

	Potential NEPCO uses fo	r GE 7FA Tu	rbines
										
	#of	#of								
_	Gas	Steam			Construction				Turbine Delivery_	
Project Description	Turbines	Turbines	MW	Contract Value	Profit	Start	_	Completion	Date	Status
NESCO, Frederickson,
WA	
2	
1	
500	
250,000,000	
15,000,000	
May-001		
Jul-02	
Aug-01	NEPCO awarded project pending
turbine availability.
-
NESCO, Goldendale,
'NA	

1	

1	

250	

98,000,000	

_ 8,000,000	

Jun-01		

Aug-03	

Sep-02	Project underdevelopment. Gas
agreement in place. Permitting in
place.
-- -"-- -
Co entrix, Southhaven	
3	
3	
800	
320,000,000	
18,000,000	
, Apr-00		
Jun-02	
Mar-01	NEPCO to negotiate project on ar
exclusive basis.
-^
ogentrix, Sterlington	

3	

3	

800	

320,000,000	

18,000,000	

Sep-00		

Oct-02	

Aug-01	NEPCO negotiate project on an

exclusive basis.
den, Burne , CA	2	1	500	260,000,000	15,000,000	Se -00		Oct-02	, Oct-01	RFP due in March, 2000

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EXH003-01402


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M-3

E0004402089

EXH003-01403


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ENRON RISK ASSESSMENT AND CONTROL

DEAL APPROVAL SHEET

  DEAL NAME: Extension of Demar Liquidity Date DASH Completed: 3/17/00
Agreement RAC Analyst: N/A
Counterparty: Demar Instaladora y Constructora, SA Investment Type:. Debt
  Business Unit: Enron Engineering & Construction Co. Capital Funding Source(s): Balance Sheet
Business Unit Originator: J. Martin Expected Closing Date: 1/3 1/00
  ]Public OPrivate Expected Funding Date: 1/31/00
  ]Merchant OStrategic Board Approval: DPending OReceived DDenied EIN/A
l lConforming ONonconforming
RAC Recommendation: OProceed with Transaction Returns below Capital Price ODo not Proceed

APPROVAL AMOUNT REQUESTED (In 000's)

Enron Engineering & Construction Company ("EECC") requests approval to extend the maturity date and modify the monthly
maximum available facility amounts on an existing revolving line of credit being provided to Demar Instaladore Constructora
S.A. De C.V. ('.`Demar"). The loan modifications are needed as a result of valid weather delays which prevented Demar's
timely completion of certain construction milestones under the EPC 4 contract with Pemex. Upon full completion of each
milestone, Pemex remits milestone payments, EECC's primary source of repayment for the loan, to an escrow account
controlled by EECC. As compensation to EECC for the loan amendments, Demar will pledge the construction revenues from a
contract with Solar Turbine totaling $12 million.
  J
Capital Commitment $ 18,100* * As of 1/24/00, EECC has advances outstanding of $12.5 million to Demar for
expenses incurred on EPC 4. EECC has also advanced $4.6 million to Demar for
expenses on EPC 43/50 which is performing. For cross-collateralization purposes,
the two facilities have been amalgamated into one commitment with two tranches;
repayment schedules and interest rates are unique to each tranche.

EXPOSURE SUMMARY (In 000's)

This transaction: $ 18,100
Total $ 18,100
Total Contracts $18,100

DEAL DESCRIPTION

Enron Engineering & Construction Company ("EECC") seeks to extend the maturity date and modify the reducing maximum
available facility amounts on an revolving line of credit provided to Demar, a Mexican construction company with an E-
Rating of 10 (B-). The current maximum facility amount is $18.1million. As security for the line of credit, Demar assigned
the proceeds from the company's ongoing construction contracts with Petroleos Exploration Y Production ("PEP"), a wholly
owned subsidiary of Petroleos Mexicanos ("Pemex") rated BB/ Bal by Standard & Poor's and Moody's, respectively, to
perform the engineering, procurement and fabrication services for four Pemex offshore and onshore hookup projects , 'EPC 4",
"Atasta", "Cuidad", ("Demar 1") and "CA-AC-4 Offshore Hookup ("Demar 2"). The original liquidity agreement
incorporated the Demar 1 projects. It was later amended to incorporate the Demar 2 project in order to cross collaterize the
security between all of the projects. As such, distinct interest rate and separate set of dates and amounts associated with the
maximum available facility amount for the Demar 2 project.

EECC will not amend any terms related to the Demar 2, as it is on schedule. However, weather conditions have caused
rough seas which have delayed work on the EPC-4 barge by two months since this agreement was extended in October 1999
due to similar problems. The period of delay will likely increase further as the Gulf of Mexico waters continue to be very
rough. These weather delays are beyond Demar's control. As a result of these delays, Demar's progress payments from PEP
have further slipped the forecasted time table and therefore the company will not be able to pay down the outstanding principal,
accrued interest, and a $5 million service fee, in accordance with the reducing facility caps. Interest accrues on facility
advances at a rate of 10% fixed per annum. All progress payments from PEP flow through an Enron controlled Mexican bank
account and are applied against the credit facility or disbursed to Demar at EECC's discretion.

E0004402090

KHO03-01404


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Page 21 of 142
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RAC Deal Approval Sheet Deal Name: Extension of Demar Liquidity Agreement
(1) EECC is requesting approval to amend the maximum facility amounts on the outstanding principal as follows:

		CURRENT	REVISED	REVISED
	(DEMAR 2)	(DEMAR 1)	(DEMAR 1)	COMBINED
EFFECTIVE DATE	FACILITY AMT.	FACILITY AMOUNT	FACILITY AMOUNT	FACILITY AMOUNT*
11/30/99	$ 4.6mill.	$17.5mill.	$17.5mill.	$22.lmill.
12/23/99	$ 4.6mill.	$13.5mill	$13.5mill.	$18.1mill.
01/30/00	$ 4.6mill.	$ 3.5mill.	$13.5mill.	$18.lmill.
02/28/00	$ 3.Omill	$-0-mill.	$12.5mill	$15.5mill.
03/30/00	$ 2.Omill	$-0-	$ 11.Omill	$13.0mill.
04/30/00	$ 1.Omill	$-0-	$ 7.Omill	$ 8.Omill
05/30/00	$-0-	$-0-	$ 3.Omill	$ 3.Omill
06/30/00	$-0-	$-0-	$-0-	$-0-

* These caps are limited to the lesser of 75% of (remaining revenues - loans for outstanding fees - outstanding
interest) or the maximum facility amount specified. No further advances under the credit facility will be allowed after
4/30/00. The outstanding principal balance will be reduced as payments are received from PEP. PEP f nal progress
payments may lag behind the project work completion date (4/18/00) by as much as 45 to 60 days. All payments are
expected to be received by the facility maturity date, 7/31/00.

(2) EECC will maintain its security position with respect to all proceeds being remitted by PEP for the four contracts
assigned to it as collateral. EECC will apply funds received in the escrow account in accordance with the required loan
repayment schedule and disburse cash to Demar only for project related expenses. PEP proceeds received in the escrow
account after 5/30/2000 will be applied as received against the outstanding principal under the credit facility. Also, no
further escrow disbursements will be made to Demar after 4/30/2000 until all amounts owed EECC are paid including
accrued interest and the $5.0 million in fees associated with the Demar 1 deal which will be accounted for as a principal
advance under the amended loan agreements.
(3) Interest will accrue on Demar 1 & 2 advances on the credit facility at a 10% p.a. fixed rate., and 90 day libor +5%,
respectively.
(4) Advances from Enron to pay its $5 million fee on Demar 1, will trigger a default interest rate of 15% if not paid by
7/31/00. Interest and fees are paid current related to the Demar 2.
(5) The revised maturity date will be 7/31/00.

TRANSACTION SOURCES AND USES OF FUNDS ($000s)

  Sources Uses
Enron Balance Sheet $18,100 Working Capital Advances $18,100
Total $18,100 Total $18,100

TRANSACTION DISCUSSION

The status of the three PEP contracts assigned to EECC as collateral and the Solar Turbine contract is as follows:

Project Name	Start Date Contractual Completion Date	Projected Completion Date
EPC 4	10/22/97 4/18/00	4/18/00
Atasta	6/29/98 9/26/99	Completed
Cuidad	6/29/98 6/27/00	6/27/00
CA-AC-4 Offshore Hookup	10/21/99 4/18/00	4/18/00
Solar Turbine (new collateral)	02/01/00 02/01/01	02/01/01
Demar has filed for an extension of the EPC 4 contract through May IS`. The turnkey	project manager (Bechtel) has already
approved previous change orders requests extending the contractual completion date through March 19`h and is reviewing the
additional extension request.	However these extensions must be approved by PEP.	PEP typically does not sign the final

Page 2

E0004402091

:XH003-01405


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RAC Deal Approval Sheet Deal Name: Extension of Demar Liquidity Agreement
change order until completion of the job. EECC project management agrees that Demar has a valid claim and anticipates
Pemex will ultimately approve the time extensions.

Assuming completion of the scheduled work, Demar expects to incur additional scheduled expenses totaling $12 million on
the projects and receive progress payments totaling $40 million from PEP. EPC 4 and CA-AC-4 Offshore Hookup, which are
the source projects for $25 mill and $12 mill respectively, are 94% and 54% complete respectively. The net project proceeds
of $27 million will be used to service Demar's obligations to EECC of approximately $24 million with the residual amounts
flowing back to Demar post EECC facility maturity date.

Pemex has a Standard & Poor's senior unsecured debt rating of "BB" which is also Standard & Poor's sovereign rating for
Mexico. The Moody's Investors Services' senior unsecured debt rating for Pemex is "Bal" (one notch better than the S&P
rating) and the sovereign rating is "Bal".

RISK MATRIX (Maximum 5)

DESCRIPTION	MITIGATION/COMMENTS
The risk the projects becomes profit neutral or	Demar is contractually liable for liquidated damages ("LD's") of $15,000 per
unprofitable for Demar if PEP assesses	each day late under the EPC 4 contract.. Demar has filed for an extension of
Liquidated Damages against Demar for failing	the EPC 4 contract through May .1,2000 The turnkey project manager
to reach the contract scheduled completion dates	(Bechtel) has already approved previous change orders requests extending the
for the projects.	contractual completion date through March 19,2000 and is reviewing the
	additional extension requests. However these extensions must be approved by
	PEP to be enforcable. PEP typically does not sign the final change order until
	completion of the job. EECC project management agrees that Demar has a
	valid claim and anticipates Pemex will ultimately approve the time extensions.
	The fact remains EECC's primary source of repayment, the contract revenues
	from PEP, may ultimately prove to be insufficient to repay Demar's full
	indebtedness to EECC if PEP does not approve the change orders and, as a
	consequence, LDs are assessed against Demar and netted against PEP's
	contract payment obligation under the EPC 4 contract. To partially mitigate
	this risk, EECC has obtained additional collateral coverage in the form of the
	assignment of proceeds ($12 million) from Demar's contract with Solar
	Turbine.

E0004402092 Page 3



XH003-01406


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RAC Deal Approval Sheet

Deal Name: Extension of Demar Liquidity Agreement

Payment default risk in the event that Demar	Demar has successfully completed 32 construction contracts for Pemex in the
defaults on the PEP contracts	past 10 years and is currently performing satisfactorily on these three contracts
	according to EECC who has spoken directly with PEP on this issue. EECC
	project management is providing consultation services to Demar and is
	working closely with the company to insure work progression remains on
	schedule going forward. However, EECC does not have a legal mechanism for
	stepping into Demar's shoes in the PEP contracts if Demar were to default on
	the contracts. The PEP contracts would likely be re-bid to other contractors to
	complete the work. PEP is only obligated to pay for actual work completed in
	full. Demar's successful performance of these contracts is critical to EECC's
	ability to receive full repayment for the Demar obligations in light of Demar's
	limited capacity to pay the obligations otherwise.
	EECC will control all payments remitted by PEP on the projects thus
	minimizing the chance for Demar to divert the- proceeds to other uses.
	Additionally, Demar has pledged assets (a barge, houses) to EECC as
	additional collateral for the credit facility. Although EECC estimates the value
	of the assets is in excess of $10 million, RAC assigns no value to the assets
	given the lack of valid recent independent appraisals for the collateral and
	given Enron Legal assessment of the difficulty associated with filing and
	perfecting a lien against property in Mexico.
Foreign Currency Risk	Demar's obligations to EECC are denominated in dollars. Approximately 65%
	($90mill.) of the total PEP contract revenues payable to Demar are
	denominated in dollars. Demar is able to increase the peso billings based upon
	increases in Mexican inflationary indexes. Actualization is standard in Pemex
	contracts to protect Mexican contractors against inflation. However, this
	mechanism does not protect the contractor in a scenario where the peso is
	devaluing at a faster rate than inflation is increasing. Given the short remaining
	term of the PEP contracts and the state of economic affairs in Mexico, the
	probability of extreme peso devaluation during the next 6 months is considered
	moderate at this time.
Credit Risk of PEP	The EPC 4 project is part of PEP's overall Cantarell project which is financed
	principally by the US Export / Import Bank, EXIM Bank of Japan and EXIM
	Bank of France.

KEY SUCCESS FACTORS

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

OTHER RAC COMMENTS: RAC recommends approval of the Demar credit facility amendments based on the resulting
improvement in EECC's collateral position. EECC will obtain the assignment of proceeds from Demar's contract with Solar
Turbine, which is projected to generate $12 million in revenues over the next twelve months.

E0004402093

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RAC Deal Approval Sheet

Deal Name: Extension of Demar Liquidity Agreement

APPROVALS
Regional Mgmt.
EECC Legal
RAC Management
Enron Global Finance
ENE Management

Name

Larry Izzo
John Schwartzenburg /Not 1
Dave Gorte
Andy Fastow/Jeff McMahon
Jeffrey Skilling / Joe Sutton

" n ure Date
3/i*a
  00




  TV j *T TO

  j~ St f F,wt vvt ApA OA4 F bj$1V. s.&j

  3

EOO04402094

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Demar I Extension 2/00
RAC Deal Approval Sheet INTERNAL EECC APPR&A me: Extension of Demar Liquidity Agreement


  NAME TITLE SIGNATURE DATE
Eddie Clay VP Project
  Management Q-
Support

  Jerry V Project
Martin Execution
Dick Westfahl Sr.VP
  Business
Development
Keith Marlow VP Finance




CHECK
THOSE THAT
  APPLY

0

17

0

E0004402095

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Global Finance Summary (addendum to DASH)

1. Transaction Summary

  Amount ($000)
Total Deal/Project Capital Commitment $18,500
Less: Financings -0-
Less: Syndications -0-
Net Enron Investment $18,500

2. Investment terms and pricing: 0 Market 0 Above Market 0 Below Market

Describe (if necessary): N/A

3. Financing terms and pricing: 0 Market 0 Above Market . Ur- elow Market*

Describe (if necessary): * EE&CC originally believed that the pricing was above market due to a $5.OMM fee to be
received as part of this financing. However, as we originally stated, this fee is not received until the construction
contract is completed, payment is received from Pemex, there has been no extreme peso devaluation, and our loan
has been repaid. Additionally, because there have been construction delays, and Pemex could raise performance
issues, it is now likely that there will not be monies left over to pay this fee. Therefore, additional Enron capital would
be required to pay up-front fees to the market if we attempted a syndication.

4. Legal or practical liquidity restrictions: 0 Unrestricted 0 Legally Restricted Ca/practically Restricted
Describe (if necessary): Limitations on Mexican debt liquidity, especially at this debt rating (E-Rating of 10 (B-)),; and
under these adverse circumstances.

5. Any recourse to Enron (other than investment): 0 Recourse o Recourse

Describe (if any):

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

6b. Intended Enron hold period: To maturity ( 07/31/00, previously 04/30/00).

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 1 or 2 0 Condor
0 Other:. 0 Margaux
6d. Is this a JEDI 2 "Qualified Investment"? 0 Yes lo

Global Finance Representative: _.3 __
Sign Name (Printed) Date

E0004402096

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M-4

E0004402097

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ENRON RISK ASSESSMENT AND CONTROL

DEAL APPROVAL SHEET

DEAL NAME: Linden Six Date DASH Completed: 02/09/00
  Counterparty: East Coast Power RAC Analyst: M. Eichman, J. Soo, E. Pedersen
Business Unit: Enron North America Investment Type: Equity
Business Unit Originator: Richard A. Lydecker Capital Funding Source(s): JEDI II/Balance Sheet
OPublic MPrivate Expected Closing Date: February 2000
MMerchant E3 Strategic Expected Funding Date: May 2000
  Conforming CNonconforming Board Approval: DPending Received DDenied ONIA
RAC Recommendation: Proceed with Transaction DReturns below Capital Price DDo not Proceed
APPROVAL AMOUNT REQUESTED
Enron North America ("ENA"), through JEDI II's interest in East Coast Power ("ECP") requests approval to build, own and
operate an additional 160 MW gas turbine adjacent to the existing facilities at Linden, New Jersey

  Total Project Cost $94,200
JEDI II (51% ownership in ECP) $48,040*

*Initial funding of the transaction will be from ECP's working capital facility. Permanent financing is contingent on a re-capitalization agreement between
ECP and General Electric Capital Corp. ("GECC"). Once the agreement with TOSCO is signed for Linden Six, ECP will have 65 days to reach agreement with
GECC or back out of the transaction. During this 65-day period, $2.2 million in progress payments associated with the HRSG and transformers for Linden Six
will be made by ECP. If ECP does not reach a tentative agreement with GECC on a re-capitalization, ECP can terminate the Linden Six transaction. TOSCO
will then reimburse ECP for the $2.2 million in expenditures through a $1.1 million payment at termination and through increased steam sale purchases for the
remaining amount over the subsequent year. If the re-capitalization with GECC does proceed, ENA expects to finance approximately 60% off-balance sheet
through the re-capitalization, which is expected to occur in the second quarter.

EXPOSURE SUMMARY
JEDI II owns a 51% stake in ECP. Enron's indirect ownership in ECP is 25.5%.
Enron Exposure (Linden Six costs) $24,021
  Existing exposure (ECP equity) $163,497 E0004402098

DEAL DESCRIPTION

ECP proposes to expand the existing facilities at the Bayway Refinery (`BR") in Linden, New Jersey with an additional 160
MW power generation facility. The Linden 6 expansion includes building and installing a dual fuel GE 7FA gas turbine with a
HRSG and an interconnect to the Pennsylvania-New Jersey-Maryland grid ("RIM").

The expansion will become part of ECP's Linden generating facilities, which provide electricity to Consolidated Edison.
Linden Six will sell the majority of its generating capacity to BR through a 17-year Energy Service Agreement ("ESA"). ECP
will enter into an Engineering Procurement and Construction contract ("EPC") with NEPCO for the construction of Linden
Six.

The primary value drivers in this deal will be the contractual cash flows received from BR, improvements to existing plant
efficiencies, and merchant sales revenue. Any excess generating capacity will be dispatched and sold into PJM when market
prices permit (about 30 MW in summer months based on monthly dispatch model).

The strategic benefits of this transaction are to: (i) Protect the QF status at existing plant, which would be jeopardized if
TOSCO developed its own project/steam supply. A loss of QF status would decrease Con Ed revenues by 10% (about $25-30
million per year) and adversely impact the PPA restructuring with Con Ed; (ii) Expansion of site, which gives ENA the option
to develop a merchant plant to sell into New York City and/or to develop other project (TES & Gray Water) (iii) Enhance the
overall value of ECP (iv) Enhance the relationship with BR.

JEDI II purchased a 100% equity stake in ECP for $80 million on February 4, 1999 as part of the $1.6 billion asset acquisition
from Cogen Technologies. As part of the purchase consideration, Enron contributed approximately 7.6 million shares of
common stock to ECP in exchange for a $250 million subordinated note. In April, ECP successfully placed $850 million in
senior notes in the open market to refinance the acquisition debt. Simultaneously, $62 million of subordinated notes were
retired. In August, JEDI II sold a 49% equity interest to an affiliate of El Paso Power Services for $133 million plus up to an
additional $17 million in contingent payments. ENA's current net equity interest in ECP is 25.5%

This project would be a significant component of larger planned expansion at the Linden facility, funding for which requires
the re-capitalization of East Coast Power. Under the terms of the re-capitalization GECC's Limited Partner interest at the
project level would be exchanged for an equity interest at the East Coast Power (Holding Company) level. Under the proposed
structure GECC would infuse an additional $166 Million into East Coast Power. East Coast Power would concurrently raise an
additional $630 Million in debt in the capital markets. The capital from these two sources would be,used to pay down plant
level debt at (Camden & Linden), fund the Linden Six Project, and pay any associated transaction costs.

=XH003-01412


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RAC-Deal Approval Sheet

TRANSACTION SOURCES AND USES OF FUNDS

  Sources
Enron Equityy (JEDI II) $19,217
Total $19,217

  Uses
Capital Expenditure $19,217
  $19,217

RETURN SUMMARY

	PV @	Cumulative
Return Components:	Capital Price	IRR
Cash Outflows	$62,696	-
Fees	$0	-
Intermed. Cash Flows	$28,418	%
Terminal Value	$41,243	20.81%
Total NPV	$6,965	20.81%

E-Rating

Capital Price Components	
Risk free rate (%):	6.57%
Equity/Credit premium (%):	1.85%
Country Premium (%):	%
Transaction-Specific (%):	3.58%
RAC CAPITAL PRICE:	12.00%


%	IRR Distribution			
8.0
7.0						
6.0%		e				
5.0%						
4.0%						
3.0%				P95		
2.0%						
1.0%						
0%						
0.				
0 0	0 0 o a e	o	0	0 0
N O
00	~ D M Q
/1 a~ P1 O	I-
O	It
C	N O
00 N
M I~	.N. O h
N N N	7
M	00
M	N C`
-tt

Relative upside ratio 0.868

E0004402099

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RAC -Deal Approval Sheet
CASH FLOW SUMMARY

Cash FlowSummary

$60,000
$40,000
$20,000
$(20,000)
$(40,000)
$(60,000)

$(90,000)
  O
O

 Terminal Value
rmnm Ongoing

  Fees
Outflows
-~- Cumulative P95
-- Cumulative P5

  Egected curruLative cast
flows

Average Life =2.3 years

N M U') ti O O CV M U7 N- W O N C') It) r. OR O
O O O G O r T T r r r fV CV N CV CV N t~7
Years

TRANSACTION UPSIDES/OPTIONALITY
 The deal team estimates that the associated subsidized land lease payments have a present value of $2.5 MM. The land
may be used for three other projects to be developed in the medium term:
  1. Linden Seven - at a development cost of $83.7 Million - is a 160 MW merchant facility that would have the
ability to sell power into the volatile New York City market.
  2. Thermal Energy Storage - at a total cost of $28.3 Million - would give the base plant up to an additional 70 MW
of merchant capacity in the summer.
  3. Gray Water - an on-site water treatment facility, will have a total cost of $11.6 Million.
 The structuring desk estimated extrinsic option value on the available merchant capacity of at least $10 MM, which was
not modeled in the base case.

EXIT STRATEGY (Merchant investments only)
The current exit strategy assumes that the East Coast Power will be liquidated in January 2003 (the model and all return
numbers reflect this assumption). This project would be part of the bundled sale of the Linden facility.

E0004402100

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RACDeal Approval Sheet
RISK MATRIX (Maximum 5

DESCRIPTION	MITIGATION/COMMENTS
Off-take risk	RAC's review of Tosco suggests that the credit quality sufficiently mitigates
Risk of default or non-payment by	payment performance risk associated with the expansion.
Tosco	
	Tosco Corporation (rated 5 on the Enron scale and BBB by S&P), will
	provide a parent payment guarantee for the Bayway Refinery (`BR"). Under
	conditions of Tosco default, ECP will sell its total power supply (160 MW)
	on a merchant basis. Tosco has owned BR since 1993 when it was bought
	from Exxon. ECP has had no payment problems during the 13 months it has
	operated the generating facilities at Linden.
	Tosco is the largest independent refiner in the US and controls 6.5% of the
	US refining capacity. Tosco's strong market position, consistent operating
	results and interest coverage supports its investment grade credit rating.
	Conversely, volatile refining margins and increased debt levels offset some of
	the credit strength.
Construction risk	The Linden Six expansion will be constructed under an EPC with NEPCO, an
Risk of construction delays or cost	Enron affiliate.
overruns.	
	According to the Energy Service Agreement ("ESA") between ECP and
	Tosco, any construction cost in excess or below the amount outlined in the
	construction contract will be shared jointly between ECP and Tosco.
	ECP will be penalized by $18,000 / day for delays in excess of 15 days but
	less than 76 days from the project completion date (July 1, 2001). Delays in
	excess of 76 days will be fined with a lump sum of $1.08 MM and 36,000 /
	day. Conversely, ECP will receive similar compensation for early
	completion.
Operating Risk	Tosco will compensate ECP through capacity payments. In turn, ECP will
Risk that ECP will not meet the	provide an availability guarantee of 92% for up to the full capacity of the
standards set out in the model and in the	plant. RAC review of the deterministic case suggests that a 2% move (below
construction contract.	92%) would reduce the IRR by 20 bp.
	Contractually, Tosco has a call on the entire load at Linden Six (160 MW).
	Current production at BR plus planned expansions demand about 120 MW;
	however, over time, the total demand at BR may increase and approach 160
	MW thus reducing merchant revenues.
	The model assumes that capacity is available for merchant sale in excess of
	the average projected load for Tosco of 138 MW in Summer & 131 MW in
	Winter. Currently Tosco's peak load is closer to 120 MW per annum. The
	134.5 MW estimate reflects load from proposed projects.
Price risk	A fall in the average annual demand by BR will increase the price exposure
Risk of exposure to electricity and gas	ECP is taking when dispatching into the spot market. Enron structuring desk
prices	provided the dispatch model assumptions.
	The deterministic model assumes that Tosco's annual average load is 134.5
	MW. This estimate was provided by Tosco and includes demand for projects
	that will come on line between today and July 1, 2001. Under circumstances
	where Tosco's demand falls below 90MW, Tosco will compensate ECP for
	any losses incurred from third party sales.

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,t;-lieai ADvrovat meet

Terminal Value The merchant value was determined based on input from internal sources and
Risk of mis-pricing terminal value of market-based comps with regard to valuation of the asset after the PPA
facility after 2017. expires. Three different values were obtained and used as probabilistic
parameters in the RAROC model:

1. Salvage value of the equipment and residual value of land lease,
buildings, etc. was estimated by EE&CC and ECP to be approximately
$92/kW ($14.7 million) in nominal dollars (2000 base).
2. Sale of three comparable projects yielded a range of $275 - $347/kW.
Comps varied considerably from Linden Six with respect to heat rate and
size.

An expected deterministic price of $302/kW was used in the model with a
triangular distribution. All values were adjusted for inflation.

Terminal value accounts for 10.2% of present value of the expected cash
flows. The value was derived from current market estimates, and the future
value of the turbines (at the end of the PPA in 2017) is highly uncertain.

KEY SUCCESS FACTORS

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

r Ato ra1nS le /.:	1i.c- Go ,}hc~	O1	~- Overcl~ EGP ~q~ejh+.cr+1 Or. a sh"gr~4l~Ta 6c5i~~ o-r
			

E0004402102

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RAC Deal Approval Sheet

OTHER RAC COMMENTS:

Terminal value accounts for 10.2% of present value of the expected cash flows. The value was derived from current market
estimates, and the future value of the turbines (at the end of the PPA in 2017) is highly uncertain.

Funding of this transaction will initially be from ECP working capital, but Linden Six is contingent upon a successful re-
capitalization of ECP, which is still uncertain.

E0004402103

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RAC Deal Approval Sheet

APPROVALS
Regional Management
ENA Management
ENA Structuring
Legal
RAC Management
Enron Capital Management
ENE Management

Name

Richard A. Lydecker
Cliff Baxter / Greg Whalley
Jeff Donahue

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

  a re Date

  _ a q eG


  Lei
-X LA

E0004402104

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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: O Market
Describe (if necessary):

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

$0


0 Above Market 0 Below Market

3 Financing terms and pricino: O Market 0 Above Market 0 Below Market


  Describe (if necessary):

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):
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"?

