IN: Jeff, Below is a list of items I'd like to discuss with you when we both have time(?). I just wanted to brief you first. I'm thinking about having a meeting with the basis traders every morning from 8:15 - 8:30 after each trader has gathered information from their desk meetings. This would be the optimal time to strategize as a group since changes in regional fundamentals and respective basis implications would be fresh in everyone's mind. Would it be okay to delay EOL market-making in basis until 8:30? I think it would be worth it. I think it would be a good idea to meet with leaders from other groups (origination (who? ), structuring (who? ), Julie Gomez, and Fred Lagrasta) on a regular basis to obtain new information on anything that might affect ENA's basis positions. Could you point me in the right direction as far as whom to involve and maybe notify them of my intentions? Should we set up a new book (under my management) which would hold certain strategic positions such as spread trades and/or more complex structured positions? I think it would be easier to manage that way by not being "cluttered up" in different books (i.e. the P/L from these trades would be my focus instead of managed by other traders.) Do you think the traders could eventually report directly to me? It seems like more intense leadership might provide an extra push to the group. Talk to you soon, Fletch

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OUT: Administative Items

IN: Classmates, The reunion is rapidly approaching! I think we have been able to get ahold of just about everyone now, and it looks like there will be a very big turn-out ... thanks for taking the time to let us know your plans!! Also, special thanks to Constantine for doing a bang-up job on recruiting,

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OUT: Anderson '96 Reunion - 10 Days and Counting!

IN: Tracy, I spoke with Fred and we have a resource available to assists with the remaining ETS modeling and development. Dymetrix can be here this Wednesday and will be dedicated to ETS through the end of the year. He will be responsible for the completion of the O&M model for home office. He will also be responsible for the Marketing initiative. I spoke to Ben Humann about Omaha's resource needs. They will require a resource for two weeks starting November 12th to implement the O&M contributor model. If they should decide to move forward with development of a full financial system, they will require an additional six weeks of time at a minimum. We will scope their financial system requirements during the initial two weeks to better determine what the actual recourse requirements will be. As we discussed this morning I will be dedicated to ETS through the end of January. I will address the remain issues with Operations. I address data transfer issues between Adaytum and the Data Warehouse. I will assist with and manage all of the above initiatives. Please feel free to contact me if you have and questions or concerns. Thanks

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OUT: ETS resource requirements

IN: Attached is the second draft of Enron's comments to FERC on ICAP. The structure of the paper is summarised below: 1. RTO's are a positive step forward for the industry. 2. Spot markets are a necessary part of RTO development to ensure that the RTO can manage real time realiability. 3. A well functioning spot market eliminates the need for separate capacity type products such as ICAP, reserve margin (i.e. it achieves the objectives of iCap). The paper incorporates theoretical and emperical evidence from other sectors of the economy and deregulation in other parts of the world to support this conclusion. 4. During the transition from a regulated environment to RTO's there may be a 'political' need for ICAP. Specifically states that any interim proposal should be limited to 2 years after RTO implementation. 5. If that is the case, the paper sets out the two common theoretical platforms which can be used as a basis for ICAP. 6. Proposes two options based on the theroetical platforms. We would appreciate input on two issues. Firstly, Enron needs to make a decision on whether to limit our position to reliance on spot markets (i.e. don't suggest an interim solution). While this is attractive, it is unlikely that Enron will get support from other participants (ICAP payments subsidize generation investment so no support from IPP's and consumers are not as confident as Enron that competitive markets will maintain reliability so they will want to sustain ICAP). Secondly, drafting comments on the paper generally. Please note that the final section, that proposes the Enron solution, requires substantial redrafting which will be done if the consensus is to propose such a solution. A final draft will be sent out on the morning of Tuesday 10/16, the paper will be filed Wednesday. regards

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OUT:
EPMI/EES draft ICAP paper