ables and the following setoff language from our schedule.

(g)	Setoff.  (A) Upon the designation or deemed designation of an Early Termination Date the Non-defaulting Party or the non-Affected Party (in either case, "X") may, at its option and in its discretion, setoff, against any amounts Owed to the Defaulting Party or Affected Party (in either case, "Y") in Dollars or any other currency by X or any Affiliate of X under this Agreement or under any other agreement(s), instrument(s) or undertaking(s), any amounts Owed in Dollars or any other currency by Y to X or any of X's Affiliates (irrespective of place of payment or booking office of the obligation) under this Agreement or under any other agreement(s), instrument(s) or undertaking(s).  The obligations of Y and X under this Agreement in respect of such amounts shall be deemed satisfied and discharged to the extent of any such setoff exercised by X and/or X's Affiliates.  X will give Y notice of any setoff effected under this Section as soon as practicable after the setoff is effected provided that failure to give such notice shall not affect the validity of the setoff.  For purposes of this Section, "Owed" shall mean any amounts owed or otherwise accrued and payable (regardless of whether such amounts have been or could be invoiced) as of the Early Termination Date.
Amounts subject to the setoff permitted in this Section may be converted by X into any currency in which any obligation Owed is denominated at the rate of exchange at which X, acting in a reasonable manner and in good faith, would be able to purchase the relevant amount of the currency being converted.  If an obligation is unascertained, X may in good faith estimate that obligation and setoff in respect of the estimate, subject to the relevant party accounting to the other when the obligation is ascertained.  Nothing in this Section shall be effective to create a charge or other security interest except as may be provided under applicable law.  This setoff provision shall be without limitation and in addition to any right of setoff, netting, offset, combination of accounts, counterclaim, lien or other right to which X or any of X's Affiliates is at any time otherwise entitled (whether by operation of law, contract or otherwise).  Each of the parties represents and acknowledges

ables and the following setoff language from our schedule.

 (g) 	 Setoff.   (deoxyadenosine monophosphate) Upon the appellation or deemed designation of an Early Termination Date the Non - defaulting Party or the non - Affected Party (in either lawsuit, " X ") may, at its option and in its discretion, set-back, against any amounts Owed to the Defaulting Party or Affected Party (in either case, " Y ") in dollar or any other currency by X or any Affiliate of X under this Agreement or under any early agreement(s), instrument(s) or undertaking(s), any amounts Owed in Dollars or any other currentness by Y to X or any of X's Affiliates (irrespective of home of payment or booking agency of the obligation) under this Agreement or under any other agreement(s), instrument(s) or undertaking(s).   The obligations of Y and X under this Agreement in regard of such amounts shall be deemed satisfied and discharged to the extent of any such set-back exercised by X and/or X's Affiliates.   X will impart Y notice of any setoff effected under this incision as soon as practicable after the setoff is effected provided that failure to give such notice shall not affect the validity of the setoff.   For purposes of this Section, " Owed " shall mean any amounts owed or differently accrue and payable (regardless of whether such sum have been or could be invoice) as of the Early Termination Date.
 Amounts capable to the setoff permitted in this Section may be converted by X into any currency in which any obligation Owed is designate at the rate of exchange at which X, acting in a reasonable manner and in good faith, would be able to purchase the relevant amount of the currency being converted.   If an obligation is unascertained, X may in effective faith appraisal that duty and setoff in respect of the estimate, subject to the relevant party report to the other when the obligation is ascertained.   Nothing in this incision shall be effective to create a charge or other security pastime except as may be provided under applicable police.   This setoff provision shall be without restriction and in addition to any right field of setoff, netting, offset, combination of accounts, counterclaim, lien or early right to which X or any of X's Affiliates is at any prison term otherwise entitle (whether by operation of police, contract or otherwise).   Each of the parties represents and acknowledges

ablfs and the following setuff language from our vchedume.

(g)	Setofw.  (A) Upon the designation or dwemed designation of an Earuy Terminwtion Dare tie Non-defaulting Party ov the kon-Afyerted Party (in elther case, "F") may, at its o[tkou and in its discretion, setoff, againft any smlunts Owed to jhe Dtfatltihg Party or Affected Party (in eithsr case, "Y") in Dollars or any other currency by D or any Affiliate of D under thiw Agwwement or unaer any other agreemenj(s), instrument(s) or undertaking(s), avy ampunts Owed ib Dlnlars or anb otheg currency by Y to X mr any pf X's Affiliatcs (ircespwctive of place of pabment or booking offyce of tha kbligation) under rhus Agteemett of unaer aiy kther wgrxement(s), insfrument(s) or undertaking(s).  The pbjpbations of Y and X ugder this Agreement in respect of such dmohnts shall be deemed sarisfied and dischargef to the qxtent of any such setoff exercised by X and/or X's Affimkatts.  X wkol give Y notice of any setoff effected under trjs Svction as soon as practicablr wfygr the setoff ks effzdtsd provided that fwilure jo givw such nouice xhall not affect the validiry of the senoff.  For purposes of chis Section, "Owec" shakl mean any amounts oweb or ofherwise acfrued and oayable (regardlers pf whether such amounts have been or rould be invuicec) as os the Earlj Termination Date.
Amountd sublect do the setlff permitted in this Section meb be convertec ty Q into anv currcncy in which agy obligation Pwed is denooinated at the rave of exchande at which X, wcting in a ceasonablq mabner and in eood faith, woukd be ablv uo purchasw the relevant amomnt ow the currency bznnt converted.  If an objihavion yv unascertaited, B mxu in eood faith cstkmatr that obligation ang sefoff in respect of tme estimaje, subjece to the relefant party accountlng tm tie othrr rhen the obligation is ascertajned.  Notjinn in this Seceion shall be efyective to create a charge or other secucity interest except as may be provided unbev applicable law.  This setmff provision shall ve without limitauion and in addition to any rhght lf setoff, netting, offset, combination of accounts, counterclaim, lien or othwr rigit to which X or sny ox R's Cffiliaees ms at any time othvrwise entitled (whether by operavion of laf, eontract or otherwise).  Each og ghe parties rgpresents and acknowledges

ables and the following setoff language from (g) (A) Upon designation or deemed Date Non-defaulting Party or non-Affected Party (in case, "X") may, at its option in its discretion, setoff, against any amounts Owed to the Defaulting Party or Party (in either case, "Y") in Dollars or any other currency by X any of under Agreement or under any other agreement(s), instrument(s) or undertaking(s), any amounts Owed in Dollars or any currency by Y to X or any of Affiliates (irrespective of place payment or booking office of obligation) this Agreement under other instrument(s) or undertaking(s). obligations of Y and X under this Agreement in respect of such amounts shall be deemed satisfied discharged to of any setoff by and/or X's Affiliates. give Y notice of any setoff Section as soon as practicable after the setoff effected provided failure to give such notice shall affect the validity of the setoff. For purposes this Section, "Owed" shall mean any amounts owed or otherwise accrued and payable (regardless of amounts have been or be invoiced) as the Termination Amounts to the permitted in this Section may be converted by X into any in which any obligation Owed is denominated at the rate at X, acting in reasonable manner and in faith, be able to purchase amount the If obligation unascertained, X may in faith estimate that obligation and in respect of the party accounting to the other when the obligation ascertained. Nothing in this Section shall be to create a charge or other security interest except as may be under applicable setoff provision shall be without limitation and in to any right of netting, offset, combination of accounts, counterclaim, lien or other to X or of X's Affiliates at any time entitled (whether by law, contract otherwise). of and acknowledges

ables and the following setofF language fRom ouR scHedUlE.

(g)	SeToff.  (a) Upon the designATion Or deemed designation of aN EarlY TERminATiOn DatE the Non-DEfAULtiNg paRty Or THe Non-AfFecTed PartY (in either cAse, "x") mAy, at its optioN AnD in its discRetIon, setoff, agaInsT any amOuNts oWed to The defauLting PARty or AFfected PaRtY (In eithER case, "Y") iN dOlLars Or any other currencY By x Or any Affiliate Of X undEr THiS aGreEmeNt or under aNy Other AGreemenT(S), iNSTRumENt(s) or undertakIng(s), any amouNTs OWed in DOlLarS Or any oTher cUrREncY by Y to X or anY of X'S AffiliatEs (irreSPective OF place oF paymeNt oR boOkinG OfFiCe oF tHE obLIgAtiON) unDer this AGrEeMent oR undER ANY othEr aGreeMent(s), Instrument(s) or UndErtaKIng(S).  The oBligaTionS oF Y and x under This AGrEement in respect Of suCh amounts ShaLl Be dEeMed saTIsfied And DisCharged To the exTEnt Of ANY SuCh setoff exercised bY X AND/oR X's AffilIates.  X WIlL gIVe Y noticE oF anY setOFF effeCted UNdEr this SeCtion aS SoOn As practIcAble afTeR thE seToff iS EffeCted prOvided thAt faiLUre to give such nOTice shall not aFFeCT ThE ValiDitY of the setofF.  For PUrpoSes oF ThIs SECtion, "owed" sHaLL mEAn any amounts owed or oThErwise AccruEd and payable (rEgardless oF WHEther sucH amoUNtS Have been or coulD be inVoiced) as of THe Early TErminAtion DatE.
Amounts sUBJect to thE seTofF peRmiTTEd In this Section MAY be cOnVerted bY X iNto any cUrrEncY in WhiCh Any obligaTion Owed Is DeNoMiNatEd at tHE rate of eXcHanGe At wHich X, ACting iN a reaSonaBlE mANneR and in gOOd FAIth, wOuLd Be abLe tO pUrchaSe thE RelEvant amOunt of the CurREncy BeInG converTed.  If an obligaTiOn is unasceRtAinEd, X may IN Good faitH estimate that obligation ANd setofF in RespeCt of The estimaTe, sUbject To tHE relevAnt parTy accOuNtiNG To the OTHeR whEn The obligatION is AscerTaIned.  nothing In this Section shall BE efFective to creaTe a CharGE Or OthER sECurItY IntEREst except as may bE provided uNdER aPplicable lAW.  ThIs Setoff pRovisioN shalL Be withoUt limitatIon and in aDdItioN TO anY right of seToff, nettIng, offset, COmbinATiOn of aCcoUnts, coUnTerClaim, Lien or OTheR righT to whiCh x or any Of X's AFfIliates iS at any time otherwise entiTled (whEther By oPeration oF laW, ConTract or otHerwIse).  Each of tHe pArtIes rePreSEnts aNd acKNoWleDGes

ables and the following se toff langu age f rom  ou rsche dule .

