From: jkmurphy@jonesday.com
To: benjamin.rogers@enron.com, ron.coker@enron.com
Cc: tirwin@alleghenyenergy.com, jhammer@alleghenyenergy.com, jlapcevic@alleghenyenergy.com, wfhenze@jonesday.com, mfdolan@jonesday.com
Date: 2000-10-23 13:44:00+00:00
Subject: Environmental Due Diligence Questions

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Tom Irwin asked that we contact you each of you directly on behalf of
Allegheny to ask the following environmental due diligence questions that
we have not resolved based on our review of the Dealbench documents.
Please, however, feel free to reference specific documents on Dealbench if
you believe they would be useful.

Questions for All Facilities

1.  What are the limitations on the number of hours that each facility can
operate and what is the source of those limitations?

2.  We understand that there are tentative expansion plans for each
facility.  Were these future expansion plans disclosed to the regulating
agencies at the time that the air permits were applied for, particularly at
those facilities which did not undergo PSD review?

3.  Which facilities are required to perform continuous emissions
monitoring pursuant to its air permits?  For those facilities performing
CEM, please provide the last two years of data.

4.  Are the facilities FERC jurisdictional for environmental impact
statement purposes pursuant to 18 C.F.R. Part 380?  We noticed that the
only facility with information about this issue was the pipeline at
Lincoln, although the information seemed to suggest that only the pipeline
was subject to the EIS process.  See 2.02.12.G.  Was the rest of the
Lincoln facility subject to the EIS process?  What was the outcome of the
EIS process for the pipeline?

5.  What is Enron's understanding of the process required to transfer the
environmental permits for each facility in connection with the proposed
transaction?  For example, the 1995 stormwater permit for LV Cogen appears
to be triggered by a change in control of the facility.  See 6.02.03 at
page 16.  Do other permits have similar provisions?

6.  Will any environmental property transfer or comparable statutes (e.g.
the Illinois Responsible Property Transfer Act) be triggered by the
proposed transaction?

7. We have reviewed the United States Environmental Protection Agency
comments for the air permit at LV Cogen II, as discussed below.  Did U.S.
EPA provide any additional comments on the air permits for LV Cogen II or
any other facility?

Lincoln Facility

1.  Does the Lincoln facility have an air operating permit from the
Illinois Environmental Protection Agency?  If so, please provide a copy.
If not, please explain status.

2.  Were any wetlands impacted by the construction of the facility and, if
so, what permits were obtained?  Will any wetlands be impacted by future
expansion plans?  ENSR's conclusion on this issue seemed unclear,
particularly with respect to the 30 acre parcel.  See 02.03.09C.

Gleason Facility

1.  Does the Gleason facility have an air operating permit from the
Tennessee Department of Environment & Conservation?  If so, please provide
a copy.  If not, please explain status.  We also noticed that the
construction permit expired on October 1, 2000.  See 02.01.02.  Was it
renewed?

2.  What is the status of the petition for variance to the Tennessee
Department of Environment & Conservation for alternative testing and
monitoring methods under NSPS Subpart GG dated April 17, 2000?  See
02.01.04B.  What is the status of the letter requesting a waiver of certain
source emission tests dated April 18, 2000?  See 02.01.04A.

3.  Is there enough water to support an expansion of the facility at
Gleason?  Please provide any testing/analysis that has been performed with
respect to this issue.

Wheatland Facility

1.  We understand that the Wheatland facility may seek a NPDES permit to
discharge wastewater directly to the White River.  How is this wastewater
currently managed?  Why is the facility considering changing the management
method to direct discharge under a NPDES permit?  If there are associated
cost savings with a NPDES permit, what are they estimated to be?  We
understand that the source of the water that is discharged is a pond
associated with mining operations.  Who is the owner of the pond?  Are any
water extraction permits needed to remove water from this pond and, if so,
have they been obtained?  We also understand that sampling was recently
performed of the water.  Please provide copies of this analysis and any
associated documentation.

LV Cogen

1.  The Industrial User Discharge Permit on Dealbench appears to have
expired on July 1, 2000.  See 6.02.02.  Was it renewed?  If so, please
provide copy.

2.  The stormwater discharge permit for LV Cogen appears to be expired.
See 06.02.03.  Was it renewed?  If so, please provide copy.

3.  Does Sunco hold any environmental permits in its own name?  If so,
please provide copies.

LV Cogen II

1.  EPA contends in its March 23, 1998 and March 24, 2000 letters that BACT
for LV Cogen II was SCONOx and/or XONON.  See 06.01.09.1.   How was this
issue resolved?  Can LV Cogen II meet the 2 ppm NOx limit in the draft
operating permit with the technology that has been proposed?  See 06.01.15.

2.  It appears that the State of Nevada has contended that certain
equipment replacement should have undergone new source review in their June
13, 2000 memo.  See 16.03.6.    How was this resolved?  What is EPA's view
on this issue?