Subject: "Updated RTO Schedule".

Body: Below is a summary of upcoming RTO-related events that Enron is participating in. ************************************************************************************************ Week of October 22 Regulatory proceeding before the Indiana Commission on the transfer of control of transmission assets by the IN IOUs to MISO and Alliance. Wednesday, October 24 FERC Meeting - Discussion of RTO Developments for the Northeast, Southeast, and Midwest. Separate docketed items include (1) Reliability, Security and Market Operations, and (2) Electricity Market Design and Structure. October 29 - 30 Illinois Energy Leadership Conference - Illinois Commissioner Edward Hurley and Richard Sergel, President & CEO of National Grid USA to discuss RTOs. October 31/November 1 Western Interstate Energy Board and Western Governor's Association Conference in Seattle - Issues to be addressed are Multi-State Protocols for Transmission Siting/Permitting, and the Western RTOs and Seams Issues. FERC RTO NOPR on Market Design to be issued FERC orders in Northeast, Southeast and Midwest RTO proceeding

Subject: "PG&E Proposed Solution".

Body: Harry: At the meeting yesterday, we concluded that it would be a good idea to take the proposal that you put together based on your meeting with EES and use it as the "base case" to start running the numbers. Idea being that before we shop anything around, we need to know what the numbers look like to determine whether the thing's got any legs. Once we have a clear understanding of how the base case numbers shake out, we thought we might then want do some sensitivity analyses around the variables, come up with a final proposal, and then go back to the commercial groups for buy-in. We hoped that your folks could get together with Roger Yang et al and provide some assessment of what the base case numbers look like by middle of next week. How's this plan sound? Few other points: We assume that bullet 6's reference to "net" means that the deferral is calculated by taking any "overcollections" and subtracting them from any "undercollections" over the entire 3 year period,not year-by-year. What is the significance of the 3.1 CTC roll-off date? We're assuming it's commercially driven. We correct? If so, what's the driver? Same goes for the 2004 ending date. Some tweeks were made to the proposal at the meeting to create an "Option 2" for folks to consider. (Though we don't think that any numbers need to be run on "Option 2" until after having completed the analysis on option 1, since those results could influence any scenarios we decide to construct). Option 2 would: Keep the hydro with the utility and apply Edison's proposed ratemaking treatment. Beginning 6.1.01, make large customers "noncore," similar to the gas model in California, and force those customers to choose an ESP. Beginning 1.1.03, introduce competitive default service for remaining "core" (i.e., rez and small commercial) customers. ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ ++++++++++++++++++++++++++++++++++++++++++++++++++++ Finally, couple of things that occurred to me after yesterday's meeting that I want to throw out for folks to react to: Seems that, to be successful, the proposal needs to remain as stripped down and simple as possible. When the proposal nets out the deferral costs, does it include the over/undercollections associated with utility residual generation? In option 2, by adding the "noncore" feature, and by implementing that feature and the default service feature prior to the 04 ending date, the proposal gets more complicated (and adds significantly more risk to the utility's position). This is not to say that the complications can't be worked out, or that the added risk can't be accounted for, but wanted to highlight it for folks to consider. Attached is the original, with just a couple of minor edits, and "Option 2." Best,

Subject: "PetroChem".

Body: I am glad you asked me to lunch today. I do enjoy spending time with you even though at times it is tough and our conversations are hard right now. I do Love You so much and have a Vision.

Subject: "Foreign Insolvency Procedures".

Body:
IF YOU ARE A DIRECTOR OR OFFICER OF A NON-US CORPORATION WITHIN THE ENRON GROUP, PLEASE NOTE THE FOLLOWING: As you are aware, Enron Corp. and some of Enron's subsidiaries have voluntarily filed for Chapter 11 earlier this week. We are in the process of evaluating the effect of the filing on the company in which you serve as a director or officer. It is possible that the filing may trigger default or cross default provisions under contracts and other instruments to which your company is a party or otherwise subordinated. With that respect, we request that you DO NOT TAKE ANY STEPS TO FILE FOR ANY LOCAL INSOLVENCY PROCEDURE UNTIL YOU HAVE NOTIFIED THE ENRON IN-HOUSE ATTORNEY WITH WHOM YOU NORMALLY WORK AND ALSO HAVE SPOKEN TO CHRIS MALLON (christopher.mallon@weil.com) OR MARGARITA COALE (margarita.coale@weil.com)OR RAM BURSHTINE (ram.burshtine@weil.com) AT WEIL, GOTSHAL & MANGES LLP,PHONE NUMBER: +713 546 5000). **********NOTE********** The information contained in this email message is intended only for use of the individual or entity named above. If the reader of this message is not the intended recipient, or the employee or agent responsible to deliver it to the intended recipient, you are hereby notified that any dissemination, distribution or copying of this communication is strictly prohibited. If you have received this communication in error, please immediately notify us by telephone (212-310-8000), and destroy the original message. Thank you.