Subject: "Margaux".

Body: Scott: I have been monitoring drafts of the swap docs. Are you or someone else in your group reviewing the other docs that involve Enron Corp. such as the Certificate Purchase Agreement that appears to have a bunch of reps that Enron has to make? I( have not been paying to much attention to the docs that don't involver the swap. Carol

Subject: "Guaranty Form".

Body: Clement, Attached is a form of guaranty by Enron Corp. for ECS Compression Services Company, LLC. (ECC). ECC is owned approximately 9% by Enron Compression Services Company (a 100% owned ENA subsidiary). The form has been reviewed by Continental Divide Electric Cooperative, Inc. (the Counterparty) and they are OK with it. Please review and let me know if you have any questions. If everything looks good, please obtain execution. Thanks for your help.

Subject: "financial trading with governmental entities".

Body: Dana: What would be a convenient time for us to chat briefly about the legal issues associated with derivative transactions between ENA and municipal/governmental counterparties? Please let me know. Thanks. Sara

Subject: "Enron".

Body:
Shares of Enron Corp. (NYSE: ENE - Quotes, News, Boards) were smacked around again yesterday, following close on the heels of seven-session decline that sent the stock down more than 13 points, or 16%, from its recent high of $84.63 (December 28), all amid uncertainty and considerable volatility. The pullback doesn't appear to be company-specific exactly, although the rumblings in a certain geographic region, namely California, are triggering aftershocks throughout the U.S. energy community. As we outlined in a report on January 4, the energy situation in California has rapidly reached crisis proportions. Strict environmental legislation and the uncertain profit potential post-deregulation has kept utilities from installing sufficient generating capacity in the state over the last 10 years. The state's two major utilities, PG&E Corp. (NYSE: PCG - Quotes, News, Boards) and Edison International (NYSE: EIX - Quotes, News, Boards) , are facing the prospect of eventual insolvency due to the spiraling costs of electricity purchased on the open market. However, the rates the utilities can charge their customers for power represent a fraction of the costs that prevailed during the gradual rollout of full-scale deregulation. The risks to Enron are two-fold. For one, the crisis in California may result in a default of payments to the state's major wholesale energy providers, including Enron. Although the company does operate in California, the bottom-line impact would likely be shielded to a considerable degree because of Enron's size, strength, and diversified global revenue streams. In addition, Enron would likely be high on the list of default payees given its importance to future wholesale energy supplies in the region. More significantly, investors are concerned that California legislators may pull the plug on deregulation entirely, or at least until the current crisis abates. Some also fear this mess might derail utility deregulation in other states as regulators and politicians alike become fearful of adverse and unintended economic consequences. Neither scenario is probable. For one thing, the airline industry was deregulated in fits and starts, with plenty of mistakes and recrimination along the way. And a strong argument can be made that the shortage of electric power would have pressured rates sharply higher even in a fully regulated environment. The California Public Utility Commission will attempt to decide the best course of action this week. It appears inevitable that, regardless of PG&E and Edison's ultimate fate, the state's energy consumers will likely absorb much of the burden through an increase in the prevailing rate cap. Enron has also fallen victim to the rotation out of strong defensive stocks on the heels of the Federal Reserve's unexpected interest-rate cuts last week. The initial euphoria has waned, however, upon the realization that the sharp rate cuts will serve to offset what appears to be a rapid rate of erosion in domestic economic growth, rather than generating a rebound in economic activity. As a result, we expect investors once again to seek the shelter of well-capitalized defensive plays like Enron. We would emphasize that several factors that weigh in Enron's favor have been overlooked amid the California crisis. The November-December period was 18% colder than normal and the second-coldest start to the winter months in the past 50 years. Coupled with an uncertain supply situation, particularly in natural gas, Enron stands to profit handsomely from energy volatility and pricing, an environment that is likely to exist for at least the next 12 months. In addition, Enron's diversification into still more new avenues of growth help to insulate the company from additional challenges of this sort in the future. The markets for EnronOnline, a real-time commodities exchange vehicle, and Enron's broadband services unit are expected to at least triple over the next year. An eventual inflection point in the groups' profitability would serve to send profits measurably higher in the long term. Despite the recent turmoil, Enron's consensus earnings estimate for 2001, according to First Call, has come down a mere penny, to $1.65 a share. Although the stock's rich price/earnings multiple of 43 times may aggravate its near-term volatility, the absence of a complete collapse of the stock indicates the market approves of Enron's maneuvers so far and is confident in its prospects going forward