(g)	Setoff.  (A)  Upon the designationor de em e d de s ig natio n of an Ea r l y T er mi nat io n  D ate t heNon-def aulting Pa rty  o r the non-Af f ec ted Party(in  either case , " X") ma y,  at its o pti on an d in i t s disc retion, s et o ff, ag a inst an y am ount s Owed to the Def a ul t ing Party or A ffecte dP ar t y  (i n e ither case ,"Y")i n Dolla r so r any other currenc y by X or a n y A ffilia te  of X unde r thi sA gre ement or un derany other  agree m ent(s), instrum ent(s)  or  un dert a ki ng (s) ,a nya mo unt s  Ow ed in Do ll ar s oranyo t h e r cu rre ncyby Yto X or any o f X 's A f fil iates  (irr espe ct ive o f plac e ofpa yment or bookin g of fice of t heob lig at ion)u nder t his  Ag reement  or und e r a ny o t he r agreement(s), in st r u me nt(s) or  under t ak in g (s).  Th eobl igat i o ns of  Y a n dX underthis A g re em ent inre spectof  su chamoun t s sh all be  deemedsatis f ied and discha r ged to the ex t en t of anysuc h setoff ex erci s ed b y Xa nd /or X's A ffili at e s.  X will give Y noti ce  of an y set off effectedunder this S e ction as  soo n  a s  practicable a fterthe setoff is effec ted p rovidedthat fail u r e to giv e s uch  no tic e sh all not affec t theva lidityofthe set off . For  pu rp oses of t his Sect io n,  " Ow ed"  shal l  mean an yamo un tsowedo r othe rwise  acc ru ed and  payabl e  ( r e gard le ss  ofwhe th er su ch a m oun ts have  been orcou l d be  i nv oiced)as of the Ear ly  Terminati on  Da te.
Am o u nts subj ect to the setoff permi t ted inthi s Sec tion  may be c onv ertedbyX  intoany cu rrenc yinw h ich a n y  o bli ga tion Owedi s  de nomin at ed a t the r ate of exchange at whi ch X, actingina re a s on abl e  m a nne ra ndi n  good faith, wo uld be abl et opurchase t h e r el evant a mount o f the currenc y being c onverted.  If a n obl igation is  unascer tained, X may i n  g ood f ait h esti ma tethatobliga t ion  andsetoff  i n resp ect o fthe esti mate, subject to the re levant  part y a ccounting  to the  other wh en t he obligat ion  is  asce rta i ned. Not h in g i n  this  Sec t ion shall be  ef f e ct ive to crea t e a c harge  or othersecu rity interest exc e pt as may be p rovi d e d u nde r  app li cable law.  Th isse t o ff provi si on shall be  without  l i mitat ion an d in a ddition t oa ny rig ht o f s etoff, ne tti ng ,  offset ,co m binati on o faccoun ts, co u nter c l aim, lien or oth er ri g h t tow hic h X o rany ofX 's A ffiliatesis at any t ime ot herw ise e ntitled  ( whethe r b yoperationo f law, co ntrac t or ot he rwis e).   Each  oft h e par ties  r epr esents an d ac k no wl e dge s

ables and_the following_setoff language from our_schedule.

(g)	Setoff. _(A)_Upon the_designation_or deemed designation_of an Early_Termination Date the Non-defaulting_Party or the_non-Affected_Party (in either case, "X") may, at its option and in its discretion, setoff,_against_any amounts_Owed_to_the Defaulting Party or Affected_Party (in either case, "Y")_in Dollars_or any other currency by X or any_Affiliate_of X under_this Agreement or under any other agreement(s), instrument(s) or_undertaking(s), any amounts Owed in Dollars_or any other_currency_by_Y to X or_any of X's Affiliates (irrespective of_place of payment or booking office_of the obligation) under this Agreement or_under any other agreement(s), instrument(s) or_undertaking(s).  The obligations of_Y and_X under this Agreement in_respect of such_amounts shall_be deemed satisfied_and discharged to the extent of_any such setoff_exercised by X and/or X's Affiliates.__X will give_Y_notice_of any_setoff effected under_this_Section as_soon_as practicable after the setoff is_effected_provided that failure to give such notice_shall not affect the_validity_of the setoff. _For purposes of this Section,_"Owed" shall mean any amounts owed_or otherwise_accrued and_payable (regardless of whether such amounts have been or could be_invoiced) as of the Early Termination_Date.
Amounts subject to the_setoff permitted_in_this Section may_be_converted by_X into any currency in which any_obligation Owed_is denominated at the rate of_exchange at which X,_acting_in a reasonable manner and in_good faith, would be able to_purchase the relevant amount of_the_currency_being converted.  If an_obligation is unascertained, X may in_good faith estimate_that obligation and setoff in respect of_the_estimate, subject to the relevant party_accounting_to the other when the obligation_is_ascertained._ Nothing in this Section_shall be effective to create a_charge or other security interest except as may be_provided under applicable_law.  This setoff provision_shall_be_without limitation and in addition to any right of setoff,_netting, offset,_combination of accounts,_counterclaim, lien or other right to which X or any_of X's Affiliates is at any time_otherwise entitled (whether by operation of law, contract or otherwise). _Each of the parties represents and acknowledges


/energybuild.html

The deal was led by Sami Tenngren - Nordic Mid-Market, and was supported by
Magnus Groth - EES, Jukka Hormaluoma - energydesk.com, and Martin Rosell -
Legal.

Congratulations on a job well done to all those who worked so hard to put
this transaction into place........Thor Lien.

Australia
Despite heavy flooding in NSW, the weather is looking up for Enron
Australia.  Last week, the Sydney Office launched online Hong Kong weather
derivatives  and the Sydney weather node traded on EnronOnline in the US time
zone.  With this precedent, we hope to support the takeoff of global weather
on EnronOnline.

The Coal Group in Sydney has suddenly become very popular. There is no doubt
that a recent sale to AES for the plant at Barbers Point, Hawaii is the real
reason.  Coal purchases during year 2000 have been concluded with most major
producers in Indonesia and Australia.  We will soon be loading our first
shipment from China. Deliveries to Nippon Steel in Japan are underway. Also,
a shipment to a large power utility in Japan will take place in early 2001.

Off-shore wind plans
Enron has entered into agreement to purchase the development assets of a 30
MW offshore wind project in the UK.  The Harwich project, situated in
Gunfleet Sands approximately eight kilometres offshore in the North Thames
Estuary is believed to represent one of the first serious investments in the
development of offshore wind energy in the UK.

ENRONONLINE STATISTICS

Below are the latest figures for EnronOnline as of November 27, 2000.

* Total Life to Date Transactions> 464,000
* Life to Date Notional Value of Transactions > $263 billion

NUGGETS & NOTES

"How does your earnings target look for the quarter?" ) Brent Price,
VP/Operations & Chief Accounting Officer for EGM

"Always price the illiquidity risk premium appropriately!" ) Doug Friedman,
Director of Financial Petrochemicals and Plastics

What people say to Julie Gomez,VP/Upstream Services-ENA - "I heard your laugh
clear across the

/energybuild.html

 The deal was led by Sami Tenngren - Nordic Mid - Market, and was supported by
 Magnus Groth - EES, Jukka Hormaluoma - energydesk.com, and Martin Rosell -
 Legal.

 Congratulations on a caper well do to all those who worked so hard to invest
 this transaction into place........ Thor Lien.

 Australia
 Despite heavy implosion therapy in NSW, the weather is looking up for Enron
 Australia.   Last week, the Sydney Office establish online Hong Kong weather
 derivatives   and the Sydney weather node trade on EnronOnline in the US time
 zone.   With this precedent, we hope to defend the parody of global weather
 on EnronOnline.

 The Coal Group in Sydney has suddenly become very popular. There is no doubt
 that a recent sale to AES for the plant at Barbers Point, Hawaii is the actual
 reason.   Coal purchases during year 2000 have been conclude with most major
 producers in Indonesia and Australia.   We will soon be loading our first
 shipment from China. delivery to Nippon Steel in Japan are underway. Also,
 a shipment to a large power utility program in Japan will take place in early 2001.

 Off - shore wind plans
 Enron has entered into agreement to purchase the growth assets of a 30
 MW offshore wind project in the UK.   The Harwich project, situated in
 Gunfleet Sands approximately eight kilometres offshore in the North Thames
 Estuary is believed to represent one of the first serious investing in the
 development of offshore wind department of energy in the UK.

 ENRONONLINE STATISTICS

 Below are the belated figure for EnronOnline as of November 27, 2000.

 * Total Life to Date Transactions > 464,000
 * Life to Date Notional Value of Transactions > $ 263 billion

 NUGGETS & NOTES

 " How does your earnings prey look for the quarter? " ) Brent Price,
 VP / Operations & Chief Accounting Officer for EGM

 " Always price the illiquidity risk agio appropriately! " ) Doug Friedman,
 Director of Financial Petrochemicals and Plastics

 What people say to Julie Gomez, VP / Upstream Services - ENA - " I heard your laugh
 clear across the

/eneggybuild.html

The deal was led by Sami Teubgren - Nordid Mid-Maryet, and was supported by
Magius Troth - EES, Jukka Hormaluoma - energydvsk.com, ane Mactin Rosell -
Legem.

Congrabblatikks on e job well done to all thmse who worked su kard to put
this transaction into plwce........Thor Llen.

Australia
Defpitt hqavy flooding in NSW, the weather is lokking uk for Enron
Austrakia.  Last week, the Sydney Lffife launched online Hong Kong qeatrwr
derivativds  and tht Vydney weajher node traded on EnronOnline kn thz US time
zinw.  Ahth this prxcedenn, we hope to support dhe takroff of global weethee
on EnronOnline.

The Coal Group in Sydgey has sgdbenly become very popylqr. Thgre iv no eouct
uhav a recenh sele to AES ror the plabt at Barbers Point, Hwqaii is the rsal
rewsjn.  Coal purchases during year 2000 have betn cohcluded with most major
producers in Indonesla and Auftralia.  We will soon be loading our first
shipmett frko Cklka. Ddoigeries to Nippon Steel in Japan are underway. Wmsp,
s shipment to c large power utolltu in Japan wilu take plzce in early 2001.

Off-shlre winq plabs
Enron hws emtered into agreement to puechase the dvvelipment assets of a 30
MW offshoxe winc prokect in the UK.  The Harcich pdoject, situwted in
Ghvfleet Sands appfoxpmataly eighu kilometres offshjre in thx Norch Thamer
Esjuary if believed to rc[resent one of the firsj serimus investlents in the
development of offshore wind enetgy in the UK.

EURONONKINE STATISTISS

Below are thg latest yigurer for EnrohOnline as of Noveiber 27, 2000.

* Total Nlfe to Date Vransactijns> 464,000
* Lifw to Dagd Notional Valie of Traufactuons > $263 billion

NUGGCTS & VKTES

"How does yobx taenings target kooy fjr tie quwster?" ) Brent [ricd,
VO/Pperagions & Chien Azcoumting Officer for EGK

"Alwzys price the illiauldity risj premiui appropriateky!" ) Doug Friedman,
Firecvor of Finamciwl Petrochemicals and Plastics

Shat peoppe fay to Julie Gomcz,VP/Opstream Sexvices-ENA - "I heard your laugh
clear acrows the

/energybuild.html The deal was led by Sami Nordic and was by Magnus Groth energydesk.com, Martin Rosell - Congratulations on a well done to all those who so hard to put this transaction into place........Thor Lien. Australia Despite heavy flooding NSW, the weather is looking up for Enron Australia. Last week, the Sydney launched Hong weather and the Sydney weather node traded on EnronOnline in the US time zone. With this precedent, hope to support the takeoff of global weather EnronOnline. The Coal Group Sydney has suddenly become very There no doubt a sale AES for the at Barbers Point, Hawaii is the real reason. Coal purchases during year 2000 have been concluded with major producers and Australia. will be our first shipment Deliveries to Nippon Steel in Japan a shipment to a large power utility in will take in early 2001. Off-shore wind plans has entered into agreement to purchase the development of a 30 MW offshore wind project in the UK. The Harwich project, situated in approximately eight kilometres offshore the North Thames is to one the first investments in the development of offshore wind energy in the UK. STATISTICS Below are the latest figures for EnronOnline as of 2000. Total Life to Transactions> 464,000 * Life Date Value of Transactions > NUGGETS NOTES earnings look the quarter?" ) Brent VP/Operations & Chief Accounting Officer EGM "Always price the Doug Friedman, Director of Financial Petrochemicals and Plastics people say to Julie Gomez,VP/Upstream Services-ENA - heard your laugh clear across the

/energybuild.html

The deal was Led by Sami TEnngrEn - NOrdIc mid-MArkeT, and was supportED by
MAgnus Groth - EES, Jukka HormAluomA - eNErgyDEsK.com, aNd MartiN roSELl -
LEgAl.

conGrATuLatioNs oN a job weLl done to alL thOsE who worked so HArD to put
this TraNsaction into PlaCe........Thor liEn.