Global Finance Representative:

0 Recourse 0 No Recourse

0 None 0 Partial 0 All

0 Industry/Strategic Partner 0 Direct Private Equity

0 Capital Markets	0 JEDI 1
0 JEDI 2	0 Enserco
O LJM 1 or 2	O Condor
0 Other:	O Margaux
O Yes	O No

Signature

Name (Printed) Date

E0004402105

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  PRIVILEGED AND CONFIDENTIAL
*49

  TO: Mark Haedicke DATE: February 10, 1999
Julia H. Murray

  CC: Cliff Baxter
Greg Whalley
Richard Lydecker
Robert Licato
Brad Alford
Christine Lee
Gary Keevill
Dave Delainey
Dave Duran
  Rick Buy
Sheila Tweed
FROM: Bob Carter

  SUBJECT: Linden Cogeneration Facility Expansion - Legal Risk Memo
Description of Transaction

  East Coast Power L.L.C. ("ECP") and Tosco Refining L.P. ("Tosco"), a subsidiary of Tosco Corporation,
will enter into an Energy Services Agreement ("ESA") under which ECP will cause to be constructed, own and
operate an approximately 180 MW cogeneration facility (the "New Facility") to be located on part of the site (the
"Existing Plant Site") of the existing power generation facility (the "Existing Facility") owned and operated by
Cogen Technologies Linden Venture, L.P. ("Linden Venture"), an ECP majority-owned subsidiary, in Linden, New
Jersey. Currently, all of the electricity generated from the Existing Facility is sold to Consolidated Edison Company
of New York, Inc. under a long term power purchase agreement. Bayway Refining Company ("BRC" ), an affiliate
of Tosco, purchases steam from the Existing Facility under a long term steam purchase agreement (the "Steam
Agreement").

  Under the ESA, Tosco will agree to purchase its electricity requirements for its Bayway Refinery (the
"Bayway Refinery") that are available to be supplied from the Facility, subject to the right of Tosco to purchase
electricity from third parties under certain stated conditions. The New Facility will be interconnected to the pool
transmission facilities of PJM (the "PJM System"). The interconnection facilities between the New Facility, the
Bayway Refinery and the PJM System (the "Interconnection Facilities") will be constructed and owned by BRC on
land leased by BRC to ECP.

  As part of the consideration for the ESA, Tosco and ECP will cause BRC and Linden Venture to amend the
Steam Agreement so as to increase the minimum required steam take by BRC when both the Existing Facility and the
New Facility are operating and capable of producing steam. Previously, the Steam Agreement did not include a
\\enehouThouston\common\Legal'J3CARTER\East Coast Power\Tosco\Risk Memo - Tosco ESA2.doc

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{ISK Memo - I osCO t AL. aoc

--o- - i

minimum steam take requirement sufficient to maintain the Existing Facility's QF status. We previously accepted
this risk because the current combined steam needs of BRC and Infineum (another purchaser of steam from the
Existing Facility) far exceed the minimum steam sales needed to maintain QF status. However, BRC has a right
under the ground lease for the Existing Facility to construct, or have constructed by a party other Linden Venture, an
on-site generation facility which could supply the majority of the steam requirements of BRC and Infineum, in which
case the QF status of the Existing Facility would be jeopardized. The ESA and the amendment to the Steam
Agreement removes this risk.

  In connection with the ESA, BRC and ECP will enter into four ground leases (the "Ground Leases")
providing sites for the Interconnection Facilities and the following projects contemplated by ECP: an additional
generation facility ("Linden 7"), a new water purification facility that will allow both the Existing Facility and the
New Facility to obtain cooling water from an alternate source (the "Greywater Project"), and a thermal energy
storage facility to cool intake air, and thus improve the efficiency, of the Existing Facility, the New Facility and
Linden 7 (the "TES Proiect")

Legal Risks and Mitigants

The major risks associated with the transaction are as follows:

1. Litigation Risk-Lack of Clear Measuring/Performance Standards. Throughout the ESA,
material contract provisions rely on estimates (determination of costs of back-up energy), and set performance or
measurement standards based on "equitable allocation" (allocation of back-up demand charges and costs to Infineum
if Infineum purchases electricity from the New Facility)," recognition of "incremental economies of scale and
efficiencies" (fixed and variable O&M costs), obligations to "not unfairly disadvantage" (arrangements for back-up
energy), "maximize mutual benefits" (decisions to sell excess capacity and energy in the event of lower interim
nominations by Tosco) and similar phraseology. In addition, Tosco has the right to approve the construction
contractor, the construction contract, change orders, the annual budget and similar matters. Lack of clear
performance and measurement standards and the number of approval rights create numerous areas of potential
dispute and higher litigation risks.

Comments/Mitigants. The ESA contains a disclaimer of any representations or warranties to Tosco as to actual
costs, prices and potential merchant revenues and losses. Also, in disputes related to the reasonableness of costs and
expenses incurred by ECP, the ESA has shifted burden of proof to Tosco regardless of whether litigation or
arbitration is instituted by ECP or Tosco.

2. GE/Lender Consent. The Linden Venture partnership agreement and the project loan documents for
the Existing Plant prohibit Linden Venture from entering into the ESA, the amendment to the Steam Agreement or
the Ground Leases without GE and lender consent. Based on past experience with this lender group, it was and is
the belief of the ECP/Enron working group that the size and complexity of the ESA transaction would preclude
obtaining lender consent within the time required to meet Tosco's requirements for the in-service date of the New
Facility and without onerous conditions. As an alternative, ECP is working with GE on a proposal to recapitalize
ECP (the "Recapitalization'), part of which would involve taking out the Linden Venture project lenders. In order to
stay on schedule for the in-service date and to get to closure on the negotiations with Tosco, ECP will sign the ESA
and the Ground Leases (ECP is not subject to any lender or other consent requirements), such agreements to be
assigned to Linden Venture upon completion of the Recapitalization. In the interim, ECP will incur approximately
$2.5 Million in costs to its EPC contractor for preliminary work for the New Facility. If ECP does not obtain the
necessary commitments or assurances from GE that the Recapitalization will occur, ECP would have to abandon the
project or risk delays in achieving the in-service date as a result of the time necessary to obtain project lender
consent, which would result in substantial liquidated damages under the ESA.

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Comments/Mitigants. ECP has the option, without cause and in its sole discretion, to terminate the
ESA within sixty-five days of its execution. If ECP terminates the ESA within this sixty-five day period, Tosco will
reimburse ECP for the (a) entire $2.5 Million in EPC contractor costs, or (b) $1.25 Million of the EPC contractor
costs and an estimated $1.5 Million in additional steam sales (pursuant to a Reimbursement Agreement), depending
on whether BRC obtains lien releases from its mortgagor relating to the sites for the Ground Leases.

3. Mortgage Encumbering Ground Lease Sites. BRC has encumbered the sites to be covered by the
Ground Leases with a $150 Million mortgage. The Ground Lease for the Interconnection Facilities is essential to the
New Facility. If the liens are not released, the Ground Leases are subordinate to the mortgage and can be terminated
by foreclosure of the mortgage.

  Comments/Mitigants. If BRC fails to deliver releases from the mortgage within fifty-five days of
execution of the ESA, ECP may terminate the ESA and Tosco will be obligated to reimburse ECP for all of the $2.5
Million in ECP contractor costs that ECP will incur. ECP will have no liability for rents under the Ground Leases
unless the lien releases are delivered.

4. Reduction of Tosco's Obligation to Purchase Its Electricity Requirements From ECP/Shut Down of
Bavwav Refinery. Under the ESA, subject to certain conditions Tosco may take its electricity requirements
from sources other than the New Facility and may shut down the Bayway Refinery. In each instance, Tosco must
continue to pay all fixed charges and ECP has the right to make merchant sales in such events. However, if demand
for merchant power is insufficient to operate the New Facility at a level of output that is economically feasible or not
permitted by ECP's emissions permit (which currently would not allow the New Facility to operate at an output less
than 90MW), Tosco has no obligation to compensate ECP for lost revenues from merchants sales.

  Comments/Mitigants. In any of those events, Tosco must continue to pay the full amount of all fixed
charges (after the commercial operations date, fixed charges are payable in all events, including a force majeure in
which ECP is the affected party), except in the event of ECP's default under the ESA. Tosco will be obligated to
share a portion of the savings in the case of item (b) above and pay to ECP all costs incurred by ECP if ECP is
required to shut down the New Facility. Further, for the duration of the stranded cost recovery period in New Jersey,
electricity from purchasers from third party marketers or new generation constructed on the Bayway Refinery would
bear stranded cost charges, while the new Facility will grandfathered, thus sheilding Tosco form stranded cost
charges on electricity purchases from the New Facility.

5. Construction Cost Overruns. Payments for ECP's cost of construction are determined by a "Fixed
Facility Charge Component," based on a pro forma analysis of such costs that is an exhibit to the ESA, recoverable
in monthly payments over the life of the ESA. Subject to certain limited number of exceptions, ECP bears one-half
of the risk of construction cost overruns.

  Comments/Mitigants. There are no contractual mitigants to the risk of not recovering all cost overruns.
However, ECP retains one-half of the benefit of completing the New Facility below budget, in which case the Fixed
Facility Charge Component is reduced by only one-half of the cost savings. The risk of most construction cost
overruns can be passed to the EPC contractor. There are no contractual mitigants for cost overruns not due to EPC
contractor performance and not borne by Tosco.

6. Penalties for Delay in In-Service Date. If the actual in-service date is between 15 and 76 days after the
scheduled in-service date, penalties are $18,000 per day. If the actual in-service date is more than 76 days after the
scheduled in-service date, penalties are $1,080,000 plus $36,000 per day. At any time, ECP may cut off further
accumulation of delay payments by terminating the ESA and paying $13,140,000 in addition to the delay penalties
accrued as of the date of termination.

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Comments/Mitigants. ECP receives comparable incentive payments if the actual in-service date occurs
earlier than the scheduled in-service date. However, there are no ESA contractual mitigants to the exposure to delay
penalties. Any delay caused by the EPC contractor can be passed to the EPC contractor.

7. Back-Up Energy Costs/Availability. ECP bears the cost of all back-up energy costs if the New
Facility is less than 92% available. In addition, ECP bears the cost of back-up energy during any force majeure
period for which the cause is an event that occurs within the site of the Existing Facility and/or the New Facility that
is an insurable loss.

  Comments/Mitigants. Availability is determined on rolling average, the measuring period starting at 12
months and increasing to a six-year rolling average. This mitigates the effect of relatively short-term outages. Tosco
bears all reservation charges for back-up energy and all back-up energy charges if the New Facility is 92-100%
available during the applicable measuring period. Tosco also bears all back-up energy cost in certain enumerated
events, such as a failure of Tosco to perform certain duties, interim increases in Tosco's load, and periods in which
the New Facility is "deemed available" as a result of shutdown of the New Facility due to Tosco's election to
purchase from third parties.

8. Tosco Fuel Purchases. ECP may not enter into any agreement to purchase fuel for a term greater than 6
months. Tosco has the right on 30 days' notice to take over the purchase of all fuel for the Facility.

  Comments/Mitigants. Tosco must purchase the fuel for its own account and risk, may not require ECP
to break any then-existing fuel supply agreements entered into by ECP, must indemnify ECP for any costs or losses
as a result of Tosco's vendors' failure to deliver fuel, and generally bears the risk of higher fuel costs if it does not
properly manage fuel purchases since fuel cost is a pass-thorough. However, there is no contractual mitigant for the
potential loss of merchant revenues to ECP if Tosco mismanages fuel purchases.

9. Regulatory. The ESA requires ECP to maintain the New Facility as a QF, so long as Tosco purchases
enough steam for that purpose (aside from PUHCA-related issues, general QF status entitles Tosco to preferential
rights to, and rates for, back-up energy). If QF status is no longer necessary from ECP's and Enron's standpoint due
to changes in federal and state regulation, the ESA would require ECP to maintain QF status solely for Tosco's
benefit under the ESA.

  Comments/Mitiaants. ECP is no longer required to maintain QF status when (a) it is no longer
necessary for ECP to perform its obligations under the ESA and (b) loss of QF status has no material affect on Tosco
that can not be compensated by the payment of money (the additional cost of back-up energy). If restructuring of the
Con Ed contract for the Existing Facility results in a need to no longer maintain the Existing Facility as a QF, ECP
will be able to maintain the QF status of the New Facility stand-alone, so the ability to do the restructuring of Con Ed
contract for the Existing Facility should be unaffected by the requirement to keep QF status for the New Facility.

10. Interconnection Facilities. ECP will lease the site for the Interconnection Facilities but Tosco will
have sole responsibility for construction, operation and maintenance of the Interconnection Facilities.

  Comments/Mitigants. If Tosco fails to properly construct the Interconnection Facilities, the in-service
date will be delayed but ECP may demonstrate that the New Facility is capable of commercial operation, in which
case Tosco must commence payment of fixed charges although the in-service date has not occurred. If Tosco fails to
properly maintain the interconnection facilities, ECP may take over the operation and maintenance of the
interconnection facilities. However, there is no contractual mitigant or compensation to ECP for the loss of
merchant revenues if Tosco fails to property construct, operate or maintain the Interconnection Facilities.

11. Assinability. In the event of any assignment of the ESA, by ECP or Linden Venture, ECP would

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remain liable for ESA obligations unless there is a guarantor of the assignee's obligations having a net worth of $2
Billion, although ECP's current net worth is approximately $76 Million. Assignment of any of the Ground Leases is
not permitted unless a guarantor having a net worth of $250 Million. This may restrict ECP's ability to sell the
Linden assets or interests in the Linden assets.

  Comments/MitiRants. ECP should be able to cause such an asset transfer to occur by stripping out
other assets and causing a sale of Linden Venture or ECP.

12. Environmental. Each of the sites covered by the Ground. Leases is subject to an Administrative Consent
Order ("ACO") between Exxon, Tosco's predecessor in title, and the New Jersey Department of Environmental
Protection ("NJDEP"), calling for remediation of environmental remediation of the property by Exxon. Exxon
tightly controls any right to conduct environmental audits of the property and ECP has been unable to conduct
environmental audits. BRC indemnifies ECP for all costs and liabilities for pre-existing environmental conditions,
except for up to $500,000 per site that may be incurred as additional cost for removal and/or treatment of
contaminated soil in the construction process, although ECP can ultimately recover such costs by adjustment to the
fixed charges under the ESA. However, ECP is responsible to indemnify BRC for any contamination of the sites by
ECP after closing. The lack of an environmental audit by ECP does not allow ECP to establish a "baseline"
measurement of contamination existing at the time of closing and creates difficulty of proof as to whether any
contamination was pre-existing or caused by ECP.

Comments/Miticants. Exxon is required to periodically test the property and provide results to BRC, so a
"baseline" may be established at a time fairly close to the closing date. Constructing the new projects on concrete
pads, careful manifesting of disposal of hazardous materials and other customary environmental compliance
measures will also mitigate this risk.

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Global Finance Summary (addendum to DASH).

1. Transaction Summary
  Linden 6 will be a 160MW gas-fired expansion of the existing Linden facilities owned by ECP. Energy will be sold
to TOSCO under a 17 yr. ESA.

Initial funding of the transaction will be from ECP's working capital facility. Permanent financing is contingent on a
re-capitalization agreement between ECP and General Electric Capital Corp. ("GECC"). Once the agreement
with TOSCO is signed for Linden 6, ECP has 65 days to reach agreement with GECC or back out of the
transaction. During this 65 day period, $2.1MM in progress payments associated with the HRSG and
transformers for Linden 6 will be made by ECP. If ECP does not reach a tenative agreement with GECC on a
recapitalization, ECP can terminate the Linden 6 transaction and TOSCO will reimburse ECP for the $2.1 MM in
expenditures through a $1.1 MM payment at termination and through increased steam sale purchases for the
remaining amount.

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

65 Dav Period

  94,200
0
  94,200
0

  Permanent Financing
94,200
56,520-
37,680
  0

(* Linden 6 can Support financing of approx. 60% based on DSC ratios at ECP. With the recapitalization, GECC
will contribute equity and additional debt at ECP will be raised, restructuring debt at the project company levels,
so there will be no debt explicitly tied to Linden 6. Restructuring at ECP is expected to occur in the 2nd quarter.)

2. Investment terms and pricing: / `Market 0 Above Market 0 Below Market
Describe (if necessary):

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

  nrestricted0 Legally Restricted 0 Practically Restricted
4. Legal or practical liquidity restrictions: 4\U
  Describe (if necessary) :

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

6a. Business unit intent to syndicate: 0 None 0 Partial X All
Describe (if necessary): JEDI II owns 51% of ECP; El Paso owns the remaining 49%.

6b. Intended Enron hold period:

6c. Likely Syndication Market: 0 Industry/Strategic Partner 0 Direct Private Equity
0 Capital Markets 0 JEDI I
  X'JEDI 2 (51% - $48.04MM) 0 Enserco
Z, 1,JM I or 2 C Condor
Other: El Paso 0 Margaux
(49% - $46.16MM)
6d. Is this a JEDI 2 "Qualified Investment"? )C Yes 0 No


  7~Lt.;u, , R r i a^ 2.f Y( 2 12, oco
Global Finance Representative:
  Signature Name (Printed) w ate
EOO04402111
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KINK ASSESSMEN 1 ANI) LU1r I IWL

DEAL APPROVAL SHEET

  DEAL NAME: N/A Date DASH Completed 03/17/2000
Counterparty: Mariner Energy LLC. RAC Analyst: William McKone
Business Unit: CTG Investment Type: Debt
Business Unit Originator: Brad Dunn Capital Funding Source(s): Balance Sheet
DPublic Private Expected Closing Date: 03/20/00
)]Merchant DStrategic Expected Funding Date: 03/21/00
  t]Conforming DNonconforming Board Approval: DPending Received DDenied ON/A
RAC Recommendation: Proceed with Transaction DReturns below Capital Price ODo not Proceed
APPROVAL AMOUNT REQUESTED
Incremental Funding - $31 MM, Extension of Current Loans - $80 MM

EXPOSURE SUMMARY

Existing Exposure: $198 MM
This transaction: $31 MM
Total $229 MM

DEAL DESCRIPTION
ENA proposes to purchase $111 MM of Sr. Unsecured Notes ("Notes") from Mariner Energy LLC. The Notes will have a
term of three years and an interest rate of 15%. In addition ENA will receive 600,000 5-year, detachable warrants that strike at
$.01 per share. ENA will receive another 300,000 warrants under the same terms and conditions if the Notes are not repaid
after one year. The notes must be repaid with the proceeds of any new equity issued by Mariner. Mariner will not be permitted
to incur additional indebtedness, must maintain an EBITDAX to interest expense ratio of 1.65x, and an EBITDAX to fixed
charge ratio of 1.25x. ECT Securities LP will earn a 1% structuring fee.

The proceeds will used to repay the existing ENA credit facilities and fund a portion of the approved 2000 capital budget.
ENA currently has a $50 Mlvi convertible credit facility with Mariner Energy LLC. This facility has a maturity of 4/30/00, a
coupon of LIBOR+450, accrued interest of approximately $4.7MM, and a convert price of $175 per share. ENA also has a $25
MM revolving credit facility with Mariner Energy Inc. This facility matures on 4/30/00 and bears interest at LIBOR+250.
Iguana currently owns a participation right in both of these facilities. Approximat ly $30 MM will be re-invested under the
2000 capital budget.

The 2000 capital budget is $70 MM before asset dispositions. It consists of $40MM for development projects, $20MM for
appraisal drilling and $10 MM for exploration. The deal team feels that these projects have excellent risk/reward
characteristics and if successful, should increase Mariner's equity value by more than $50 MM.

TRANSACTION SOURCES AND USES OF FUNDS
Sources
  Enron Balance Sheet $31 MM

MEI Senior Credit $25 MM
Facility
MEI Credit Facility $54 MM
Total Sources $110 MM

  Uses
Mariner LLC Sr. Unsecured $110 MM
Notes

Total Uses $110 MM

RETURN SUMMARY

  PV @ Cumulative
Capital Price IRR

Return Components:		
Cash Outflows	N/A	N/A
Fees	N/A	N/A
Intermed. Cash Flows	N/A	N/A
Terminal Value	N/A	N/A
Total NPV	N/A	N/A

I

Capital Price Components

Risk free rate (%): 6.66%
Equity/Credit premium (%): 11.88%
Country Premium (%):
Transaction-Specific (%):
RAC CAPITAL PRICE: 18.54%

Relative upside ratio

N/A

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RAC Deal Approval Sheet Deal Name: Mariner EnergyLLC.

RETURN SUMMARY (cont.)

Instrument	Amount	Maturity	Coupon	Strike	PV	lRR**
Unsecured Notes	$11 OMM	3/17/2003	15%	N/A	($9.6MM)	N/A
Warrants*	900,000	3/17/2005	N/A	$0.01	$1OMM	1'8.5%
the valuation for this instrum	ent only considers deterministic returns and assumes that Mariner will not		
repay the unsecured notes after	1 year. In addition, the model assumes that the warrants are exercised in 3 years.		
**'Ihe IRR of 18.5% is generated from the combined	cash flows of the unsecured notes and the warrants.		
		Comparable Debt Instruments			
Company	Moody's Rating	S&P Rating	Coupon	Maturity	Price	Yield
Lomak Petroleum	Caal	B	8.75%	1/15/2007	87.00	11.55%
Drypers Corp.	Caal	B-	10.25%	6/15/2007	78.00	15.39%
Airtran Airlines	B3	B-	10.50%	4/15/2001	97.25	13.30%
Four M Corp.	Caa 1	CCC	12.00%	6/1/2006	98.50	12.34%
Trans World Airlines	Caal	CCC	11.50%	12/15/2004	63.00	25.30%
Abraxas Petroleum	Caa2	CC	11.50%	11/1/2004	68.25	23.01%
RISK MATRIX						

DESCRIPTION	MITIGATION/COMMENTS
Exploration Risk - Mariner will drill 3-5	These are all technically sound. Most have HCI, structure, and
exploration tests in 2000	nearby analogy. Only 20% of the budget is allocated to exploration
Concentration Risk - Three well bores (Pluto,	Mariner is working to mitigate this. risk with insurance and through
Dulcimer, and Apia) produce 60% of 2000	a production swap.
expected production. If one of these wells goes	
down it could material impact the companies	
ability to fund the capital program	
Development Risk - The company plans to spend	This is Mariner's area of expertise. They have successfully
52% of the capital budget ($37MM) developing	completed six subsea tiebacks to date.
two subsea tiebacks	
Solvency/Working Capital Needs Risk - Mariner	The deal team is working with investment banks in order to find a
may require additional funding for capex and	suitable company that would be willing to purchase all/a portion of
working capital needs over the medium term,	Mariner's equity. The proceeds from this transaction would be
especially if the company's operating performance	applied towards paying down debt and funding working capital
does not meet forecasted goals.	needs. However, the likelihood and timing of finding a willing
	partner is uncertain.

KEY SUCCESS FACTORS

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

OTHER RAC COMMENTS: Without the requested funding, Mariner will be forced to significantly lower its 2000 capital
budget for exploration, project development and drilling. In addition, the company would most likely experience severe
liquidity problems due to working capital shortages. RAC recommends proceeding with the funding to ensure Mariner's
viability.

O:\Stfm\FROM BD\DASH Marina_0300.4oc

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RAC Deal Approval Sheet
Global Finance Summary
1. Transaction Summary

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

  Amount ($000)
31,x,coo .
  -0-
  -0-
31, ooo, cno $r

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):

Deal Name: Mariner EnergyLLC.

0 Unrestricted 0 Legally Restricted

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

6b. Intended Enron hold period:

6c. Likely Syndication Market:

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

0 Recourse

0 Partial

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

  Practically

XNo Recourse

D All

D Direct Private Equity
D JEDI 1
  D Enserco
D Condor
D Margaux

6d. Is this a JEDI 2 "Qualified Investment"? 0 Yes XNo
Global Finance Representative:
  Signature Name (Printed) Date
O:Stfm\FROM BDIDASH Mariner 0300,E Page 3

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m ev-1
RAC Deal Approval Sheet Deal Name: Northern ea er

APPROVALS
ENA Originator
ENA Commercial
Transactions Group

ENA Regional Mgmt.

Legal
RAC Management
ENE Capital Management
ENE Management

Name

Brad Dunn

Ray Bowen
Cliff Baxter or Greg Whalley
Mark Haedicke

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

WS2finTFROM BD\DASH dthnsr fl300.&c

-P-w- 4

  to

J-/7 Y)
3 20 Ic O
  /loo
J c5 c
00

EC004402115

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M-6

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ENRON RISK ASSESSMENT AND CONTROL
DEAL APPROVAL SHEET

DEAL NAME: Mission Coal Financing Date DASH Completed: 20"' December 1999
Counterparty: Edison First Power Ltd. RAC Analyst: Esther Gerratt/David Hardy
Business Unit: Coal Trading Investment Type: Coal Purchase/Financing
Business Unit Originator: Riaz Rizvi, Stuart Staley Capital Funding Source(s): Enron Balance Sheet
OPublic Private Expected Closing Date: 16'x' December 1999
ElMerchant OStrategic Expected Funding Date: 17'x' December 1999
OConforming ONonconforming Board Approval: Wending OReceived ODenied EIN/A

RAC Recommendation: OProceed with Transaction (Returns below Capital Price ODo not Proceed
APPROVAL REQUESTED

Capital Commitment: GBP 15,000,000 (USD 24,300,000) for the purchase of 480,000 tons of coal which have an
estimated resale value of GBP 11,345,000 (USD 18,380,000).

EXPOSURE SUMMARY
I) This Transaction

  Commodity Exposure: Long coal December 1999 480,000 metric tons, reducing evenly over a 12 month period,
starting January 2000.

VAR: 0 See Other RAC Comments
Credit Reserve: 0 1-year deal
Prepay Component (GBP m): 3.65 Corresponding to the difference between purchase price and resale value
Total (GBP nm) 3.65 (USD 5.9m)

2) [:xistin, Ex pol sure Under an existing coal supply deal with Mission, there is a monthly delivered unpaid
exposure which peaks at GBP 11,000,000 (USD 17,820,000) decreasing to GBP 8,000,000
(USD 13,000,000) towards contract end at May 2000.

DEAL DESCRIPTION

Enron will purchase 480,000 metric tons of coal from Edison Mission at GBP 30.988 (USD 50.2) per metric ton. The total
initial outlay will be GBP 15,000,000. Over the following 12 months Edison Mission will buy back the coal (40,000 metric
tons per month irrespective of actual plant consumption) at GBP 32.40 (USD 52.5) per metric ton. This price is intended to
partly cover Enron's cost of capital and a credit spread tied to senior secured debt of a BBB-rated (E-rating 4) entity. There
will be no physical movement of the coal. The coal will remain on Edison First Power Ltd's property but Enron will have title
and risk over it.

III case the coal had to be resold to a third party, the coal desk estimates that its price would be GBP 23.6 (USD 38.3) per
metric ton (net of transportation costs).

Background:
In July 1999 Edison Mission Energy bought PowerGen's Fiddler's Ferry and Ferrybridge coal-Fred power plants for GBP 1.25
billion. It was reported that Edison Mission funded 32% of the acquisition by equity, and the remaining 68% was funded by
dual tranche limited recourse debt financing of GBP 850 million, term 13 years (one tranche of GBP 830 million and the other
of GBP 20 million revolving debt). Edison First Power Ltd issued a GBP 1.15 billion bond in August 1999 (lead manager was
Merrill Lynch) which is listed on the Luxembourg Stock Exchange and has been privately rated by Duff and Phelps as BBB.
Edison Mission Enery is Edison First Power Ltd.'s parent company - however, Edison First Power is a non-recourse
vehicle and does not appear- on Edison Mission's balance sheet.

