Q: I spoke with Dick Vincent who indicated that we will have no problem obtaining 12 mos renewable business interruption insurance when we go operational on gas. This should solve the warranty issue with the banks because it covers defects, design, and workmanship on the turbines and includes lost profits, etc. Incidentally, for insurance purposes the turbines are designated DE3 which is not a new technology designation. Typically we will always have this coverage in place but if their is a supplier warranty then the party providing the warranty pays ahead of the insurer. In the case where the supplier does not pay or the warranty has ended then the insurer will pay. Now we just need to come up with a fix for the drop dead date. Regards,
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A: Warranty

Q: In light of the recent PCB issue with PG&E on the Topock Lateral, I have asked Mr. John Woodyard of Roy F. Westin to c ome to Houston and make a presentation on PCB's in natural gas pipelines. Mr. Woodyard has considerable experience in the management of PCB's and works closely in industry associations (INGAA and GRI), Mr. Woodyard also works as a consultant in this capacity. The date of this meeting will be on Friday, September 3rd, beginning at 9:00 am. Lou Soldano will be setting up a meeting room and will notifiy all attendees via lotus notes prior to the September 3rd meeting date. I think this meeting will be very interesting and informative and and encourage all to attend, if possible.
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A: PG&E PCB Meeting with John Woodyard

Q: Privileged and Confidential. Attoney Client Work Product. Attached is a draft letter for your consideration. Our outside counsel believes a letter like this would help us in our position that we do not have to continue buying energy when there is no transfer capability at the SDP because we know TVA will reject it. Sending this letter is not critical to the sucess of our position but would bolster it somewhat. Before deceiding to sent or not, I wanted your thoughts on how you think that giving this information to TVA would impact us, particularly given TVA's actions today, re acces to transmission through third party transactions. Lets discuss this afternoon. Thanks
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A: Draft TVA Letter re Not purchasing energy

Q: Bill and Tanya: Clint would like to finalize Lehman and CSFB, in that order. We are in the midst of transferrring a swap from Merrill to Lehman. Thanks for your help. Sara
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A:
Enron Corp.'s "preferred" masters