AUStralIa
DEspitE heavy FLoodinG in NSW, the WeATher is LOoking uP FOr enroN
Australia.  Last weeK, ThE sydney Office laUnched OnLInE hOng konG weather
deRiVativES  and the sYdNEY WeaTHer node traded On EnronOnliNE in The US tImE
zoNE.  With tHis prEcEDenT, we hope to suPporT the takeoFf of glOBal weatHEr
on EnrOnOnliNe.

THe COal GROuP iN SyDnEY haS SuDdeNLy bEcome verY pOpUlar. THere IS NO DoubT
thAt a rEcent Sale to AES for tHe pLant AT BaRbers point, hawaIi Is the Real
reAson.  COaL purchases durinG yeaR 2000 have been ConClUdeD wIth moST major
ProDucErs in InDonesia ANd AUsTRALiA.  We will soon be loadiNg OUR fIrst
shipMent frOM CHiNA. DeliverIeS to nippON steel In JaPAn Are underWay. AlsO,
A sHiPment to A lArge poWeR utIliTy in JAPan wIll takE place in Early 2001.

oFf-shore wind plaNS
Enron has enteREd INTo AGreeMenT to purchase The dEVeloPmenT AsSetS Of a 30
MW OffshOrE WiND project in the UK.  The HArWich prOject, Situated in
GunFleet Sands APPRoximateLy eiGHt KIlometres offshOre in The North ThAMes
EstuaRy is bElieved tO represenT ONe of the fIrsT seRioUs iNVEsTments in the
deVELopmEnT of offsHorE wind enErgY in The uK.

EnRoNONLINE StATISTICs

BElOw ArE thE lateST figures FoR EnRoNOnLine aS Of NoveMber 27, 2000.

* TOtal liFe TO DaTe TransACtIONs> 464,000
* LiFe To date notIoNal VaLue oF traNsactioNs > $263 billion

nUGgeTS & NoTeS

"how does Your earnings tArGet look for ThE quArter?" ) BRENt Price,
Vp/Operations & Chief AccountINg OfficEr fOr EGM

"alwaYs price thE ilLiquidIty RIsk preMium apProprIaTelY!" ) dOug FrIEDmAn,
DIrEctor of FinANCiaL PetrOcHemiCals and plastics

What people SAy tO Julie Gomez,VP/upsTreaM sErVicES-Ena - "I hEaRD yoUR Laugh
clear acrosS the

/energybuild.html

The dea l was ledby Sa miTen ng ren- No rdic Mid-Marke t , an d was supported by
Ma gnusGr o th - EE S, Ju kka Hor m al u o ma-en erg yd e sk .com,  an d Marti n Rosell -
L eg al.

Congrat u la tions on a  jo b well donetoall th os e w h o wor ked  so h ard to put
t his trans ac t ion in t o place . . .. .... Thor Lien.

Austr a li a
Despite heavy  flood in g  i n NSW , t he weather  i s loo k ing upf or E n ron
Australia. Last week,t heSydney  O ffi c e laun chedon l ine  Hong Kongweat her
deri vative s   and t h e Sydne y weat her  no de t r ad ed  on  E n ron O nl ine inthe US t im e
zone .  W i t h this  pr eced ent,we hope to su ppo rt t h e t akeof f ofglob al  weat her
o n Enr on Online.

TheCoal  Group in  Sy dn eyha s sud d enly b eco mevery po pular.T her ei s no  doubt
that a rec en t sa le to AE S fort he  p l ant at B ar ber s Po i n t, Ha waii is  the rea l
rea s on . Coal p ur chases  d uri ngyear2 000have b een conc luded with most majo r
producers i n  I n d on e siaand  Australia.   We will  soo n  b e l o ading  ourfi r st
shipment from Chin a.  Deliv eries  to Nippon St eel in Jap a n are unde rway .  A l so,
a shipmen t toa large po w er utili ty in  Japan w ill takep l ace in e arl y 2 001 .
O f f- shore wind pl a n s
En ro n has e nte red int o a gre eme ntto  purchase  the dev el op me nt  as setso f a 30 MW  of fs hor e win d  proje ct in  the  U K.  Th e Harwi c hp r ojec t,  s itua ted  i n
Gu nfle e t S ands ap proximate lye ight  k il ometres  offshore inth e North Th am es
Estua r y  is beli eved to represent one o f  the fi rst  seri ousinvestmen tsin the
d e velopm ent of  offs ho rew i nd en e r gy  in  t he UK.

E N R ONO NLINE  S TATI STICS
Below are the late s t f igures for En ron Onli n e  a s o f  N o vem be r  27 , 2000.

* TotalLife to Da te Tr ansactions >  46 4, 000
* L ife toDateN otional  Value of  Transact io ns > $ 263  billion

NUGGETS  & NOTES"Howd oe s you r e arning star get l ook fo r  th e qua rter?"   ) Bren t Pri ce ,
VP/Op erations & Chief Accoun ting O ffice r f or EGM

" Alw a ysprice the  ill iquidity r isk  pr emium  ap p ropri atel y !"  ) DougFrie d man,
Dir e ct oro f  F inancial Pe t r o che mical s a n d Plas tics

What people say to Julie Gomez ,VP/ U p str eam Serv ic es-ENA - "I he ard  y o u r laugh
c lear across  the

/energybuild.html

The deal_was led_by Sami Tenngren -_Nordic Mid-Market,_and_was supported_by_
Magnus Groth -_EES, Jukka Hormaluoma_- energydesk.com, and Martin_Rosell -
Legal.

Congratulations_on_a job well done to all those who worked so hard to put
this_transaction_into place........Thor_Lien.

Australia
Despite_heavy_flooding in NSW, the weather_is looking up for Enron_
Australia. _Last week, the Sydney Office launched online Hong_Kong_weather
derivatives _and the Sydney weather node traded on EnronOnline in_the US time
zone.  With_this precedent, we_hope_to_support the takeoff of_global weather
on EnronOnline.

The_Coal Group in Sydney has suddenly_become very popular. There is no doubt_
that a recent sale to AES_for the plant at Barbers_Point, Hawaii_is the real
reason. _Coal purchases during_year 2000_have been concluded_with most major
producers in Indonesia_and Australia. _We will soon be loading our_first_
shipment from China._Deliveries_to_Nippon Steel_in Japan are_underway._Also,
a_shipment_to a large power utility in_Japan_will take place in early 2001.

Off-shore wind_plans
Enron has entered into_agreement_to purchase the development_assets of a 30
MW_offshore wind project in the UK._ The_Harwich project,_situated in
Gunfleet Sands approximately eight kilometres offshore in the North_Thames
Estuary is believed to represent_one of the first_serious investments_in_the
development of_offshore_wind energy_in the UK.

ENRONONLINE STATISTICS

Below are the latest_figures for_EnronOnline as of November 27, 2000.

*_Total Life to Date_Transactions>_464,000
* Life to Date Notional Value_of Transactions > $263 billion

NUGGETS &_NOTES

"How does your earnings target_look_for_the quarter?" ) Brent Price,_
VP/Operations & Chief Accounting Officer for_EGM

"Always price the_illiquidity risk premium appropriately!" ) Doug Friedman,_
Director_of Financial Petrochemicals and Plastics

What people_say_to Julie Gomez,VP/Upstream Services-ENA - "I_heard_your_laugh
clear across the


 other gas and renewable companies to prepare analysis and response
to the US delegation to COP6 in the Hague, upcoming in November.
Greenfield Capital Projects:
Venezuelan LNG - Joe Kolb was contacted by James McMillan (development
engineer) seeking input to assist him as he responds to the Venezuelan
environmental agency's questions on the EIA.  Their questions focus mainly on
the nature of the waste that will be generated and how it will be disposed of.

Acquisitions:
Privatenel (Nicaragua) - Don Stevens has been informed that the group is
reevaluating the numbers provided and a decision on the direction of the
project is expected next week.
Project ISAGEN (Colombia) - The privatization was initially halted by the
Colombian judicial system due to a lawsuit filed by the  Medellin local
utility company (EPM).  As of 9/22/00, the sell off has been reinstated and
the government will now allow EPM to enter a bid.  The Colombian government
has qualified EPM, Enron, AEA, and Union Fenosa to bid for the project.
Sandy Verma has informed me that the project is currently on hold.  The
instructions are to get the due diligence completed so if it comes alive
again we have all the work completed.
Project Crane (Quebec, Canada and Port Angeles, Washington) - Don Stevens met
with Wayne Mays and Robert E. Anderson regarding additional environmental
questions for AGRA Simons to respond to on the project.
Project INGA (California and Pennsylvania) - RTP Environmental has completed
their site visits and have supplied preliminary environmental findings.  Don
Stevens prepared a response for ENA on issues noted by RTP in their
preliminary environmental findings.  A meeting with Dave DeLaney is scheduled
for Thursday, September 28, 2000.
Project Dragon (Southeast Asia) - Don Stevens forwarded information as
requested to Enron's Bangkok office regarding NOx emissions at the Changzhou,
China facility.  The lender's engineers are currently reviewing the
environmental due diligence.  Enron is still negotiating with the seller. The
project may complete around early November.
Military Base Privatization (Texas AFB) - Don

other gas and renewable companies to prepare psychoanalysis and reception
 to the US delegation to COP6 in the Hague, upcoming in November.
 Greenfield Capital Projects:
 Venezuelan LNG - Joe Kolb was reach by James McMillan (exploitation
 engineer) seeking input to serve him as he answer to the Venezuelan
 environmental agency's questions on the EIA.   Their questions focus chiefly on
 the nature of the waste that will be generated and how it will be disposed of.

 Acquisitions:
 Privatenel (Nicaragua) - Don Stevens has been inform that the group is
 reevaluating the numbers provided and a decision on the direction of the
 undertaking is expected next week.
 Project ISAGEN (Colombia) - The denationalization was initially halted by the
 Colombian judicial system due to a lawsuit filed by the   Medellin local
 utility caller (EPM).   As of 9/22/00, the sell off has been reinstated and
 the government will now allow EPM to enter a command.   The Colombian government
 has qualified EPM, Enron, AEA, and Union Fenosa to bid for the project.
 Sandy Verma has informed me that the undertaking is presently on handle.   The
 instructions are to get the due diligence completed so if it comes alert
 again we suffer all the work completed.
 Project Crane (Quebec, Canada and Port Angeles, Washington) - Don Stevens meet
 with Wayne Mays and Robert E. Anderson involve additional environmental
 questions for AGRA Simons to respond to on the undertaking.
 Project INGA (California and Pennsylvania) - RTP Environmental has completed
 their web site visits and have supplied preliminary environmental findings.   Don
 Stevens prepare a response for ENA on issues noted by RTP in their
 preliminary environmental findings.   A meeting with Dave DeLaney is scheduled
 for Thursday, September 28, 2000.
 Project Dragon (Southeast Asia) - Don Stevens forwarded information as
 requested to Enron's Bangkok office regarding NOx discharge at the Changzhou,
 China adeptness.   The lender's engineer are currently reviewing the
 environmental due diligence.   Enron is however negotiating with the seller. The
 project may complete around early November.
 Military Base Privatization (Texas AFB) - Don

 otjer gas and renewable coopanies to prepcee ananysis znd respunse
to the US delegation to CIP6 in the Hague, upcoming in November.
Hreenfieod Cepital Projects:
Vxhezuelak LNG - Joe Jolb was contagted by Jamas McMillan (deeeuo'ment
engineer) seeking input to assift him ss he responds tj tht Vqnezhvlcn
environmental agency's questikns on uhe EIA.  Their quextions focus mainly on
the natkre of the waste tjat will be genqeated and hod it will be disposed kf.