TRANSACTION SOURCES AND USES OF FUNDS
  Sources Uses
Enron Balance Sheet GBP 15,000,000 To purchase commodity GBP 15,000,000

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RAC Deal Approval Sheet

RETURN SUMMARY

Return Components:

  PV @ Cumulative
Capital Price IRE
(GBP)

Deal Name: Mission Coal Financing

Cash Outflows 15,000,000 -
Fees -
Intermed. Cash Flows -
Terminal Value -
Total NPV (83,580) 8.60%

Capital Price Components

6 month GBP LIBOR	6.25%
Enron Credit Spread	0.80%
Mission Credit premium	1.20%
Syndication Fees	1.50%
RAC CAPITAL PRICE:	9.75% (*)

(*) The RAC Capital Price represents an estimate of the price necessary to syndicate the transaction to a third
party (i.e. market clearing price - excluding legal costs) and is supported by input from EGF. The coal desk is
expected to be charged an additional 260bp for the deal (GBP 184,420) which represents the difference between
Enron's WACC (9.63%) and LIBOR + Enron Spread. This will.bring the cost to the team to 12.35% and the
deal's NPV to GBP (268,000).

TRANSACTION UPSIDES/OPTIONALITY

The deal is subject to the closing of a separate 12-month coal import contract with Mission starting in June 2000 which is an
extension to the existing 9-month coal supply contract described under "Existing Exposure" above. This extension deal
involves supplying 4,200,000 metric tons of coal with an optional further 1,000,000 tnt and has a net present value of USD 8
million.

CASH FLOW SUMMARY

4.00
2.00 ---------------------------------------------------------------
0.00
-2.00 ----------..---------------------------------------------
-4.00 - ------------------------------------------------------------

c
0
-6.00
E


  -10.00 ----------------------------------------------..--
m -8.00 ----- - --------------------- ------------------------
-12.00 -------- - - -

-14.00 1`1.............................................................

-16.00 ..._._.---
CP OO 61 k& 00 00 00 00 00 00 0p 00 00

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RAC Deal Approval Sheet
RISK MATRIX (Main 5 Risks Only)

Deal Name: Mission Coal Financi

DESCRIPTION	MITIGATION/COMMENTS
Credit Risk of Counterparty	Edison First Power Ltd. is a non-recourse vehicle and there is
	therefore no parental guarantee from Edison Mission. However, 'its
	GBP 1.15 billion senior secured debt (listed on the Luxembourg
	Stock Exchange) has been privately rated by Duff and Phelps as
	BBB. This rating was the basis for the calculation of the credit
	spread.
Commodity Risk	In the event of insolvency Enron retains title and risk over the coal
	and always has access to it. The risk of the coal being disposed of
	in some way other than by Enron is covered by Enron's global
	products insurance (covering in particular theft, fire, etc).
	An independent inspection will confirm the physical existence of
	the coal to which Enron has title and risk. Enron's coal will be
	made distinguishable from other coal stock at the site with
	flagpoles. Regular inspection rights will be a contractual obligation.
	Contractual terms will state that storage is free.
	In case the coal had to be resold to a third party, the coal desk
	estimates that its price would be GBP 23.6 per metric ton (net of
	transportation costs).
Station Shutdown	It is considered very unlikely that the power station will shutdown
	in light of the recent bank financing of GBP 1. 15 billion (6 months
	into a 13-year loan).
	If the station were to shutdown Enron would wear the risk of the
	transportation costs of moving the coal to another site.

OTHER RAC COMMENTS:

']'here is no market risk in this deal unless the counterparty defaults in which case the originating desk estimates that the coal
could be transported to another site and sold there for a net value of GBP 23.6 per ton (a loss of approximately 24%).

APPROVALS	Name
Business Originator	Stuart Staley
Regional Mgmt.	Mark Frevert
Regional Mgmt.	John Sherriff
	
Legal	Michael Brown
RAC Management	Rick Buy
RAC Management	Steve Young
Enron Global Finance	Paul Chivers
Enron Global Finance	Jeff McMahon
ENE Management	Jeffrey Skilling

  Signature Date


  (~-V -2 L - 2. c
23 1z l

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RAC Deal Approval Sheet Deal Natvo. ?vti~sion Coal Finanrin2
.RIS r rATRIX loin S Risks Only)

DGSCRIPrrON	NUT] GkTIOhICOMMFILWS
Credit Risk of Coanterpnrty	Edisoe First Power Ltd. is a nont-recourse vehicle and There is
	thcrefcre no parental ;uarentee from Edi.eon Mission. However, its
	G)3? 1.15 billion senior secured debt (listed on the L+xccmbourg
	Stock Exchange) has been privatzly rated by Duff end Phelps as
	$88. This ratdl" was the basis for the ealculatioo of the crediI
	s read.
Commodity Risk	Lo the event of insolvency Enron retains title znd risk over the coal
	and always has access to it. The ri or the coal being disposed of
	
some wry other than by Enron is eoverid by Enron's global
ii
	products insurance (covering in particutir theft, fire, ctc).
	An independent inspection will confirm, the physical existence of
	the coal to which Euron has titL a risk. Enron's coal will be
	made distinguishable from other caal stock at the site with
	flagpoles. Regular inspection rights will be a conttecvtat obligation..
	Contractual ;eras will state that storage is free.
	in cage the coal had to be resold to a third party, the coal dc:k
	estimates that is price would be GB;' 23.6 per metric ton (n t of
	erac.sporillion costs).
Station Shutdown	It is considered'i ; f ut;likely that tbee power station wilt shutdown
	its light of the recent bank financing of G13P 1.15 billion (G -nor-Us
	into a 13ycar loan).
	If the station. were to shutdown Eros would wear the rill: or t e
	rre.nsportation costs of moving the coal to another Site.

OTHER RAC COMMENTS:

Thcrc is no tnarkec risk in this deal ttrtlrss the eottnterp: Try dogs; lrs in Which case the otiginating desk estimates that the coal
could be transported to another site and said there for a net value of GSP 93.6 par tar, (;, loss of approximately 241/y).

AMOVALS	Name
Be.5itiess Originator	Stuart Stzlcy
Regional Mgrsit.	Mark Ftevett
Regional Mat.	John Sherri.'
Legal	Michaci Brown
?.AC Management	Pick Buy
R-0.C Maragenieat	Stave Young
T_'uron Gloloa] Finance	Paul Chivers
	_
Enron Global Finance	'*W-11 a _Q-
,F4.
I:.NE Management	Jeffrc Sk Inn

  Signstture Date


~3 !z ~
l X799

  ~z(2,7,JSp

S ~tlrgerwtieingl~F'raieecUtti~~"ivigr MpAy4tittt ivn u.`Stt a tz~.ae~



E0004402120

yaps 3

P.04

-1003-01434


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RAC Deal Approval Sheet Deal Name: Mission Coal Financing
Global Finance Summary (addendum to DASH)
I. Transaction Summary

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

Amount

'V/ ..-t000.ODQ

6881' IS*, ooo, pop

2. Investment terms and pricing: Market 0 Above Market 0 Below Market
Describe (if necessary): -Po a &A., rl Cc

3. Financing terms and pricing: (Market O Above Market 0 Below Market
Describe (if' necessary): /ht hGl-
  ~ A~c'r ^t"~h f alto n

4. Legal or priictical liquidity restrictions:
Restricted

  Describe (if necessary):

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

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

6b. Intended Enron hold period:
  09C Mo^(at

6c. Likely Syndication Market:

6d. Is this a JEDI 2 "Qualified Investment"? 2 (yes 1A ZL,,

Global Finance Representative:
  Signature
S:1Underwriting\a Projects\Active\Mission Prepay\Mission DASH 21-12-99.doc

eA I I

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

O No

PAir- Cat vt2-J4s
  Name (Printed)

E0004402121

(Unrestricted 0 Legally Restricted

0 Recourse

C3 Practically

  o Recourse

0 None 0 Partial

0 Industry/Strategic Partner
[9'Capital Markets
YJEDI 2
  OLJMIor2
0 Other: _

23 /.2 Y
  Date
Page 4

XH003-01435


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M-7

EO004402122

wunn2n1 A"J


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ENRON DASH ADDENDUM

DEAL NAME: Motown Date DASH Completed: 02/11/00
Counterparty: MCN Energy Group, Inc. RAC Analyst: M. Bonney, E. Pedersen
Business Unit: Enron North America Investment Type: Equity
Business Unit Originator: Doug Clifford Capital Funding Source(s): Balance Sheet/Jedi II/Other
OPublic 1 Private Expected Closing Date: March 2000
(]Merchant OStrategic Expected Funding Date: April 2000
[]Conforming ONonconforming Board Approval: Wending OReceived ODenied [HIN/A
RAC Recommendation: []Proceed with Transaction DReturns below Capital Price ODo not Proceed

REASON FOR ADDENDUM
Subsequent to the internal approval of the Motown Project (attached DASH dated 01/31/00), the Region reformulated its
bidding strategy to exclude the Carson assets from the bid to MCN. Based on this information and additional changes made to
the model to better reflect the reality of the transaction, the new economics are outlined below.

APPROVAL AMOUNT REQUESTED		
Enron North America ("ENA") seeks approval to bid on the sale of MCN Energy Group, Inc.'s ("MCN") ownership in two co-
generation facilities in Michigan.		
Capital Commitment $57,500		
EXPOSURE SUMMARY		

0
This transaction: $57,50		
Total $57,500		
TRANSACTION SOURCES AND USES OF FUNDS		
Sources		Uses
Enron Equity $57,500	Capital Expenditure	$57,500
Total $57,500		$57,500
RETURN SUMMARY		
PV @ Cumulative		
Capital Price IRR	Capital Price Components	
Return Components:		
Cash Outflows ($21,600) -	Risk free rate (%):	6.51%
Fees $0 -	Equity/Credit premium (%):	1.76%
Intermed. Cash Flows $30,897 -3.40%	Country Premium (%):	0.00%
Terminal Value $0 16.15%	Transaction-Specific (%):	2.73%
Total NPV $9,297 16.52%	RAC CAPITAL PRICE:	11.00%
E-Rating	Relative upside ratio	0.724

E0004402123

=XH003-01437



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  RAC Deal Approval Sheet
CASH FLOW SUMMARY

$15,000
$10,000
$5,000
$0
$(5,000)
$(10,000)
$(15,000)
$(20,000)
$(25,000)
0.1 0.8 1.8 2.8 3.8 4.8 5.8 6.8 7.8 8.8
  Years

  Terminal Value
Ongoing
Fees
1~ Outflows
Cumulative P95
-r -Cumulative P5
  .. Expected cumulative cash flo

E0004402124

O:\ECM\RAAP\$OPNDEAL\ECT\Motown 1l\Pricing_0200\Run 032200\DashAddendum_Motown 032900.doc

Page 2

=XH003-01438


  Cash Flow Summary


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RAC Deal Approval Sheet

APPROVALS
Originator
Regional Management
ENA Management
RAC Management

  Name
Doug Clifford / Dave Duran
Jeff Donahue
Cliff Baxter
Rick Buy / Dave Gorte P

  Date
  22 (! !IC.rr.h(O
3 A
3 Q06

E0004402125

O:\ECM\RAAP\$OPNDEAL\ C1'av7otown 1lTricing_0200iitun 032200\DashAddendum_Motown 032900.doc Page 3

-

=XH003-01439



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ENRON RISK ASSESSMENT AND CONTROL

DEAL APPROVAL SHEET

DEAL NAME: Motown Date DASH Completed: 1/31/00
Counterparty: MCN Energy Group, Inc. RAC Analyst: M. Bonney, K. Lucas, E. Pedersen
Business Unit: Enron North America Investment Type: Equity
  Business Unit Originator: Doug Clifford Capital Funding Source(s): Balance Sheet/Jedi II/Other
OPublic IM Private Expected Closing Date: January 31, 2000
  (]Merchant OStrategic Expected Funding Date: April 30, 2000
  )]Conforming ONonconforming Board Approval: OPending DReceived ODenied ON/A
RAC Recommendation: Mx Proceed with Transaction DReturns below Capital Price ODo not Proceed

APPROVAL AMOUNT REQUESTED
Enron North America ("ENA") seeks approval to bid on the sale of MCN Energy Group, Inc.'s ("MCN") ownership in three
co-generation and one simple cycle facilities.

Capital Commitment $58,785*

  *After non-recourse debt placement and Jedi 11 equity participation, ENA's equity stake wilt be approximately $18.75 MM
EXPOSURE SUMMARY
  This transaction: 5$ 8,785
Total $58,785

DEAL DESCRIPTION
Enron North America ("ENA") proposes to purchase three Qualifying Facilities ("QFs") in Michigan and California from
MCN Energy Group, Inc. ("MCN").

The strategic rationale for acquiring these assets is to (1) restructure the PPAs in order to monetize stranded costs and (2) create
new market-based PPAs with the utility that currently purchases power at above-market rates. ENA plans to restructure the
PPAs associated with the three QFs by 2002 with a 20% discount on stranded cost to the utility. The value of the restructuring
is derived from the delta between the current PPA prices and market-based replacement PPAs based on a curve, which the
utility is willing to accept. The new PPAs will be decoupled from the current QFs, and ENA may fill its PPA requirements by
buying power from the open market or running the plants. The facilities will essentially act as merchant plants dispatched
based on their heat rate and market prices for electricity.

The main value drivers in this transaction are (1) monetization of stranded costs specific to the three QFs, (2) replacement of
the PPAs with a short position from the market, and (3) merchant value of the plants. ENA will incur breakage costs
associated with unwinding the PPA and associated gas, steam and management contracts, which will take the form of up-front
payments to the appropriate counterparties.

The total bid price is expected to be less than $59 million, financed on a 60/40 debt to equity basis. Debt financing is still to be
negotiated with banks and model assumptions are based on Enron Global Finance estimates of achievable financing terms.
The facilities will most likely be purchased through a "Friend of Enron" structure, in order to satisfy any regulatory limitations
on Enron's ability to hold QF assets. Other structures are also being considered, including Enron ownership through a special
purpose vehicle with an option to buy out the investor when permissible (pending approval of a PUCHA exemption request
from the SEC).

Background information with regard to the three QFs is as follows: E0004402126

The Michigan Power Project ("Michigan Power") is a gas-fired, combined cycle power plant located in Northwestern
Michigan (Ludington) that generates up to 129.0 MW (including 6 MW of merchant capacity currently sold to the utility
on first right of refusal). The project is currently managed through long-term PPA with Consumers Energy ("CE"), steam
contract with Dow Chemical Company and fuel contracts with MCN affiliates. Michigan Power began commercial
operation in 1995. The turbines have historically produced about I million MWh per year and have a current heat rate of
approximately 9,500 MMBtu/kWh

 The Ada Cogeneration Project ("Ada") is a 29.4 MW gas fired combined cycle power facility located in West-Central
Michigan. Commercial operation commenced in 1991. Ada serves electricity to CE under a 35 year PPA and maintains a
steam contract of equal term with Amway Corporation. Fuel requirements are supplied under a firm Gas Supply
Agreement which expires on December 31, 2008. The turbines are 9-years old and have a current heat rate of 10,300
MMbtulkWh with 190,000 MWh of annual production.

   The Carson Cogeneration Project ("Carson") is a 42.0 MW gas-fired facility located in the Los Angeles, California area.
The Carson project providc3 3crvicc to Southcrn California Edi3on undcr a 30 year PPA and provides Steam ".rvicee to
XH003-01440


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RAC Deal Approval Sheet
  Mountain Water Ice Company. Both contracts expire in 2020. Gas is supplied under short term (one year) contracts at a
price equal to the average California border gas price. The turbines at the Carson facility have been in operation since
1990 and have a current heat rate of 9,000 Mmbtu/kWh with 340,000 MWh of annual production.

  The Carson and Ada facilities are operated under long-term contracts with General Electric Plant Operations, Inc.
("GEEPO") and Dynegy provides O&M services for the Michigan project.

 The Carso ;, Ada and Michigan power facilities have historically met the 5% PURPA power standard and 45% operating
efficiency standard necessary to qualify as a Qualifying Facility ("QF') under the PURPA. If, during the term of the
PPAs, the Ada or Carson facilities were to lose their status as QFs, then the off-taker may terminate the PPA. In the case
of Michigan, CE will be obligated to purchase power pursuant to a tariff set by the appropriate regulatory agency.

The bid submitted by the deal team will be subject to completion of due diligence and implementation of a viable regulatory
structure (see Risk Matrix under Legal Risk).

TRANSACTION SOURCES AND USES OF FUNDS
  Sources Uses
Enron Equity $58,785 Capital Expenditure $58,785
Total $58.,785 $58,785

RETURN SUMMARY

	PV @	Cumulative
Return Components:	Capital Price	IRR
Cash Outflows	($24,676)	-
Fees	($ 1,733)	-
Intermed. Cash Flows	$26,173	10.56%
Terminal Value	$ 236	10.81%
Total NPV	($0)	10.81%

Capital Price Components	
Risk free rate (%):	6.53%
Equity/Credit premium (%):	5.02%
Country Premium (%):	0.00%
Transaction-Specific (%):	-0.55%
RAC CAPITAL PRICE:	11.00%

E-Rating

Relative upside ratio

IRR Distribution
1
0.0%		
	Expected	
9.0%		
8.0%		
7.0%		
6.0%		
5.0%		
4.0%	PS	
3.0%		
	5	
2.0%		
1.0%		
0
0%		
.
t~ eE zg aQ t~ tg * tE tR tE s t aE t4 se zg
00 M O. st h O A 0% rn a0 N n _
N 1O a Cn f1 CT ~O N o0 Vy o0 d' n V'
O t~ 7 N O N v1 00 O N1 ~O 00 ~ ~O C

E0004402127

C:ITEMP\Dash_Motown_0201DO-graph corrections.doc

Page 2

0.437

=XH003-01441


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RAC Deal Approval Sheet
CASH FLOW SUMMARY

  Cash Flow Summary
  $20,000 r -- __
$15,000
  $10,000  Elapsed  Outflows
$5,000
  $0
$(5,000) 0 Fees tH Ongoing
$(10,000)
  $(15,000)
$(20,000) 0 Terminal Value
$(25,000)
  $(30,000) -
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31
Years

Cash flow weighted average life: 8.75 years

TRANSACTION UPSIDES/OPTIONALITY
(include chart to show impact if appropriate)
 State-backed securitization plan.
  The return summary above assumes that 75% of the time "termination payments" are received from CE over time and are
monetized by ENA in the capital markets at a rate reflective of CE's cost of borrowing long-term funds (unsecured credit).
To the extent the final deregulation plan for Michigan includes provisions for securitization of stranded cost, the effective
rate of monetization will be more reflective of rates seen in the municipal bond market.
 Replacement PPA at Bid curve.
  The return summary above assumes that utility stranded investment and the replacement PPA are priced at ENA's Offer
curve. To the extent ENA can buy power at prices below the offer, additional margins will be realized by Enron.
 Ancillary services provided at the Ada facility.
  The return summary above assumes that the Ada Project is shut down at a terminal value of $50/kW upon PPA
restructuring. The facility is currently used to provide voltage support on the CE electric system. To the extent that an
ancillary service market develops as a result of deregulation in the Michigan, additional value may be realized from the
plant.
 Expansion of the Ludington site.
  The Michigan Power Project is interconnected to the 138 kV system in Northwestern Michigan and has undeveloped land
adjacent to the site for future expansion. The state's 5% generation reserve margin, physical constraints currently present
in the electric transmission system (which limit delivery of power into the state) and active development of gas pipeline
projects in the region make Michigan attractive from a network coverage standpoint. No value has been attributed to future
expansion in the above return summary.
 Transmission constraints as they impact prices used to value merchant plants.
  Transmission constraints into Michigan may lead to periods of higher price volatility in the Michigan market than may be
reflected in the AEP to Michigan curves used to value merchant assets post restructuring. The ability to realize this value
stems from the development of a more liquid power market than exists presently in Michigan. A more liquid market may
develop with deregulation in the state and the introduction of multiple suppliers and load aggregators. No value is
  attributed in the return summary relating to this effect.

EXIT STRATEGY (Merchant investments only)
The Region plans to sell the facilities if the restructuring process is successfully achieved either to a third party or to the ENA
trading desk.

E0004402128

C:ITEMP\Dash_Motown_O2010D_graph corrections.doc

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:XH003-01442


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RAC Deal Approval Sheet
RISK MATRIX (Maximum 5

DESCRIPTION	MITIGATION/COMMENTS
Regulatory Risks	The progress and timing of deregulation in Michigan may impact
-Risk that restructuring of Michigan Power and/or	ENA's ability to restructure and monetize the Michigan Power
Ada PPAs will be delayed or does not occur due to	and/or Ada PPAs - CE has low incentive to restructure contracts
uncertainty related to Michigan electric utility	before MPSC determines overall stranded costs. Michigan's
industry restructuring.	Legislature is expected to consider legislation during the 2000
	Session - probable passage in Sine Die. If legislation passes by
	12/31/00, Consumers Power can expect a MPSC Order on stranded
	costs within 24 months.
-Risk that Michigan legislation will not provide for	Monetization of stranded costs will be greatly enhanced to the
Securitization.	extent the final plan for deregulation in Michigan provides state-
	backed recovery of costs through Securitization. In the absence of
	legislative mandate, Motown has been modeled using a rate for
	monetization that is reflective of the utility's long-term cost of
	borrowing.
-Risk that either MPSC or CPUC do not approve	The MPSC and CPUC must approve the PPA restructuring. ENA
the PPA contract reforms.	should seek to structure the reformed PPAs to provide ratepayer
	benefits.
-Risk that MPSC issues enforceable Order	In the initial MPSC Restructuring Order, the MPSC did not
providing Consumers Power with a legal	address the recovery of stranded costs after 2007 - this issue is
regulatory out.	currently under appeal. If this is found to be legal, CE could
	interpret the Force Majeure.clause to stop payment to Michigan
	Power and/or Ada PPAs. There exists persuasive case law apart
	from this appellate case that supports the proposition that the
	MPSC cannot limit the time frame for the recovery of QF stranded
	costs.
-Risk that transmission constraints impact	
replacement PPA.	See Transmission Risk discussion below.
-Risk that California modifies current policy	California AB 1890 provides for full recovery of QF associated
supporting QF associated stranded costs.	stranded costs. California could modify its current position. There
	exists persuasive case law that would limit California changing its
	policies. Mitigation through rapid contract reform.
-Risks inherent with QF status - efficiency/thermal	ENA indicates that both issues are managed.
obligations and ownership restrictions.	

E0004402129

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RAC Deal A roval Sheet

Merchant asset value	The model assumes that the current PPA will be replaced with a
Risk that estimated merchant value is	PPA that is non-specific to the facilities. It is the Region's
overestimated.	intention to run the plants as merchant assets.
	The merchant value was determined based on input from the East
	Desk trading floor and the deal team with regard to proper price
	curves and constraint issues. Three different values were obtained
	and used as probabilistic parameters in the RAROC model:
	(1) Spread option valuation of $216/kW (intrinsic) was estimated
	based on Cinergy plus Michigan basis power curve from 2000-
	2015, New York plus $0.30/MMBtu gas curve and treasury
	rates.
	(2) The deterministic dispatch model yielded a value of $237/kW
	based on Cinergy plus Michigan basis power curve from 2001-
	2020, Chicago City gate plus $0.15/MMBtu gas curve and a
	14% discount rate.
	(3) Regression analysis value of $301/kW was estimated based on
	the plants' heat rate and age (R2 of 0.7 and T-stats of - -4.5 ).
	An expected price of $237 was used in the model with an extreme
	value distribution (minimum of $216 and a maximum of $301).
Transmission	The impact of transmission constraints into Michigan is deemed
-Risk that ENA will be transmission constrained in	considerable and could impact the pricing and deliverability of
filling the electric needs of the utility under a	power. The problem is deemed to be most critical for the summers
replacement PPA.	2001 and 2002.
	The value of Michigan and Ada as merchant facilities was adjusted
	for such constraint and the cost of the plant's "optionality" as it
	relates to fulfillment of the replacement PPA is fully reflected in
	each plant's merchant value based on the power and gas curves
	given by the desk. If these offer curves do not reflect the market in
	2002, the merchant value of the plants could change.
	As the plants located in Michigan are currently interconnected to
	and operate in parallel with the CE system, the risk of non-delivery
	from the plants should not materially change due to PPA
	restructuring.

C:ITEMP\Daslr_Motown 020100graplr_corrections.doc

EOO04402130

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RAC Deal Approval Sheet

Financing assumptions	The model financing assumptions are based on Enron Global
-Risk that debt cannot be financed at specified	Finance estimates of achievable financing terms for the stated
rates	facilities in North America. No letters of interest have been
-Risk that securitization or monetization will be	obtained from banks at this time.
more expensive than assumed	
	The model assumes that ENA will leverage its investment. A 14-
	year loan term based on a swap LIBOR rate plus 138 by (increasing
	to L+175) was assumed as new debt to the project. Average and
	minimum interest coverage limits were assumed to be 1.35 and
	1.50, respectively.
	Existing debt at the asset level is paid according to the current
	financing terms. Michigan has $130 million of outstanding debt
	paying LIBOR + 125-200 by over 13 years. Ada has $30 million in
	Bank debt paying LIBOR + 88 by for 8 years. Carson's current
	debt is $60 million, financed at a fixed rate of 8.30% and payable
	over 20 years to expire in 2019.
	The power off-takes, CE and Southern California Edison, are rated
	BB and A, respectively. Model financing assumptions were based
	on achievable financing terms for these entities under the
	monetization scenario and for a state entity under a securitization
	scenario. A 25% probability was given to the chance of realizing
	value through securitization.
Price Risk	The economic value of this transaction is derived from converting
-Risk that curves move against ENA	existing PPAs to market-based, fixed-priced PPAs. ENA will
	manage the price and delivery risk associated with the restructured
	PPA. ENA will also wear the price risk on the physical assets.
	Restructuring is not likely to occur until 2002 at which time the
	relevant power and gas curves is highly likely to be different from
	today. The deterministic impact of a 5% increase in the price of
	power (ceteris paribus) reduces the transaction IRR by 1,000 bp.
Legal Risk	Diligence is still continuing on the Projects, but is nearing
-Diligence on Projects Not Complete	completion. The primary area in which diligence is still underway
	is with respect to environmental matters. Nothing in the completed
	diligence indicates any non-standard risks or issues. There will be a
	diligence out in the bid letter.
-Corporate Goverance	The ENA interests will in no case have control over the affairs of
	the Project entities in question and in the case of the Carson facility
	less than 50% will be owned. Thus the ability of the ENA interests
	to influence the actions of the Project entities will be restricted.
	The ENA interests will, however, be the managing general partner
	of the Ada facility and will, in each case, hold a substantial interest
	Due to.Enron Corp.'s status as a "public utility" under federal law,
-Reglatory Permissible Structure	either an exemption from restrictions on direct ownership by ENA
	of the QF interest must be obtained or a regulatory "friendly" third
	party investor structure must be utilized. In the event that the latter
	course must be followed, the co-option of the remaining parties in
	each Project and the lenders in each Project must be obtained.
	None of these parties have yet been contacted. In mitigation of this,
	it is noted that ENA has been able to successfully employ the
	relevant structure twice previously (although some indemnification
	by Enron Corp. may be required) and the bid letter will contain an
	out with respect to regulatory structure requirements.

C.ITEMPtDash_Motown_020100 raph_TmTecCirms.dov

:J

EO004402131

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  RAC Deal Approval Sheet

APPROVALS Name Signatur Date
Originator Doug Clifford / Dave Duran cNZc ___ '10
Regional Management Jeff Donahue ~~ Tax Jordan Mintz 0

Legal Mark Haedicke
Regulatory Affairs Richard Shapiro _3 ___
ENA Management Cliff Baxter
RAC Management Rick Buy / Dave Gorte v`~r o 0
Enron Global Finance Andy Fastow / Jeff McMahon
ENE Management Jeffrey Skilling / Joe Sutton 3~
r

'1lndhou-uv5\epeders$\Deais - CurrentlMatown\Dash_Motown Q13100F.doc

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Global Finance-Summary (addendum to DASH)

1. Transaction Summary
  North America proposes to purchase three Qualifying Facilities in Michigan and California from MCN Energy
Group, Inc.
  Amount ($000)
Total Deal/Project Capital Commitment 59,000
Less: Financings 34,000
  Less: Syndications & 1 X 2 6X58" 1~3~a
Net Enron Investment of ilp-

2. Investment terms and pricing: X Market 0 Above Market 0 Below Market

Describe (if necessary):

3. Financing terms and pricing:

Describe (if necessary):

  ki~ ezT ~1

4. Legal or practical liquidity restrictions:

Describe (if necessary):

S. Any recourse to Enron (other than investment):

Describe (if any):

6a. Business unit intent to syndicate:

XX Market 0 Above Market

XUnrestricted0 Legally Restricted

0 Recourse

0 None XXPartial

O Below Market

0 Practically Restricted

WNo Recourse

D All

  Describe (if necessary): This is a JEDI II Qualified Investment. We will use a RADR structure which will result in
Enron having an option to own 75% and Calpers via JEDI II having an option on 25%.
  y~ vw 1 i (a X ,yam) 7v 1144-& WOJ E - 097AA'Ntf I k[.- 5
TN EWO 2WO
6b. Inte d d Enron hold period:
  Enron intends to hold its equity at least until it can restructure the PPA.

