IN: Pursuant to our discussion yesterday regarding the above, please find below for your consideration a suggested revision to MAC/Credit Rating trigger definition to used in all future master trading agreements or confirmations in which Enron Corp's credit rating is part of a MAC/Credit Rating trigger. "Material Adverse Change" means (i) with respect to [Enron Trading Entity], Enron Corp. (or its successor or its successor's parent company) shall have long-term, senior, unsecured debt not supported by third party credit enhancement that is rated by S&P below "BBB-" [also insert Moody's as appropriate]; I understood yesterday that we may also need to consider changing the definition of Credit Support Provider in the ISDA's. I suspect that if "Credit Support Provider" is defined as Enron Corp. in the relevant Master, then the corresponding changes noted above would also need to be made. Your further thoughts regarding this issue are welcomed. Please provide me your comments to the above language by tomorrow so we can start implementing a revised definition in our agreement templates. Regards, Alan

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OUT: Draft of revised definition of Material Adverse Change/Credit Rating Trigger

IN: Enclosed are those documents I believe would be impacted if we elect to use separate Credit Support Annexes, one for the new EPMI ISDA and one for the Power Master (already in existence ("Old CSA")). 1. New Credit Support Annex - to be attached to EPMI/ML ISDA ("New CSA"). Draft enclosed, including one marked to show changes from CSA currently in place between ENA and ML. 2. Schedule to ISDA - Part 4(F) would reflect New CSA rather than Old CSA. Revised Schedule attached. 3. No Amendment to Power Agreement would be required. (Delete document named "Power Amendment 1). (black-line version)

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OUT: Merrill Lynch Capital - Alternate Deal Structure

IN: Hi, Just wanted to get an update from you on the Citizens info I asked you about last week. I am wondering about the payment to John Cogan for Aug production and the EAMR payment due. Did you talk to Sarabeth about that? Thanks

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OUT: Citizens

IN: Tracy: We can't move any further with Southern California Water Company (for derivatives trading) as they believe that the company requires CA PUC approval. Does legal need to actively pursue this party for financial trading? Hope you're surviving!

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OUT:
Southern California Water Company