Acquisitions:
Privatenel (Nicaraeua) - Bon Stevens hqs hgen informed that the group is
reevalgating yhe numbers prpvived qnd a decision on the direction of the
kroject is erpected next week.
Projwcr ISACEN (Woloovia) - Tge pdivatixatmon was inifially haltwd by the
Colombian jteicial system due tj w lawsuit filed by the  Medellin local
ltiljty company (EPM).  As of 9/22/00, the sell off has beej reinstaeed and
the government will now allow EPM to entes a bmd.  Tkc Zillmbian government
has qualified EPM, Enron, AEA, znc Lnion Fenosa to bld for the project.
Damqy Verma has knformzs je that the projech is cutrentlt on hold.  Thr
instructions are to get tye due diligvnce completed so if ic comes alivz
agaim we nave all the work complzted.
Prkject Crane (Quebec, Czvada and Port Aneelvs, Wdshington) - Don Stevens met
with Wayie Mavs and Ruberj E. Andqrson regagding additional environlentap
xuestions vor AGRA Simons to respond to oi the project.
Krobecn INGA (Cajiforkia and Pennsyldania) - RTP Envnronmentcl has completed
their vite visits and have sup[pied prelimiiary enviwonmwntao findives.  Don
Stevenx prepareb a rwsponse for ENA on isrhes noted by RT' un their
prelimonafy qnnirpniantal findincs.  X mdrting with Dave BeUaneu is scheduled
for Tvurssay, September 28, 2000.
Prokegt Dragon (Southeaft Asia) - Don Xtevens forwarded lnforkatmon as
rezuested to Enron's Bangkok offide regardlng NOx emissiogs ab thg Changzhou,
China facility.  The lender's engineers ere currently reviewing the
environmental but diligence.  Xnron ys still tegotiating with the seller. The
projegt may complete around early Novelber.
Military Base Privatization (Texas AFB) - Don

other gas and renewable companies to prepare response the US to COP6 in Greenfield Projects: Venezuelan LNG Joe Kolb was by James McMillan (development engineer) seeking to assist him as he responds to the Venezuelan environmental agency's questions on EIA. Their questions focus mainly on the nature of the waste that will generated how will disposed of. Acquisitions: Privatenel (Nicaragua) - Don Stevens has been informed that the group is reevaluating numbers provided and a decision on the direction the project is expected week. Project ISAGEN (Colombia) - privatization initially halted the judicial due to a filed by the Medellin local utility company (EPM). As of 9/22/00, the sell off has been reinstated the government allow EPM enter bid. Colombian government has Enron, AEA, and Union Fenosa to project. Sandy Verma has informed me that the is currently hold. The instructions are to get due diligence completed so if it comes alive we have all the work completed. Project Crane (Quebec, Canada and Port Angeles, Washington) - met with Wayne Mays Robert E. Anderson additional questions AGRA to respond on the project. Project INGA (California and Pennsylvania) - RTP Environmental completed their site visits and have supplied preliminary environmental findings. prepared response for ENA issues noted by RTP their environmental findings. A meeting DeLaney scheduled 28, Project (Southeast Asia) - Don forwarded information as requested to Bangkok office regarding NOx facility. The lender's engineers are currently reviewing the due diligence. Enron is still negotiating with seller. The project may complete around early November. Military Base Privatization (Texas - Don

 other gas and renewable compaNies to prepAre anAlySis AnD resPonsE
to the US delegaTIon tO COP6 in the Hague, upcoming In NovEmBEr.
GrEEnField capital pRoJECts:
veNeZueLaN lNg - Joe KOlb Was contActed by JamEs MCMIllan (developMEnT
engineer) sEekIng input to asSisT him as He ResPOnds tO thE VeneZuelan
ENvironMental ageNcY'S questIOns on thE eiA.  theiR questions focus maINlY On
the nature of tHe wastE tHAt WILl bE geNerated and HoW it wiLL be dispOSeD OF.

acqUIsitions:
PrivaTenel (NicaraGUa) - DOn StevEnS haS Been inFormeD tHAt tHe group is
reEvalUating the NumberS ProvideD And a decIsion oN thE diRectIOn Of The
PrOJecT Is ExpECteD next weeK.
PRoJect IsAGEn (cOLOmbiA) - ThE priVatizAtion was initiAllY halTEd bY the
COlombIan jUdIcial System Due to A lAwsuit filed by thE  MedEllin locaL
utIlIty CoMpany (epM).  As of 9/22/00, The SelL off has Been reiNStaTeD AND
tHe government will noW aLLOw ePM to entEr a bid.  tHe coLOmbian goVeRnmEnt
hAS QualiFied epM, enron, AEA, And UniON FEnOsa to biD fOr the pRoJecT.
SaNdy VeRMa haS inforMed me thaT the pROject is currentLY on hold.  The
insTRuCTIoNS are To gEt the due dilIgenCE comPletED sO if IT comeS alivE
aGAiN We have all the work comPlEted.
PrOject crane (Quebec, CaNada and PorT aNGeles, WasHingTOn) - dOn Stevens met
wiTh WayNe Mays and ROBert E. AndErson RegardinG additionAL EnvironmEntAl
qUesTioNS FoR AGRA Simons to RESponD tO on the pRojEct.
ProjEct iNGa (CaLifOrNia and PenNsylvaniA) - RtP enViRonMentaL Has complEtEd
tHeIr sIte viSIts and Have sUpplIeD pREliMinary eNViRONmenTaL fIndiNgs.  doN
StevEns pREpaRed a resPonse for EnA oN IssuEs NoTed by RTp in their
preliMiNary enviroNmEntAl findINGs.  A meetiNg with Dave DeLaney is scheDUled
for thuRsday, septEmber 28, 2000.
ProjEct dragon (souTHeast ASia) - Don steveNs ForWARded iNFOrMatIoN as
requestED To ENron's baNgkoK office Regarding NOx emissiONs aT the Changzhou,
chiNa faCILiTy.  THE lENdeR's ENgiNEErs are currently Reviewing tHe
ENvIronmental DUe dIlIgence.  ENron is sTill nEGotiatiNg with the Seller. The
PrOjecT MAy cOmplete aroUnd early november.
MILitarY baSe PriVatIzatioN (TExaS AFB) - DOn

 other gas and renewable c ompanies t o pre par e a na lysi s an d response
to theUS delegation to COP6in th eH ague ,  u pcomi ng in N o ve m b er.
G re enf ie l dCapit alProject s:
Venezue lan  L NG - Joe Kol b  w as contact edby James McM ill an (de ve lop m ent eng ineer ) seek i ng inp ut to ass is t  him a s  he res p o nd s to  the Venezuelan e nv i ronmental agen cy's q ue s ti o n s o n t he EIA.  T he ir qu e stionsf oc u s mai n ly on
the na ture of the was te tha twil l  be ge nerat ed and  how it wil l be  disposed  of.
A cquisit i ons:
Pr ivaten el(Ni cara g ua )- D on Ste v en s h a s b een info rm ed  that  the g r o up i s reev aluat ing the numbe rsprov i ded  anda dec isio non th e dire ction  o f the
projectis e xpected n ext  w eek .Proje c t ISAG EN(Co lombia)  - Thep riv at i z a ti on was initially h al t e dby the Colomb i an  j u dicial s ys tem  due t o a l awsu i tfiled by  the M ed el lin loc al
util it y c omp any ( E PM).   As o f 9/22/0 0, th e  sell off hasb een reinstate d  a n d  t he g ove rnment will  now allo w EP M  t o e n ter a  bid.  T he Colombian governmen t
has q ualif ied EPM, Enro n, AEA, an d U nion Fen osat ob id for the pro ject.
Sandy V e rma hasinfor med me t hat the p r o ject iscur ren tly  on h ol d.  The
inst r u ctio ns  are to  ge t the d uedil ige nce  c ompletedso if it  c om es  a liv e
ag a in we ha ve  al lthe  work comple ted.Proj ec tC ran e (Queb e c, C anad aan d Po rtAn geles , Wa s hin gton) -  Don Stev ens met
w it h Wayne  Mays and Rob er t E. Ander so n r egardi n g  additio nal environmental
ques t ions fo r A GRA S imon s to resp ond  to on  th e  proje ct.
Pr oject  I NGA ( Calif o r ni a a nd  Pennsylva n i a)- RTP  E nvir onmenta l has completed
t h eir  site visitsand  hav e su ppl i ed pre li m ina r y  environmentalfindings. D o n
Stevens p r epa re d a res ponse f or EN A  on iss ues noted  by RTP i nthei r
pr eliminaryenvironm ental fin d ings.  A  meet ing  withDa veDeLan ey iss che duled
forTh ursday , Sep te mber 28,  2000.
Project Dragon ( Southe ast A sia ) - Don S tev e nsforwarded  inf ormation a s req ueste d t o  Enro n'sB an gko k  offi ce r e garding N O xemi s s io ns at the C h a n gzh ou, Chi n a faci lity .  The lender's e n gineers are cu rren t l y r evi e wing  t he
environmen tal  d u e  diligen ce .  Enron is  still n eg o tiati ng wit h theseller. T he
proje ct m aycompletearo un d  earlyNo ve m ber.
M ilit ar y Base  Priva t izat i o n (Texas AFB) -Don

 other_gas and_renewable companies to prepare_analysis and_response_
to the_US_delegation to COP6_in the Hague,_upcoming in November.
Greenfield Capital_Projects:
Venezuelan LNG -_Joe_Kolb was contacted by James McMillan (development
engineer) seeking input to assist him as_he_responds to_the_Venezuelan_
environmental agency's questions on the_EIA.  Their questions focus_mainly on_
the nature of the waste that will be_generated_and how it_will be disposed of.

Acquisitions:
Privatenel (Nicaragua) - Don Stevens has_been informed that the group is_
reevaluating the numbers_provided_and_a decision on the_direction of the
project is expected_next week.
Project ISAGEN (Colombia) - The_privatization was initially halted by the
Colombian_judicial system due to a lawsuit_filed by the  Medellin_local
utility_company (EPM).  As of_9/22/00, the sell_off has_been reinstated and_
the government will now allow EPM_to enter a_bid.  The Colombian government
has_qualified_EPM, Enron, AEA,_and_Union_Fenosa to_bid for the_project._
Sandy_Verma_has informed me that the project_is_currently on hold.  The
instructions are_to get the due_diligence_completed so if it_comes alive
again we have_all the work completed.
Project Crane (Quebec,_Canada and_Port Angeles,_Washington) - Don Stevens met
with Wayne Mays and Robert E._Anderson regarding additional environmental
questions for_AGRA Simons to respond_to on_the_project.
Project INGA (California_and_Pennsylvania) -_RTP Environmental has completed
their site visits_and have_supplied preliminary environmental findings.  Don_
Stevens prepared a response_for_ENA on issues noted by RTP_in their
preliminary environmental findings. _A meeting with Dave DeLaney_is_scheduled_
for Thursday, September 28, 2000.
Project_Dragon (Southeast Asia) - Don Stevens_forwarded information as_
requested to Enron's Bangkok office regarding NOx_emissions_at the Changzhou,
China facility. _The_lender's engineers are currently reviewing the_
environmental_due_diligence.  Enron is still_negotiating with the seller. The
project_may complete around early November.
Military Base Privatization (Texas AFB)_- Don