6c. Likely Syndication Market:

0 Industry/Strategic Partner 0 Direct Private Equity
0 Capital Markets 0 JEDI I
XXJED12 0 Enserco
0 LJM I or 2 0 Condor
XXOther: 0 Margaux
A friend of Enron will need to initially hold a 3% equity piece for
regulatory / QF reasons.

6d. Is this a JEDI 2 "Qualified I

r.-
Global

  Finance Rep

Yes

  O No
  1 ~J ^a, 2 t1L
  Ll
Name (Printed) Date

E0004402133

=XH003-01447


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M-8

EO004402134

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ENRON RISK ASSESSMENT AND CONTROL
ADDENDUM TO DEAL APPROVAL SHEET

DEAL NAME: Octagon Date DASH Completed: February 7, 2000
Counterparty: Octagon Energy Ltd. RAC Analyst: Olivier Herbelot
Business Unit: Enron Europe (Corp. Development) Investment Type: Debt
Business Unit Originator: Chris Harris Capital Funding Source(s): JEDI II/Balance Sheet
OPublic (Private Closing Date: February 9th., 2000
(Merchant OStratcgic Expected Funding Date: February 9, 2000
(Conforming DNonconforming Board Approval: DPending DReceived DDenied lEN/A
RAC Recommendation: [Proceed with Transaction (Return below Capital Price ODo not Proceed

APPROVAL AMOUNT REQUESTED

This DASH stands to correct the Octagon DASH approved 9/11/99. The approved amount should have been reflected as
11.5MM ($18.0 M1, not 10MM ($16MM) as reflected in the original DASH. The lower amount originally approved is the
notional amount of the loan being made to Octagon, but does not reflect interest capitalized by the borrower during the first two
years of the project's operation which is projected to bring the maximum outstanding balance to 11.5MM. The RAROC
model and economics presented on the original DASH both contained the assumption that up to 1.5MM of interest would be
capitalized and the results of the RAROC model from the original DASH remain unchanged.

EXPOSURE SUMMARY
  This transaction:  11.5MM (S 18.4MM)
Total I1.5MM (518.4MM)

DEAL DESCRIPTION (From original DASH- Changes in Bold)

Enron Europe proposes a  I OMM (now 11.SMM) secured debenture to finance the coal bed methane ("CBM") development
of Octagon Energy Ltd. ("Octagon"). The 10MM (now L11.5MM) facility is divided into four tranches of up to f2.5MM
($4MM) each drawable over 2 years and up to 1.5MM of capitalized interest during the first two years. The facility has a
life of 7 years. Each ensuing tranche of financing will only be provided with Enron's approval as success is demonstrated in
the project. While the existence of the CBM is known, commercial viability of its extraction and use to fuel electric power
generation must be proven. This transaction has been structured to minimize Enron's commitment while providing exposure to
the potential upside.

The terms of the financing are as follows with Enron receiving: 1) A semi-annual coupon of 12.5% p.a. 2) An up front
arrangement fee of 300,000. 3) A commitment fee of 0.50% p.a. on the undrawn part of the facility. 4) Warrants for from
20% to 35% of Octagon's equity, depending on utilisation of the facility. 5) Rights to 15% of Octagon's emissions credits and
pre-emptive rights on the remaining 85% of emissions credits. 6) A 15-year PPA with Octagon to hedge the power produced
by Octagon. Enron will also receive a seat on Octagon's Board.

The PPA provides a fixed-price power swap for the first five years on the base case production with an option to apply this
fixed price to 44% of any power upside generated. For years 6-15 it purchases power at the market price less a fixed discount
for the base case production, and at market for any excess. The PPA also gives Enron 15% of the valuable "embedded
benefits" (i.e. use of system savings passed on by the regional electricity supply company) received by Octagon as a local
power producer. Trading profits to be realized by Enron from the PPA have not been modeled by RAC, but have an estimated
NPV of 5.6MM ($9MM) (now f 3.1MM - S5.02_M M).

Octagon is an UK based company with a business plan focussing on exploration and production of CBM projects as a fuel
source for embedded electricity generation. It acquired the full British Coal UK CBM data set following privatization then
acquired licenses in what Octagon felt would be the most productive CBM areas. Currently Octagon is one of the largest CBM
acreage! holders in the UK with majority interests in 16 license blocks for CBM exploration covering 1,571 square km.
Octagon will be converting the CBM to electric power using, small mobile power generation units and will sell the power to
Enron under the 15 year PPA described above.

Approval is now requested in this Addendum to DASH to reflect the total Octagon transaction amount as $18.4 million.

TRANSACTION SOURCES AND USES OF FUNDS (S 000's)
  Sources Uses
Enron Balance Sheet 18,400 Debt 18,400
Total 18,400 18,400

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RAC Deal Approval Sheet

OTHER RAC COMMENTS: N/A

APPROVALS
Originator
Business Unit Mgrnt.

UK Power Risk Mgmt.
Regional Mgmt.
Legal
RAC Technical
RAC Management
Enron Global Finance
Enron Global Finance
ENE Management

Deal Name: Octagon (Addendum to DASH)

  Name
Chris Harris
Paul Chivers/Christoph
Waltenspuel
Richard Lewis

John Sherriff

  i ture ate
  l _

Michael Brown
Monte Gleason i If:%rII-1<:. -~:%
Dave Gorte /Rick Buy
Paul Chivers
JeffMcMahon

Jeffrey Skilling

S:fUnderwriting`a-Projccts\Activc\Octagon\Addendum to DASH (07-2-00).doc


  2
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Z- O

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ENRON RISK ASSESSMENT AND CONTROL
DEAL APPROVAL SKEET

DEAL NAME: OPET Date DASH Completed: 25 February 2000
Counterparn': OPET Petrolci itik A.S. RAC Analyst: Renata Frankova
Business Unit: Corporate Finance Origination investment Type: Equity
Business Unit Originator: John Bottomley Capital Funding Source(s): Balance Sheet
0 Public El Private Expected Closing Date: 29 February 2000
l] Merchant 0 Strategic Expected Funding Date: Tranche 1= 1Q2000; Tranche 2 = 3Q2000;
El Conforming 0 Nonconforming Tranche 3 =4Q2000.
  Board Approval: OPendine Received ODcnied a N/A

RAC Recommendation: 0 Proceed With Transaction 0 Returns below Capital Price 0 Do not Proceed

RAC is nor currently in a position to recomrnend the deal despise itspositive NPV in view nf the fact char (i) it carries
significant downside risk (Enron faces a 50% chance of a negative return and a 66% chance of a negative NPV. assuming that
there is an IP0) and (ii) it lacks clear srrare: is benefits to Enron (see A4C Comments).

APPROVAL AMOUNT REQUESTED
Approval is sought for S 9,975,000 to exercise 84,000 warrants into 7.7% equity ki OPJ T, a Turkish petroleum products
marketing company (Tranche 1). Exercise of Tranchc I will allow Enron to retain additional warrants on 9% more of OPET's
equity (Tranches 2 and 3). Exercise of Tranches 2 and 3 will require separate approvals.

TVs DASH replaces the DASH approved 17 November 1999 for a SI7m.subordinated--debt facility to OPET which the
company eventually rejected The exposure reflected on this DASH corstitutes Enron's only exposure to OPET.

EXPOSURE SUMMARY
This transaction: Equity S 9,975,000
Global Fuel contract: Credit Pcservc S 60,000 (co.rrespondi7g to a possible 1-year fuel supply)
Value at Risk S 0
  Total S 10,035,000

DEAL DESCRIPTION

The Company. OPET is a Turkish family-owned petroleum products company with 1999 (ttnaudited) turnover of (JSSS 992.8
million, EBITDA of USS 42.4 million and net income of USS 21.2 million. The company owns: (i) import/storage facilities;
(ii) a wholesale business; and (iii) a retail network composed of 465 franchised gas stations under the OPET brand. OPET is
the 4'h largest petroleum products distribution company in Turkey with a 9.6% market share in white products, and a 4.9%
market share in black products (sec Annex 1). EBITDA had been --rowing at an average of 12% per year from 1996 to 1998
but increased by 180%o from 1998 to 1999 due to market liberalisation, company market share growth an.d rising product
prices.

The Transaction: In December 1999, Enron was Given a series of warrants on OPET's equity with the characteristics outlined
in the table below,


Tranche #	Tranche
Expiration	4 of warrants l
shares	Capital Amount
(Smm)	Equity
Shareholding
1	29 February 2000	I 84,000	59.975	7.7%
2	15 July 2000	, 34.800	$4.1.2	2.9%
3	15 December 2000	81,200	59.643	6.1%
Total		200.000	523.750	l6.7%

a

All warrants have a strike price of S 1I8.75. Each tralnche must be exercised in its entirety and a given tranche can only be
exercised if the previous one has been exercised. Enron will be given a seat on OPET's Board upon exercising Tranche 1 and
will retain it provided that Enron's share of equity dots not drop below 7.5% (which could well happen in case of an IPO unless
Enron acquires additional shares; Eaton is otherwise protected against dilution under the Subscription Agreement). Also, if
Enron were to acquire a direct equity interest in one of OPET's competitors in Turkey, the Turkish shareholders would have the
right to buy all Lnrorr shares back at S 118.75 per share.

TRANSACTION SOURCES AND USES OF FUNDS
Sources
  Equity Capital $9,975,000
(Tranche 1)

Total

$9,975,000

  Uses
New storage facility in 59;975,000
Marmara (Phase 1)

  59,975,000

' Jinron has the option to exercise 58,000 warrants in Tranche 2 and 58,000 in Tranche 3 (instead of 34,800 and 81,200).

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RAC Deal Approval Sheet Deal -Name: OPET
RETURN SUMfYLkRY
  PV u? Cumulative
  Return Components (*l: Capital Price 1RK Capital Price Components
  Tranche 1 (equity) (321) Risk free rate (%): 6.7%
Tranche 2 (warrants) 1,379 Country Premium (%): 2.6%
Tranche 3 (warrants 3,071 Company Risk (%) (**): 20.7%
Total NPV $4,129 48% RAC CAPITAL PRICE: 30%
Turkey E-Rating 9

(*) The model assumes that Tranche I is exercised but that Tranche 2 and. 3 are only exercised if the RAROC model shows that
it is optimal to do so.
("11) The capital price was calculated using two separate methods that yielded similar results: (i) a modified CAPM-formula
using the ratio of Turkish to US equity market volatilities to assess the company risk (following a Goldmaa Sachs approach);
and (ii) a build up from RAC's 22% subdebt price as calculated in November 1999, which itself was based on the company's
senior bank debt price.

CASH FLOW SUMMARY

Cash FlowSummarv

S:\Undcn~Titino.a-P roj cetc` A etive\OPLIIDASII 25-02.00. do e

t Ongoing
-^t Fees
Q Outno.w
Cumulative 1:95
Tcrinuii V31uc
--A-- Curnulative PS
- Expected cumaativc cash noss
..-i -- Elapzed

Average Life = 2.5 Years

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RAC Deal Approval Sheet

TRANSACTION UPSIDES/OPTIONALITY (not included in financial model)



The transaction could create supply opportunities for the Global Fuels team, even though it has so far proved difficult to
execute a transaction with. OPET.

The Turkish origination group considers that the deal could lead to a number of opportunities, in particular:
 Leveraging Baron's trading and risk management expertise to optimize OPET's operations by (1) establishing a `trading
hub' to supply other distribution companies by using unused import quotas and (2) providing risk management and
hedging activities to minimize the price risk between wholcsalc purchase and retail sale;
 New business opportunities such as bunkering business near Istanbul, naphtha supply/fuel switching, and possible LPG
supply;
  Enron's merchant business will be able to utilize OPET facilities;
 OPET's existing facilities at Mersin can be used by Enron's autogencration facility plans in southern Turkey; and
 In conjunction with potential natural gas from the recently approved Thrace basin, OUT would provide Enron with a full
range of energy product capabilities in Europe's fastest growing energy market.
Ilowever, neither the Turkish origination group nor the Global Fuel team considers the proposed transaction as indispensable
for their activities to the region.

EXIT STRATEGY
 If IPO, sale of the equity in the public market or through a biockistratc!~ic sale (Turkish shareholders currently have a right
of lust refusal). V
 If no IPO within 3 years, Enron has a right to put its equity back to the Turkish shareholders at a strike price of 5175/share
(which would correspond to an annual return on our original investments under each tranche of 14%, 16.o and 20%
respectively).

RISK MATRIX (TOP 5 ONL
DESCRI
Exit Strategy

S;\Undcr%%-idn;gin-Proicct.%lActivekOPLMASH 25-02-00.doc

Deal Name: OPET

IPO Timing. OPET is seeking to conclude an IPO on the Istanbul
Stock Exchange (ISF) within 3 years in order to fund its future
gowtlt. L'ivestment banks consider that 2Q and 3Q 2000 constitute
a window of opportunity for IPOs in Turkey given, the market's
current appetite for Turkish exposure, but a number of large LPOs ;
already announced for the same period could affect the demand for
OPET shares. Also, investment banks are stressing that Enron's
commitment to stay in for the long term would be key, and envision
Enron participating in IPO roadahows.
Value. Enron is unlikely to be able to sell its shares before Spring
2001 at the earliest since: (i) double taxation would apply if we sold
to a Turkish resident within one year of purchasing the shares; and
(ii) we are likely to face a lock-up period of at least 6 months in
case of an IPO. In the meantime, we will be subject to the large
volatility of the Turkish equity market (historically 730,40 per year -
see RAC Comments).
Li uidi . There is a significant liquidity risk on the ISE since it is
not clear what percentage of the company will be offered through
IPO (the Turkish shareholders wish to retain at least 51%%
ownership). Daily trading volumes on the ISE averaged $300m in
1999. Comparable companies had daily volumes of about 5% of
liee floating shares. The model assumed a 30% liquidity discount
and a sale one year after IPO.
lenenotiation Risk. It is expected that a number of clauses under
the Subscription and Shareholders Agreement may have to be
renegotiated bctwc,en Enron and the Turkish Shareholders net case
of an 20.

Pave 3

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RAC Deal Approval Sheet Deal (lame: OPET
  If an IPO is not concluded within 3 years Enron will be allowed to
put its holding back to the Turkish shareholders (see Exit Strategy
above). Lack of information on their personal wealth makes the
corresponding credit risk difficult to assess, but Euron will have
recourse to the Company if the Turkish shareholders arc not able to
pay (amount would be between $14.7 and S35 million depending
on how many Trenches Enron has exercised).

Competitive Environment and Impact
POAS.!Tupras Privatization



5:\Undarwrin n;\3.1.'raj ccu./Active\OPLT\DASH 25-02-00. doe

The planned privatization of POAS - the largest distribution
company - may create a price-cutting environment forcing margins
down and making it much more difficult for OPET to increase
market share, particularly given its relatively small retail network
and weakness in metropolitan areas. This risk is only partly
mitigated by Arthur Andersen (AA)'s belief that: (i) the acquisition
costs and high investments required to maintain POAS' current
network may prevent it from becoming a test-cutter; and (ii)
OPET's steadily improving network of sites and "impressive
management" should position it well vis-a-vis its competitors.

The planned IPO of Tupras -- the domestic refinery company -
could give control of refining activities to competitors, thereby
potentially affecting OPET's expansion plans, market share and
martins. This risk is partly mitigated by OPET's strong import--
orienrati_on, which makes the company less dependent on domestic
refining. Also, if a large industrial player (Shell or 13P) acquired
Tupras, the government would probably relax the 60,140 rule, which
requires distributors to source at least 60%'u of their products
domestically.

OPET's operation is subject to significant regulatory risks,
reflecting the only partial and recent deregulation of the sector. In
particular, the margins of petroleum product dis_ibution and retail
companies are still capped by Government at a level 20-80% lower
than in the rest of Europe, even though the 1998 Automatic Pricing
Mechanism (APivt) contributed to "de-politicizing" downstream
pricing somewhat. Similarly, the fuel consumption tax is still
subject to significant regulatory uncertainty, which the Government
is trying to reduce by linking it partly to the Turkish wholesale
price index.

Enron's overall political risk insurance (PRI) will cover
expropriation, political violence, war and currency risk. The RAC
capital price above uses Turkey's sovereign bond spreads against
US Treasury yields as a measure of sovereign risk (PRI premituns
were therefore not included in the model). Those spreads have
narrowed significantly in recent months, reflecting market
optimism about Turkey's relationship with the EU and the
perspective for an IMF agreement. GDP growth is forecasted by
EIU at 5% in 2000 and 4.5% in 2001.

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RAC Deal A roval Sheet

Deal Name: OPET

Management Risk	General ylanager. He joined OPET in mid-1996 from Shell and
	has been making a key contribution to performance of the company
	since then. His departure would have an adverse impact (AA views
	him as "pivotal"). However, he recently signed a 5-year contract
	and has a good working relationship with the family owners.
	Working Capital. The strong growth of OPET's retail network, the
	Automatic Prime,, Mechanism (see above), the 601,10 rule, OPET's
	high inventory turnover and the currently significant diffcr.-ncc
	between the company's receivables and payables, could lead to a
	considerable growth in working capital requirements. This risk
	should be partly mitigated by the Company's new policy of
	matching credit received from suppliers with credit extended to
	clients (as demonstrated by recent financial statements), as well as
	by the proposed infusion of new equity.
	lzmit Terminal. The Izmit tenninal suffers from deficiencies in its
	fire protection system as well as ground contamination caused by
	operation at a nearby refinery. OPET has committed itself to
	increase its insurance protection and undertake a baseline
	enviror.mental audit in order to limit the risk of future liabilities.
Petroleum Product Contraband from Iraq	Illegal product imports from Iraq have now reached 20% of overall
	domestic consumption and are likely to rise further given the
	continued expected market growth, earthquake damage to Izmit
	domestic retincry and the 60/40 import limitation rule. This is
	likely to affect the overall Turkish market, even though OPET may
	be somewhat less affected because of its focus on the North/West
	of the country. Also, the government is in the process of
	letritimizin this trade by taxing such ir,, orts.



	N/A 1	Poor Excellent
Core Business		
Stratagic Fit		
Upside Potential	`	,,
Management		
r
rRisk lvlitigation		

KEY SUCCESS FACTORS

OTHER RAC COMMENTS:

The equity investment (Tranche 1) provides a marginal return and the value of the Tranche 2 and 3 warrants derives primarily
from the high volatility of the Turkish stock exchange i1 case of an IPO. The RAROC simulation shows that, assuming that
there is an IPO, Enron faces a 50% chance of a negative return on our investment and a 66% chance of a negative NPV. In
case of no P0, the return is expected to be sub-market (i.e. negative NPR/).

Using a multiple analysis and on the basis of summary accounts only, OPET's equity value was estimated by CSFB at 5250-
315 million and by ABN Amro/Rothschild (A.RR) at $275-325 million. Salomon Smith Barney (SSB) calculated a value of
$200 million, based on a highly simplistic no-growth DCF model. Enron's model gives a value of 5206 million in the case of
an IPO. Based upon exercise of Tranche 1 only, E'nron's cost of $9.975 million compares to an estimated value for 7.7% of
OPET of $19.3-24.3 million from CSFB, 521.2-25.0 million from ARR and 515.4 million from SSB. Based upon the exercise
of all three tranches, Enron's cost of 523.8 million compares to an estimated value for 16.7;b of OPET of 541.8-52.6 million
from CSF B, $45.9-54.3 million from ARR and S33.4 million from SSB.

S;1Unduwritutgla-Projcct;L4ctivclQPET\1)ASIt 25-02-00.doc

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RAC Deal Approval Sheet

APPROVALS
Business Unit Originator
Turkish Origination
Legal
ENE Europe Management

Enron Global Finance

RAC Management

ENE Management

  Name
John l3ottoniley
Tim Battaglia
Michael Brown
Mark Frevert
John Sherri IT
Jeff McMahon
Paul Chivers
David Gorte/Rick Buy
Steve Young
Jeffrey Skilling(Jocc Sutton

ANNEX 1

Sales of Road Fuel Grades, Retail (1995)

  D
oZ d - W.L p
.-3 2 )JcrV

  y o0
7,0
  Z
Co

	White Produce
(diesel & gasoline)
No of SiteG (thousand tons	
Black Products
(thousand tons)	
Storage Capacity
(cubic meters)
POAS	4,715 I 4.555	3,422	330,900
BP	728 I 3,158	731	76,400
Shell	592 1,786	316	73,300
OPLT	465 7,432	251	217,000
Turk etrol	771	1,352	62	62,',00
Total	347	947 I	91	306,000
Elf	131	514	I 7	37,300
4 Other Turkish Comp.	446	1,171	I 257	35,000
Total	8,195	14,915	I 5.137	1,739.000



S:\Ut1dutivriting\a-Projccts\Activc\OPF'\OASH Z5-)2-ao.dne

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RAC Deal Approval Sheet

Deal Name: OPET

DEAL DEFINITIONS

Bid Rond A letter of credit or surety bond delivered at the time of submission of a hid. Tt 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 summar_v of the investment.

Deal Name Unique name for an investment/deal usually defined by Capital Pricing director or Business
Unit Originator.

Deal Risk Premium .'o Premium for a deal derived by a comparison of the transaction volatility ofreturns to
historical sector volatility ofreturns; 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 Comntinnent(SM) Expected present value of cash outflows in the transaction.

Expected 1128 (`%) the discount rate at which the net present val-ae of the expected cash flows would be equal
to zero. This measures the expected return of the transaction but does rot incorporate a
measure of risk.

NP\'r Capital Price (SM) Net Present Value at the Capital Price discourt rate

Risk Free Ratc ^/o 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, rcitnance, and physical sales. Sometimes referred to as Tnstrunent Type.
Value at Risk (SIM) The loss in value over a specified period of time (quarterly, daily, etc.) "which will be
  exceeded with a certain probability. Evaluated based au market comparables.

S',Underwriting\a-p,ajcctdActive;OPLTiDASH 25-02-O .doc

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ENRON RISK ASSESSMENT AND*CONTROL
DEAL APPROVAL SHEET"'

DEAL NAME: OS Integration Holdings Limited	Date DASH Completed: 21 March 2000
Counterparty: Current Owners/Managing Directors	RAC Analyst: P. S. Thuraisingham
Business Unit: New Ventures	Investment Type: Private Equity
Business Unit Originator. David Pope	Capital Funding Source(s): Balance Sheet
OPublic Private	Expected Closing Date: April 2000
Merchant UStrategic	Expected Funding Date: April 2000
OConforming Nonconforming	Board Approval: Wending DReceived DDenied N/A

RAC Recommendation: OProceed with Transaction ORetums below Capital Price ODo not Proceed

The investment in OSI appears to be at an attractive valuation based on values for similar companies in today's public markets.
However, RAC does not recommend this investment until OSI's ability to generate cash sufficient for. working capital and
major expenditures prior to the IPO can be evaluated. A cash flow model agreed between Enron and OI is recommended in
order to illustrate how cash will be managed as the consulting staff is doubled (assuming they are billed at historical levels) and
the company increases to a size necessary to sell to the public markets. The commercial team has stated that the growth in
consultants and revenues at the levels currently projected (see Risk Matrix below) will be key to the success of this investment.
The lack of a cash flow model also does not allow for the analysis of this investment if Enron is forced to retain its interest and
ultimately sell to a private investor.

The following issues are also necessary and are expected to be addressed prior to closing:

 Enron is given the ability, as minority investor, to veto major decisions (eg. acquisitions, dividends, future sale of equity
etc.).
 Receipt of audited accounts (fiscal 1999).
 Satisfaction with the results of due diligence presently being completed.

Receipt of the items noted above are particularly important for the following reasons: (i) this investment is non-traditional
compared to other technology-related investments made by Enron; (ii) the IPO market for internet and high-tech companies is
highly volatile and Enron might be forced to maintain its interest in OSI beyond the initial estimated exit date; and (iii) there
has been limited commercial due diligence performed to date on this company.

APPROVAL REQUESTED

Amount: Up to $11.2 million.

Purpose: Purchase, from current owners, of 30% private equity interest in OS Integration Holdings Limited (OSI), a UK-based
IT consulting and e-commerce enabling company.

Requirements: After closing, the deal team will submit to EEL's Senior Management and RAC going forward (i) audited
accounts when available; and (ii). monthly Management Accounts per section 9.4 of the latest Shareholders' Agreement
showing the revenues, operating results and overall results, relevant cash flow information, and performance compared to
budget. These monthly reports shall also describe the status of the implementation of OSI's strategy and major projects asset
out in the Budget and update details on projected capital requirements.

EXPOSURE SUMMARY

Prior to transaction: $ 0.0 million

This transaction: $ 9.6 million Expected purchase price
  $ 1.6 million Estimated maximum price adjustment following receipt of 1999 and Ql '00
audited accounts
Total: $ 11.2 million
DEAL DESCRIPTION E0004402146 -

Transaction:
Enron proposes to acquire a 30% equity interest in a new company (Newco) which will be established to acquire the entire
share capital of OSI in return for the issue to the two co-founders of: (i) 70% of Newco's shares, (ii) loan notes for an amount
equivalent to the expected purchase price and (iii) a cash payment to reflect any positive balance in OSI's working capital and
net assets. The principal amount of the loan notes will be adjusted down by an amount equal to 30% of any decrease in
working capital and net assets between end-1999 and completion. The loan notes will be redeemable in amounts of 250,000

  utuM 110111111 CLLZ 4L4 TLT plr+ vv,r rT:AT nn. CO/TZ

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RAC Deal Approval Sheet Deal Name: OS Integration Holdings Limited
no earlier than the first interest payment date falling six months after issue and on each subsequent payment date. The loan
notes will expire on the eighth anniversary at which point the remainder will be redeemed, together with accrued interest. The
loan notes will accrue interest (LIBOR - 1%) which will be payable every six months.

Enron will have one director on OSI's board who will be the Chairman, alongside the two co-founders who will remain on the
OSI boa d. In addition, an Enron employee will be seconded to OSI for at least 6 months to assist with business development.

Background:
OSI was founded in 1991 specializing in networks, application development, and data warehousing. Over the last 18 months,
OSl hqs ventured into the area of e-commerce consulting and web development.

OSI has partnership agreements with Microsoft, Dell, and Novell to provide services to commercial and industrial customers
mainly in Europe. OSI has delivered successful solutions to leading -organizations like British American Tobacco, Dresdner
Kleinwort Benson, The Houses of Parliament, ING Barings, Unilever, Vodac/Vodafone, among others. OSI has also done
some work for Enron Europe in the past and the IT department was impressed by their performance.

OSI has a commercial staff of about 100 with the two co-founders, Richard Thwaite and Michael Altendorf, acting as joint
managing directors. Each of them currently owns 50% of the issued shares of OSI and the employees may acquire up to 20%
of the shares through a share option plan. OSI's current business is approximately 50% e-commerce enabling and 50% IT
consulting. Unaudited 1999 accounts show revenues of $15.5 million, a 15% increase with respect to the previous year; in
addition, profits before taxes and minority interests increased by 4% to $2.8 million in 1999. The intention is to grow OSI
dramatically over the next 12-18 months, at least doubling the number of commercial employees by recruitment and potential
additional acquisitions of other similar companies.

TRANSACTION SOURCES AND USES OF FUNDS
  Sources uses
Enron Balance Sheet $11.2m Purchase of Equity $9.6m
Possible Adjustment to $1.6m
Purchase Price
  Total $11.2m Total $11.2m

VALUE PROPOSITION

i eturn Summary:

No financial model of sufficient substance was provided to evaluate this transaction, as the origination team believes that OSI's
future performance and strategy are too uncertain to model. Instead, the purchase price was the result of negotiations between
the origination team and OSI and corresponds to a total value of $32 million for 100% of OSI's equity.

