IN: Phillip, I'm building a sheet for each person specifically for financial hedging. Each day it will pull in the previous days position and previous day price curve to calculate the mark to market. Then that day's transactions can be entered to calculate the P & L of transactions which close out previous positions, as well as to calculate the new open positions. Initially, I thought that daily P&L could be calculated by simply adjusting the P&L whenever a transaction was made by the difference between the bid/offer of the closed out position by the offer/bid of the new position (of course time value and storage costs would be included). However, this only works if the person is 100% hedged, meaning they do not have any open positions which require marking. As the seller of synthetic storage utilizing 100% hedging, I should be able to do this, except for the fact that I will have size limits on transactions that will probably leave me open here and there. The main question I have is simply, "Should I be calculating the P&L for each person's storage book for open and closed positions?" Then beyond that, if we do calculate the P&L's from the buyer side, it seems that if their storage is not hedged, I will have to develop the market value of the storage in the ground and the remaining capacity to mark to market it. So, I guess I could apply the model for that purpose. Does this make sense to you? Any comments are appreciated. Thanks. Mat

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OUT: Synthetic Storage

IN: Hi everyone, The Risk is in the process of adding the daily price for the front month into the existing price report. Besides the existing Region curves, we could also add several more frequently used Basis curves in this report if it's necessary. So we would like your input on what Basis curves you think would be helpful to be added to the new report. Thanks for your help and please let me know by the end of today. Samantha x7248

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OUT: West Power Daily Price Report

IN: Bob and I just spoke with Steve Susman. I tried to mention the points you asked. Here are his comments: 1. F&J probably could not simply send us our files back and put itself in a position to be adverse to us with Arthur Anderson. Susman believes that there is a "hot potato" rule that prevents F&J from doing so. 2. That being said, Susman doesn't care if F&J represents Arthur Anderson or anyone else potentially adverse to us in the actions he is handling. 3. Susman would not, however, agree to a broad advance ethical waiver, as proposed by F&J. He does not believe such waivers are effective. Susman would agree to a waiver once we were advised who F&J wanted to represent. I don't know whether F&J would agree to this or not. 4. Susman recognizes that we cannot force F&J to take on the new Mariner matter, and that this is ultimately a risk/benefit decision for us to make, and that we may have to agree to terms that we otherwise wouldn't agree to. Parenthetically, I have received no comments on F&J's proposed waiver letter. Under the circumstances, from his standpoint, Bob is inclined for us to get the best deal on the waiver letter that we can with F&J, but that if F&J won't budge, that we take something along the lines of what they have given us (Bob, let me know if I have mischaracterized your thoughts). From my standpoint, I unfortunately think there are some parts of the letter that we must have changed. This would be to the extent that the letter purports to have Enron Corp. agree to bind all the Enron entities, and to the extent that it involves Enron's agreement to what will happen after the Dynegy merger (as I set out in my earlier e-mail). My recommendation would be, as set forth in my earlier e-mail, that only the Enron entities currently being represented by F&J sign it and be bound by it, and to remove the language regarding what Enron would agree to after the Dynegy merger. I also find the advance ethical waiver language repugnant, but could agree to it if the other modifications mentioned could be made. I do not know whether F&J would be willing to make these changes or not. Our biggest problem right now is time-management. I know that Mariner wanted to make a decision by today as to who to use. I am willing to confer with Dutton ASAP to see what F&J would agree to, and if he can agree in principle, to send him a proposed draft agreement. I believe he is out of the office but is checking his voice-mail. Please let me know what you want me to do. Britt

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OUT: In re F&J Representation

IN: Please plan to attend a meeting today at 1 PM to discuss our strategy for lining up transmission and commodity agreements for Newco. The meeting will be held in the Mt. Hood conference room.

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OUT:
Transmission Service Agreement Meeting