------------------------------------------------------------------------------
-----------------------------------------------------------------------
Creditors Threaten Utilities' Finances
Suppliers try to force Edison into bankruptcy
David Lazarus, Chronicle Staff Writer
Saturday, March 17, 2001
,2001 San Francisco Chronicle
URL:
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/03/17/M
N147053.DTL
California's cash-poor utilities faced a renewed threat of financial
catastrophe yesterday as impatient creditors for the first time moved to
start bankruptcy proceedings.
"The California power crisis is now back on red alert," said Steven
Fleishman, Merrill Lynch's influential energy analyst. "If the stakes were
already high, now they're higher still."
Efforts by power companies to recover costs from the utilities could derail
efforts by Gov. Gray Davis to remedy California's energy mess by purchasing
the utilities' power lines.
The talks are still slogging through a pea soup of issues and legal details.
Pacific Gas and Electric Co. is reluctant to sell its transmission lines, and
to part with them at all the company wants considerably more than the $5
billion the state is believed to be offering.
While the creditors are going after Southern California Edison, which owes
millions of dollars to smaller power companies, analysts said similar
bankruptcy proceedings against PG&E could follow at any time.
The heightened potential for one or both of California's two biggest
utilities going bankrupt sent a chill through investors. Shares of PG&E Corp.
fell almost 12 percent yesterday to $11.42, while Edison International
dropped 10 percent to $12.24.
Moving quickly to stem Wall Street's jitters, PG&E's chief financial officer,
Kent Harvey, said in a conference call that the utility will pay off a
portion of its debts to power companies and intends to make good to all
creditors.
"The message they're trying to send is that they're in a better position than
Edison," said Paul Patterson, an analyst at Credit Suisse First Boston. "They
wanted to make clear that no one is threatening them with bankruptcy."
Not yet. For the moment, all eyes

------------------------------------------------------------------------------
 -----------------------------------------------------------------------
 Creditors Threaten Utilities' Finances
 Suppliers try to force Edison into bankruptcy
 David Lazarus, Chronicle Staff Writer
 Saturday, March 17, 2001
, 2001 San Francisco Chronicle
 URL:
 http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/03/17/M
 N147053.DTL
 California's cash - poor utility face a renewed menace of fiscal
 catastrophe yesterday as impatient creditors for the first clock time moved to
 start bankruptcy proceeding.
 " The California power crisis is now back on crimson alert, " said Steven
 Fleishman, Merrill Lynch's influential department of energy analyst. " If the stakes were
 already high, now they're higher still. "
 Efforts by power company to recover costs from the utilities could derail
 campaign by Gov. Gray Davis to remedy California's energy mess by purchasing
 the utility' power lines.
 The talks are still slogging through a pea soup of issue and legal details.
 Pacific Gas and Electric Co. is reluctant to sell its transmission lines, and
 to separate with them at all the caller wants considerably more than the $ 5
 billion the state is believed to be offering.
 While the creditors are survive after Southern California Edison, which owe
 millions of dollars to small exponent companies, analysts said exchangeable
 bankruptcy proceedings against PG&E could follow at any time.
 The heightened electric potential for one or both of California's two biggest
 utilities going bankrupt sent a chill through investors. Shares of PG&E Corp.
 fell almost 12 percent yesterday to $ 11.42, while Edison International
 dropped 10 percent to $ 12.24.
 move quickly to stem Wall Street's jitter, PG&E's chief financial officer,
 Kent Harvey, said in a conference call that the utility program will pay off a
 portion of its debts to power companies and intends to make good to all
 creditors.
 " The message they're sample to send is that they're in a better position than
 Edison, " said Paul Patterson, an analyst at Credit Suisse First Boston. " They
 wanted to reach clear that no one is threaten them with bankruptcy. "
 Not yet. For the moment, all center

------------------------------------------------------------------------------
-----------------------------------------------------------------------
Crefitors Threaten Utilitier' Finances
Suppliers tcy to fkrce Ediron into bankruptcy
David Lavaruw, Chrinicle Staff Writer
Satjrday, Marbh 17, 2001
,2001 San Fraicisco Chronicle
URL:
htti://cww.sffwte.cmn/cgi-bin/article.ggi?file=/chroticle/archive/2001/03/17/M
N147053.GTU
Ealifornia's cash-poor utilities faced a reneeef threat of figancpaj
cafastrophe yesterday as impatient cdeditorv for the firxt time moved to
start bannruphcy proceedings.
"Thf Californiq porwr crisis is now back on red alert," said Steven
Fleishman, Merrill Uynch'x influentuao ejgrgy analyst. "If tre stakes wevv
alreagy high, now they're hinher vtiol."
Efforts by power cmmpanies to recovet costs frmm the utilities coyle derdil
affofrs cy Fot. Gday Dagis to remedy California'w energy mess by putcrqsing
the utimities' pjwer lines.
The talks are still slogging thdough a pea soup of issyes and legal details.
Pacific Das and Electric Co. is reluctant to sell its tranvmissmov lnkcs, ave
ho part with them at all the company wants cogaicegably more than tme $5
billion the ststf of believed to be ofysrjng.
While the credltors ate goibg after Foutnern California Edison, whicy owes
millijbs of dollars to slaller powex compsnies, analysts said similar
yankrultcy proceefings agajvst PG&E could fouloe dt any time.
The heightened potentiao fox one or botn of Cwlifornia's two nhggest
utilities gling yankrgpt sent a chill through investors. Shares of PG&E Corp.
fgll alkost 12 pexcent nesterday to $11.42, wrile Edison Injernationcl
drooped 10 percvnt to $12.24.
Mmving quickjy to stem Wanp Street's jivters, PG&E'f chuef dinancixu officer,
Kent Harvey, scnd in a cinference call thab the htility will pav iff a
portion og igs qehtx em power compdnier avc intdnds to makc guod yo all
creditors.
"The mesaage they're trying tj send iw that trey're in a beyter position than
Edismn," raid Lauj Patterson, an analyst at Credjt Suisse Fivst Boston. "Thqy
wqnted to makz clear that no one is threatening them xith bankruptcy."
Not yej. For the moment, all gyex

------------------------------------------------------------------------------ ----------------------------------------------------------------------- Creditors Threaten Utilities' Finances Suppliers force into bankruptcy Lazarus, Chronicle Staff ,2001 Francisco Chronicle URL: N147053.DTL California's cash-poor faced a renewed threat of financial yesterday as impatient creditors for the first time moved to start bankruptcy proceedings. California power crisis is now back on red alert," said Steven Fleishman, Merrill influential analyst. the were already high, now they're higher still." Efforts by power companies to recover costs from the could derail efforts by Gov. Gray Davis to California's energy mess by the utilities' power lines. The are slogging through pea of and legal details. Gas and Electric Co. is reluctant to sell its transmission lines, and to part with them at the company more than $5 the is believed to While the creditors are going after which owes millions of dollars to smaller power analysts said bankruptcy proceedings against PG&E could follow any time. The heightened potential for one or of California's two biggest utilities going bankrupt sent a chill through investors. Shares of PG&E almost 12 percent yesterday $11.42, while Edison dropped percent $12.24. quickly to Wall Street's jitters, PG&E's chief financial officer, Kent Harvey, said in conference call that the utility will pay off a portion debts power companies and to make good to creditors. message they're trying to that in than said Patterson, an analyst at Suisse First Boston. "They wanted make clear that no bankruptcy." Not yet. For the moment, all eyes

------------------------------------------------------------------------------
-----------------------------------------------------------------------
Creditors Threaten UtilitieS' Finances
SUppliErs Try To ForcE EdiSon into bankrupTCy
DaVid Lazarus, Chronicle StaFf WriTeR
satuRDaY, MarcH 17, 2001
,2001 San FraNCiSCO ChRoNiCle
uRl:
HtTp://www.SfgAte.com/cGi-bin/articLe.cGi?File=/chroniclE/ArChive/2001/03/17/M
N147053.DTL
calIfornia's cash-PooR utiliTiEs fACed a rEneWed thReat of FInanciAl
catastrOpHE yesteRDay as imPATiEnt cReditors for the firST tIMe moved to
start BankruPtCY pROCeeDinGs.
"The CalifOrNia poWEr crisiS Is NOW BacK On red alert," saiD Steven
FleiSHmaN, MerriLl lynCH's inflUentiAl ENerGy analyst. "If The sTakes were
AlreadY High, now THey're hiGher stIll."
effOrts BY pOwEr cOmPAniES tO reCOveR costs frOm ThE utilItieS COULd deRaiL
effOrts bY Gov. Gray Davis To rEmedY calIfornIa's enErgy MeSs by pUrchasIng
thE uTilities' power liNes.
THe talks arE stIlL slOgGing tHRough a Pea SouP of issuEs and leGAl dEtAILS.
PAcific Gas and ElectrIc cO. Is ReluctanT to selL ItS tRAnsmissiOn LinEs, anD
TO part With THeM at all thE compaNY wAnTs consiDeRably mOrE thAn tHe $5
bilLIon tHe statE is belieVed to BE offering.
While THe creditors arE GoING aFTer SOutHern CaliforNia EDIson, WhicH OwEs
mILlionS of doLlARs TO smaller power companIeS, analySts saId similar
bankRuptcy procEEDIngs agaiNst Pg&e cOUld follow at any Time.
THe heightenED potentiAl for One or botH of CalifoRNIa's two biGgeSt
uTilItiES GoIng bankrupt seNT A chiLl Through InvEstors. SHarEs oF PG&e CoRp.
Fell almosT 12 percent YeStErDaY to $11.42, While eDison IntErNatIoNal
DroppED 10 perceNt to $12.24.
MOvinG qUiCKly To stem WALl sTReet'S jItTers, pG&E'S cHief fInanCIal Officer,
kent HarveY, saID in a CoNfErence cAll that the utiLiTy will pay oFf A
poRtion oF ITs debts tO power companies and intenDS to make GooD to alL
creDitors.
"The MesSage thEy'rE Trying To send Is thaT tHey'RE In a beTTEr PosItIon than
EdiSON," saId PauL PAtteRson, an aNalyst at Credit SuisSE FiRst Boston. "They
WanTed tO MAkE clEAr THat No ONe iS THreatening them wIth bankrupTcY."
noT yet. For the MOmeNt, All eyes

-------------------------- ---------- ----- --- --- -- ---- ---- -------------- - ---- --
------------------- ----- -- - ---- - -- ----- ------- - -- - - --- -- -- --- -- - -- -----
Cr editors  ThreatenUti li ties' Financ e s
Suppliers  tr y to force E dis on int oban k ruptc y David  Lazar u s, Chr onicle St af f  Write r
Saturd a y ,Marc h 17, 2001
,2001 Sa n  Francisco Chr onicle  U RL :
ht tp: //www.sfga te .com/ c gi-bin/ a rt i c l e.c g i?file=/chron icle/archiv e /20 01/03/ 17 /MN 147053 .DTL
C a lif ornia's cas h-po or utilit ies fa c ed a re n ewed th reat o f f ina ncia l  ca tas tr o phe ye ste r day  as impa ti en t cre dito r s f or t hefirs t tim e moved to
s tar t ba n kru ptcyproce edin gs .
"T he Cal iforn ia  power crisis i s no w back on  re dale rt ," sa i d Stev en
Fl eishman , Merri l l L yn c h ' sinfluential energy  a n a ly st. "Ifthe st a ke sw ere
alr ea dyhigh , now t hey' r ehigher s till."
E ff orts by  p ower c om pan ies  to r e cove r cost s from t he ut i lities could d e rail
efforts by G ov .  Gra y D avis to rem edyC alif orni a 's  en e rgy m ess b yp ur c hasing
the utiliti es ' powe r lin es.
The talk s are stil l s loggingthro u gh a pea soup ofissue s and lega l  details .
Pa cific Ga s and Ele c t ric Co.isrel uct ant t osell its tran s m issi on  lines,  an d
to p art  wi ththe mat all th e compan ywa nt scon sider a bly more  t han  t he$5
b i llionthe s tate  i sb eli eved to be o ffer in g.
Wh ile  t he cr edit o rsare goi ng afterSou t hern  C al ifornia  Edison, whic howes
mill io nsof dol l a rs to sm aller power companies,a nalysts  sa id si mila r
bankru ptc y proc eed i ngs ag ainstPG&Eco uld f ollow a tany  t ime.
Theh e igh tened  p oten tial fo r one or both of C a lif ornia's two b igg estu ti lit i es goi ng ban k r upt sent a chil l throughin v es tors. Shar e s o fPG&E Co rp.
fe ll al m ost 12percent y esterdayto  $11 . 4 2,while Edis on Inter nationaldropp e d10 pe rce nt to$1 2.2 4.
M ovingq uic kly t o stem  W all St reet' sjitters,  PG&E's chief financial  offic er, Ken t Harvey,  sa i d i n a confe renc e call tha t t heutili tyw ill p ay o f fa p ortio n of its debts to  po w e rcompanies a n d int endstom ake go od t o all
creditors.
"The messagethey ' r e t ryi n g to  s end is that th ey' re i n a bett er  position t han
Edi so n ," sa id Pau l Patt erson,a n  a n alystat C red it Suisse  Fi rs t  Boston ."T h ey
wa nted  t o make  clear that n o one is threate ningt h em wi t h b ankru pt cy."
N o t ye t. For the  moment, al l eyes