In the absence of a detailed model, RAC isolated and evaluated OSI's e-commerce revenues (which correspond to
approximately 50% of its total revenues), and applied a 30% liquidity discount. Current market comparables would imply a
value of $70 - $100 million for OSI (depending on whether a market cap/employee or market cap/sales multiple is used).
However, the comparison is somewhat misleading since OSI is not currently traded (see Annex 1 for details on the basket of
comparables).

Transaction Upsides/Optionality (not captured in the Return Summary):

The proposed transaction would provide Enron with:
 Opportunity to gain expertise in e-commerce related ventures
 Potential exposure to internet start-ups, VC community and IPO market

EXIT STRATEGY

OSI's current plan is to IPO in the next 12 to 18 months. However, IPO market conditions cannot be forecasted. Under most
IPO arrangements, Enron is likely to be subject to a lock-in period of at least 6 months beyond the IPO date.
If an attractive bid is received beforehand then Enron might consider selling its interest. However, there are tag-along rights in
the event Enron. wants to liquidate'more than 50% of its equity interest which might make this somewhat more difficult.

S:\Underwriting\a-Projects\Active\OS Integralion\Approval\OSI DASH 21 March 2000Final.doc page 2

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RAC Deal Approval Sheet Deal Name: OS Integration Holdings Limited
RISK MATRIX (Main 5 Risks Only)

DESCRIPTION	MITIGATION/COMMENTS
Retention of'Key Staff	The retention and continued performance of key staff, particularly
	the two managing directors, are key to the growth of the business.
	In the proposed structure, the two managing directors will retain a
	sizeable equity stake (each having 35% of issued shares) in OSI,
	encouraging them to maintain their role in its continued success.
	Both managing directors are to be tied in under fixed term
	contracts.
IPO Risk	The main value driver of this investment is realizing a successful
	IPO and achieving the high multiples being placed on technology
	companies by the market today. Hence, Enron is taking full
	internet market risk for a period of up to 24 months. The target is to
	double the number of employees to about 200 and to double
	revenues to about $31m before IPO.
	Although there is no direct mitigation for this risk, OSI is a
	profitable business, with a gross margin of 18% on sales. If an IPO
	cannot be achieved satisfactorily, Enron will still have a minority
	stake in a going concern (DCF valuation using a perpetuity formula
	and a discount rate of 15% gives a value of $12m for the IT
	business only).
Legal Risk	The transaction documents to be negotiated will seek to require the
	two co-founders to give customary warranties and indemnities in
	respect of the sale of their shares in OSI, including any tax
	liabilities arising prior to completion. The co-founders' aggregate
	liability in respect of claims under such warranties and indemnities
	will be limited to the purchase price, and subject to such claims
	being made by Enron within approximately 24 months (and in the
	case of tax-related matters, within 7 years). The transaction
	documents will not provide for any right of set off against the
	purchase price in respect of such claims.
Uncertainty on Future Performance and	The market in internet-related products and services is expected to
Strategy	continue growing significantly, particularly in Europe (see Annex
	2). A business plan covering how best to take advantage of this
	opportunity, mitigate risks of changes in the market and exploit
	new opportunities as they arise has not yet been formed (the
	intention is for OSI's management team to prepare such a plan after
	Enron's investment is made). Such a plan would be particularly
	important given the major changes that OSI is currently undergoing
	or planning (new business, -new markets, new owners, accelerated
	growth, etc.).
	The underlying assumption on OSI's performance is that by
	increasing the number of employees, OSI will grow
	correspondingly in every respect; this growth is a key factor in
	achieving the significant estimated value for this investment.
	Overall, the originating team has forecasted, as per the latest
	income statement presented to RAC, that the following key near-
	term targets are achievable:
	JanOO-JunOO MOO-DecOO lannOl-JunOl Jul01-DecOl
	Comm. Employees 121 176 217 251
	(end of period)
Revenue(6 t^&) $12.0m $16.3m $22.3m $25.6m
	Pre-tax pr fit $2.25m $1.5m $1.9m $1.2m

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11 A roval Sheet heal Name: US integration riOloln s Ltttutea
Risk There is risk that Enron's investment in the OSI group (through
Newco) will be considered a passive foreign investment company
(PFIC) for US tax purposes.

  The implications of PFIC status follow:

 Enron's proportion (30%) of OSI group earnings would be
immediately taxable in the US as well as the UK.
 Any future dividends received from the OSI group that were
previously taxed under the PFIC regime would not be subject
to tax when distributed.
 Any amount recognized immediately due to PFIC regime
would reduce the amount of capital gain Enron would
recognize in' the US upon later disposition of the OSI group
investment.
 The maximum expected exposure is $500,000.

KEY SUCCESS FACTORS

		Poor Excellent
Core Business		x
Strategic Fit		x
U side Potential		x
Management		x
Risk Mitigation		x

OTHER RAC COMMENTS:

The proposed OSI investment is non-traditional compared with other technology-related investments made globally by Enron
in the sense that: (i) our investment is not being retained by OSI to fund growth, but to liquidate a portion of the founders'
equity ownership; (ii) it is larger than the typical venture capital investments made by Enron and (iii) there is no other
technology-related co-investor, with significant experience in this industry, that would have enabled us to benchmark the deal
team's value proposition.

The deal team believes that OSI will grow rapidly, either organically or through further acquisitions over the next 12 to 18
months and that no additional equity commitments from Enron or other shareholders will be required. However, if there was a
need for additional funds, the deal team believes that OSI could seek alternative financing through other venture capital firms
that have approached OSI already.

RAC will work with the deal team to finalize a financial model that will (at a minimum) include (i) 2 years of historical
financials (already provided); (ii) projected cash flow statement illustrating free cash flows to fund future growth in greater
detail than provided to date; and (iii) the information be broken down by main lines of business (e.g. IT and e-commerce
consulting).

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RAC Deal Approval Sheet

Deal Name: OS Integration Holdings Limited

  APPROVALS
Business Originator
IT
  Legal
i Transaction Support
Tax
  Enron Global Finance

RAC Management

Regional Mgmt.

ENE Management

Name

  Date
  00
a2.~ 3 tro
2(300
Z3 3 0

  3 0~
ZT
  -4rz, 0
of
  ad

  David Pope
Mark Pickering
Michael Brown
W'r-- Phillip Lord
Rod Sayers
Jeff McMahon
Paul Chivers
Dave Gorte
Steve Young
Mark Frevert
John Sherriff
Joe Sutton

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RAC Deal Approval Sheet Deal Name:. OS Integration Holdings Limited
  Annex 1: Market Comp rabies

	Revenue Metric	Employee Metric
Basket of Comparables multiples	Market Cap
= 42.9 x Revenue	Market Cap
= 54.7m x no. of commercial employees
OSI 1999 data	Revenue = $15.5m	No. of commercial employees - 100
of business web-related	50%	50%
Liquidity discount	30%	30%
OSI valuation using comparables	Implied Market Cap
= 42.9 x 50% x 30% x $15.5m
=S99.7m	implied Market Cap
=$4.7mx50%x30%x100
= $70.5m
OSI valuation based on
expected purchase price	Expected purchase price of 30% of OSI = $9.6m
Implied value of 100% of OSI = $32m

Comparable companies
For the purposes of estimating the value the market would place on OS Integration if it were fully traded, a basket of similar
companies ('comparables') that are already traded was used. This basket was designed to be a broad representation of the
market in internet services, both in the US and in Europe.

Revenue Metric
This is used to estimate the value the market would place on a company if it were fully traded, by assuming that market
capitalization is a multiple of revenue and determining what this multiple is in the current market for similar companies. For
companies in the internet sector, this metric is preferred to the earnings metric, as many of these companies are currently
unprofitable.

Employee Metric
This is used to estimate the value the market would place on a company if it were fully traded, by assuming that market
capitalization is a multiple of the number of commercial employees and determining what this multiple is in the current market
for similar companies. This metric is particularly useful in companies which consist mainly of intellectual capital and which
operate on a fee-based consulting model.

	
Exchange	
IPO Date	Market Cap ($m)	Revenue
($m)	Market Cap /
Revenue multiple
			Mar-00	Sep-99	9r0	1999	Mar-00
Valtech	Euro NM	Apr-99	1,066	59	1706%	26.1	40.8
Sclent	NASDAQ	May-99	7.634	2,686	184%	62.9	121.4
Whlttman Hart/UK Web CKS	NASDAQ	May-96	5,306	3,467	53%	986.6	5.4
Razorfish	NASDAQ	Apr-99	2,840	1,171	143%	51.2	55.5
IXL	NASDAQ	Jun-99	2,529	1,850	37%	171.9	14.7
Proxicom	NASDAQ	Apr-99	2,217	1,485	49%	82.7	26.8
Vlant	NASDAQ	Jun-99	1,643	871	89%	43.8	37.5
AppNet Inc.	NASDAQ	Oct 99	1,527	n/a	n/a	89.0	17.2
ICON Medlalab	Stockholm	Nov-98	1,068	477	124%	33.0	32.4
Agency.com	NASDAQ	Dec-99	987	n/a	n/a	64.0	15.4
US Interactive	NASDAQ	Aug-99	868	512	69%	27.8	31.2
Framfab	Stockholm	Jun-99	3,383	560	501%	29.0	116.0
AVERAGE (simple)			2,587	1,314	295%	139.0	42.9
OS Integration	n/a	We	n/a	n/a	Ma	15.5	n/a

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RAC Deal Approval Sheet

Deal Name: OS Integration Holdings Limited

	Market Cap

($m)	No. of commercial
employees*	Market Cap per
commercial
employee $m	Revenue per
commercial
em to ee $000
	Mar-00	Mar-00	Sep-99	6-month
growth	Mar-00	1999
Valtech	1,066	200	150	33%	5.3	130.5
Sclent	7,634	612	397	54%	12.5	102.8
Whlttman Hart/UK Web CKS	5,306	5,810	4,396	32%	0.9	169.8
Razorfish	2,840	770	530	45%	3.7	66.5
IXL	2,529	1,213	1,123	8%	2.1	141.7
Proxicom	2,217	421	344	23%	5.3	196.3
Viant	1,643	230	201	14%	7.2	190.8
AppNet Inc.	1,527	770	636	21%	2.0	115.6
ICON Medlalab	1,068	504	296	70%	2.1	65.5
Agency.com	987	700	525 i	33%	1.4	91.4
US Interactive	868	245	162	51%	3.5	113.5
Framfab	3,363	322	261	23%	10.4	90.1
AVERAGE (simple)	2,587	983	762 i	34%	4.7	122.9
OS Integration	n/a	104	90 j	16%	Ns	171.2

  Where detailed employee information was unavailable, it was assumed that 70% of the employees are commercial.

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RAC Deal Approval Sheet Deal Name: OS Integration Holdings Limited

Annex 2: Market Summary

The European Internet Market
 By 2002, Europe is expected to be the world's largest internet user group and seven of the top ten e-commerce companies
are expected to be European.
 By 2002, The global internet services market is expected to more than double to $44bn; the Eurotsean internet services
market is expected to more than treble to $23bn over the same period.
 By 2003, internet services are expected to have grown to 7% of all IT expenditure, from the current level of 3%.
 Several European internet services companies have been floated successfully over the past 18 months (see Annex 1).

Internet Services Companies
 Internet services companies typically offer e-commerce solutions for businesses looking to tap into end-user internet
customers. This ranges from technical activities such as building websites to management consultancy, such as advising on
e-commerce strategy.
 Historical comparison of price behavior shows that the market in internet services stocks is well correlated with the overall
market in internet stocks.
 Internet services companies work on a fee-based consulting business model, whereas most other internet companies have
revenues based on the number of end-users. Hence internet services companies should have more predictable revenues.

Key Criteria for Success
 For most internet companies, market share drives expected future revenue and hence is the main factor in the valuation of
these companies; however, this does not apply to internet services companies, as they are not exposed to the end-user
market.
 Brand and reputation play an important role in how the market perceives internet companies: a strong reputation will make
such companies stand out from the crowd. This is crucial for internet services companies, for which success is
demonstrated by retaining existing clients and attracting new ones by referral.
 Management quality is another vital component of how the market views internet companies. A clear vision and strategy
are key to establishing a sustainable position in the quickly changing technology environment before it crystallizes, along
with the execution capability at all levels to implement this strategy.
 In the internet market, certain fundamentals are used to distinguish stronger companies from weaker ones: for example,
revenue figures are considered far more important than earnings figures, as companies concentrate on expanding rapidly
and on increasing market share.

Competition in Internet Services
Competition in the near term appears to be much less significant for internet services companies than for other internet
businesses. A demonstration of this is the Swedish market, in which several internet services companies (FramFab, Icon
MediaLab, Connecta, Cell Network, Adera, et al) compete. Although Sweden is at the forefront of European internet use, some
of the other more populous Western European markets should rapidly catch up; hence, competition is unlikely to affect the
market valuations of internet services companies in the near term.

Bibliography

 Technology Focus 2000 Report - Dresdner Kleinwort Benson.
 Internet/e-commerce Quarterly Handbook Q4 1999 - Merrill Lynch.
 Internet/New Media Review - Friedman Billings Ramsey.
 Internet Quarterly Q41999 - Donaldson, Lufkin & Jenrette.
 Internet Valuation Oct 99 - Salomon Smith Barney.
 Which eBusiness Projects - Forrester Research.
 Miscellaneous articles in the financial press.

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View of the Commercial Team on RAC recommendations:

RAC have raised two main issues they feel should be addressed before investment in OS Integration
progresses. The commercial team's view on these is given below:

1. A cash model should be agreed between OSI and Enron to project the cash flow necessary to
achieve the growth to IPO and ensure no further cash for working capital or major expenditure is
anticipated to achieve this growth. This will also allow for the analysis of this investment if Enron
is forced to retain its interest and ultimately sell to a private investor.

The commercial team disagree with RAC as the team feels that, as this is a consultancy, the main
hold on growth will be recruiting the staff required. If new employees join, they will be charged
out as soon as they join. The only reason there will not be enough working capital is if there is not
the work, in which case there will not be the growth required anyway - this is the risk, not the
potential lack of working capital. With regards to major capital expenditure, there is no way of
anticipating at this stage whether this will be desirable (at the moment, the company is growing
organically without the need for this). However, Enron has no obligation to provide cash in this
instance and will assess potential acquisitions if and when they arise on a stand-alone basis.

If Enron was forced to retain the investment and sell to a private investor, it is true that DCF may
be a method used for valuation. However at this stage the commercial team feel there is no value
in trying to predict what the performance of the company will be past 2001.

2. Several issues need to be addressed before completion (a key veto for Enron as a minority investor
in major decisions, receipt of audited accounts, completion of due diligence satisfactorily).

The commercial team agrees that these should be received pre-completion although the team sees
little comfort in audited accounts for this sort of business where the purchase price and major risks
relate to intellectual capital.

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c

RAC Deal Approval Sheet Deal Name: OS Integration Holdings Limited
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: et
Describe (if necessary):

  Practically

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

4. Legal or practical liquidity restrictions: U Unrestricted Q Legally Restricted
Restricted

  Describe (if necessary): b1d 7~ 4)
5. Any recourse to Enron (other than investment): Q Recourse

Describe (if any):

6a. Business unit intent to syndicate: U None Q Partial
Describe (if necessary):
  (N e"IT aL lktiL 5 /l ht/,~i;d
6b. Intended Enron hold period:

1-2-74>



6c. Likely Syndication Market:

  No Recourse

  All

,dustry/Strategic Partner 0 Direct Private Equity
0 Capital Markets 0 JEDI 1
  U JEDI 2 0 Enserco
U LJM 1 or 2 ~-, U Condor
ether: ZYV 0 Margaux

  Amount ($000)
$11,200
  -0-
-0-
$11,200
0 Above Market 0 Below Market

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

II No .


Global Finance Representative: __`~m SMC
  Signature Name Date

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A 11\V1\ A%iAkJ11 L-x AJLJ d"L71V1L1 I 1 LXi. vv, . ----
  DEAL APPROVAL SHEET AMENDMENT

DEAL NAME: Project Buffalo	Date DASH Completed: February 11, 2000
Counterparty: Invasion Energy Inc.	RAC Analyst: N/A
Business Unit: Enron NA - Canada	Investment Type: Equity
Business Unit Originator: Kyle Kitagawa	Capital Funding Source(s): Balance Sheet
OPublic Mx Private	Expected Closing Date: February 18, 2000
Merchant OStrategic	Expected Funding Date: N/A
[EConforming ONonconforming	Board Approval: Mending DReceived ODenied EN/A
RAC Recommendation: []Proceed with Transaction OReturns below Capital Price ODo not Proceed

APPROVAL AMOUNT REQUESTED
Capital Commitment $ 1,520,000

EXPOSURE SUMMARY
  This transaction: $ 1,520,000
Total $ 21,600,000

DEAL DESCRIPTION

Enron Canada seeks approval to dedicate $1.5MM of cash flow, which would have been received to amortize the Enron loan
(C$ 25.452MM) to purchase additional equity in Invasion Energy Inc. ("Invasion") at the original per unit cost to maintain
Enron's proportional ownership.

Invasion is a private upstream oil and gas company. Enron Canada owns 46.6% of Invasion's Common equity purchased for
approximately $2.8MM in the third quarter of 1999. Enron owns 100% of Invasion's outstanding debt purchased for
approximately $17.4MM in the third quarter of 1999. Enron owns a 3% production royalty on Invasion's properties received
as part of the debt financing. The royalty has a market value of approximately $1.5MM.

The liquidation strategy outlined in the original DASH contemplated Enron selling the company within 12 months with a goal
of an accelerated sale. Although the company has not yet been sold, offers have been received in excess of the original
purchase price. In addition, the company is in the process of updating its sales materials to reflect the results of recent capital
spending. The 1999/2000 winter drilling program is essentially complete, with preliminary results exceeding Enron's base
case. At the time of initial funding, the company was producing 13mmcf/d of sales gas, Enron Canada anticipates production
will increase to approximately 18-19mmcf/d within the next 4 weeks. Enron Canada continues to believe that total proceeds
from disposition will exceed C$ 45MM and that the company will be sold prior to the end of the third quarter of 2000 (all
original economics were based upon a 12 month hold). Assuming such a sale and a 9/30 closing date, an all-in IRR of 38% is
expected.

The Enron loan provides for a full cash flow sweep to amortize the loan, although the company is permitted to reinvest cash
flow over the 1999/2000 winter drilling season. In the event cash flow over the 1999/2000 period is used to fund the capital
program, Enron is entitled to receive an increase in .the production royalty from 3.0% to 3.5%.

Since Invasion's cash flow is not sufficient to fund the entire 1999/2000 capital program of $3.2MM, the company conducted a
rights offering of $1.8MM to fund the shortfall. This rights offering was fully subscribed.

Given the results of the winter program, Enron Canada has determined that Enron would significantly benefit by participating
in a rights offering instead of maintaining the outstanding debt and increasing the royalty. Enron Canada views the incremental
risk associated with converting a $1.5MM portion of the loan into equity as negligible and anticipates an incremental gain of
between $400,000 (IRR of 46%) and $800,000 (IRR of 98%).

Accordingly, Enron Canada recommends amending the original DASH to allow Enron Canada to dedicate $1.5MM of cash
flow to purchase additional equity in Invasion at the original per unit cost.

TRANSACTION SOURCES AND USES OF FUNDS
  Sources Uses

Invasion Loan $1.5MM Equity $1.5MM
Repayment
Total $1.5MM $1.5MM

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RAC Deal Approval Sheet Deal Name: Project Buffalo
RETURN SUMMARY
  Return Components: PV (a. Capital Price 2 IRR
Cash Outflows $1.5MM N/A
  Terminal Value $1.7MM 46% Capital Price
Total NPV $0.2MM 46% 21.5%

APPROVALS
President & CEO, ECC
ECC Legal
Business Unit Originator
RAC Technical
RAC Management
ENA Commercial
Transactions Group

Name

Signature

Date

John Lavorato

Mark Haedicke (Peter Keohane)
Kyle Kitagawa
Monte Gleason
Rick Buy / David Gorte 4%j ,;
C

Ray Bowen

Enron Capital Management Andy Fastow / Jeff McMahon
ENA Management Cliff Baxter
ENE Management Jeffrey Skilling / Joe Sutton

  18100
1 z.5~o~
~ Qa

E00044O2158

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2 21.5% from original DASH.
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RAC Deal Approval Sheet		Deal Name: Project Buffalo
RETURN SUMMARY		
Return Components:	PV (u, Capital Price2	IRR
Cash Outflows	S l .5MM	N/A
Terminal Value	$1.7MM	46%

APPROVALS
President & CEO, ECC
ECC Legal
Business Unit Originator
RAC Technical
RAC Management
ENA Commercial
Transactions Group
Enron Capital Management
ENA Management
ENE Management

Name

John Lavorato

Mark Haedicke (Peter Keohane)
Kyle Kitagawa
Monte Gleason
Rick Buy / David Gorte

Ray Bowen

Andy Fastow / Jeff McMahon
Cliff Baxter

Jeffrey Skilling / Joe Sutton

  Signature
17() 1

  Date
/.a we

  ~15 n v
Jzll

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2 21.5% from original DASH.
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PAC Deal Approval Sheet
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):


Deal Name: n-

  Amount ($000)
-0-
-0-

0 Market 0 Above Market 0 Below Market

0 Market 0 Above Market 0 Below Market

0 Unrestricted 0 Legally Restricted 0 Practically

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

Global Finance Representative:

C:\TEMP\EEX GRM DASH 2nd.doc

0 Recourse 0 No Recourse

0 None 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

  0 No
J1 OL
  Name (Printed) Date

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ENRON RISK ASSESSMENT AND CONTROL

DEAL APPROVAL SHEET

DEAL NAME: Sapphire/Independent	Date DASH Completed: 3/9/00
Counterparty: Independent Production Company	RAC Analyst: Chulley Bogle
Business Unit: Ward Polzin	Investment Type: Equity
Business Unit Originator: ENA	Capital Funding Source(s): JEDI/Enron Balance Sheet
DPublic Private	Expected Closing Date: 3/20/2000
lMerchant DStrategic	Expected Funding Date: 3/27/2000
]Conforming ONonconforming	Board Approval: DPending DReceived ODenied l IN/A
RAC Recommendation: Proceed with Transaction DReturns below Capital Price ODo not Proceed
APPROVAL AMOUNT REQUESTED	
Capital Commitment $2.919MM	
Bid Bond Amount NA	

EXPOSURE SUMMARY
  This transaction: $2.919MM
Total $7.59MM

DEAL DESCRIPTION

This deal requires the investment of $3.135MM to fund the drilling of 27 wells for coal bed methane production in the Powder River Basin,
Wyoming. ENA will provide $2.919MM, and its joint venture partner, the Independent Production Company, the remainder.
This deal can properly be regarded as Phase II of a larger deal as explained below:

Phase I:
Independent Production Company, Inc. (IPC) is a privately held oil and gas company based in Denver, Colorado. The company's area of
primary focus is the Powder River Basin of north-eastern Wyoming, where it operates conventional and coalbed methane wells.

In July 1999, ENA/ JEDI II on the one hand and IPC on the other formed Sapphire Bay L.L.C. The company was formed to extract coalbed
methane gas from one of IPC's acreage blocks in the Powder River Basin. ENA/JEDI contributed $4.680MM (90%) of the capital while IPC,
the managing partner, contributed the leases and the remaining $0.520MM(10%).
Of a planned 65 wells, 46 had been drilled as of early March 2000. Of these, 26 have been connected to the gathering system and are
currently producing. Early results have exceeded expectations and, while the potential for variability remains, reserves per well have been
increased to 245mmcf from 147mmcf.
Distributions:
Distributions will be as follows: 90% of cashflows will go to Enron and 10% to IPC until Enron achieves an IRR of 15%(Payout 1). After
Payout 1, Enron receives 10% of cashflows and IPC 90% until Enron reaches 22.5%.(Payout 2). After Payout 2, IPC will receive 100% all
cashflows.

Phase II:
The aim of this phase is to fund the drilling of 27 more wells and the construction of additional gathering system lines.
The partners will remain the same, with ENA contributing 90%, and IPC 10%, viz.:

Sources ($1000's) Uses($1000's)
Enron Contributions 2,919 Drilling & Completion 2,160
IPC Contributions 216 Gathering System 975
Total 3,135 3,135

Distributions:
Distributions will be the same as in Phase I above.

E0004402162

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RAC Deal Approval Sheet Deal Name: Sapphire/Independent

TRANSACTION SOURCES AND USES OF FUNDS (in 1000s)
  Sources Uses
Enron Contribution $2,919 Drilling & Completion $2,160
IPC Contribution $216 Gathering System 975

Total $3,135

RETURN SUMMARY

  Probabilistic DCF Cumulative , PV @ Capital
b Component IRR Price
Cash Outflows + Outstanding NA $ (2,674)
Fees -100.00% $ -
Ongoing Cash Flows 23.06% $ 2,924
Terminal Value 26.68% $ -
Total 26.68% $ 250

w_,-
Capital

Price Components	
Risk free rate (%):	6.51%
Equity/Credit premium (%):	1.85%
Country Premium (%):	0.00%
Transaction-Specific (%):	9.64%
RAC CAPITAL PRICE:	18.00%

				IRR Distribution
90.0% ,---P				
80.0%				
i
70.0%				
60.0%				
50.0%				i
40.0%				
30.0%				
20.0%	P 5			
10.0%				
				
0.0%	
,-			
10	C\
N		
s	
s N
s s 10 ~
N
10
r	O, N
Cr1 N	'IT
O	[- O
O0 C`	-
N 'f ~
1 ao O M 10 00
_
n c'1 O 00 'O ' M C~
O
N	0' 00
N Cn	N
V'	Y1 'ct
`O	M N --O W N b '( 7 N
N 00 O\ O O N (fl V,

O:\ECM\RAAP\$OPNDEAL\EMapphire\priced_0300\DASH-Sapphire-Ind.doc E0004402163 Page 2

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RAC Deal Approval Sheet

Deal Name: Sapphire/Independent

CASH FLOW SUMMARY

Cash Flow S ummary

$4,000
$2,000 Monson
  $0:
$(2,000)
$(4,000)
$(6,000)
C M \0 CS
  N N- N M M
I Mthc

  Ongoing
Fees
  ?7 Outflows
! Cumulative P95
Terminal Value
-A- Cumulative P5
- 4- Expected cumulative cash flows
--a--- Elapsed

  Average life = 1.4 years

TRANSACTION UPSIDES/OP.TIONALITY
1. It should be noted that, while all the gas produced will be gathered, transported and purchased by Enron, the economics of
these peripheral transactions are not included in the returns of this deal.
2. This deal also improves the terms of the $750,000 gathering system advance from Enron Midstream Services.

EXIT STRATEGY
When it realizes an overall IRR of 22.5% ENA will exit the deal.

RISK MATRIX

DESCRIPTION	MITIGATION/COMMENTS
Reserve Risk: Risk that wells will not be as	Coals are present throughout the Basin, with around 1,500wells on
productive as expected, i.e. expected EUR will not	production. There is significant well control proving the presence
be realized.	of coal within the IPC acreage. Significant coal bed methane
	production occurs adjacent to the IPC acreage. In addition, based on
the results of the wells drilled so far, ENA engineers have revised
	the EUR upwards.
Drilling Cost Overruns: Risk that drilling costs	Forty-six wells have already been drilled, all within budget.
will exceed budgeted amounts.	Barrett Resources, another drilling company operating in the
	Powder River Basin, estimates the capex/well at $68,000 per well.
	A capital budget, requiring ENA's approval, will be presented
	ever six months.
Operator Risk: Risk that the operator will not	IPC has significant well-operating experience in the Powder River
perform as expected.	Basin. IPC also has economic incentive through their partial
	funding of the drilling costs.
Timing Risk: Risk that project delays may reduce	While the 15% IRR flip point and the 22.5% IRR cap limit ENA's
returns to ENA.	upside, they also mitigate timing as a significant risk. Effectively,
	timing delays come at expense of the "excess" production that goes
	to IPC
	

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RAC Deal Approval Sheet Deal Name: Sapphire/Independent

KEY SUCCESS FACTORS

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

OTHER RAC COMMENTS:
Enron receives a 2% fee on all drilling and completion payments. This fee explains why the expected return marginally exceeds
the 22.5% cap.

