IN: As you may know by now, the media learned of the employee meeting that was planned for next Wednesday, January 23 at the Hyatt. To protect the privacy of our employees, we have chosen to cancel the meeting. As an alternative to the Hyatt, we are looking at space options within our building. This will require that we hold several, smaller group meetings, but will help to ensure our employees privacy and safety. We are currently working through logistics and hope to coordinate these meetings rather quickly. We are continuing to compile a presentation for the meetings. It would provide an overview of our current situation, including a timeline of the bankruptcy process and other major challenges we must overcome. It would further explain the NetCo agreement and its impact on Enron's ongoing business. And finally, it would outline Enron's organizational structure and strategy going forward. I will be back in touch soon with further details on the rescheduled meetings. Regards,

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OUT: Employee Meeting

IN: I am pleased to announce that Jana Domke has accepted the position of Director, Compensation for Enron Transportation Services, effective August 1, 2001. Jana started with Enron in May, 2000 and most recently has been Director of Compensation & Benefits for Enron Wind. Prior to joining Enron, Jana was a Practice Leader with PricewaterhouseCoopers, and Director, International Compensation & Benefits for Smith International. Jana has 19 years of experience in both domestic and international compensation and benefits. Jana received her M.B.A. from the University of Houston. She also has a Bachelors Degree from U of H in Organizational Behavior & Management. Jana can be reached at (713) 853-6329 and her office location is EB1156. The ETS Compensation staff, including Jana's direct reports, can be viewed on the attached organization chart. Please join me in welcoming Jana to the ETS team.

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OUT: Organizational Announcement

IN: Lorraine, I've been studying the El Paso/Dynegy reservation reduction mechanism (RRM). Basically the deal was that Dynegy's minimum-pay obligation would be reduced by the amount of the fixed cost component of IT revenues generated by El Paso's transportation of IT volumes above a historical threshold. (The parties based the threshold on El Paso's monthly IT volumes for the 12 months ended 9/30/97.) The volumes in excess of the threshold were calculated and a ratio of the volumes in excess of the threshold to the total volumes was determined; the ratio would then be applied to the fixed cost component of all IT revenues and the resulting dollar value applied to Dynegy's monthly reservation charge, to the extent Dynegy had not met its minimum pay obligation for a particular month. This provision of course met with heavy opposition; however, FERC allowed it. FERC stated that while the RRM had anticompetitive effects because it created a disincentive for El Paso to discount IT, it was not unduly discriminatory. The "unduly discriminatory" conclusion was based on an analysis on the potential effect on the Cal. gas transportation market -- the

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OUT: Duke

IN: Steve and Christian Could you please review and let me know what you think of this? There is a call on Thurs at 200 (Central) to discuss. Do you want to participate?

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OUT:
CAISO draft definition rewording