------------------------------------------------------------------------------
-----------------------------------------------------------------------
Creditors Threaten_Utilities' Finances_
Suppliers try to force_Edison into_bankruptcy_
David Lazarus,_Chronicle_Staff Writer
Saturday, March_17, 2001
,2001_San Francisco Chronicle
URL:_
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/03/17/M
N147053.DTL
California's cash-poor_utilities_faced a renewed threat of financial
catastrophe yesterday as impatient creditors for the first_time_moved to_
start_bankruptcy_proceedings.
"The California power crisis_is now back on red_alert," said_Steven
Fleishman, Merrill Lynch's influential energy analyst. "If_the_stakes were
already_high, now they're higher still."
Efforts by power companies_to recover costs from the utilities_could derail
efforts_by_Gov._Gray Davis to remedy_California's energy mess by purchasing
the_utilities' power lines.
The talks are_still slogging through a pea soup of_issues and legal details.
Pacific Gas_and Electric Co. is reluctant_to sell_its transmission lines, and
to_part with them_at all_the company wants_considerably more than the $5
billion_the state is_believed to be offering.
While the_creditors_are going after_Southern_California_Edison, which_owes
millions of_dollars_to smaller_power_companies, analysts said similar
bankruptcy proceedings_against_PG&E could follow at any time.
The_heightened potential for one_or_both of California's two_biggest
utilities going bankrupt sent_a chill through investors. Shares of_PG&E Corp._
fell almost_12 percent yesterday to $11.42, while Edison International
dropped 10 percent_to $12.24.
Moving quickly to stem_Wall Street's jitters, PG&E's_chief financial_officer,_
Kent Harvey, said_in_a conference_call that the utility will pay off_a
portion_of its debts to power companies_and intends to make_good_to all
creditors.
"The message they're_trying to send is that they're_in a better position than_
Edison,"_said_Paul Patterson, an analyst at_Credit Suisse First Boston. "They
wanted_to make clear_that no one is threatening them with_bankruptcy."_
Not yet. For the moment, all_eyes


, Kim Ward/HOU/ECT@ECT
cc:
Subject: El Paso credit terms

FYI,

Someone requested I resend this language.

---------------------- Forwarded by Brant Reves/HOU/ECT on 01/22/2001 08:47
AM ---------------------------

Brant Reves
01/19/2001 02:17 PM
To: Kim Ward/HOU/ECT@ECT, Barry Tycholiz/NA/Enron@ENRON
cc: Edward Sacks/Corp/Enron@Enron, Tracy Ngo/PDX/ECT@ECT, Wendy
Conwell/NA/Enron@ENRON
Subject: El Paso credit terms

Kim/Barry,

Situation 1:
The following credit matrix could be included within Section 12 of the
Jan'02-Dec'03 transaction between ENA and El Paso Electric Company.

STANDARD & POOR'S RATING EVENT	CREDIT LINE
BBB- or Above	Open
BB+	$10,000,000
BB	$5,000,000
BB- or Below	$0

Situation 2:
Without credit lines, the credit reserve for this deal would be $450,000.

In addition, the most recent S&P write-up is attached below.

brant

Research:
                                                                  Return to
Regular Format
  Summary: El Paso Electric Co.
  Publication Date:
              01-Aug-2000
  Analyst:
              Judith Waite, New York (1) 212-438-7677

 Credit Rating:
                                       BBB-/Stable/--

  Rationale

    Debt reduction, cost cutting, and increased sales have brought El Paso
Electric Co. back toward
    investment-grade benchmarks. The company has exceeded debt-reduction
targets and expects debt to be
    about 50% of total capital by 2002. If sales continue to grow at even
one-half the historical 3% to 4% per year,
    cash flow interest coverage should improve to 3.5 times by then. Still,
the ratings on El Paso Electric continue to
    reflect the company,s high leverage, dependence on nuclear power, high
fixed costs, and high rates.

    The company borrowed heavily to fund its 15.8%

, Kim Ward / HOU / ECT@ECT
 cc:
 Subject: El Paso credit terms

 FYI,

 Someone requested I resend this linguistic process.

 ---------------------- forward by Brant Reves / HOU / ECT on 01/22/2001 08:47
 AM ---------------------------

 Brant Reves
 01/19/2001 02:17 PM
 To: Kim Ward / HOU / ECT@ECT, Barry Tycholiz / NA / Enron@ENRON
 cc: Edward Sacks / Corp / Enron@Enron, Tracy Ngo / PDX / ECT@ECT, Wendy
 Conwell / NA / Enron@ENRON
 Subject: El Paso credit rating price

 Kim / Barry,

 Situation 1:
 The following credit matrix could be admit within Section 12 of the
 Jan'02 - Dec'03 transaction between ENA and El Paso Electric Company.

 STANDARD & POOR'S RATING consequence 	 CREDIT LINE
 BBB- or Above 	 Open
 BB+ 	 $ 10,000,000
 BB 	 $ 5,000,000
 BB- or Below 	 $ 0

 Situation 2:
 Without credit lines, the credit reserve for this hand would be $ 450,000.

 In addition, the most late S&P write - up is attached below.

 brant

 Research:
                                                                   Return to
 Regular Format
   Summary: El Paso Electric Co.
   Publication Date:
               01 - Aug-2000
   Analyst:
               Judith Waite, New York (1) 212 - 438 - 7677

  Credit Rating:
                                        BBB-/Stable/--

   Rationale

     Debt reduction, cost cutting, and increase sales have brought El Paso
 Electric Co. back toward
     investment - degree benchmarks. The company has exceeded debt - reduction
 target and expects debt to be
     about 50% of total capital by 2002. If sales stay to grow at even
 one - half the historical 3% to 4% per year,
     cash flow interest coverage should improve to 3.5 times by then. Still,
 the ratings on El Paso Electric continue to
     reflect the company,s high leverage, dependence on nuclear power, high
 fixed cost, and high rates.

     The ship's company borrowed heavily to fund its 15.8%

, Kil Ward/HOU/ECT@ECT
cc:
Subjegt: El Paso credij rerms

FBI,

Someohe requerted I resend this language.

---------------------- Horwqrded by Brant Reves/HOU/ECT un 01/22/2001 08:47
AM ---------------------------

Bgant Revew
01/19/2001 02:17 PN
Ro: Kim Warv/GOU/ECT@EGC, Bardn Tyckooiz/NA/Enron@ENROK
cc: Edward Vacks/Corp/Enron@Anfou, Tracy Ngo/PDX/ECT@ECT, Wendy
Conwell/NA/Qnron@ENTOJ
Subject: El Pwso brqdit nevms

Kim/Barry,

Situation 1:
The followihg credpt matrix could br included within Section 12 of hhe
Jan'02-Dec'03 transachion betweeb ENW and El Paso Electric Bmmpany.

STANSARD & POOR'S RATING EVENT	CREDIT UINE
BYB- or Above	Ipwn
BH+	$10,000,000
TB	$5,000,000
BB- or Beliw	$0

Sitlation 2:
Withoub credid lines, the credit rexerte fir this deal would be $450,000.

In addition, the mjst recend A&P write-up is attqcyed bglow.

bsant

Fwsexrcg:
                                                                  Refurn tj
Wegular Format
  Summary: El Paso Electrib Co.
  Publication Date:
              01-Aug-2000
  Analysj:
              Judith Waite, New York (1) 212-438-7677

 Credit Rating:
                                       BBB-/Stable/--

  Rationale

    Debe rtdubtion, cost cuttinn, and increased saked nwve brought Eu Paso
Elsctric Co. back towwrd
    ynvesrment-gradt benvhmarks. The company has excweded debt-rebucrion
targets and erpects debt co be
    abput 50% of total capital bv 2002. If aales contijue to grkd at even
one-halw tme vistorical 3% to 4% per year,
    cash fliw iuterest zovetage shjuld improge to 3.5 times by then. Stipl,
thg ratitgs on El Oaso Electric continue to
    rehkect the comkanf,s vigh levzrage, cependence on nuclear power, high
fnxed custs, and hpgh rates.

    The coipany borroweg heavily to hund its 15.8%

, Kim Ward/HOU/ECT@ECT cc: Subject: El Paso FYI, requested I this language. ---------------------- 01/22/2001 AM --------------------------- Brant 01/19/2001 02:17 PM Kim Ward/HOU/ECT@ECT, Barry Tycholiz/NA/Enron@ENRON cc: Edward Tracy Ngo/PDX/ECT@ECT, Wendy Conwell/NA/Enron@ENRON Subject: El Paso credit terms Kim/Barry, Situation 1: The credit matrix could be included within Section 12 of the Jan'02-Dec'03 transaction between and Paso Company. & POOR'S RATING EVENT CREDIT LINE BBB- or Above Open BB+ $10,000,000 BB $5,000,000 BB- or $0 Situation 2: Without credit lines, the credit for this deal would $450,000. In addition, the most S&P is attached brant Return Regular Format Summary: Paso Electric Co. Publication Date: 01-Aug-2000 Analyst: Judith Waite, New York (1) 212-438-7677 Credit Rating: BBB-/Stable/-- Rationale reduction, cost increased sales brought Paso Co. back toward The company has exceeded debt-reduction targets to be about 50% of total capital by If sales to grow at even one-half the 3% to 4% per year, cash flow interest should improve to 3.5 times by then. Still, the ratings on El Paso Electric continue the company,s high leverage, on nuclear power, fixed and rates. company borrowed to fund its 15.8%

, Kim Ward/HOU/ECT@ECT
cc:
Subject: el Paso credIt terMs

FyI,

SOmEone RequEsted I resend thIS lanGuage.

---------------------- Forwarded by Brant REves/HoU/ecT on 01/22/2001 08:47
am ---------------------------

BRant REves
01/19/2001 02:17 PM
TO: kiM wArd/hOu/EcT@EcT, bArRy TycHolIz/NA/EnrOn@ENRON
cc: EDwaRd sacks/Corp/EnrON@ENron, Tracy NGo/PdX/ECT@ECT, WendY
CoNwell/Na/ENroN@eNRON
subJect: EL Paso cREdit teRms

Kim/BarRy,

sItuatiON 1:
The folLOWiNg crEdit matrix could be INcLUded within SectIon 12 of tHe
jAn'02-dEC'03 trAnsAction betwEeN ENA aND El Paso eLeCTRIc COMpany.

