QUESTION: SERC- Soco a mid 20's to low 30's bid through the afternoon peak. They did not show an offer, other than quoting CT's. They bought from their neighbors. Duke was a seller most of the day in the mid 30's to mid 40's. OPC's bid never got higher than a mid 30's. They also bought from DUKE. Vepco offered out in the 40's to 50's. SOCO, OPC will be on the bid for Monday. TVA was offered power in the mid 20's to mid 30's with no response(I'll take your number down). FRCC- FPC was best bid buying up to $70. We began selling to them HE 10 at $10 and walked them up to $70 (200mw's). FPL showed very little interest in getting anything into them. TECO got rain all day and did not show a bid. TAL also did not show a bid. FPL and FPC will on the bid for hourly power on Monday. ERCOT- Bids in the morning were very weak HLP was a $30. TU did not show a bid in the morning hours and they were a $65 offer. Heading into the afternoon. HLP was a $40 bid during HE 14-18. TU was a $50 bid for HE 14-18, no trans available going south to north. CSW offered $45 in the south and $65 in the north. TU will be looking in the hourly marketet for monday. We have 85 mw's of trans. from spp to ercot.
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ANS: SUNDAY NOTES

QUESTION: Hello Penny, It was nice meeting you and your associates yesterday. I presented the income tax issue that we discussed to some of our accountants and they see things a little differently. It is our opinion, that since a cash payment would be offset by the demand charge obligations associated with the capacity contract, it is not income per se, but rather funds dedicated to meeting an out-of-the-money contract obligation. Depending on your accounting method, that money would probably be amortized over the term of the contract. Let me know what you think, perhaps we should have our accountants talk. As for adjusting the cash amount after the San Juan/Permian allocation issue is settled (I'm not sure you could hear all that at your end of the table) we are not really interested in any type of post assignment "true-ups". But we are willing to talk about what those allocation percentages should be. Regarding next steps, on Monday I will provide you with some "alternative" forms of payment and some ways we might spread the payments out0. After that we will look to you guys for your preferred deal structure and payment terms. I'll follow up this email with a phone call today.
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ANS: Income Tax Issue

QUESTION: I am in the process of terminating the old Master as we have a new one in place. AS a result we will need to put an new Guaranty in place for this new master for Enron. Have you spoke to Tristar re this? Thanks
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ANS:
Tristar