Q: Hey guys, I'm wondering if either of you can locate transaction diagrams for these projects. I can't locate any of the ECS working files (don't know what Hilgert did relative to the move). Let me know, mk
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A: Kachina, Bisti and Bloomfield info

Q: Dear Jeff: I learned about your decision to resign from the CEO role at Enron. As a McKinsey alum who has watched you transform Enron from a pipeline operator to the world's foremost energy/trading company, it is hard for me to imagine Enron without you. Enron's strategies based on 'options thinking' and investments in growth options inspired my work on 'real options' which turned out to be the winner in McKinsey's worldwide Practice Olympics in 1995 (thought you might like a copy of an offshoot). I left McKinsey to join Morgan Stanley in 1997 and I am currently running KnowledgeCube, a venture capital firm with a couple of McKinsey alums such as Ali Hanna (Stamford) and some classmates from MIT. Our Advisors include the Heads of Entrepreneurship at MIT, Stanford, Harvard, CMU and Cornell. Our investors include Rajat Gupta of McKinsey, the CEO Hughes Networks and MDs from institutions such as AIG and CSFB. KnowledgeCube has just launched a $150M Energy Fund which would invest in IT companies that seek to enhance the productivity of the energy sector. We have partnered with some folks with global relationships and knowledge of the space including Lord Cecil Parkinson (Energy Secretary of UK). I was wondering if I could persuade you to be a part of the KnowledgeCube network as a Lead Partner, Advisor or Investor. I will arrange to send some more information on KnowledgeCube and the proposed Energy Fund to your home address if that is OK with you. I look forward to hearing from you. Regards,
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A: McKinsey alums/Energy Fund

Q: EPMI is entering into more and more transactions that are settled against a floating, published index price. Our physical contract does not currently provide for what happens if the published source is not available or is otherwise materially changed. Under ISDA for financial trading, this is addressed as a Market Disruption Event (MDE). Under ENA's standard contract for financial trading, there is included as a MDE "the imposition of trading limits on the range within which the price of the commodity may fluctuate". What this may mean is that if a cap is imposed on power prices, then in lieu of using the capped price to determine the floating price, you would be required (under ISDA) to eventually get brokers to determine what the price would have been without the cap. I want to add language to our physical contracts that addresses material changes/disappearance of the published prices that would mirror the financial trading terms and doubt whether we would want to make the imposition of a cap on power prices a MDE. If you treat the imposition of a cap (say in CA of prices to $500 or in NEPOOL to $1,000) as a MDE, then we would be required to secure quotes as to what the price would have been without the cap each time that a pricing date trades at the cap level. This only seems fraught with litigation risk to me. Alternatively, if caps are not deemed a MDE, then you would always settle against the published prices, even if they are "artificially" determined after the trade was entered into. While caps are not appealing, I think it would be better to not have the imposition of caps be considered a MDE. I have spoken with the financial trading group and they will follow our lead on this. So, depending upon what you both think, we will make sure that financial and physical power are treated the same on this issue. Thanks for your thoughts.
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A: Index Transactions

Q: Jeff, The GISB drafting meetings are going to be at Williams' offices in the Galleria. They will be on the afternoon of Monday, May 21st, all day Tues May 22 and the morning of Wed May 23 . I will give you more details when I get them. Stacy
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A:
GISB Meetings