Problem: BODY: ENA received a letter 10/30/01 stating that Man would begin margining on a risk-weighted basis rather than using the NYMEX SPAN calculation. This is prohibited under our futures agreement. Man has not formally called for additional margin (which they have the right to do) but rather is withholding about $25M based upon a misunderstanding between traders about moving option positions (I'm not entirely clear about the circumstances). Man has never claimed that the $25M was "additional margin". ENA faxed a letter this morning to Man demanding the return of margin in excess of the SPAN calculation, basically a response to the letter. ENA acounting does not have the software to execute SPAN calculations. A recommendation to purchase the software was made by Sarah Wesner (who then reported to Joe Deffner) to accounting last year. I understand that John Arnold intends to move most positions (including options) from Man to Paribas. However, this information changes frequently. Joe Deffner signed the letter and a copy was delivered to Louise Kitchen. Let me know if you need further information.
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A: SUBJECT: Man Financial: margin calculation

Problem: BODY: I'm working with Mark on approval of our counterparty lists for online trading. Mark asked me to contact you about the approach we should take with respect to financial trading with Singapore counterparties. Should Singapore be approved for all types of trading with all types of counterparties? Are there are special counterparties we shouldn't approve for trading outside the governmentals, such as the utilites? Are there any products that might not be approved for trading out of Singapore, such as weather, or any others? Are there any special types of reps we might need to include in our agreements? Any guidance you could give us with this would be most appreciated! How are you and the baby doing? We hope to see pictures on your next trip over!
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A: SUBJECT: Online Trading

Problem: BODY: Today FERC issued the following draft orders: NYISO TEP and Bid Cap (ER01-3001): Commission granted NYISO's request to extend the currently effective $1000/MWh Bid Caps on certain NYISO adminstered markets, and to extend its Temporary Extraordinary Procedures for Correcting Market Design Flaws and Addressing Transitional Abnormalities, until the Northeastern RTO is operational. The Commission ordered NYISO to narrow the scope of the TEP, and to file tariff sheets doing so within 30 days. NYISO proposed virtual bidding procedures (ER01-3009; ER01-3153): Tariff changes to implement virtual bidding were approved. The changes would allow market participants to bid non-physical generation and load into the day-ahead market and settle the bids in the real-time market. Also accepted were NYISOs Market Mitigation Measures to address gaming or market power strategies that might emerge as a result of the virtual bidding. NYISO - Cost responsibility for new interconnections. (ER01-2967): Tariff changes allocating cost responsibility for interconnection facilities. The provisions allocate to developers 100% of the cost of facilities necessary to physically interconnect the project. Additionally, developers are allocated the coswts for transmission system upgrades that would not have been made "but for" the interconnection, minus the cost of any facilities that the NYISO's regional plan dictates would have been necessary anyway for load growth and reliability purposes. ISO-NE - Interim Bid Caps (ER01-3086): Commission approved extension of bid caps until the Northeastern RTO is operational. Calpine v. ISO-NE (EL01-124): Commission granted complaint by Calpine and Mirant, finding that ISO-NE has amended Market Rule 5 to exclude external contracts from setting the energy clearing price, in violation of a Commission order. If you need further information, please let me know. Susan Lindberg x30596
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SUBJECT: Orders issued today in NYISO and ISO-NE proceedings