QUESTION: Ken - As you know, we had several issues that needed to get tied down before the BoD reconvenes to review Project Southwood. Both Jeff McMahon (deal timing) and Rick Causey (goodwill) are ready. Andy Fastow expects to have a read from the agencies very soon (likely late today). As soon as I hear from Andy, I will begin polling and will set the date, hopefully, for early next week. At this time, I am not aware of any additional items that need to be addressed by the Board in the upcoming meeting. We need to confirm the 2002 BoD calendar but can do that in the regularly scheduled meeting in Dec. Thanks, Paula
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ANS: Next BoD Meeting

QUESTION: Swaps Legal Team: Please prepare an amendment to the existing ISDA Master Agreement between Merced Irrigation District and ENA dated 3/25/99. Please note the changes to the agreement are in 'red' in the attached credit worksheet. Note: Carol St. Clair has worked on municipal ISDA's in the past [ie Benton and Franklin] that contain a 'regulatory out' clause that can also be applied in this ISDA. Please call with any questions. Regards,
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ANS: Amendment Request to Merced ISDA

QUESTION: Allyson, As you know, we have had discussions with the City of Rocky Mount regarding possibly buying gas from them for the new power plant in Edgecombe County. Evidently, the gas company has figured this out, and is not happy with this prospect. We would like your opinion concerning the City's ability to (a) require that a tap be made so that the power plant be served and (b) sell gas to Enron for this purpose. When considering these issues, please assume that the City would own and annex the land, and lease it to an Enron entity. We will need the gas by next March or April, so time is critical. Should the gas company decline, what is the appeal process and how long can it be expected to take? Do you have any suggestions for expediting the process? I am having the contracts between the gas company and the City sent to you, and you should have them by Monday. Thank you for your assistance,
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ANS:
VEPCO/City of Rocky Mount