Problem: BODY: On Thursday last week the Commission eliminated the old "Texas Eastern" rule that required pipelines to obtain prior FERC approval before contracting for transportation and storage capacity on upstream or downstream pipelines. The new rule allows pipelines to acquire and use such capacity without going to FERC first. The rule does reiterate that bundled sales of gas are still prohibited, and further provides that the acquiring pipeline will be financially at risk for the costs of the acquired capacity. Interestingly, the acquiring pipeline apparently has the option of selling the acquired capacity under its own rate schedules or of releasing the capacity pursuant to its capacity release program. The order is silent on whether the price cap applies to short term releases of acquired capacity. While we are still reviewing the order and may provide additional guidance at a later time, I'd emphasize for now that our normal contract approval procedures and authority thresholds should be deemed to apply to capacity contracts. For example, the "Approval Authorization for Cash Expenditures" dated Feb. 3, 2000 provides Dave and Steve with authority up to $250,000 on operating expense obligations. Please contact me if you have any questions on this matter. DF
======
A: SUBJECT: Upstream Capacity

Problem: BODY: Before the day gets away from me, I wanted to once again tell you how much I truly appreciate you and your dedication to our company, shareholders and employees. You did an outstanding job today. You caused tears in my eyes during the last employee meeting and today when you shared your heartbreak related to what we are now going through my heart again went out to you. There is so much I could say, but I think to sum up how I feel is simply to state again that I appreciate you and value your integrity, commitment and honesty. I know there is probably so much you wanted to say, but for sound business reasons simply can not share today. To be honest, I did walk away not fully motivated for the next struggle. It is not a lack of trust, confidence or commitment, but it is simply a natural human response to another blow to our reputation that simply takes time to fully absorb and then move on in a postive and productive manner. You and all of Enron are in my prayers and I know that God will continue to keep his hand on you (and us) and guide us all through yet another personal growth opportunity. Respectfully Cynthia Barrow Sr. Director of Benefits.
======
A: SUBJECT: thank you

Problem: BODY: In light of the recent PCB issue with PG&E on the Topock Lateral, I have asked Mr. John Woodyard of Roy F. Westin to c ome to Houston and make a presentation on PCB's in natural gas pipelines. Mr. Woodyard has considerable experience in the management of PCB's and works closely in industry associations (INGAA and GRI), Mr. Woodyard also works as a consultant in this capacity. The date of this meeting will be on Friday, September 3rd, beginning at 9:00 am. Lou Soldano will be setting up a meeting room and will notifiy all attendees via lotus notes prior to the September 3rd meeting date. I think this meeting will be very interesting and informative and and encourage all to attend, if possible.
======
A:
SUBJECT: PG&E PCB Meeting with John Woodyard