IN: Dear All, The business units are operating on a lean G&A budget and cut costs whenever we can and making sure that we are efficient. Are there any initiative to do likewise for all corp functions? As an accountant in the business unit, we received corp allocations. The total for corp was more than $700MM. This, of course, excludes Enron Net Work, Enron Property, and Global Finance, which if we include those, the G&A to Enron could well be over $1Billion (not counting the business units G&A). The number just blew me away. I think we need to make sure all functions are needed and are run efficiently. We cannot say it's OK just because we can allocate to the business units because the business units may not receive benefits for these costs. We sure don't want Enron, as a whole, to be growing so fat and so fast that it will hurt our bottom line. I'm sorry if I'm out of line, but I really do care about Enron and am very proud to be its employee. Thank you for your time.

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OUT: cost cutting measures - from an Employee/shareholder point of view

IN: Sheila: ENA is ready to sign (Ihope) in the a.m. I just wanted to verify that you had sent an email to Cassandra (or Rick Buy) so that she is prepared to countersign. Also, your status report reflects that you also need a custody agreement for ECT Investments. Why? Thanks.

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OUT: Global Custody Agreement with JPMorganChase

IN: Though the electronic copy is not yet available, we have faxed out a hard copy of FERC's "Order on Rehearing" issued today in RM01-9, "Reporting of Natural Gas Sales to the California Market." All requests for rehearing and clarification have been denied, as the requirement "is in the public interest...[and further] is necessary for the Commission to advise Congress as to whether it should change the existing regulatory framework..." Some major points are: (1) Arguments that FERC cannot require the info. from non-jurisdictional entities is disputed by citation to the NGA and FPA, allowing FERC to collect any information in order to advise Congress on a matter of urgent concern. The Commission also cites the FPA's authorization to investigate electricity issues, including the cost of generation (of which natural gas is a key factor). (2) In response to Enron's arguments, the order states the following: Enron argues that the data collection should be undertaken on an as-needed basis, not regularly; FERC simply denies this. Enron argues that the burden of reporting was underestimated; FERC says this may be true but is no reason to rescind the requirement. Enron argues that the reporting is not based on the business method utilized by the company and that it does not have the information on a daily pricing and volume basis (matched to physical volumes); FERC answers that data should be submitted "in a manner consistent with the way the particular gas seller does business." Examples are given in the text of the FERC order. If Enron is contending it should only file aggregate information, FERC finds this option unacceptable. Only Enron asked for an extension for the filing deadline, from 30 days to 45 days after the close of each month; FERC denies this request as unnecessary. (3) CPUC request for access to all information filed is denied. Sensitive price data will be exempt from public disclosure (with no exceptions) so that all parties must comply. The order also states, "Moreover, the purpose in seeking the information is to enable the Commission to understand the operation of the market for gas sales into California, not to investigate the conduct of particular participants in that market."

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OUT: CA rept requirements rehearing denied

IN: Sally, One of the things that Greg Piper has asked me to do is to take a look at the rest of the year and get each of the VP's to assess their margins and EBIT for the remainder of 2001. For Energy Operations, that is usually very easy since there has been no revenues, and all of the costs are allocated out, so there should be zero EBIT if nothing changed. Given your present direction, however, you may be generating some margin in 2001. Do you have a feel for an amount I can put into our analysis and will 100% of your costs continue to be billed out or will some be applied to this new activity? I am hoping to put something together next week, so if you or a designate could let me know in a few days I would appreciate it. Kerry Roper (x5-4895)

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OUT:
Forecast for 2001