O:\ECM\RAAP\$OPNDEAL\ECI1Sapphire\priced_0300\DASH-Sapphire-Ind.doc

E0004402165

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RAC Deal Approval Sheet

Deal Name: Sapphire/Independent

APPROVALS
Origination
Business Unit Mgmt
Enron Capital Management
RAC Management
ENA Comm. Trans. Group
ENA Legal
ENA Management
ENE Management

  Name
John Cleveland
John Thompson/ Scott Josey
Andy Fastow/Jeff McMahon
Rick Buy/ David Gorte
Ray Bowen
Mark Haedicke
Cliff Baxter/ Greg Whalley
Jeff Skilling/ Joe Sutton

Signature

Date

O:\ECM\RAAP\$OPN D EAL\ECT\Sapp hire\priced_0300\DASH-Sapphire-Ind.doc

E0004402'166



~3 jS Ue

31,Z1 o
L O~

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03/14/00 TUE 17:54 FAX 303 534 2205
RAC Deal Approval Sheet

APPROVALS
Origination
Business Unit Mgmt
Enron Capital Management
RAC Management
ENA Comm. Trans. Croup
ENA Legal
ENA Management
ENE Management

ENRON NORTH" M1 K1 t,A z - -

Deal Name: Sapphire/Independent

  Name Signature Date
John Cleveland r"\ -A
  John Thompsont Scott Jose-
Andy Fastow/Jeff McMahon
Rick Buy/ David Gorte
  Ray Bowen
Mark Haedicke
  Cliff Baxter/ Greg Whalley
Jeff Skiliing/ Joe Sutton

O:\ECMIRAAPISOPNDPAL. ECI\Sappbize\prieed 03001DASli-8apphimind.doe

E0004402167
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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):

  Amount ($000)
$2,919
  -0-
$1,459
$1,460

  Market 0 Above Market 0 Below Market

  Market 0 Above Market 0 Below Market

4. Legal or practical liquidity restrictions: 0 Unrestricted 0 Legally Restricted Practically Restricted
Describe (if necessary): Would be difficult to sell due to size.

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

6a. Business unit intent to syndicate: Non O Partial 0 All
Describe (if necessary):

6b. Intended Enron hold period:

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

6d. Is this a JEDI 2 "Qualified Investment"? 0 No
Global Finance Representative: -~ cc,.~
  Signature Name (Printed) Date

E0004402168

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M-13

E0004402169

EXH003-01483


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ENRON RISK ASSESSMENT AND CONTROL

DEAL APPROVAL SHEET

DEAL NAME: Whiskey	Date DASH Completed: March 31, 2000
Counterparty: N/A	RAC Analyst: Marc Eichman
Business Unit: Enron NA - Canada	Investment Type: Public Equity
Business Unit Originator: Kyle Kitagawa	Capital Funding Source(s): Balance Sheet
RIPublic OPrivate	Expected Closing Date: 4/12-5/22/00
Merchant OStrategic	Expected Funding Date: 4/12-5/22/00
O Conforming ONonconforming	Board Approval: OPending OReceived ODenied ON/A
RAC Recommendation: [X]Proceed with Transaction DReturns below Capital Price ODo not Proceed
APPROVAL AMOUNT REQUESTED	
Capital Commitment' $16.4 MM	

EXPOSURE SUMMARY
  This transaction: $16.4MM
Total $16.4MM

DEAL DESCRIPTION
Enron Canada Corp. ("ECC") seeks approval to purchase up to 1.9 million shares (the "Toe-Hold") (9.9% of common shares
outstanding) of Whiskey on the open market for a maximum cost of $16.4 MM ($8.65 / share).

Whiskey is a public upstream oil and gas company listed on the TSE. Whiskey's production and reserve base is focused &2qk
primarily in Western Canada. At year end 1999, production was 17,000 BOE/d (44% gas), enterprise value was $281 MM 11~~~
($158 MM Equity Value, $123 MM Net Debt) and net asset value was $284 MM (PV10, external engineering) ($14.84/share). Zl

Whisky has been a chronic industry underperformer as evidenced by (a) three year annualized share decline of 20% versus 8%
annualized decline for the TSE Producers Index and (b) 3`d quartile 3 year average F&D costs of $7.11 (proved). However,
despite the poor performance, Whiskey has assembled a valuable asset position characterized by low decline rates (20%) and a
large undeveloped land position (764,000 net acres). ECC believes that the company is trading at a significant discount to its
underlying break-up value.

Acquiring the Toe-Hold is "Stage One" of a potential two stage transaction. After the Toe-Hold has been acquired, ECC will
approach Whiskey management to "recommend" that the company seek strategic alternatives to maximize shareholder value.
"Stage Two" of the transaction is optional and would be to bid for the company either through a sale process, through a
producer partner or on an "unsolicited" basis. Stage Two will require a separate transaction approval for $170 MM to launch a
bid for the remaining shares of Whiskey. If that bid is unsuccessful ECC will tender the Toe-Hold to the highest bidder. If the
bid is successful ECC will manage the sale of Whiskey's assets over a 6 to 12 month time frame with an expected origination-
of $40 MM.

CanFund VE Investors LP announced on 4/7/00 that they own 8.1% of the target company's stock, that one of their principals
will stand for Whiskey's Board and that they believe the company is trading at a significant discount to asset value. The market
price has since advanced approximately 20% to $8.59 per share. ECC anticipates that the price will fall back to a level at which
their recommended strategy can be successful.

TRANSACTION SOURCES AND USES OF FUNDS
  Sources Uses
Enron Balance Sheet $16.4 MM Equity Investment $16.4 MM

RETURN SUMMARY

Return Components:
Cash Outflows z-
Fees
Intermed. Cash Flows

  PV @ Cumulative
Capital Price IRR
$55.1 MM
  $0.0 MM -
$0.9 MM

Terminal Value $54.2 MM 69.17%
Total NPV10 $0.0 MM 69.17%

` FX rate used CAD 1.4553 / USD. Approval is for C$ 23.8MM.
2 fl.aauIfn.J aY nvl.lagl. pul l.IlaJ{. }1t tt.t. Vf C.O11.J0,'*], l V.

Capital Price Components
Risk free rate (%): 6.23%
Equity/Credit premium (%): 5.02%
Country Premium (%): %
Transaction-Specific (%): 61.01%
RAC CAPITAL PRICE: 69.16%

Relative upside ratio

N/A

E0004402170

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RAC Deal Approval Sheet Deal Name: Project Whiskey
CASH FLOW SUMMARY

$400,000
$300,000
$200,000
$100,000
  $0
$(100,000)
$(200,000)
$(300,000)

Cash Flow Summary


  c 04' ti~ ti~

Years

  Terminal Value
Ongoing
Fees
  Outflows
_~ Cumulative P95
Cumulative P5
~_ Expected cumulative cash flows

TRANSACTION UPSIDES/OPTIONALITY
Provides potentially significant contribution to 2000 earnings. Compelling risk adjusted economics. Exploits an arbitrage
opportunity which exists between Canadian E&P asset valuation and public company valuations.

RISK MATRIX
This risk matrix reflects risks and mitigants for both Stage 1 and Stage 2 because ECC believes that a decision on Stage 1
cannot be made without considering Stage 2 issues.

DESCRIPTION	MITIGATION/COMMENTS
Toe-Hold Acquisition Risk	ECC has had discrete discussions and believes some block
At the present time Whiskey is an illiquid	purchases can be arranged with institutional shareholders eager to
stock in a very illiquid sector of the market.	obtain liquidity.
Equity Market Risk	ECC is exposed to general equity market risks while it holds
	the Toe-Hold. This can be mitigated by a general short of
	Canadian oil and gas equities, however, the short duration of
	this exposure may render such a strategy unnecessary.
	If ECC successfully acquires Whiskey, ECC has a specific
	gameplan to sell assets and manage the company. ECC has
	identified key personnel to assist in this process.
	If ECC successfully acquires Whiskey, ECC will not be
	directly exposed to equity markets because Whiskey will be
	private and the disposition of assets will largely be done in the
	asset market.
Unsolicited Bid Risk	ECC conducted a thorough review of all existing production
A potential unsolicited acquisition increases	through public databases and was able to reconcile stated
the risks due to incomplete data.	production volumes.
Note that this DASH does not seek approval	 ECC has identified and quantified all material long-term
for an unsolicited bid. Establishing a toehold	transportation and marketing arrangements through public and
would create the option to bid for the rest of	industry sources. These obligations are appropriately marked
the company, possibly on an unsolicited basis.	in the economics of the project.
	ECC has conducted a thorough search of SEDAR and legal
	databases to ensure no material potential contingent obligations
	exist.
	ECC is familiar with Whiskey management and believes that
	they are conservative and material nondisclosure of assets or
	liabilities is unlikely.
	 Unsolicited bids are complex. ECC will use external legal
	representation who are fully conversant in applicable securities
	and corporate law. In addition, Whiskey has a very typical 45
	day shareholder rights plan to ensure an orderly process. Since
	no shares are being offered as consideration, there is no need
	for prospectus level disclosure in the takeover bid circular.

C.\My Documents\Documents\DASH\whiskey-d.doc

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RAC Deal Approval Sheet

Deal Name: Project Whiskey

Asset Monetization Risk	Whiskey is an illiquid stock and this would cause ECC
	difficulty in selling the Toe-Hold if ECC did not proceed with
	the acquisition. However, ECC would recommend a bid for
	Whiskey in almost all circumstances to unlock the value
	potential in the shares either directly or through a producer
	partner.
	An extremely liquid market exists for high quality assets ($8
	billion of asset deals closed in 1999).
	Produce out economics are positive in the event quality bids
	were not immediately realized from the asset market.
Reserve Risk	ECC Engineering has evaluated 200 wells or well groups
	representing 92% of the company's production
	Decline rates are significantly below that of the Canadian
	Industry average. In addition, these are low operating cost
	assets, which further mitigates reserve risks due to price and
	economic cutoffs.
	There are no well concentration issues. The most significant
	well accounts for only 1.5% of corporate production.
Finding & Development Risk	ECC would dramatically restrict the capital program as asset
	monetization is pursued. The going concern assumptions
	assume 25% reinvestment in 2000 with 3rd quartile finding and
	development costs.
Management Risk	ECC is exposed to existing management risk for 3 months until
	the company is either acquired or the Toe-Hold is tendered.
	Management is very conservative and ECC believes this is not
	a material concern.
Commodity Price I FX Risk	At year-end, 100% of oil, and 65% of gas production was
	exposed to spot market prices (13% fixed price and 22%
	aggregator netback).
	Commodity hedges will be employed if the company is
	purchased. All valuations use existing forward curves.
Legal Risks	Legal risks will be discussed and reviewed with Peter
	Keohane, Jeff Hodge and Mark Haedicke. A separate legal
	memorandum is enclosed in the deal book.

KEY SUCCESS FACTORS

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

OTHER RAC COMMENTS:
Realization of high levels of upside potential requires successful execution of a total company purchase, restructuring and sale
(likely at the asset level). Execution of this strategy is very dependent on specific industry contacts, skills and knowledge.

EOO04402172

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=XH003-01486


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RAC Deal Approval Sheet
Global Finance Summary

1. Transaction Summary

Deal Name: Project Whiskey

	Amount ($000)
Total Deal/Project Capital Commitment	{ t o 0 077
Less: Financing	/ -0-
Less: Syndication's	-0-

Net Enron Investment	
0, CSZSO
/6, go
2. Investment terms and pricing: 0 Market	O ~ove Market U Below Market
3. Financing terms and pricing: 0 Market	U Above Market 0 Below Market
Not Applicable	IV I ' 1
4. Legal or practical liquidity restrictions: U Unrestricted	0 Legally Restricted U Practically Restricted
The shares are freely tradable with no restrictions in their primary juri	sdictions.
5. Any recourse to Enron (other than investment):	0 Recourse <No Recourse

6a. Business unit intent to syndicate: None 0 Partial 0 All
6b. Intended Enron hold period: 0 None U Partial All
Stage One expected holding period is 3 Months.

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

6d. Is this a JEDI 2 "Qualified Investment"? 0 Yes 0 No
Stage One expected holding period 1 3 Months. U),
Global Finance Representative `~ P \ ) GIt' 1 v
Name (Printed) Date

E0004402173

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=XH003-01487



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RAC Deal Approval Sheet

Deal Name: Project Whiskey

APPROVALS
President & CEO, ECC
Business Unit Originator
ENA Commercial
Transactions Group

Name

John Lavorato
Kyle Kitagawa

  Ray Bowen
ENA Mgmt. Cliff Baxter or Dave Delainey
Legal Mark Haedicke (Peter Keohane)
RAC Management o' "/)(Z, Rick Buy or David Gorte
Enron Capital Management Andy Fastow/Jeff McMahon
ENE Management I c1 ing or Joe Sutton

  C.\My Documents\Documents\DASH\whiskey-c.doc
XH003-01488

Signature

EOO04402174

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Date


/2f~
p -( Q
  00

  6 co



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RAC Deal Approval Sheet

Deal Name: Project Whiskey

APPROVALS Name Date
President & CEO, ECC John Lavorato
Business Unit Originator Kyle Kitagawa
ENA Commercial
Transactions Group ga Bowen

ENA Mgutit.
Legal
RAC Management
Enron Capital Management
ENE Management

  I
Cliff Baxter or Dave Delaincy
Mark Hacdicke (Peter Keohane)p'~
Rick Buy or David Gorte
Andy Fastow/JeffMcMahon
Jeffrey Skilln g or Joe Sutton

E0004402175

C:ITEMP\ Whiskey-b.doe



Page 6

  r
)fJIQd~ll - d600 WCdI'J NO J. wdvv:b 000Z'ET'bdU

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M-14

m
n

0
0
-p
0
N
v
0)

EXH003-01490


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ENRON RISK ASSESSMENT AND CONTROL
DEAL APPROVAL SHEET

DEAL NAME: CEZ Date DASH Completed: 15th February 2000
Counterparty: CEZ a.s. RAC Analyst: Tim Davies
Business Unit: Central European Business Origination Commitment Type: Fixed price physical power purchase
Business Unit 0 'b or: Eric Shaw Capital Funding Source(s): Balance Sheet (5 yr
t7Public X11/ ,,ate Commodity Commitment)
  Merchant Strategic Expected Closing Date: 18th February
~C nforming 0 Nonconforming .. Expected Funding Date. I" 0 "'
Board A roval: Wending OReceived Denied /A
RAC Recommendation: Proceed with Transaction DReturns below Capital Price ODo not Proceed

APPROVAL REQUESTED

Enron purchases

 a total of 250 MW of baseload power for March 2000, followed by 300 MW for 59 months
 on the Czech-German and Czech-Austrian borders from CEZ, a listed joint stock company (E rating:4),
 a contract quantity of 13.1425TWh, discounted volume 11.1TWh (Nominal amount EUR215mil., US$21Omil).
Czech Republic Sovereign rating is A- (S&P), Baal (Moody's). Enron's country rating for Czech Republic is 4.
Key Risk: Five year commodity price risk and four year transmission risk (see Risk Matrix for additional detail).

IMPACT ON POSITION OF CONTINENTAL POWER PORTFOLIO

Pre deal (6.6 TWh short)
This deal 11.1 TWh long
Net position post deal 4.5 TWh long

RETURNS/EXPOSURE SUMMARY

Contract Volume 13.1425TWh

Initial Credit Reserve (provisional) EUR 397,800
Initial Mark to Market (provisional) EUR 1.63mi1.
VaR 30 day close out horizon EUR 6.5mil.
  I day close out horizon EUR 1.9mil.
Total Risk Adjusted Capital
(Credit Reserve + 30 day VaR)

EXISTINC EXPOSURE TO COUNTERPARTY CEZ

Discounted Volume 11.1 TWh
$389, 690

$1.6mil.
$6.5mil.
31.9mil.
$6.9mil.

London Physical (MTM)
London Purchases
Net Exposure (CEZ's obligation to Enron)

($8.0)mil.
4.Omil.
{ $4.0)mil.

Ec004402177

H003-01491

FEB-18-2WOU Id:.Sd


01719797251



1JI;.

F. 02


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ENRON RISK ASSESSMENT AND CONTROL
DEAL APPROVAL SHEET

DEAL NAME: CEZ Date DASH Completed: 15th February 2000
Counterparty: CEZ a.s. RAC Analyst: Tim Davies
Business Unit: Central European Business Origination Commitment Type: Fixed price physical power purchase
Business Unit Originator: Eric Shaw Capital Funding Source(s): Balance Sheet (5 yr
  MPublic 3 Privatc Commodity Commitment)
ElMerchant 0 Strategic Expected Closing Date: 18th February 2000
a]Ccnfornting 0 Nonconfonning Expected Funding Date: N/A
  Board Approval: OPcnding OReccived 13Dcnicd (KNIA
RAC Recommendation: (]Proceed with Transaction []Returns below Capital Price DDo not Proceed

APPROVAL RE Q U ESTEI)

Enron purchases

  a total of 300 MW of baseload power for 60 months,
  on the Czech-German and Czech-Austrian borders from CEZ, a listed joint stock company (E rating:4),
  a contract quantity of 13.1472TWh, discounted volume 11.1TWh (Nominal amount EUR215mil., US$210mi1..
Czech Republic Sovereign rating is A- (S&P), Baal (Moody's). Enron's country rating for Czech Republic is 4.
Key Risk: 5 year commodity price risk and our ability to secure only 1 year grid interconnector capacity (see Risk
Matrix for additional detail).

IMPACT ON POSITION OF CONTINENTAL POWER PORTFOLIO

Pre deal (6.6 TWh short)
This deal 11.1 TWh long
Net position post deal 4.5 TWh long

RETURNSIEXPOSCRE SUMMARY

Contract Volume	13.1472TWh	Discounted Volume 11.1TWh
Initial Credit Reserve (provisional)	EUR 397,800	$389,690
Initial Mark to Market (provisional)	EUR 1.63mil.	$1.6mil.
VaR 30 day close out horizon	EUR 6.5mil.	$6.5mil.
I day close out horizon	EUR 1.9mil.	$1.9mil.
Total Risk Adjusted Capital		$6.9mil.
(Credit Reserve + 30 day VaR)		

EXISTING EXPOSURE TO COUNTERPARTY CEZ

London Physical (MTM)
London Purchases
Net Exposure (CEZ's obligation to Enron)

($8.0)mil.
$4.0mil.
($4.0)mil.

E0004402178

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01719707251 1-11% F.03

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RAC Deal Approval Sheet
DEAL DESCRIPTION

Deal Name: CEZ

Enron contracts to purchase 13.1425 TWh from 1" March 2000 to 28'' February 2005 from CEZ for delivery at

A.) Czech-German Border, between the border interconnectors
i.) Hradec (Czech grid connector) and Rohrsdorf (German grid connector) for 200 MW,
ii.) Hradec (Czech grid connector) and Etzenricht (German grid connector) for 50 MW (beginning I April 2000), and

B.) Czech-Austrian Border, between the border interconnector Slavetice (Czech grid connector) and Durnrohr
(Austrian grid connector) for 50 MW

The seller of the power is CEZ, the dominant power generator in Czech Republic, generating over 70% of the
country's electricity, and owner and operator of the country's HV transmission system. CEZ is a listed joint stock
company, 67% owned by the Czech State. CEZ's credit rating is BBB+ (S&P), Baal (Moody's) and an E rating of 4.

Czech Republic Sovereign rating is A- (S&P), Baal (Moody's). Enron's country rating for CR is 4.
Strategic rationale

a) Value is created for Enron by creating a position in Central Continental Europe that we can trade around.
b) Close ties will be forged with a major European power utility with low cost generating base and strong grid
connections to Germany, Austria, Poland and Slovakia.
c) A long term wedge will be driven into the established relationships between CEZ and BAG, VEAG, Austrian
Verbund (OVG) and Czechpol (a small power trading company based in CR)

TRANSACTION UPSIDES
Favourable five year pricing.
The fixed price agreed for this deal is 16.41 EURIMWh. This should be compared with our five year mid swap price
for Czech Border power of 16.56 EURIMWh, which itself lies 10% above today's coal price equivalent of
aoproximately 15 EUR/MWh.
TRANSACTION DOWNSIDES
Border interconnector capacity risk (price and availability)

t\ECT-LON_DSI\ASTEINEI3\CEZ\L'r coauut\cw= dash Mcb.doe Pagc 2
  EC004402179

r~ti-to-~ev~ 10.39 01715707231 71K P.0.1

:H003-01493


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RAC Dcal Approval Sheet

Deal Name: CEZ

RISK MATRIX (Main 5 Risks Only)

DESCRIPTION	MITICATION/COMMENTS
Transmission	
Risk	1. CEZ has obligation to deliver to the Czech side of the border interconnector.
	2. Enron must secure capacity at the interconnector points at the border, and
	transmission into and within Germany and Austria. The current practice for allocating
	transmission rights is via an annual auction. The extent to which there is over-
	subscription for these rights may result in capacity being allocated on a pro-rata basis
	or denied. Bidders are required to have contracts to back the need for transmission.
	Interconnector capacity is therefore constrained and Enron faces the risk of not
	obtaining capacity or that charges for access to the interconnectors will exceed the
	amount anticipated today..
	3. Today's weighted average cost incurred by Enron (0.88 EUR/MWh) has been
	increased to an average of 1.25 EUR/MWh over the life of the contract for valuation
	purposes. An expected value analysis supporting this cost is attached.
	4. In the event of a capacity constraint.CEZ will use reasonable efforts to redirect power
	to unconstrained points. CEZ is not required to spend more than EUR 50,000 in this
	regard
	5. CEZ is required to compensate Enron it.
	a) CEZ sells power in excess of the maximum capacity of the delivery point, or
	b) CEZ itself contracts for border capacity and thereby restricts Enron's access to
	interconnector capacity (this clause in practice would be hard to enforce due to the
	practical difficulties in proving and establishing loss).
	6. Enron is able to claim Force Majeure under certain circumstances related to statutory,
	regulatory or governmental constraint in Germany and/or Austria. Should FM
	conditions continue for more than 30 days, the contract may be terminated and a
	termination amount in line with Enron standard practice will be payable or receivable.
Counterparty	CEZ is the predominant electricity generator in the Czech Republic. It generates over 70%
Risk	of the country's electricity and owns and controls the transmission grid. CEZ is 67% owned
	by the Czech State, with 26% of its share capital being held by various institutional
	investors.
	CEZ's current generating capacity exceeds their share of domestic demand in CR by
	approx. 10 TWh p.a. This excess is due to increase by the end of 2002 by a further 10
	TWh p.a. as new capacity comes on line. CEZ's export contracts in 1999 amounted to 5.6
	TWh p.a. and this contract represents 2.6 TWh p.a.
Tax Risk	Enron has accepted New Tax risk of up to EUR 0.5 mil. per annum for five years. Enron
	therefore does not have an ability to terminate the contract on the introduction of a New
	Tax which results in a tax cost to Enron of less than EUR 0.5 mil. per annum.
Legal and	1.The contract is entered into under a Master Agreement (MA) which provides for cross
Regulatory Risk	default between all contracts entered into thereunder. A default under any other contract
	under the MA could therefore trigger a right to terminate this contract.
	2. Should there be action by German or Austrian Authorities against imports of power from
	CEZ on dumping or ecological grounds, the contract may be found to be invalid, the
	consequences of which are at present uncertain. On the basis of market and cost
	indicators at our disposal, we believe that the power is sufficiently above cost (see
	Transaction Upsides above and Regulatory Affairs memo.)
	3. Re ulato Affairs believe that the risks are manageable -please see attached memo.
Market Risk	The value of this transaction is subject to the market price risk in the German and Austrian
	power and transmission markets over the next five years.
	These markets may be characterised as: liquid to one year, semi-liquid to two years, and
	illiquid further out
	Monthly curve validation will need to take account of this.
	See attached note from Market Risk entitled "Impact on Positions"

\\ECT_LON DSl\ASTE)NEM= \LT contractktz dash 17feb.doc

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:H003-01494


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RAC Deal Approval Sheet

Deal Name: CEZ

KEY SUCCESS FACTORS

CH003-01495

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

ATTACHMENTS:
Note from Market Risk entitled "Impact on Positions"

Expected Value Analysis of grid interconnector pricing	

SJ,as1 C y Srer,~(-~
Memo c,,%
Meov-, ReS~wlAi7N~ Ka'Si1 (Tov%,,. $')
Urr -cT,trtzcl-
APPROVALS	Name	Signature	Date
Business Originator	Eric Shaw		
		LIE&	I ~e -1, - 0 P
EF.L ivlanagement	Mark Frevert		
			
EEL Management	John Sherriff		
			
F.F,L Management	Joe Gold		
			
Accounting	Fernley Dyson		
Legal	Michael Brown		
			

RAC Management Ted Murphy

RAC Management Steve Young

Z_( - - - C-=l



  I'41r'. - 1-11
GovernmuntAffairs Tom Briggs

Tax Jim Sandt RS , r$12-1; WD

Enron Global Finance Jeff ahon
Enron Global Finance Pa ivers

ENE Management

ENE Management

C:\'I'E.NIP\cez dolt 171bb.doc

'Es-ie-,2Z15a 09-15

Rick Buy

Jef Skiiflng
Z,oe 5u#

017197072.>1



ECOO44O2181

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Page 4

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11
In
m
r
CO
Q
rr

Q
rs
v

a

Expected value of Interconnector capacity

		weighted
Known: year 2000		VEAG BNG APG average (4:1:1)
Price	DMJMW	20,000
Capacity	MW	200 50 50
Total cost	DM	4.000,000
	hours	8.760
Energy	MWh	1,752.000
Price	DM!MWh	2.28 1.25 0 1.73

	

months
DMIMWh	


rob.	
2001
12
prob x price	


rob.	
2002
12
prob x price	


rob.	
2003
12
prob x price	


rob.	
2004
12
prob x price	


rob.	
2005
2
prob x price	weighted
average price

DMIMWh
VEAG	2	0.05	0.10	0.05	0.10	0.05	0.10	0.05	0.10	0.05	0.10	
200 MW	2.3	0.9	2.07	0.85	1.96	0.8	1.84	0.8	1.84	0.75	1.73	
	3	0.05	0.15	0.1	0.30	0.15	0.45	0.15	0.45	0.2	0.60	
	expected value	1	2.32	1	2.36	1	2.39	1	2.39	1	2.43	
BNG	1.25	0.05	0.06	0	0.00	0	0.00	0	0.00	0	0.00	
50 MW	2.3	0.8	1.84	0.8	1.84	0.2	0.46	0.1	0.23	0.1	0.23	
	3	0.1	0.30	0.15	0.45	0.4	1.20	0.4	1.20	0.4	1.20	
	5	0.05	0.25	0.05	0.25	0.4	2.00	0.5	2.50	0.5	2.50	
	expected value	1	2.46	1	2.54	1	3.66	1	3.93	1	3.93	
APG	0	0.5	0.00	0	0.00	0	0.00	0	0.00	0	0.00	
50 MW	1	0.2	0.20	0.1	0.10	0.05	0.05	0	0.00	0	0.00	
	2.3	0.2	0.46	0.8	1.84	0.5	1.15	0.5	1.15	0.5	1.15	
	3	0.1	0.30	0.1	0.30	0.45	1.35	0.5	1.50	0.5	1.50	
	expected value	1	0.96	1	2.24	1	2.55	1	2.65	1	2.65	
Total EV (weighted 4:1:1)		2.12		2.37		2.63		2.69		2.71	2.46

  Notes:
1. Table assumes that in the future capacity cost will reflect demand.
  2. VEAG border (Rbhrsdorf) is currently unconstrained, whereas BHN (Etzenrichl) Is constrained. Therefore the price of BHN capacity Is forecast to rise.
3. APG border (DOrnrohr) is also constrained.
  4. There are currently no extra charges for 11V transmission within Germany. The assumption has been made that the figures above represent the total charge (import 4 transmission to liquid point)
5. Austrian side of APG border is assumed to be a liquid trading point
0
n

18102/2000

E0004402182

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Impact on Positions

Discounted volume in the deal is 11.1 TWh. The addition of this purchase to the trading book moves
the position to long 4.5 TWh (pre-deal short 6.6 TWb).