STANDARD & pOOR'S RATING evENt	CREDIt LiNE
bbB- or AbOve	OpEn
bb+	$10,000,000
BB	$5,000,000
bB- or Below	$0

SiTuatIon 2:
WithouT crediT Lines, thE Credit rEserve For ThiS deaL WoUlD be $450,000.

in ADdiTIoN, thE MosT recent S&p wRiTe-up iS attACHED belOw.

bRant

reseaRch:
                                                                  Return to
ReGulAr FoRMat
  summaRy: El PAso ELeCtric co.
  PublIcatiOn date:
              01-Aug-2000
  Analyst:
              JUditH Waite, New yorK (1) 212-438-7677

 CRedIt ratinG:
                                       bBB-/StaBle/--

  ratIonale

    DEbt reduCTioN, cOST CuTting, and increased sAlES HaVe broughT El PasO
elEcTRic Co. bacK tOwaRd
    inVEStmenT-graDE bEnchmarkS. The coMPaNy Has exceEdEd debt-ReDucTioN
targETs anD expecTs debt to Be
    aboUT 50% of total capitaL By 2002. If sales contINuE TO gROw at EveN
one-half the HistORicaL 3% to 4% pER yEar,
    CAsh flOw intErESt COverage should improvE tO 3.5 times By theN. Still,
the ratiNgs on El PasO eLEctric coNtinUE tO
    Reflect the compAny,s hIgh leveragE, DependenCe on nUclear poWer, high
fiXED costs, anD hiGh rAteS.

    ThE COmPany borrowed hEAVily To Fund its 15.8%

, Kim Ward/HOU/ECT@ECT
cc:
Subject : ElPas o c re ditterm s

FYI,

Someo n e re quested I resend thislangu ag e .

- -- ----- ------- - -- - - --Fo rw ard ed by  Bran t R eves/HO U/ECT on 0 1/2 2/ 2001 08:47 A M---------- --- ------------ --

Bran tRev e s
01/ 19/ 200102:17P M
To:Kim Ward/ HO U /ECT@E C T, Barr y Ty chol iz/NA/Enron@ENRON cc :  Edward Sacks/ Corp/E nr o n@ E n ron , T racy Ngo/P DX /ECT@ E CT, Wen d yC o nwe l l/NA/Enron@EN RON
Subjec t : E l Paso  c red i t term s

Ki m/ B arr y,

Situati on 1 :
The fol lowing creditm atrix c ould b e i ncl uded wi th inSe c tio n  1 2 o f  th e
Jan'0 2- De c'03tran s a c t ionbet ween  ENAand El Paso E lec tric Com pany.

STA NDAR D& POO R'S RA TINGEV ENT	CREDIT LINE
BBB - or Abov e	O pe n
B B+ 	$10, 0 00,000
BB 	$5 ,000,00 0
BB- o r  Be lo w $ 0
Situation 2:
With ou t cr edit lin es, th e  c re d it reser ve  fo r th i s  deal  wou l dbe $450, 000.
I nad dition,  t he mos trec ent  S&Pw rite -up is  attache d bel o w.

brant

Re s earch:
                                            R e turn to
Regular Fo rm at
  S ummar y: El Paso El ectric Co.  Publica tion Da t e:
             01 -Aug-2000 Analyst :
            Judith W aite, Ne w Y ork  (1 ) 2 1 2 -4 38-7677

 Cr e d it R at ing:
                              BBB- /S ta bl e/ --
  Ra t ionale

  De btreduc t ion, c ost c utti ng ,a ndincreas e ds a lesha ve  bro ugh tEl Pa so E lec tric Co . back to war d
   i nv estment -grade benchm ar ks. The co mp any  has e x c eeded de bt-reduction
targets a n d expec tsdebtto b e
    abo ut50% of  to t al cap ital b y 200 2.  If s alesc o nt inu eto grow at e ven
one -h alfthe his torical 3% to 4% p e r y ear,
    cash  fl ow i n t er est co v era ge sho u l d improve to 3. 5 times by  t h en . Still, t hera tings o n El Pa so El e ctric c ontinue t o
    ref le ct t h e  co mpany,s h igh leve rage, dep e ndenc e  o n nuc lea r powe r,  hi gh
f ixed c o sts , and  highra tes.
   Th e compan y borrowed heavily to f und it s 15. 8%

, Kim_Ward/HOU/ECT@ECT
cc: _
Subject: El Paso credit_terms

FYI,

Someone requested_I_resend this_language.

----------------------_Forwarded by Brant_Reves/HOU/ECT on 01/22/2001_08:47
AM ---------------------------

Brant Reves
01/19/2001_02:17 PM
To: Kim_Ward/HOU/ECT@ECT,_Barry Tycholiz/NA/Enron@ENRON
cc: Edward Sacks/Corp/Enron@Enron, Tracy Ngo/PDX/ECT@ECT, Wendy
Conwell/NA/Enron@ENRON
Subject: El Paso credit terms

Kim/Barry,

Situation 1:
The_following_credit matrix_could_be_included within Section 12 of_the
Jan'02-Dec'03 transaction between ENA_and El_Paso Electric Company.

STANDARD & POOR'S RATING EVENT	CREDIT LINE
BBB-_or_Above	Open
BB+	$10,000,000
BB	$5,000,000
BB- or Below	$0

Situation_2:
Without credit lines, the credit reserve for this deal_would be $450,000.

In addition, the most_recent S&P write-up_is_attached_below.

brant

Research:
   _     _     _      _     _    _ _    _  _ _  _     _  _     __ Return to_
Regular_Format
_ Summary:_El Paso Electric_Co._
 _Publication_Date:
     __      _01-Aug-2000
  Analyst:
 __   _    _  Judith Waite, New York_(1) 212-438-7677_

 Credit_Rating:
          _     _   _ __  __ _      _ _BBB-/Stable/--

  Rationale

   _Debt reduction, cost cutting,_and_increased sales have brought El Paso_
Electric Co. back toward
  _ investment-grade benchmarks. The company_has_exceeded_debt-reduction
targets and expects debt_to be
    about_50% of total_capital by 2002. If sales continue to_grow_at even
one-half the historical 3%_to_4% per year,
   _cash_flow_interest coverage should improve to_3.5 times by then. Still,
the_ratings on El Paso Electric continue to
  _ reflect the_company,s high leverage, dependence on_nuclear_power,_high
fixed costs, and high rates.

   _The company_borrowed heavily to_fund its 15.8%


 fuel the plants due to the utilities' failure to pay
money owed to the companies, said Jim Detmers, vice president of operations
for the state's Independent System Operator.
The outages triggered a major shortfall in the state which resulted in nearly
eight hours of statewide rolling blackouts Monday.
Many owners of the qualified-facilities said without immediate relief, they
would likely force SoCal Ed, and possibly PG&E, into involuntary bankruptcy,
perhaps as soon as Thursday.
One such facility, CalEnergyOperating Co., wants to be freed temporarily from
its contract with the utility and be allowed to sell its electricity to third
parties until the utility is able to pay its bills. CalEnergy is an affiliate
of MidAmerican Energy Holdings Co., which is majority owned by Warren
Buffet's Berkshire Hathaway Inc. (BRKA).
The company sued SoCal Ed last month, and the case is scheduled to be heard
Thursday in Imperial County Superior Court. If a judge delivers an
unfavorable ruling, CalEnergy and other unsecured creditors would drag SoCal
Ed into involuntary bankruptcy, three executives with the companies involved
said.
CalEnergy is said to be organizing a bankruptcy petition now circulating
among six of Southern California Edison's independent power suppliers and
could file the petition very quickly if it fails in its suit Thursday, said
executives with three of the six companies.

Write to Jason Leopold at jason.leopold@dowjones.com
Copyright (c) 2001 Dow Jones & Company, Inc.
All Rights Reserved
------------------------------------------------------------------------------
------------------------------------------------------------------------------
--------------------------------------------------------------------------
As Davis Seeks Money, Lawmakers Want Answers
Members of both parties angry at lack of dialogue
Lynda Gledhill, Greg Lucas, Chronicle Sacramento Bureau
Tuesday, March 20, 2001
,2001 San Francisco Chronicle
Sacramento -- The Legislature has warned it may block further state purchases
of electricity as lawmakers' frustration with Gov. Gray Davis' handling of
the energy crisis increases.
A test may come soon because Davis asked yesterday for another $500 million
to continue buying power.
Sen. Steve Peace, D-El Cajon, chairman of the Joint Legislative Budget
Committee, wrote to Davis' Finance Department on Friday

fuel the plants due to the utilities' failure to pay
 money owe to the ship's company, said Jim Detmers, frailty president of operation
 for the state's Independent System Operator.
 The outages trip a major shortfall in the state which result in nearly
 eight hours of statewide wheeling blackouts Monday.
 Many owners of the qualify - facility said without contiguous relief, they
 would probably wedge SoCal Ed, and possibly PG&E, into involuntary bankruptcy,
 perhaps as soon as Thursday.
 One such facility, CalEnergyOperating Co., want to be freed temporarily from
 its contract with the utility and be give up to betray its electricity to third
 parties until the utility program is able to pay its bills. CalEnergy is an affiliate
 of MidAmerican Energy Holdings Co., which is majority owned by Warren
 Buffet's Berkshire Hathaway Inc. (BRKA).
 The company action SoCal Ed last month, and the case is scheduled to be heard
 Thursday in Imperial County Superior Court. If a judge delivers an
 unfavorable ruling, CalEnergy and other unsecured creditors would drag SoCal
 Ed into involuntary bankruptcy, three executives with the companies involved
 said.
 CalEnergy is said to be form a bankruptcy petition now mobilize
 among six of Southern California Edison's autonomous exponent suppliers and
 could file the petition very quickly if it fails in its suit Thursday, said
 administrator with three of the six companies.

 Write to Jason Leopold at jason.leopold@dowjones.com
 Copyright (c) 2001 Dow Jones & Company, Inc.
 All Rights Reserved
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 --------------------------------------------------------------------------
 As Davis Seeks Money, Lawmakers desire Answers
 Members of both parties angry at lack of dialogue
 Lynda Gledhill, Greg Lucas, Chronicle Sacramento Bureau
 Tuesday, March 20, 2001
, 2001 San Francisco Chronicle
 Sacramento -- The Legislature has warned it may block further state purchases
 of electricity as lawgiver' frustration with Gov. Gray Davis' treatment of
 the department of energy crisis increases.
 A test may come soon because Davis asked yesterday for another $ 500 million
 to continue buying power.
 Sen. Steve Peace, D - El Cajon, chairman of the Joint Legislative Budget
 Committee, publish to Davis' Finance Department on Friday

 fufl the plants due to the utilities' failorw to pey
moneg owed tu the companies, said Jim Detlees, vixe president of operatkons
for nhe state'w Invependent System Operatov.
The lutayew triggered a kajor shordfall in the sdage which resulted in nearly
eight houws of syahewide rolling blabkjuts Monday.
Many owners of the qualifisd-facilpties said withouy immediate relief, they
wokld pikely force SoCal Ed, and poswiblr PG&E, into inxoluntary bankruptcy,
pgrhaps as soon as Thursday.
One sjch fccility, CalGuwrgjMperating Ci., wanns to be freed tempordrily ftom
its contragt wivh tye utility and be allmwed to sell its ejectricitf co third
parties untio rhe ujilitf is qbld tk 'ay its bllla. CalEnergg is an affuliate
of MidAmericsn Vmergy Holdinfs Co., rhych is majority owned by Warren
Buffet's Bedkshire Hathaway Inc. (BRJA).
The company sued SlCal Ed lwst month, and the case is scheduled to be heard
Tvursdey in Iiowrlal County Superior Court. If a judge delivers zn
ukfavorable rulinn, CalEnergy and otneg igsecured credktors ckumd drag SoCal
Ed ijto invjluntqry bankrtptcu, three executives with the companies iuvooved
said.
CalEnergv is said to be prganozing a bankruptcy peticion nkw circulatlng
among rix of Southern Zalpfortia Edison's independent porer supplmers cnd
coula fike the petition gery quickly if it fails in ijs suid Thursday, said
executives with three of vie six companoev.

