IN: PRIVILEGED AND CONFIDENTIAL - ATTORNEY/CLIENT COMMUNICATION As we said in our initial meetings with you, it is very important that you preserve your records relating to Enron. Attached is a letter we received from one of the plaintiffs' lawyers requesting that we preserve all documents relating to Enron. We have already responded to the letter, but we are passing it on to you because, despite its tone, it provides a useful outline of the types of records you should preserve and the places where such documents might be found. Please do not hesitate to call me if you have any questions.

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OUT: Retention of Documents

IN: In an effort to avoid loss of our executed agreements/files (master agreements, brokerage and futures agreements, repo agreements), we are testing out the "library approach" and instituting a checkout procedure. Whenever you remove one of these files from the file cabinet, please "hold the file location" with a signed "card" (legal sized) available on top of the master agreement file cabinet. You will also see a large sign reminding you to sign out for your file. When the file is returned, just replace the "card" with the file and delete your name from the "card". Please be sure to check out all files currently in your office. Thanks for your cooperation.

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OUT: check out procedure for swap group files

IN: gambit (GAM-bit) noun 1. An opening in which a minor piece is sacrificed to obtain a strategic advantage. 2. A maneuver used to secure an advantage. 3. A remark used to open or redirect a conversation. [From Spanish gambito, from Italian gambetto (the act of tripping someone), from gamba (leg).] "North Korea will no doubt try to gain maximum advantage by playing South Korea, America and Japan off against each other. If it fails to get the result - and the cash - it wants from its new diplomatic gambit, it may simply abandon the enterprise." The Two Koreas: Mr Kim, Meet Mr Kim, The Economist (London), Apr 15, 2000. This week's theme: words from chess. ............................................................................ Sin is geographical. -Bertrand Russell, philosopher, mathematician, author,

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OUT: A.Word.A.Day--gambit

IN: At yesterdays CPUC meeting the Commission approved on a 3-2 vote the Comprehensive Settlement we supported to unbundle the SoCal system. This includes open access to their backbone system and receipt point procedures we supported. I'll distribute the final order as soon as its available with the effective dates and details. gh

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OUT:
SoCal Unbundling