However, if we assume that:
  the first year of the deal nets with the current position, due to our having secured transmission for
this period,

 the remaining years do not net with our current position because we do not have secured
transmission for this period
the trading book would move to around long 1.7 TWh.

The effect of the second assumption is small since our existing position is small and only extends to
December 2001.

Transmission to the border is the responsibility of the counterpart, CEZ under this contract. Enron must
secure capacity at the interconnector points at the border, and into Germany. The current practice for
allocating transmission rights is via an annual auction. The extent to which there is over subscription
for these rights will result in capacity being allocated on a pro-rata basis. Bidders are required to have
contracts the back the need for transmission.

Interconnector capacity is therefore constrained and Enron faces the risk the failure to secure
transmission could lead to default on the contract. This loss will be the mark - to - market value of the
deal at default, plus other penalties.

  Continental Powor Position
2DOAOD.00

  -t00.00e.00
P '0200Aa,,OQ
:OO,OD0.00
` .oD,eoaoo
L70,000.0Q
GOOAD000
-7ooA00A0 ,
  S e$ v a a o- S s g s s a~ ~ s s L o 3 a_"
a y a ' ' 5 3 ;, e c n e b 5
S ,. a s $ c o a C 2 u a u Y a o` d o u"

Value-at-Risk (VAR)

VAR with a close-out horizons of 30 days for the transaction alone, is S6.5m.
Portfolio effects of the addition of this transaction are limited due to the effects of transmission on our
ability to net the position. as noted above.
Current portfolio VAR, with a 30 day close-out horizon, is $7.7m. The inclusion of this transaction
gives a VAR, again, with a 30 day close-out horizon, of Sl0.2m.

Trading Support I Risk -Management

The transaction will be booked in EnPower and included in the portfolio as part of the normal reporting
process. The only change required to accommodate this deal is the inclusion of a forward market price
curve for this location that extends to the tenor of this deal. Liquidity at these maturities will likely be
low, and monthly curve validation will need to take account of this.

VAR for the purposes of daily risk reporting currently adopts a close - out horizon of I day. On this
basis, the trading portfolio VAR, including this transaction, will be of the order of S 1.9m.

Close-out Hurizon refers to the length oftime required to extinguish lute position in the markcL

ECO044O2183

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TO: Steve Young

FROM: Tom BrigV
Mark Schroeder
Peter Styles

DATE: 16 February 2000

RE: CEZ Power Deal - Regulatory/Political Risk Evaluation

We have reviewed the memo dated February 17th prepared by Antony Steiner
describing the risks surrounding the deal and the manner in which the risks have been
addressed in the deal structure. In addition, we have reviewed the information
provided on the DASH form. We have not seen the exact terms of the transaction nor
have we participated in structuring of the deal. Our observation is that the regulatory
and political risks have been identified and adequately addressed within the deal
structure. However, the regulatory and political risks identified below should be
closely monitored and actively managed over the life of the transaction.

Potential Risks

Downstream Capacity Risk. The main risk exposure is Enron's ability to acquire
transmission capacity on the German and Austrians grids downstream of the
designated delivery points under the contract, as Enron assumes the risk of
unavailable capacity. CEZ assumes the capacity and pricing risk of upstream
transmission services. According to Antony, Enron has sufficient capacity at the
designated points (200MW at 'VEAG, 50 MW at BHN and 50 MW at APG) until the
end of 2000. However, there is no guarantee that Enron will be allocated sufficient
capacity for the remaining years of the contract. Moreover it is not clear whether the
Force Majeure provisions will provide Enron with adequate legal protection in such
event.

We are not familiar with the current rules for capacity allocation on the German and
Austrian grids and whether such rules will change in the future (forr example, moving
to an auction for capacity rights). However, based on past experience with capacity
allocation methodologies, any allocation procedure should acknowledge the existence
of firm, long term power purchase obligations and ensure that the results of any
allocation methodology do not impair the ability to obtain firm capacity necessary to
perform the transaction. However, capacity allocation has been a contentious issue
throughout Europe and there is a risk that future allocation methodologies do not
favour incumbent firm transactions. The possibility that the relevant grid companies
may implement a "first come, first served" allocation methodology would necessitate
that theses grid companies be notified of the nature of the transaction in order to
preserve Enron's place in a queue should one be developed.

Moreover, according to the DASH, CEZ is contractually precluded from acting in any
way that might adversely affect Enron's ability to acquire downstream capacity (such
as overselling firm power to other downstream parties). Arguably, given that CEZ

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cannot oversell farm power at the border, there should be no incentive for another
downstream party to hoard firm capacity and thus interfere with Enron's ability to
obtain firm capacity. Furthermore, although there is no guarantee that we will be
successful, Government and Regulatory Affairs is well positioned to actively manage
the risk of obtaining sufficient downstream firm capacity..

Delivery Allocation Risk. On a daily basis, measured power deliveries at a given
point do not match scheduled deliveries (for reasons of Force Majeure or otherwise).
At points where title to power is transferred between multiple upstream and
downstream parties, it is important to allocate over and under deliveries to the
appropriate parties. Various allocation methodologies attribute under or over
deliveries on a pro rate basis or require that one party take the "swing". An
inappropriate allocation methodology could result in Enron being long or short on a
given day, thus incurring penalties and triggering contractual shortfall provisions. It
is not clear how allocation methodologies operate at the designated points or how they
may change in the future. Antony informed us that as a baseload supply, Enron is
deemed to receive the scheduled quantity except in situations of Force Majeure. Even
if this is not the case, the cost of allocation risk should be negligible and effectively
managed by Enron during the life of the deal.

Upstream Unbundling Risk. Antony's memo states that the upstream transmission
grid is owned and operated by CEZ's wholly owned subsidiary CEPS and that CEPS
may be transferred to 100% State ownership within the life of the proposed
transaction. Such restructuring raises three issues: first, whether restructuring will
impair CEZ's obligation to retain firm capacity on the CEPS system necessary to
perform its firm sales obligation (as CEPS would no longer have the financial
incentive to favour its former affiliate); second, whether restructuring of CEZ will
impair its ability to fulfil its sales obligations; and third whether removal of CEZ's
underlying transmission asset base will somehow impair its creditworthiness.

Risk arising from the first issue does not appear significant. First, although the terms
of such unbundling are not yet known, it would is unlikely that the Government
would interfere with existing firm transactions by taking CEZ's firm grid capacity to
benefit another market player. However, as stated earlier, capacity allocation issues
are contentious issues and such "grandfathcring" may not be guaranteed. Second, to
our knowledge, there is no definitive timetable for such restructuring and it may not
transpire within the life of the proposed transaction. Finally, even assuming CEZ was
no longer allocated upstream transmission capacity, it may be possible to add
incremental capacity to the transmission grid to accommodate demand for more firm
capacity. However, this is pure speculation.

The Legal Department may wish to advise whether CEZ can invoke the Force
Majeure clause to excuse performance in the event any of these restructuring risks
arise. In addition, the impact (if any) of potential CEZ restructuring on its underlying
performance capabilities and creditworthiness is a matter for the Credit Department
and the Legal Department.

Power "Dumping" Allegations and Implications for CEZ Exports to Austria or
Germany. On February 11, 2000, the Czech News Agency reported that the
European Commission is checking whether CEZ is "breaking the rules of economic

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XH003-01499


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competition by exporting its surplus electricity for prices that are below production
costs." In addition, other news articles have reported the Austrian's concern that the
Czech Government will complete the controversial Temclin Nuclear plant and
increase exports to Austria. It is not clear whether the Austrians are concerned about
nuclear safety or cheap power imports that will displace more expensive Austrian
power. Based on discussions Peter Styles has had with the EU Competition
Directorate, the news report is not accurate - there are no investigations being
conducted.

Investigation under either EU State Aid provisions (assuming such provisions are
applicable to -the Czech Republic) or EU Competition Law could restrict CEZ's
ability to export and/or Enron's ability to import power into the EU. In addition, an
outcome of the ongoing EU accession negotiations between the Czech Republic and
Brussels could be that Austria and Germany are able to invoke reciprocity provisions
which will restrict power imports from non-EU Member States. According to Paul
Hcnnemyer, section 1 3 of the Austrian Energy Law requires imported power to be
generated from politically correct sources as opposed to nuclear power. Importers are
required to obtain approval from the Economics Ministry for power imports. For this
reason, imports into Austria are deemed to be sourced from hydro facilities. Such
restrictions do not apply to power transit through Austria for another country.

Given that the Austrian Government retains a 51 % ownership in the Verbund, the
Government has an incentive to prohibit or otherwise discriminate against low cost
power imports controlled by competitors of the Verbund. However, there are a
number of reasons why such "dumping" concerns may not pose significant political or
regulatory risks. First, Enron's interpretation of EU Member State discrimination and
reciprocity provisions is that so long as incumbent utilities are importing power from
non-EU Member States, competitors such as Enron maintain an equal right to import
from the same sources (assuming capacity is available). Therefore, in the event anti-
dumping concerns arc raised, they will impact all parties importing power. It is
unlikely that such parties will want to "cut their nose to spite their face" by restricting
access to cheap power for their own needs.

Second, the basis for a "dumping" allegations is that power is being sold below
average cost (fixed and variable) - at marginal cost. Current published spot prices
suggest that most power in the wholesale market is sold at below "average cost".
Therefore, it is unlikely that such an argument can be sustained without disrupting the
entire power market. It is also unlikely that CEZ can be accused of predatory pricing
given that its exports represent a relatively small portion of the German and Austrian
market.

Third, according to the news article, it appears that the Austrian Government has
already cleared CEZ of these dumping allegations. Antony has a copy of the Austrian
government's opinion that will be included in the deal file. In addition, issues with
regard to import into Austria of politically incorrect power appear overblown given
that the Austrian Verbund is seeking to import power from TUTS in Russia and the
Ukraine (see attached European Power Daily article).

Fourth, it has been argued that the World Trade organisation rules applicable to trade
in goods (which can be defined to include energy cormnodities) prohibit reciprocity

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restrictions on trade. This has been the position maintained by the Swiss to gain
access to export power markets. Moreover, if Austria or Germany invoked
reciprocity rules, they would have to be applied equally to all importers. Therefore,
Enron could be protected by the rules prohibiting discriminatory access conditions.
Finally, the Legal Department may wish to comment on whether the Force Majeure
clause can be invoked by either Enron or CEZ in the event any dumping or reciprocity
rules prohibit Enron from importing and CEZ fi-om exporting power to the 2U.
Although there is a political risk that Austria and Germany may act to restrict Czech
power imports, Enron is well positioned to monitor and actively manage any impact
such risk may inflict on the proposed transaction.

Downstream Transmission Pricing Risk. According to the DASH form, the cost of
utilising Austrian and German transmission capacity has been fixed for 2000.
However, German transmission prices have been established pursuant to the
Verbundevereinverang (sic) (VVII) which is currently being examined by the EU
Competition Directorate. Such review could result in transmission prices changing
for 2000, but it is unlikely. However, we cannot speculate on the cost of
transmission for the remaining life of the transaction.

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Interoffice
Memorandum

To: All signatories to DASH form

From: Antony Steiner

Subject: Risks surrounding 60 month power purchase on Date: 17 February 2000
Czech border

1 Deal description

  Enron purchases a total of 300 MW of baseload power for 60 months on the Czech-German and Czech-Austrian
borders, beginning on 1 March 2000. The seller of the power is CEZ, the dominant power generator in Czech
Republic (CR) and owner and operator of the country's HV transmission system.

2 Strategic rationale

a) Value is created for Enron by agreeing a fixed price below our mid swap price for the period.
b) Close ties will be forged with a major European power utility with low cost generating base and strong grid
connections to Germany, Austria, Poland and Slovakia,
c) A long term wedge will be driven into the established relationships between CEZ and BAG, VEAG, Austrian
Verbund (OVG) and Czechpol (a small power trading company based in CR)

3 Deal value

Provisional Mark to Market value is EUR 1.63 million

4 Delivery risk

a) CEZ's current generating capacity exceeds their share of domestic demand in CR by approx. 10 TWh p.a.
This excess is due to increase by the end of 2002 by a further 10 TWh p.a. as new capacity comes on line.
CEZ's export contracts in 1999 amounted to 5.6 TWh p.a. This contract represents 2.6 TWh p.a.
b) CEZ's credit rating is B8B+ (S&P), Baal (Moody's). Czech Republic Sovereign rating is A- (S&P), Baal
(Moody's). Enron's country rating for CR is 4.
c) EZ is a listed joint stock company, 67% owned by the Czech State, and has made several international
issues of debt.

5 Transmission risk within Czech Republic

a) CEZ has the obligation at its cost to deliver to the border of CR, this obligation being limited solely by events
of Force Majeure.
b) FM clause excludes circumstances of statutory, regulatory or governmental constraint
c) Today the Czech HV transmission system is owned and operated by CEZ's wholly-owned subsidiary, CEPS,
and CEZ exercise defacto monopoly rights to export power via CEPS. However, it is likely that within five
years CEPS will be transferred into full state ownership, and full regulated TPA introduced as part of the
measures being taken by the CR to comply with the EU Electricity Market Directive.

6 Border interconnector capacity risk

Department: ECT-Europe

E0004402188

a) Enron is responsible for acquisition of import capacity on the border interconnectors between Czech and
German grids, and between Czech and Austrian grids, to enable the power to be exported, and the cost of
that acquisition.
b) Enron currently has rights to sufficient capacity until the end of 2000. Capacity on the German border points is
currently allocated by grid operators VEAG and BNG annually for calendar years, and is likely to continue to
be so allocated in the next five years. In the event that demand exceeds supply of capacity, allocations are
scaled down pro rata to the capacity applied for. Applicants must show evidence of contracts for power
delivery at the relevant border point Although currently the price of interconnector capacity is fixed, it is

  Your Personal Best Makes Enron Best
Forth COO-45-1 (7M2)

  F;A-1 R-2~GIA A9: 1B
XH003-01502

Communicate- Facts Are Friendly

01'1115/0 51 31

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Risks surrounding 60 month power purchase on Czech border 18/02100 Page 2

  expected in the future to reflect supply and demand. Capacity on the Austrian border point is currently
allocated by grid operator APG on an ad-hoc basis, but is expected to follow a similar pattern to the German
case.
c) No procedure currently exists for long term capacity allocation at VEAG or BNG interconnectors, and both
operators refuse to reserve capacity reservation for 2001 onwards.
d) APG has not yet published their transmission tariffs.
e) GEZ is precluded from acting in any way (including selling firm power in excess of the border point capacity,
and itself acquiring capacity in preference to Enron) that might adversely affect Enron's ability to acquire
interconnector capacity. If capacity is constrained, CEZ will use best efforts to redirect power to unconstrained
points.
f) Today's weighted average cost (1.73 DEM/MWh) has been increased to an average of 2.5 DEM/MWh over
the life of the contract for valuation purposes. An expected value analysis supporting this cost is attached.

7 Regulatory risk of import into Germany and Austria

a) Enron is obliged to take delivery of power, this obligation being limited solely by events of Force Majeure.
b) FM clause includes circumstances of statutory, regulatory or governmental constraint,
c) Imports into Austria are declared as being generated solely by hydro power plants in order to comply with the
Austrian Energy Act.

8 Regulatory risk of export from Czech Republic

IEZ assumes full responsibility for export of the power, including holding an export licence and making the
necessary customs declaration.

E0004402189



  Your Personal Best Makes Enron Best
Farm 000.469.1(5192)

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0171970?21d1 91%

Better, Faster, Simpler

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DRAFT

CONTRACT

B.) Delivery will only be made between Sokolnice and Bisamberg in the
case that
a) Enron is unable to acquire capacity on the grid connector Slavetice-
Durnrohr but has acquired capacity on the grid connector Sokolnice-
Bisamberg, provided that CEZ is able to make delivery at the grid
connector Sokolnice-Bisamberg, or
b) CEZ is unable to make delivery at the grid connector Slavetice-
Dornrohr but has acquired capacity on the grid connector Sokolnice-
Bisamberg, provided that Enron has acquired capacity on the grid
connector Sokolnice-Bisamberg.

Date: [ ] February 2000
Parties: 1. CEZ, a.s. ("CEZ"), Jungmannova 29, 111 48 Praha 1, Czech Republic,
fax no.: +42 02 24 08 24 46, and
  2. Enron Capital & Trade Resources Limited ("Enron"), Enron House, 40
Grosvenor Place, London SW1X 7EN, England, fax no.: +44 207 783 8917

We refer to the Framework Contract About Mutual Trade in Electricity dated 14 April 1999, as
amended (the "Master Agreement"). Terms defined in the Master Agreement shall have the same
meaning in this agreement, unless otherwise provided for herein, and this agreement represents a
Future Contract (the "Contract ") under the Master Agreement, the terms and conditions of which
are as follows:

Seller: CEZ
Buyer: Enron
Contract Price: 16.4125 EUR per MWh
Capacity: From 1 March 2000 to 31 March 2000: 250 MW
From 1 April 2000 to 28 February 2005: 300 MW
Supply Term: For Delivery Points A.) 1.) and B.) specified below. From 1 March 2000,
00:00 hours, to 28 February 2005, 24:00 hours, each day inclusive
  For Delivery Point A.) ii.) specified below: From 1 April 2000, 00:00
hours, to 28 February 2005, 24:00 hours, each day inclusive
Contract Quantity: 13,110, 000 MWh
Supply Characteristics: Firm
Czech System
Operator: CEPS for all Delivery Points specified below
Relevant Foreign
System Operator: For Delivery Points specified below: A.i.) VEAG, A.ii.) BNG, B.) APG
Delivery Points: A.) Czech-German Border, on the interconnected high-voltage 400kV
lines between the border interconnectors
  i.) Hradec (CEPS grid connector) and Rohrsdorf (VEAG grid
connector) for 200 MW,
  ii.) Hradec or Prestice (CEPS grid connector) and Etzenricht (BNG grid
connector) for 50 MW, and

In the case of grid constraints at the respective Delivery Point
(including, e.g., Enron's failure to acquire grid access), at Enron's
request, CEZ shall make reasonable efforts (within total contract
quantity and total contract capacity) to deliver a capacity and quantity
allocation different from the allocation specified herein or to make
delivery to a further delivery point not currently specified herein,

H003-01504

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DRAFT 2

provided, that such efforts will in no case require CEZ to incur expense
greater than 50,000 EUR. Other than as a result of such specific
request, CEZ shall be under no obligation to reserve any capacity on
the Czech side of any delivery points other than provided for above
under A.) and B.).



Notification: CEZ and Enron shall notify the despatch centre of CEPS and the
Relevant Foreign System Operator respectively of all delivery
programmes as requested by CEPS and the Relevant Foreign System
Operator, respectively.

Specifications: Enron will confirm VEAG, BNG, APG grid access by 25 February 2000
for delivery in the year 2000 and thereafter by 27 December of each
year for delivery in the following year.

Special Provisions:

1.A) CEZ shall not take any action that directly or indirectly results in, or could contribute to, the
total Maximum Guaranteed Capacity available at the relevant Delivery Point being exceeded
(taking into account the quantity and capacity provided for in this contract).

Maximum Guaranteed Capacity shall for the purpose of this provision be defined for each Delivery
Point as the total secured transmission capacity notified by the relevant grid operator for the
relevant grid connector for the relevant period. In the case that the grid operators on either side of
a border notify differing Maximum Guaranteed Capacities, the lower Maximum Guaranteed

Capacity notified shall apply.

In the case of a breach of this clause 1.A), Enron shall have the right to notify CEZ that, for the
period Enron failed to acquire access rights, CEZ shall be deemed to have failed to deliver
electricity (the quantity of non-delivered electricity being determined on a pro-rata basis in the
case of partial acquisition) and the provisions of Article I, paragraph 8 of the Master Agreement
shall apply.

1.B) CEZ shall not take any action that materially adversely affects (including, but not limited to,
price or availability) the acquisition of grid connector capacity access at the relevant Delivery Point
by Enron. In the case of a breach of this clause 1.B), CEZ shall hold Enron harmless with respect
to the resulting loss demonstrated by Enron to CEZ through supporting evidence. For the
avoidance of doubt, CEZ shall, subject to the provisions of this Contract, not be precluded from
itself acquiring grid connector capacity access at the Delivery Points.during the Supply Term.

2. It is the obligation of CEZ to secure transmission rights up to (and including) the Czech border
with respect to the Delivery Points provided for herein and CEZ shall not be entitled to claim Force
Majeure pursuant to Article II of the Master Agreement for any circumstances arising directly or
indirectly out of statutory, regulatory or governmental constraint within the Czech Republic other

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DRAFT 3

than States of Emergency as declared in accordance with the Czech Republic Energy Act 222 of 2

November 1994.

3. Each of the parties agrees and warrants that it will not, and shall procure that its Affiliates and
their respective employees will not, make, cause to be made, or promise or offer to make, in
connection with this Agreement any payment, loan, gift or transfer of anything of value, directly or
indirectly: (i) to or for the use or benefit of any government official or government employee
(including employees of government-owned entities or corporations); or (ii) to any political party,
official of a political party or candidate: or (iii) any official or employee of a public international
organization; or (iv) to an intermediary for payment to any of the foregoing.

CEZ agrees that it will, at the request of Enron, certify its compliance with the foregoing. In the
event that CEZ has acted in non-compliance with the United States' Foreign Corrupt Business
Practices Act of 1977, as amended (the "FCPA"), in respect of any transaction provided for in, or
incidental to, this Contract, Enron shall have the unilateral right, exercisable immediately upon

giving written notice to CEZ, to terminate this Contract subject to the provisions of Article III of the
Master Agreement. In the event that Enron shall be found in non-compliance with the United
States' Foreign Corrupt Business Practices Act of 1977, as amended (the "FCPA") solely as a
result of its actions, in respect of any transaction provided for in, or incidental to, this Contract,
CEZ shall have the unilateral right, exercisable immediately upon giving written notice to Enron, to
terminate this Contract subject to the provisions of Article III of the Master Agreement.

In its current form, the FCPA makes it unlawful to offer, pay, promise or authorize to pay any
money, gift or anything of value, including, but not limited to, bribes, entertainment, kickbacks or
any benefit, directly or indirectly, (i) to any non-US government official or any non-US political
party, or (ii) to any person while knowing or suspecting that the payment or gift will be passed on
to a foreign official in connection with any business activity of Enron or its affiliates.

Each of the Parties agrees and warrants that should it learn of any conduct causing non-
compliance with these Business Conduct provisions, it will immediately advise the General
Counsel at Enron and [insert CEZ representative] respectively.

4. If any New Tax is or shall become applicable with respect to this Contract, and Enron succeeds
in passing the same through to a third party, Enron shall pay all such New Taxes or shall
reimburse CEZ for such New Taxes. If Enron is not able to pass through a New Tax, the Party that
is liable for such New Tax ("Taxed Party") shall be entitled to terminate this Contract provided that
(i) the total amount of New Tax to be paid in respect of the outstanding Contract Quantity by the
Taxed Party exceeds 500,000 EUR annually (ii) the Taxed Party has-given the other Party written
notice of its intent to terminate this Contract following a period of at least one month, and (iii)
during this period the Parties have not been able to reach an agreement in good faith as to the
sharing of the New Tax. Thereupon each party shall calculate the termination Amount resulting

Vonbockm/German trading/documents/CEZE7.doc

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DRAFT 4

from the termination of this Contract in accordance with paragraph.3 of Article III of the Master
Agreement. If there is a difference between the Termination Amounts- so calculated by the Parties,
then the lower amount calculated shall be payable by the relevant Party plus one half of the
difference between such Termination Amounts. Such payment shall be settled within ten Business
Days.

For the purpose of this clause, "New Tax" means "any Tax enacted and effective after the
Effective Date or that portion of an existing Tax which constitutes an effective increase in
applicable rates or any law, order, rule or regulation or interpretation thereof, enacted and effective
after the Effective Date resulting in the application of any Tax to a new or different class of
persons", "Tax" means any royalty, tax, duty or levy on electricity or on the generation, sale,
transportation or supply of electricity other than value added tax, and "Effective Date" means
"the date of execution of this Contract by the Parties".

For the avoidance of doubt, New Tax shall not include fair market consideration for making
available grid connector or transmission capacity.

5. For the avoidance of doubt, this Contract shall remain valid and binding in its entirety for the
term set forth above and shall not be affected by any termination or modification notice under
Article VI, paragraph 5 of the Master Agreement or any other form of termination, novation or
voidance of the Master Agreement.

6. For the purposes of this contract, the following terms shall have the following meaning:

"CEPS" means "Czech Transmission System Operator CEPS, a.s., Argentinska 38, Praha 7,
Czech Republic, dispatch centre tel. +420 2 2408 2954 (Programme), +420 2 2408 2211
(24 hour)"

"VEAG" means "German Transmission System Operator Vereinigte Energiewerke AG,
Chaussestrasse 23, 10115 Berlin, Germany, dispatch centre tel. +49 030 5150 4237
(Programme), +49 030 5150 4500 (24 hour)"

'BNG" means "German Transmission System Operator Bayernwerk Netz GmbH Nymphenburger
Strasse 39, 803 35 Munich, Germany, dispatch centre tel. +49 89 1254 2231 (24 hour)"
"APG" means "Austrian Transmission System Operator Verbund - Austrian Power Grid GmbH,
  Am Johannesberg 5, A-1100 Vienna, Austria, dispatch cetre tel. +43 1 53113/53223"

7. This Contract has been executed in four copies, two of which have been retained by each Party.
For the avoidance of doubt, Article VI paragraph 2 through 4 and 6 of the Master Agreement shall
apply.

Vonbocirn/German tr8dingldocuments/CEZE7.doc

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DRAFT

Enron Capital & Trade Resources Limited OEZ, a.s.

  ... By: ........................................
Name, Title Name, Title:
  Stanislav Svoboda, Chief Executive
Officer
  Ivan Bafka, Executive Director for Trade

Date: ..................................... Date:......................................

5

E0004402194

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ENRON RISK ASSESSMENT AND CONTROL

DEAL APPROVAL SHEET

DEAL NAME: Zeppelin Date DASH Completed: 2/4/00
Counterparty: IBM RAC Analyst:
Business Unit: EES Investment Type:
Business Unit Originator. Troy Henry/Gayle Muench Capital Funding Source(s): Balance Sheet
Public OPrivate Expected Closing Date: 2/4/00
  Merchant OStrategic Expected Funding Date:
  Conforming ONonconforming Board Approval: OPending DReceived DDenied !]N/A
RAC Recommendation: Proceed with Transaction OReturns below Capital Price ODo not Proceed

RETURNS/EXPOSURE SUMMARY ($ millions)

Wholesale Commodity Risks:	$26.6 (Overnight VaR of $2.8 and liquidation period of 90 days)
Credit Risk:	$ 1.0
Retail Risks:	9.5 (Overnight VaR of $1.0 and liquidation period of 90 days)
Total "Risk Adjusted Capital"	$37.1

DEAL DESCRIPTION

EES will provide commodity management services (electricity and related services) to the 12 of IBM's 21 facilities located in
the following states: NY, NC and CA (see attached). The consumption volumes at this locations are approximated at 9.7 million
Mwhs with a load factor of-70%, based on historical loads (no growth) over a period of 10.5 years. EES will provide
wholesale power in CA and fully bundled power at all other locations. Load growth/decline above 10%, as well as material
changes in the load profile allows EES to pass incremental costs to the customer.

The pricing structure is a combination of fixed prices for the first few years and wholesale power indices plus a fixed basis for
the remainder of the term (see attached schedule). EES costs are determined primarily by their ability to deliver physical
commodity, based on assumptions of the beginning and ending deregulation dates for each utility, and the appropriate
economics at each location. The beginning of deregulation provides for competition with the incumbent utility and end of
deregulation calls for unconditional commodity management services by EES.

