IN: Remember we need to make a filing for our BP Energy deal, which becomes effective Dec. 1. (Mary, I think you and I talked about this several weeks ago). The contract simply includes a right of first refusal for BP Energy. The contract is such that the shipper would not have been entitled to a ROFR under our tariff, which is why it's a material deviation. The filing will simply need to reference a tariff sheet on which the contract provision is described. Let me know if you need anything (a copy of the contract, for instance). I have a conf. call from 2 to 3 but otherwise should be available if you want to give me a call.

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OUT: Material deviation filing

IN: Notes from Bryson conversation with Ken Lay: Urged us to "stay at the table". Says teams in Washington have all the demand curves from the utilities (from which to calculate offering prices). QF meeting starts at 7:00 pm tonight. says average cost of QFs today is 15?/kwh (amounts to 30% of supply). believes that cost can be brought down significantly if gas is purchased forward (perhaps by state entity). Says all utility generation (another 30%), mostly hydro and nuclear is cost based at 4?/kwh. If suppliers come in at 5.5? (or even 6? ), there is room under the 7? new commodity rate component to recover securitized costs (amounts to about 40% of SCE supply). Says good progress was made today. Believes they may have a framework this evening. Believes 5.5? is causing problem; maybe room to squeeze it up (perhaps as high as 6.0?). Thinks governor will slightly increase rates (or pay more at government facilities) if the parties can get 97% of the way to a solution. Thinks it's nearly a "done deal" that DWR (state entity) will buy power. Says securitization may be harder to get. Bryson's questions to Ken (and Ken's to us): Are we willing to forbear payment of amounts owed to us and continue to sell power to the utilities over the next several weeks. Ken realizes that Bryson may be overstating the progress made, and made no commitments to Bryson. Let's discuss at 10:30 call tomorrow.

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OUT: Bryson Conversation

IN: As of today May 9, 2001 Bammel has working gas of approximately 20.3 TBTU. Economics are favorable to keep injecting. I estimate that injections will average around 1TBTU per week through May 31, 2001 which would result in another 3+ TBTU beibng injected. At the current pricing level this means that AEP would owe Enron somewhere around $98 million. Is this something Accounting should be working into the AEP settlement to pay Enron on June 1, 2001? Should AEP be notified of the volume and approximate value. Is there anything that needs to be done contractually other than the original agrrement to facilitate this transaction? I just wanted to make sure everyone is aware! Please let me know your thoughts.

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OUT: Bammel Working Gas Sale To AEP

IN: Sent at the request of Debra Perlingiere Lisa, Changes as per previous document, please forward to your contact. Please call me if you have any questions. Debra

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OUT:
Aspect Resouces Committed Reserves TNCT