Problem: BODY: The following reports have been waiting for your approval for more than 4 days. Please review. Owner: John L Garrison Report Name: Previous Statement Credits/New Trip Days In Mgr. Queue: 6
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A: SUBJECT: Expense Reports Awaiting Your Approval

Problem: BODY: I am trying to distinguish these two types of entities both practically (what are we able to negotiate) and legally (what do we really need in our Schedule). I am also interested in your experiences in dealing with these parties. ENA's form of "municipal" Schedule ("the ENA Schedule") was essentially taken from the 1992 ISDA U.S. Municipal Counterparty Schedule ("the ISDA Schedule"). In addition to other provisions, the ISDA Schedule (1) adds reps designed to avoid "an Orange County" type meltdown and (2) incorporates the concept of "Incipient Illegality" (which occurs before the Termination Event of Illegality). The "Incipient Illegality" concept is used in Section 2(a)(iii) (obligations) as well as the Section 3 (reps) of the ISDA Schedule: the concept is added to the Section 3(b) rep ("..absence of Event of Default, Potential Event of Default, Incipient Illegality...), and for purposes of notifying the other party of its occurrence. Interestingly enough, the ENA Schedule does not include the Section 3(b) rep change. I think we need to add this change to ENA's Schedule. With respect to IOUs, we need to clarify our position on "Regulatory Development" (which is actually a watered-down "Incipient Illegality" concept). If such an event occurs, ENA should be advised of the event (Notice). But, does ENA really want the ability to terminate trades at mid-market ("Additional Termination Event") or simply to have this event included as part of a Section 3(b) rep such that the occurrence of the event merely triggers an Event of Default at ENA's side of the curve (for breach of the Section 3(b) rep)? I have found that negotiating with IOUs for the "Notice" provision can be difficult. Extracting the Additional Termination Event is tough. Arguing for a Section 3(b) change may be easier (and would mirror the municipal format). I think ENA really needs the ability to decide when to halt trading with a counterparty experiencing a Regulatory Development (which we may only learn about through notice from the counterparty). Thus, I recommend that for IOUs, we add a notice provision and Section 3(b) rep change incorporating our latest definition of "Regulatory Development." But we really have to negotiate for this protection. Otherwise, why bother to include this additional language? What do you think?
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A: SUBJECT: Municipals (including municipal utilities and other regulated entities) vs. investor owned utilities ("IOUs")

Problem: BODY: Rob, independent of dotted/solid lines, you already have the primary and complete responsibility to manage the office and the business. At the risk of being bold, I think the undercurrent of your note and your discussions with Haedicke over the last couple of days is a matter of absolute control. Ownership and passion are important characteristics of our best commercial people but so is fostering a diversity of opinions and ideas. With the back and mid office, the current Enron model is based upon scale and standardization which generates tremendous operating leverage. Further, it helps us manage risk and is a board mandated control issue. In the long-run, it is actually less costly (ie) systems that don't work together, less transferable human capital, un-managed legal risks, etc. A lot of your points are very valid and Haedicke has never and never will get in the way of managing commercial business; however, Mark, Wes, Sally, Beth et al have a mandate to provide a flexible, scalable but standardized delivery mechanism, that manages our risk across the broad empire. Don't quit protecting the business and your people; however, please help accomplish some of these goals as well. In short, I would like to keep the reporting structures the same. Lets take the earliest opporunity to discuss this. Regards
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A:
SUBJECT: Reporting Structure