IN: Ken, As you'll recall, during the September 10th advisory board meeting, we discussed the need for strong, senior-level support to ensure an opportunity for Xcelerator's success. At the conclusion of the meeting, we agreed you and Greg Whalley would discuss the support level with the Management Committee on the 13th. Of course, the sad events of the 11th understandably delayed that timeline. Since September 10th, I've revisited the Xcelerator with several members of the Management Committee including Louise Kitchen, John Lovorato, Jim Fallon, John Sheriff, and Andy Fastow. In summary, they are supportive contingent on support from you and Greg. Additionally, other Xcelerator board members are supportive - specifically Jeff Donahue and Kevin Garland - but all agree the sincere support from you and Greg will be necessary for success. Greg Whalley and I have also discussed the Xcelerator on two occasions. Greg is concerned that I will be unable to attract good talent from within Enron to this "risky" initiative, especially given the trajectory of the economy and scarcity of new jobs within the company. I agree with him. Greg asked if I would try the Xcelerator understanding that most if not all of the full-time team members would need to be hired from the outside. Although not optimal, I think it is doable and told him I'd be willing to proceed under those circumstances. While Greg was quite supportive, he was appropriately distracted by the upcoming board meeting and close of the quarter. As a result, he and I are planning on discussing the future of the Xcelerator this Tuesday. (Of course, the earnings announcement may delay that discussion to next week.) As I mentioned in the Xcelerator's board meeting, I am excited about this opportunity and am committed to giving it my all, with the support of the senior team. This effort could create tremendous value for Enron. However, I have no delusions about how difficult it will be and the patience it will require. If we are successful over '02, we will definitely create value for our shareholders, but are almost certain to be a drag on earnings -- albeit a small one. If you and Greg are not able to be supportive, then let's acknowledge that and discontinue the Xcelerator's operations. As we discussed on the 10th, lukewarm senior support will not be sufficient for success.

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OUT: Quick update: status of the Xcelerator
IN: This is an email
Attached is a unilateral form of Confidentiality Agreement where Counterparty is the protected party. This form needs a little tweaking since it is more directed for a financing transaction. Peter can find it, as well as other forms, in the attorney forms bank. Call me, or have Peter call me, if I can be of further help.

What is the subject?

OUT: Confidentiality Agreement
QUESTION: Gouger Gray Davis California's petulant governor ignores reality as he overpays for electricity LANCE T. IZUMI Mr. Izumi is a senior fellow in California Studies at the San Francisco- based Pacific Research Institute. On the surface, things seem to be going pretty good for Gov. Gray Davis with regard to California's electricity crisis. The governor has scored some nice publicity by switching on some new power plants. The weather has been unseasonably cool. His poll numbers are edging back up. Yet beneath this optimistic picture lie troubling problems. For example, Davis's argument that out-of-state power generators are responsible for the electricity crisis has been falling apart. For months, Davis has been claiming that private generators have overcharged California by $8.9 billion and demanded that this amount be refunded to the state. However, after a two-week mediation between state officials and the generators, Curtis Wagner, the federal government's chief energy regulatory judge, rebuked Davis's claim saying that such a huge overcharge "has not and cannot be substantiated." Further, while the generators may be liable to refund a much smaller amount to the state, perhaps $1 billion, Wagner said that generators are owed more money by the state than they owe the state in refunds: "Can a cash refund be required where a much larger amount is due the seller? The chief judge thinks not." Davis reacted to the judge's ruling by calling it a "raw deal" and by urging the Federal Energy Regulatory Commission to ignore the lack of evidence and the judge's conclusions and to "step up and provide the refunds we've asked for." Davis's position, as usual, is motivated purely by politics. Indeed, Dan Walters of the Sacramento Bee says that Davis is operating in a "melodramatic virtual world" de-linked from reality. Davis's blame-the-generators argument took another body blow when newly released documents showed that, on average, major out-of-state power companies such as Enron, Duke, Dynergy and Mirant charged less than the average prices paid by the state during the first three months of the year. California government utilities, on the other hand, such as the Los Angeles Department of Water and Power and the Sacramento Municipal Utility District (SMUD), charged the state much more for electricity than the out-of-state generators. For example, while Texas-based Enron, a favorite Davis whipping boy, charged an average $181 per megawatt hour, SMUD charged an average $330 per megawatt hour. Davis responded to this revelation in typical political fashion. A Davis spokesman said that the governor had expressed his anger at "the generators who wear cowboy hats" and that "just because there are other entities that are charging us more doesn't change the fact that we are getting ripped off by companies from Houston, Tulsa, Atlanta or Charlotte." Yet, for all Davis' feigned indignation about consumers being ripped off, it turns out that he and his regulators are poised to ensure that business consumers are ripped off by state government. Davis has signed $43 billion in ill-advised long-term purchase contracts at rates above-market-price. The state must, therefore, ensure that enough business customers remain in the current state-controlled distribution system to pay for high-priced state power purchases. This is especially important to Davis since the high prices are borne disproportionately by business. Thus, Davis' regulators are set to eliminate "direct access," which allows businesses to shop for cheaper power. Who's the real gouger? No matter how much Davis points the finger, Californians are paying dearly for his political opportunism and bad policies.
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ANS: Gouger Gray Davis :
Q: Attached is my draft of the "two-pager" for LLC. Obviously it is going to be a bit longer than two pages. Please take a look and provide any comments that you might have. Also: 1) Gerald please provide summaries of the debtor contracts as you did for NNG and also respond to the issues that have your name by them in the memo; 2) Karen - please continue your efforts (in cooperation with Mark) to provide the revenues/expenses both actual and forecasted to be attached to the memo; 3) Mark - please provide the deal structure diagrams for the deals (obviously you already gave me Gallup - but please forward to me electronically) and also respond to the issues that have your name by them in the memo. I really would like to have this memo completed by mid-day tomorrow so that I can get it to Patty M as promised. Thanks in advance for your efforts. Regards
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A:
ECS Compression Co, LLC ("LLC")