IBM transaction creates the following position types (in millions):

Unbundled utility tariffs Short 3.3 Mwhs - prior to the date when EES commences physical service (regulated)
Wholesale power - Load Short 6.4 Mwhs - after the date when EES commences physical service (non-regulated)
Wholesale power Long 4.8 Mwhs - position results from index-based pricing (Entergy, PJM and COB)
  (non-regulated).
Ancillary Services - Load Short 6.4 Mwhs - after the date when EES commences physical service (non-regulated)
ICAP - Load Short 4.5 Mwhs - after the date when EES commences physical service (non-regulated)
T&D - Load Short 6.4 Mwhs - pass through to the customer after deregulation (regulated)

This transaction also creates: congestion risks, load growth (within the 10% band: load at profitable locations decreases by
10% and vice versa), load following and other operational risks.

RAC COMMENTS/CONCERNS

 NY East location is extremely illiquid, no long-term trades have ever been executed by the desk. NY is a fairly closed
market with limited transmission in and out of the state. Additionally, basis differentials between zones within NY vary
significantly due to transmission constrains.

 It is rather difficult to price ancillary services, installed capacity and congestion costs in NY, which will be greatly affected
by the regulatory developments of the NY ISO.

 It is difficult to predict the timing and rate impact of electric restructuring in North Carolina, due to recent legislative
proposals from Duke and CP&L concerning acquisition of municipal generating assets and debt. There is a potential
negative deal impact of $1.6 million.

  E0004402196 -.

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RAC Deal Approval Sheet Deal Name: Zeppelin
RISK MATRIX

	
Wholesale Price Risk - increasing power prices at the	 Hedge majority of the wholesale exposure through the
respective locations will negatively affect the value of	power desk. Work on improving liquidity in the NY
the deal.	markets. Currently it is difficult-to-impossible to hedge
	NY short electricity position.
Other Wholesale Risks (Ancillary services, congestion,	 Hedge majority of the wholesale exposure through the
basis, etc.) - increasing prices will deteriorate the value	power desk. Work on improving liquidity in the NY
of the deal.	markets. Ability to assess prices in CA, based on current
	trading activities and historical data. Currently it is
	difficult-to-impossible to hedge NY short ancillary
	services position.
Retail Commodity Risks - increases in the unbundled	 Regulatory assessments are made by the experts who
utility tariffs and T&D tariffs will negatively affect the	have significant expertise on the related topics. Currently,
value of the deal.	EES is unable to hedge its regulatory exposure.
Regulatory Risk - miscalculations of the dates of	 Regulatory assumptions: deregulation dates, utility
deregulation by utility will alter the value of the deal	unbundled tariffs, transmission and distribution tariffs
and the size of wholesale positions calculated for this	have been reviewed and evaluated by the ENE
transaction.	Regulatory group.
Credit risk - receivable and MTM exposure on the deal.	 IBM is rated "A+" by S&P.

KEY SUCCESS FACTORS

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

APPROVALS
EES Structuring
EES Trading
EES Legal
EES Management
ENA Regulatory
ENA Risk Management
RAC Management
ENE Management

  Name
Gayle Muench
  i
Bemis Beae*ides- _%.
Vicki Share

C.

  Date
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2/7/ov

C:\TEMP\-0057984.doc

Lou Pai/John Echols

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  Jim Steffes/Rick Shapiro
Greg Whalley
  Rick Buy/Ted Murphy
Joe Sutton/Jeffrey Skilling
r

  I

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ENRON RISK ASSESSMENT and CONTROL
DEAL APPROVAL.SHEET - DIVESTITURE

DEAL NAME: Calder	Date DASH Completed: 01/10/2000
Counterparty: Beau Canada Exploration	RAC Analyst: N/A
Business Unit: Enron Canada	Investment Type: Public Equity
Business Unit Originator: Kyle Kitagawa	Capital Funding Source(s): JEDI I
Mx Public OPrivate	Expected Closing Date: 6/30/2000
MMerchant OStrategic	Expected Funding Date: N/A
(]Conforming ONonconforming	Board Approval: OPending O Received O Denied El N/A
RAC Recommendation: (]Proceed with Transaction	OReturns below Capital Price ODo not Proceed

DEAL DESCRIPTION:

Enron Canada ("ECC") proposes to sell its common shares in Beau Canada Exploration ("Beau"), for gross proceeds of
approximately C$15.8MM (US$10.8MM), "' or C$2.25/share (US$1.55/share) with ECC's net position C$9.5MM
(US$6.5MM). Enron acquired 7,000,000 common shares in Beau (the "Investment") in early 1996 for a gross cost of
C$11.4MM (US$7.8MM), or C$1.63/share (US$1.12/share). The transaction was funded 100% JEDI I. At 12/31/1999
Enron's net investment was carried at C$7.IMM (US$4.9MM), or C$1.70/share (US$1.17/share).

This transaction is consistent with ECC's broad strategy of liquidating the Canadian public equity merchant portfolio. Although
Beau is currently trading 20% below the target price, Beau's low relative valuation and high quality asset base make Beau a
prime takeover candidate. ECC has requested execution of this Divestiture DASH in anticipation of a possible takeover and
resulting purchase price premium.

ECC requests discretion to sell the Investment prior to June 30, 2000 at current levels not below C$1.25/share (US$0.86/share),
either (i) following a takeover announcement or (ii) pursuant to a lockup agreement. Any transaction contemplated after June
30, 2000 and/or below this minimum price/share, will require a separate transaction approval. The transaction will be executed
by a broker and directed by Enron Financial Trading.

ECC is required to file a trading report in connection with the sale pursuant to Canadian securities legislation. This report is
required because ECC and its affiliates own greater than 10% of Beau's common shares on a fully diluted basis (in addition to
the Investment, ECC and its affiliates own warrants to purchase an additional 7,900,000 Beau shares). The Investment is freely
tradable with no restrictions in its primary jurisdiction. Although Enron may posses material non-public information, Enron
would not be precluded from selling its position following a takeover announcement or tendering pursuant to a lockup.

VALUATION:

The company trades at an EBITDA multiple of 4.90X. (2) Beau is currently trading at C$1.80/share (US$1.24/share).

CURRENT POSITION:

Book Position (12/31/99) (31:
Cumulative write-up (12/31/99)

Gross
C$11.9MM (US$8.1MM)
C$0.5 MM (US$0.3MM)

ECC Net
C$7.1 MM (US$4.8MM)
C$0.3 MM (US$0.2MM)

IMPACT of SALE (4):

  Achieved IRR (C$):
Gain on Sale (5) :
Enron Canada Tax Impact
Enron N.A. Tax Impact

Gross
7.6%
C$3.9 MM (US$2.7MM)
N/A
No Cdn. withholding tax

ECC Net
7.6%
C$2.3 MM (US$1.7MM)
N/A

(1) Foreign exchange rate used CAD 1.4548/USD unless otherwise noted.
(2) Q3 1999 annualized and January 16, 2000 share price.
(3) Foreign exchange rate used CAD 1.4733/USD.
(4) Assuming C$2.25/share (US$1.55/share).
(5) From 12/31/99 levels. Loss versus booked value (ECC Net) is C$1.9MM (US$1.2MM) if shares are sold at C$1.25/share (US$0.86). RAC assumes
that the sale of these shares at this price is not anticipated. but should it occur would be predicated on specific business reasons/conditions at the
discretion of ECC.

F C004402199

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RAC Deal Approval Sheet

Deal Name: Calder

  Beau Canada Exploration
  2.9 -----------------------------------------------------
---- Target Price --
2.7 -------------"-A
U 2.5 ------------- -------- --------
' 2.3 ----------- ---- ------- --------
L
R
17
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v
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  1.7----- -- -------------- ~-.- ---------- -
1.5 T-~-T
  qC) qq qq 9P qC, qc ~c ,q CP ~qq Bq GBf
SP Ou o

NOTIFICATIONS:

JEDI I

  APPROVALS
RAC Management
RAC Technical
ENA Commercial
Transactions Group
ECC Legal
Business Unit Originator
ECC Management
Enron Capital Management
ENA Management
ENE Management

Name Signature

Shirley Hudler


David Gorte
Monte Gleason
Ray Bowen

  Mark Haedicke (Peter Keohane)
Kyle Kitagawa
  John Lavorato
  Andy Fastow/Jeff McMahon
eel C ''/ i'i--,f JCliff Baxter
Joe Sutton/Jeff Skilling


  J

Date

  i/, 7/_.-

~~VN
;12-41 1

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Beau Canada Exploration
  2.9 . ........................................................................... .....
2.7 4 .......................................... Target Price ......
U 2.5 ' ._.... .............. .
  i
L 2.3 ~ 1
  ... ...
~ ~ Cost
  1 g ................... .........................

RAG Deal Approval Sheet

Name

NOTIFICATIONS:

JEDI I

  APPROVALS
PAC Management
PAC Technical
ENA Commercial
Transactions Group
ECC Legal
Business Unit Originator
ECC Management
Enron Capital Management
ENA Management
ENE Management

  Shirley Hudler

David Gorte
Monte Gleason

Ray Bowen

Deal Name: Calder

Signature

Date


  f2 cr
Mark Haediche (Peter Keohane,,,,~, Al 121Z 1111,14 a
Kyle Kitagawa '
John Lavorato
Andy Fastow/Jeff McMahon
h~f
  an/ lift Baxter
Joe Sutton/Jeff Skilling

E0004402201

I:\Canadian Energy Services\Finance\Deals\BEAU\Calder\Internal Documents\BEAU disposition DASH.doc

'/ 'd 0LOfi'IN

  1.7 ! ................ ........
  1.5 --
c1~ c c AP c ~p 9c) 9P F1 AP q9 9P
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ENRON RISK ASSESSMENT AND CWNTRUL

DEAL APPROVAL SHEET

DEAL NAME: FirstWorld Divestiture Date DASD Completed: 2/10/00
Counterparty: FirstWorld Communicatinns RAC Analyst: NA
Business Unit: Principal Investments Investment Type: Private Equity
Business Unit Originator: Steve Horn Capital Funding Source(s): ENE Balance Sheet
OPublic !]Private Expected Closing Date: 3/1/00
  (]Merchant OStrategic Expected Funding Date: 3/1/00
  OConforming ONonconforming Board Approval: OPending OReceived ODenied ON/A
RAC Recommendation: M Proceed with Transaction OReturns below Capital Price ODo not Proceed

DEAL DESCRIPTION

Transaction:
Enron's Principal Investments Group proposes to sell a approximately 80% of its investment in FirstWorld
Communications ("FirstWorld") for gross proceeds of S129.1 million, based on a $10,75 per share purchase price. Enron
will retain 3,000,000 FirstWorld Warrants, which expire April 2005.

Investment History
Enron acquired 5,000,000 shares of Series A Common Stock, 3,333,333 shares of Series B Common Stock, 5,000,000
December 2004 Warrants and 3,333,333 April 2005 Warrants between 12/97 and 4/98. Enron paid $25.0 million in two
tranches for the shares and warrants Warrants were priced at the money, $3.00 per share. The transaction was funded by
Enron's balance sheet. Today, the investment represents fully diluted ownership by Enron of approximately 30.0% of
FirstWorld, and at 12/31/99 the investment was value on Enron's books at $149.2 million, $10.55 per share.

In conjunction with the investment, Enron entered into a Security Agreement and Investor Rights Agreement. Enron will
be released from such agreements upon FirstWorld's IPO of Series B Common Stock. Consequently, Enron will no longer
be an Affiliate of FirstWorld based on Enron's ownership level and lack of board representation/influence. Moreover,
Enron's ownership level, post-closing of the partial divestiture, will require the filing of form 13G, eliminating Enron's
13D filing requirement related to the FirstWorld investment. A 13G filing entails little market visibility with respect to
changes in Enron ownership of FirstWorld because a 13G is only filed annually.

Investment Performance:
Enron's return on its investment in FirstWorld has been exceptional. The Principal Investments Group invested $25.0
The common share valuation at that time was $3.00 per share. The sale price of 5129.1 million represents a 516.7% return
on Enron's investment, with an approximate two year holding period. Including the 3,000,000 retained warrants, the
FirstWorld investment produced 5124.2 million in earnings for Enron through 12/31/99.

VALUATION

The FirstWorld investment was valued at 12/31/99 based on a DCF approach utilizing the company's current business
plan projections. The valuation parameters at this date were: i) 14.9% WACC, ii) I Ox Year 2008 EBITDA terminal exit
multiple, and iii) 30% liquidity discount. The resulting valuation ($10.55 per share) is consistent with valuations
performed by FirstWorld's underwriters and slightly below the proposed sale price of $10.75 per share.

CURRENT POSITION

Book Position (12/31/99): $149.2 million
Cumulative write-up (12/31/99): $124.2 million

IMACT OF SALE

Cumulative IRR: 516.7%
Gain on Sale': $2.7 million
Enron N.A. Tax Impact: Capital Gain

ECO04402203

' Based on 12/31/94 carrying valuc of 510.55 per share, before Boar Sterns' feec.

EXH003-01517


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RF.C Deal Approval Sheet

APPROVALS
RAC Management
ENA Management
ENA Business Unit
Enron Legal
Enron Global Finance
ENE Management

Other

  Name
David Gorte
Cliff Baxter/Greg Whalley
Stephen R. Horn
Mark Haedicke
Andy Fastow/Jeff McMahon
Jeffrey Skilling

O:\Equity_Invest\Efc-m&a\RKK\telecom\firstworld\Exit Dash 2_11 OO.doc

  Date
/ov
as
  )7

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DEAL APPROVAL SHEET - DIVESTITURE

DEAL NAME: Hubble Date DASH Completed: 01/21/2000
Counterparty: Startech Energy Inc. RAC Analyst: N/A
Business Unit: Enron Canada Investment Type: Public Equity
Business Unit Originator: Kyle Kitagawa Capital Funding Source(s): JEDI II
Mx Public DPrivate Expected Closing Date: 6/30/2000
[]Merchant DStrategic Expected Funding Date: N/A
[]Conforming ONonconforming Board Approval: DPending D Received D Denied P1 N/A
RAC Recommendation: []Proceed with Transaction DReturns below Capital Price DDo not Proceed

DEAL DESCRIPTION:

Enron Canada ("ECC") proposes to sell its common shares in Startech Energy Inc. ("Startech") in two stages.

The first shares to be sold are those that were acquired by JEDI II. ECC proposes to sell these common shares for gross
proceeds of approximately C$16.5MM (US$11.4MM),' or C$10.00/share (US$6.89/share) with ECC's net position C$8.3MM
(US$5.7MM). Enron acquired, through JEDI II, 1,650,000 common shares in Startech (the "Common Shares") in early 1998.
At 12/31/1999 Enron's net investment in the Common Shares was carried at C$5.4MM (US$3.7MM), or C$6.60/share
(US$4.48/share).`

The second shares to be sold are the flow through (tax deferred) shares, which were acquired directly by ECC. Due to the tax
deferral provided, these shares will be sold after all of the JEDI II shares have been sold. ECC proposes to sell these common
shares for gross proceeds of approximately C$6.OMM (US$4.IMM) or C$10.00/share (US$ 6.89). ECC acquired legal
ownership of 600,000 Startech flow through shares in late 1999 (the "Flow Through Shares"). At 12/31/99 ECC's investment
was carried at C$4.OMM (US$2.7), or C$6.60/share (US$4.48/share).3

This transaction is consistent with ECC's broad strategy of liquidating the Canadian public equity merchant portfolio.

ECC requests discretion to sell the Common Shares and the Flow Through Shares prior to June 30, 2000 at current levels not
below C$6.00/share (US$4.13/share). Any transaction contemplated after June 30, 2000 and/or below this minimum
price/share, will require a separate transaction approval. It is expected that these shares can be sold in as few as 7-8
transactions. The transactions will be executed by a broker and directed by Enron Financial Trading.

ECC is not required to file a trading report in connection with the sale. The Common Shares and the Flow Through Shares are
freely tradable with no restrictions in their primary jurisdiction. Enron does not posses material non-public information.

VALUATION:

The company trades at an EBITDA multiple of 4.12X.4 Startech is currently trading at C$8.40/share (US$5.79/share).

CURRENT POSITION:'
  Book Position (12/31/99)6:
Cumulative loss (12/31/99)

Gross
C$14.9 MM (US$10.1 MN
C$ 1.1 MM (US$0.9 MM)
Gross
N/A
C$7.7 MM (US$5.4 MM)
N/A

ECC Net
[)C$9.4 MM (US$6.4 MM)
C$0.8 MM (US$0.6 MM)
ECC Net
N/A
C$4.8 MM (US$3.4 MM)
N/A

IMPACT of SALE:'

Achieved IRR (C$):
Gain on Sale':
Enron Canada Tax Impact
Enron N.A. Tax Impact

No Cdn. withholding tax

' Foreign exchange rate used CAD 1.4508/USD (January 17, 2000 mid day rate) unless otherwise noted.
2 Foreign exchange rate used CAD I.4733/USD (December 1999 average).
3 IBID.
4 Q3 1999 annualized and January 16, 2000 share price.
  ECOO44OZZO6
S JEDI II and low through shares.

6 Foreign exchange rate used CAD 1.4733/USD (December 1999 average).
7 Assuming C$10.00/share (US$6.89).
R From 12/31/99 levels. Loss versus booked value (ECC Net) is C$0.8 MM if shares sold at C$6.00/share (US$4.13/share). PAC assumes that the sale of
these shares at this price is not anticipated, but should it occur would be predicated on specific business reasons/conditions at the discretion of ECC.

EXH003-01520


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RAC Deal Approval Sheet

Deal Name: Hubble

  Startech Energy Inc.
  11 ---------------- ----------------------------------------------------- ----------- -----------------------
10-~
  9 ------------------------------------------------------------------ -- ........... -------- -
v
  8 - ------ --------------- .------------------------ .-- ---- -----------
L
v' 6
a 5 ............... ........ ------ ....... Cost .............
  Target Price
4 ................. . ...---...

  ) ~ ~al g ~ clC) O
qql qqq elcl al C) q >~c 0 OG~ OcG sac

NOTIFICATIONS:

JEDI II

  APPROVALS
RAC Management
RAC Technical
ENA Commercial
Transactions Group
ECC Legal
Business Unit Originator
ECC Management
Enron Capital Management
ENA Management
ENE Management

Name

Signature

Date

Shirley Hudler


David Gorte, f
  ~
Monte Gleason !/L
Ray Bowen
  6-71
  l 3! d i
,Z~1,
Mark Haedicke (Peter Keohane)
Kyle Kitagawa _c
John Lavorato
Andy Fastow/Jeff McMahon
Kevin Hannon/Cliff Baxter 2 Q
Joe Sutton/Jeff Skilling _

E0004402207

C:\TEMP\Startech disposition DASH.doc

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EXH003-01521



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RAC Deal Approval Sheet

  i

  10
L
  7
a 6 - ..................... !
~a 5
  4 ...............
3.

Deal Name: Bubble

  ,JCS 1J: ~4`1 :i~ 0


NOTIFICATIONS: Name

JEDI II

  APPROVALS
RAC Management
RAC Technical
ENA Commercial
Transactions Group
ECC Legal
Business Unit Originator
ECC Management
Enron Capital Management
ENA Management
ENE Management

Signature



Date

Shirley Hudler
David Gone
Monte Gleason
Ray Bowen

  Mark Haedicke (Peter Keoh~.
  Kyle Kitagawa 2`{2
John Lavorato 2 r 20`
Andy Fastow/JeffMcMahon
  Kevin Hannon/Cliff Baxter
Joe Sutton/Jeff Skilling

E0004402208

L\Canadian Energy Serrices\Finance\Deals\STARTECH\Internal Documents\Startech disposition DASH.doc



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ON IO"yl - dNO ,OVNU NO dPI3 V`VLQ' l l QQQZ ' Q?' ue r

EXH003-01522


  Startech Energy Inc.




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In' office
Memorandum

To: File

c: Julia Murray

From: Peter Keohane Department: Law

Subject: DASH dated 11/04/99 - Startech Energy Inc. (Hubble) Date: November 18, 1999

This memo confirms my conversations with Julia Murray in connection with the DASH and my understanding
from the Canadian Producer Finance Commercial Group that, in connection with the proposed disposition of
Startech shares, that Enron Canada does not hold material non-public information affecting the proposed
disposition of the Startech shares.

It is my understanding that any information that Enron Canada would have would relate only to certain of
Startech's oil and gas reserves, title and environmental liabilities, but that any such information would in any
event be available to the public, at least in material summary form, including pursuant to the following:

most recent Annual Information Form for Startech;

2, most recent Annual Report for Startech:

3. most recent Third Quarter Report for Startech;

4. press releases and public disclosure with respect to the Startech/Wintershall" Canada transaction; and

prospectus issued in connection with Startech's recent public offering in connection with financing the
Startech/Wintershall Canada transaction.

Further, it should be noted, that any information which is known to Enron Canada, would have been
available in detail to the underwriters in connection with the prospectus and, to the extent considered
material by the underwriters, disclosed in the prospectus.

Finally, it should be noted that the commercial purpose for the disposition is to reduce Enron Canada's
exposure to public equities and not for any anticipated or perceived downward trend in the Startech stock.

PCMK/nc

E0004402209

Respect Integrity Communi=cation Excallance
l:VegaArinancelstarlechhemo.hla.DASRdoc November 18,1999 2:21 PM

  k1l , d 0' Vc9' ON 9NIOydi - HO) VOVNU NONN~ AV/0:11 OOOZ ;Turf

:XH003-01523



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M-19

E0004402210

EXH003-01524


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ENRON RISK ASSESSMENT AND CONTROL

DEAL APPROVAL SHEET

DEAL NAME: Merlin	Date DASH Completed: December 21, 1999
Counterparty: ENA CLO Trust I	RAC Analyst:
Business Unit: ENA	Investment Type: Divestiture of Structured Credits
Business Unit Originator: Ray Bowen	Capital Funding Source(s): Public Market
OPublic i lPrivate	Expected Closing Date: December 22, 1999
OMerchant 0 Strategic	Expected Funding Date: December 22, 1999
]Conforming ONonconforming	Board Approval: Mending OReceived ODenied ON/A
RAC Recommendation: Proceed with Transaction 0 Return below Capital Price ODo not Proceed

APPROVAL AMOUNT REQUESTED

Net Divestiture Amount of a portfolio of 23 non-investment grade structured credits with a gross and net carrying
value of-
 Net Carrying Value: $249.5 million E' 4 PbrN~+~
 Gross Carrying Value: $320.1 million
For Proceeds of: dt~ r~~,lJe~S
FNn
Porh'e~~ (An
 Net to ENE: $242.8MM (E L AI
 Gross Proceeds: $324.2MM

EXPOSURE SUMMARY

This transaction: $268.2MM of debt in ENA CLO Trust I was placed via a public capital market sale of all
$101.5MM of A-1L Notes, $55.OMM of A-2L Notes, $32.8MM of A-2 Notes, $48.2MM of A-
3L Notes, $l0.OMM of A-3 Notes, and $14.5MM of A-4 Notes and $6.2MM of B-I Notes.

  The remaining $56.OMM raised was placed via the sale of interests as follows:
 $2.9MM B-lNotes (BBB) to Condor
   $20.6MM B-2 Notes (BB) to Condor
 519.6MM B-2 Notes (BB) to LJM2
   $12.9MM preferred interest in the membership interest (equity) to LJM2
DEAL DESCRIPTION a t.~.u~ltd pan,I-"strc~
  Contribution of a portfolio of 23 non nvestment grade structured credits of up to $320.1MM ($249.5MM net to ENA)
carrying value from the Enron Nort American merchant portfolio to a Delaware Business Trust (ENA CLO Trust I,
or the "Trust") that .indireetly owns interest in a Special Purpose Vehicle that will hold these assets. Exhibit I
CSp1 outlines the assets to be held by them". Bear Steams, on behalf of ENA, will sell interests in all of the Class A-
1L(rated AAA/Aaa by Fitc an oody's, respectively), A-2L (AAA/-), A-2 (AAA/-), A-3L (AA+/-), A-3 (AA+/-),
and A-4 (A/-) Classes of Notes issued by the Trust and $6.2 million of the Trust's B-1 (BBB/-) Notes for aggregate
debt proceeds of approximately $268.2MM. Condor will purchase the remaining B-1 Notes and approximately half of
B-2 Notes issued by the Trust. LJM2 will purchase the remainder of the B-2 Notes as well as a preferred interest in
the membership interest (equity) in the Trust. All debt tranches were purchased at par, for Total Debt raised of
$311.3MM. Par value of the equity is $53.8MM and was purchased for $12.9MM. Enron will retain a residual
interest in the Membership unit ed by the t &5-s- ft SP/.

  The transaction is structured with eight debt Classes that will sequentially benefit from the cash flows generated by
the portfolio of structured credits held by ENA CLO Trust I. Attached as Exhibit II is a synopsis of the Classes of
debt and the membership units with interests in the Trust. Payments b the Trust are limited to e cash flows_
generated by the portfolio of structured credits held by the Trust. NA CLO Trust I is non-recourse to Enron.
  Certain over-collateralization tests will apply to each of the debt tranches which, in certain circumstances, may result
in no payments being made to the holders of certain Classes of debt which are subordinate to the Class whose
overcollaterization test has not been satisfied. This may result in ENA CLO Trust I being unable to satisfy the
expected oavment amounts on the subordinate Classes of debt and the membership units.

TRANSACTION SOURCES AND USES OF FUNDS

Debt Proceeds	$311.3MM
Equity Proceeds	$ 12.9
Gross Proceeds	$324.2
Less Fees & Expenses	$ 10.5
Adjusted Gross Proceeds	$313.7
Less Paid to ENSERCO	$15.0
Less Paid to JEDI II	$126.9
Net to ENE	$171.8MM*

Gross Carry Value of Assets Sold: $320.1MM
Net Carry Value of Assets Sold: $249.5MM

E0004402211

:XH003-01525


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RAC Deal Approval Sheet Deal Name: Merlin
  * Net of Enron's interest in ENSERCO and JEDI II; including Enron's proportionate interests in these entities, the net
ampunt received by Enron from this monetization is approximately $242.8MM.
RETURN SUMMARY

See "Transaction Upside/Optionality" section below.

CASH FLOW SUMMARY

  N/A
TRANSACTION UPSIDES/OPTIONALITY

As it relates to the membership interests (equity) in the Trust, cash flow distributions are as follows:
 LJM2 receives 100% of equity cash flow until it receives 30% IRR
 LJM2 receives 75% of equity cash flow until it receives 35% IRR, ENA receives the remaining 25% cash flow
 Thereafter, LJM2 receives 25% equity cash flows, ENA receives remaining 75% cash flow

  In a zero default, zero prepayment scenario, ENA expects an NPV @20% of approximately $21MM on its residual
equity interest.
EXIT STRATEGY (Merchant investments only)
  This transaction represents a significant risk transfer of the assets comprising the portfolio of ENA CLO Trust I. To
the extent that Enron retains a residual interest in ENA CLO Trust I, ENA has not fully divested itself of this risk, but
has significantly reduced its exposure to these assets.
RISK MATRIX (TOP 5 ONLY)
  Since this transaction is a divestiture, no risk matrix has been prepared. Because there was no practical method for
ENA to divest these assets through individual sales, no meaningful comparative analysis of this divestiture against
alternative methods of effecting this divestiture can be prepared. ENA's deeply subordinated residual equity interest
may have no value if there are significant defaults and/or oreoavments of the Trust's assets.

KEY SUCCESS FACTORS

	Poor	Fair	Good	Very Good	Excellent
Core Business					X
Strategic Fit					X
Upside Potential		X			
Management (NOT APPLICABLE					
Risk Mitigation					X

OTHER RAC COMMENTS:

This transaction represents a divestiture/monetization of a significant portion of ENA's merchant portfolio of
structured credits in a relatively efficient manner. This monetization will permit the redeployment of this capital to
alternative uses by Enron. The retained equity interest is deeply subordinated to the preferred equity interest held by
LJM2 and RAC has not independently assessed the value of this interest.

APPROVALS
Business Unit Originator
ENA Mgmt.
Legal
RAC Management
Enron Global Finance
ENE Management

Name

Ray Bowen
Cliff Baxter/K-

Mark Haedicke

Rick Buy/David Gorte
Andy Fastow/Jeff McMahon

Jeffrey Skilling

  Date
l / y c~
/i 0

-Z110 /V a
v o

X212

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=XH003-01526