Q: Notes from Bryson conversation with Ken Lay: Urged us to "stay at the table". Says teams in Washington have all the demand curves from the utilities (from which to calculate offering prices). QF meeting starts at 7:00 pm tonight. says average cost of QFs today is 15?/kwh (amounts to 30% of supply). believes that cost can be brought down significantly if gas is purchased forward (perhaps by state entity). Says all utility generation (another 30%), mostly hydro and nuclear is cost based at 4?/kwh. If suppliers come in at 5.5? (or even 6? ), there is room under the 7? new commodity rate component to recover securitized costs (amounts to about 40% of SCE supply). Says good progress was made today. Believes they may have a framework this evening. Believes 5.5? is causing problem; maybe room to squeeze it up (perhaps as high as 6.0?). Thinks governor will slightly increase rates (or pay more at government facilities) if the parties can get 97% of the way to a solution. Thinks it's nearly a "done deal" that DWR (state entity) will buy power. Says securitization may be harder to get. Bryson's questions to Ken (and Ken's to us): Are we willing to forbear payment of amounts owed to us and continue to sell power to the utilities over the next several weeks. Ken realizes that Bryson may be overstating the progress made, and made no commitments to Bryson. Let's discuss at 10:30 call tomorrow.
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A: Bryson Conversation

Q: Hi Kent, I don't know whether Lee has mentioned the Delta Power deal that we are working on. We are taking 4 turbines and putting them in an LLC, and selling some of the interest in the LLC to Delta Power. Three of the turbines are turbines formerally known as LV Co Gen turbines, and we are buying new LM's to replace the ones we are using here. In any event, Delta Power is financing the deal, and they have asked that we get GE sign off on the attached documents. Therefore, I would be interested in your response to the attached. I understand that Lee is in New Orleans today, but I'll send him a copy anyway. Thanks,
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A: Enron/Delta Turbine Acquisition

Q: Shelley & Lynn, Fran has advised me there are no legal problems with schedulers working a weekend shift from 7 am to 10 pm for one weekend day, the other scheduler will take the other day. Each will be given a two days of comp time as they are today for their two 8 hour shifts. Fran does have a concern of fatigue in the later hours, just a we do. There are only two team members that are interested in this schedule, so we'll give it a try and let you know how it goes. Sheila
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A: Weekend duty

Q: Karolina and Rod: This swap has ended up on my desk! Imagine that. This transaction ought to be booked between RMT and ETOL. The existing ISDA Master Agreement from December 31, 1998 is between Enron Capital & Trade Resources Corp. and ETOL. We need to create an RMT/ETOL ISDA Master Agreement for this 3-year rate swap. Is ETOL prohibited from entering into swaps with other parties, such as RMT (under the terms of the lending documents)? Please bring me up to date. Thanks.
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A:
Enron Teeside Operating Limited ("ETOL") 3-year rate swap with Enron North America Corp.