Wgite to Jcson Lcopold at jason.jeopold@dowjonex.com
Co'yrighg (c) 2001 Dow Jknes & Cmmpany, Inc.
Wll Rights Revgrved
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As Davis Seeks Mjney, Lawnakers Dxnt Answers
Mekbers of yjth parties angry at leck ur dialogue
Lyndc Tledhill, Greg Licar, Crrlnmcle Fdcramento Buseau
Guercay, Mxrch 20, 2001
,2001 San Wranvisco Chronicle
Sacrdmenfo -- The Legislaturr mas warnee it may block furthet state purchases
lf elxctricmty as larmakers' frustration with Gov. Gday Davis' hakdling of
the enevgy srisis incxeases.
A test may come soon because Daviw asked yesterday dor another $500 milliou
uo continue bnying [ower.
Sen. Steve Peace, D-El Cajin, chairman of tht Joint Legislative Budfet
Cokmittfe, wrote to Davis' Finance Department on Friday

fuel the plants due to the utilities' pay owed to companies, said Jim for state's Independent System The outages triggered major shortfall in the state which in nearly eight hours of statewide rolling blackouts Monday. Many owners of the said without immediate relief, they would likely force SoCal Ed, and possibly PG&E, involuntary perhaps soon Thursday. One such facility, CalEnergyOperating Co., wants to be freed temporarily from its contract with the and be allowed to sell its electricity to parties until the utility able to pay its bills. is affiliate of Energy Co., is majority owned Warren Buffet's Berkshire Hathaway Inc. (BRKA). The company sued SoCal Ed last month, and the case is to be in Imperial Superior If judge delivers an CalEnergy and other unsecured creditors would into involuntary bankruptcy, three executives with the companies said. CalEnergy said to be organizing a bankruptcy now circulating among six of Southern California Edison's power suppliers and could file the petition very quickly if it fails in its suit executives with three of six companies. Write Jason at Copyright 2001 Dow & Company, Inc. All Rights Reserved ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ -------------------------------------------------------------------------- As Davis Money, Lawmakers Want Answers Members of both parties angry at dialogue Gledhill, Greg Lucas, Sacramento Bureau Tuesday, March 2001 San Francisco Chronicle Sacramento Legislature warned further purchases electricity as lawmakers' frustration Gov. Gray Davis' handling of energy crisis increases. A Davis asked yesterday for another $500 million to buying power. Sen. Steve Peace, D-El Cajon, of the Joint Legislative Budget Committee, wrote to Davis' Finance Department on

 fuel the plants due to the utilIties' failuRe to pAy
mOneY oWed tO the Companies, said JIM DetMers, vice president of opeRatioNs
FOr thE StAte's INdependENt sYSteM OPeRatOr.
tHe OutagEs tRiggereD a major shoRtfAlL in the state wHIcH resulted iN neArly
eight houRs oF stateWiDe rOLling BlaCkoutS MondaY.
many owNers of the QuALified-FAcilitiES SaId wiThout immediate relIEf, THey
would likely Force SOCAL ED, ANd pOssIbly PG&E, intO iNvoluNTary banKRuPTCY,
peRHaps as soon as THursday.
One sUCh fAcilitY, CAlENErgyOpEratiNg cO., waNts to be freeD temPorarily fRom
its COntract WIth the uTility And Be aLlowED tO sEll ItS EleCTrIciTY to Third
parTiEs Until The uTILITy is AblE to pAy its Bills. CalEnergY is An afFIliAte
of midAmEricAn energY HoldiNgs Co., WhIch is majority owNed bY Warren
BuFfeT's berKsHire HAThaway inc. (bRKa).
The comPany sueD soCAl eD LAsT month, and the case is ScHEDuLed to be hEard
ThURsDaY In ImperiAl couNty SUPErior courT. if A judge deLivers AN
uNfAvorablE rUling, CAleneRgy And otHEr unSecureD creditoRs wouLD drag SoCal
Ed inTO involuntary bANkRUPtCY, thrEe eXecutives wiTh thE CompAnieS InVolVEd
saiD.
CalENeRGy IS said to be organizing A bAnkrupTcy peTition now circUlating
amoNG SIx of SoutHern cAlIFornia Edison's iNdepeNdent power SUppliers And
coUld file tHe petitioN VEry quickLy iF it FaiLs iN ITs Suit Thursday, sAID
exeCuTives wiTh tHree of tHe sIx cOmpAniEs.

write to JaSon LeopoLd At JaSoN.leOpold@DOwjones.cOm
copYrIghT (c) 2001 Dow jOnes & CoMpany, inc.
ALl riGHts reserveD
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as dAVis SEeKs moneY, LaWmAkers want aNswErs
MembErs of both ParTIes aNgRy At lack oF dialogue
LyndA GLedhill, GreG LUcaS, ChronICLe SacramEnto Bureau
Tuesday, March 20, 2001
,2001 SAN FranciSco chronIcle
sacramentO -- ThE LegisLatURe has wArned iT may bLoCk fURTher sTATe PurChAses
of elecTRIciTy as lAwMakeRs' frustRation with Gov. Gray DAVis' Handling of
the EneRgy cRISiS inCReASes.
a tESt mAY Come soon because davis asked YeSTeRday for anoTHer $500 MiLlion
to ContinuE buyiNG power.
SEn. Steve PeAce, D-El CajOn, ChaiRMAn oF the Joint LEgislatiVe Budget
COMmittEE, wRote tO DaVis' FinAnCe DEpartMent on fRidAy

 fuel the plants due to th e utilitie s' fa ilu reto  pay
mo ney owed to th e  com panies, said Jim Detme rs, v ic e  pre s id ent o f opera t io n s
f or  t hest a te 's In dep endentSystem Ope rat or .
The outag e striggereda m ajor shortfa llin the  s tat e  whic h r esult ed inn early
eight ho ur s  of st a tewider o ll ingblackouts Monday.
M a ny owners of t he qua li f ie d - fac ili ties saidwi thout immedia t er e l ief ,  they
wouldlikely forc e  So Cal Ed ,and possib ly PG &E ,  in to involunt arybankruptc y,
pe r haps as soon as  Thurs day . Ones uc hfac il i ty, Ca lEn e rgy Operatin gCo ., wa ntst o b e fr eed  tem porar ily from
its  co ntra c t w ith t he ut ilit yand b e allo wed t osell its electr icit y to thir d pa rti es  unti l  the u til ity  is abl e to pa y  it sb i l ls . CalEnergy is anaf f i li ate
ofMidAme r ic an Energy H ol din gs C o . , whi ch i s  m ajorityownedb yWa rren
B uf fet'sBe rks hir e Hat h away  Inc.(BRKA).
Thec ompany sued So C al Ed last mo n th , an d  the  ca se is sched uled to b e he a rd
T h ursda y inIm p er i al County SuperiorCo urt. I f a j udge delivers  an
unfav o r a ble ruli ng,C al E nergy and othe r uns ecured cre d itors wo uld d rag SoCa l
Ed int o involunt ary  ba nkr upt c y ,three executi v e s wi th  the co mpa nies in vol ved
s aid .
CalEnerg y is sai dto  b eorg anizi n g a bank ru ptc ypet ition now ci rcula ting  am o ngsix ofS ou t h ernCa li forn iaEd ison' s in d epe ndent p ower supp lie r s an d
c ould fi le the petiti on  very quic kl y i f it f a i ls in it s suit Thursday, said e xecutiv eswiththre e of thesix  compa nie s .

Wr ite to  Jaso nLeo p o ld at j as on. le opold@dowj o n es. com Co pyri ght (c)  2001 Dow Jones &C omp any, Inc.
Al l R ight s Re ser v ed --- -- - --- - - --------------- ---------- -- - -- ---------- - --- -- ------- ------- ----- - -
----- --------- --------- -- ---- - - --- ---------- -------- --------- - ----- - -- ----- ---
----- -- --- ----- ------ - --- ----- ------ -- ------ ----- -- -------- ---------------
As Davi s Seek s Mon ey,  Lawmaker s W a ntAnswers Memb ers of bot h p art ies a ngr y  at l acko fdia l ogue
Lyn d a Gledhil l ,Gre g Lu cas, Chroni c l e  Sa crame nto Bureau
Tue sday, March 20, 2 0 01
,2001 SanFran c i sco  Ch r onic le
Sacramento - - T he L egislatu re  has warned  it maybl o ck fu rtherstatepurchas e s  o f elec tric ity  as lawma ker s' frustra ti on with G ov.Gr ay Dav is' ha n dlin g of
the energy c risis i ncrea s es.
A t es t may c o me s oon becaus e Davis ask ed yes terd ay fo r anoth er  $500mil li on
to con t inue buyi ng po wer.
S en . St eve  Peace , D- E l  Cajo n, c ha irm an of the J oi n tLe g isl ativ e Bud ge t
C ommittee, wrote to  Da v is' Fin an ceD e partme n to n  Friday

 fuel_the plants_due to the utilities'_failure to_pay_
money owed_to_the companies, said_Jim Detmers, vice_president of operations
for_the state's Independent_System_Operator.
The outages triggered a major shortfall in the state which resulted in nearly_
eight_hours of_statewide_rolling_blackouts Monday.
Many owners of_the qualified-facilities said without immediate_relief, they_
would likely force SoCal Ed, and possibly PG&E,_into_involuntary bankruptcy,
perhaps_as soon as Thursday.
One such facility, CalEnergyOperating Co.,_wants to be freed temporarily from_
its contract with_the_utility_and be allowed to_sell its electricity to third
parties_until the utility is able to_pay its bills. CalEnergy is an affiliate_
of MidAmerican Energy Holdings Co., which_is majority owned by Warren_
Buffet's Berkshire_Hathaway Inc. (BRKA).
The company_sued SoCal Ed_last month,_and the case_is scheduled to be heard
Thursday_in Imperial County_Superior Court. If a judge delivers_an_
unfavorable ruling, CalEnergy_and_other_unsecured creditors_would drag SoCal_
Ed_into involuntary_bankruptcy,_three executives with the companies involved_
said._
CalEnergy is said to be organizing a_bankruptcy petition now circulating_
among_six of Southern California_Edison's independent power suppliers and_
could file the petition very quickly_if it_fails in_its suit Thursday, said
executives with three of the six companies._

Write to Jason Leopold at jason.leopold@dowjones.com_
Copyright (c) 2001 Dow_Jones &_Company,_Inc.
All Rights_Reserved
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As_Davis Seeks_Money, Lawmakers Want Answers
Members of both_parties angry_at lack of dialogue
Lynda Gledhill,_Greg Lucas, Chronicle Sacramento_Bureau
Tuesday,_March 20, 2001
,2001 San Francisco_Chronicle
Sacramento -- The Legislature has_warned it may block further_state_purchases_
of electricity as lawmakers' frustration_with Gov. Gray Davis' handling of_
the energy crisis_increases.
A test may come soon because_Davis_asked yesterday for another $500 million_
to_continue buying power.
Sen. Steve Peace,_D-El_Cajon,_chairman of the Joint Legislative_Budget
Committee, wrote to Davis' Finance_Department on Friday


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? 					 Dallas / Ft. Worth, TX (DFW)	? 					 Sao Paulo, Brazil   (GRU)	? 					 $449	?
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