IN: Congratulations! Sounds like the merchant storage business has had a good couple of weeks with you guys clearing your environmental hurdles and the Tioga guys finally starting construction! I may have acted rashly in joining the evil empire--should have jumped into the storage business instead!

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OUT: California Storage

IN: I have developed a database in which I keep track of the counterparties Legal has approved, any supporting rationale for approval of each counterparty (I 'm giving away my secret that I just don't approve them on on pure whim!) and the products such counterparties are approved to trade. Additionally, at the bottom of each entry there is a listing of any amendment to the Password Application, ETA , GTC, or any other online documentation. The information for the financial products is pretty accurate (I may have missed an entry here or there in trying to enter 6 months of memos and excel spreadsheets. If I have missed a counterparty let me know). The information for Power has been updated only since this database was in production, about 6-7 weeks ago. I am going to have to go back and input the power data from the original approval lists. As for gas trading and emerging products, we have never yet had a counterparty that we have had an issue with, so no information has been entered for those products. You should count them as being approved for everything. Eventually, if we continue not to use those dropdowns, I will delete them. I don't know if you will find this information helpful or not, take a look and I will be glad to hear any input. Obviously, we are all working out the kinks and finding out what is useful and what is not useful as we go along, so this database may evolve over time. The only people who should have change access are the Legal team (Mike Neves: Mark Taylor, Carol St Clair, Leslie Hansen, Marie Heard and myself). Let me know if you have change access by mistake. On a closing note, please try to keep the information in the database confidential to the group we have granted view access to. Do not forward this email on to anyone as it will grant access without my approval. Much thanks!

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OUT: ENA Legal Online Trading Database

IN: Rhett: You may recall a few weeks ago I asked you about some language that one of our counterparties wanted as an amendment to the term "Indemnifiable Tax". Another counterparty, Deutsche Bank, has requested the following which I think is very similar to what we were looking at before: Notwithstanding the foregoing, "IndemnifiableTax" also means any Tax imposed by reasons of a Change in Tax Law by a government or taxing authority of a Relevant Jurisdiction of the payer, unless the payee is incorporated, organized, managed and controlled or considered to have its seat in such jurisdiction, or is acting for purposes of this Agreement through a branch or office located in such jurisdiction. In the ISDA Users' guide, they explain that the effect of this language is to eliminate the payee's risk of bearing new taxes imposed by the payer's jurisdiction even if the payee's activities in such jurisdiction is the basis for such taxes. (except if the circumstances in the definition occur). It thus results in the payer having to gross up for such taxes. Do you think that we can or should accept this?

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OUT: ISDA Tax Issue

IN: A quote from Pennsylvania Ave.: "This is pretty serious!" This was just received from the DOE and pertains particularly to DOE and National Nuclear Security Administration (NNSA) facilities: "DOE/NNSA is at SECON 3 with additional measures designed to detect and deter vehicular-borne explosives. Effective immediately, and until further notice, all DOE/NNSA activities shall add measures to their current heightened state of readiness designed to deter terrorist attacks by visibly increased perimeter security and security checks. Change in routines, including institution of random measures, shall also be implemented." Thank you,

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OUT:
NERC security update from DOE