Q: I have received questions about interpreting the ratio. Let me use yesterday's closing price. The merger probability is derived from a two scenario test, merger closure or merger non closure (there is also a competing offer scenario in reality). Let's use a closing DYN price of $46.20 yesterday (note I had a typo), at the exchange ratio, (not taking into account timing and dividends), this yields a merged ENE price of $12.40 ($46.20 * .2685). ENE closed at $10.00 yesterday. Thus if the market thought there was complete certainty of merger, the prices would converge at $12.40. Now comes the artful part, the non merger ENE price. I included another tab (Merger) to sensitize this. Say we pick an ENE price with no merger of $4.00. Looking at a deterministic probability, one can look at the distance (difference) in dollars to calculate the probability. For instance: ENE merged 12.40 ENE close 14-Nov 10.00 ENE no merger 4.00 Probability of merger = (1-((12.40-10.00) / (12.40 - 4.00))) or 71.4%. Said another way, there is a 71.4% chance of being worth $12.40 and a 28.6% chance of being worth $4.00, which yields a weighted price of $10.00 ($12.40 * 71.4%)+($4.00 * 28.6%). I also included a $1 distressed ENE price and a $7 previously observed low end ENE price as scenarios. Regards,
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A: Exchange ratio prices and probability

Q: Hi Everyone, Some of you might be aware that we are planning a Bridal Shower for Jennifer Bowles on Nov 3rd. Invitations have not yet been sent out so don't be alarmed if you haven't received one. The shower will be between the hours of 7-9 (maybe 9:30 p.m.) What we were thinking about doing afterwards is going to the Mucky Duck and catching Jimmy LaFave, who is performing at 10 p.m. He is one of Jennifer's favorites and we thought it would be a nice surprise. What I need is to know is who all would be interested in going to the show? Tickets are $15 and we need to get them ASAP. It will probably last until midnight. If everyone could please email me back and let me know if you are interested in going, that would be great. Please don't mention this to Jennifer, we want to keep it a surprise. Thank You,
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A: Jennifer's Shower - RSVP

Q: We currently have $21.4 million in reserve for potential Northwest refunds. $10 million currently sits in the LTCA book and $11.4 currently sits in the LTNW book. During the summer, FERC initiated an investigation into the potential of unjust and unreasonable spot prices in the northwest from December of 2000 through June of 2001. Seatlle City Light, Tacoma City Light, Eugene Water and Electric Board, and Sacramento Municipal Utility District all filed claims at FERC for refunds from EPMI. The claims totaled close to $100 million. However, many of these claims were, on their face, spurious. For example, Eugene Water and Electric Board filed for refund of forward purchases which was clearly outside the scope of FERC's proceeding. We hired consultants from Charles River Associates (CRA) to help us with this process. One of their tasks was to apply the CAISO competitive benchmark pricing methodology to the Northwest market. That is, CRA attempted to reverse engineer the CAISO's methodology in order to estimate our Northwest risk. I was informed by our litigation team that EPMI's realistic potential exposure using this methodology was roughly $30 million. We decided to reserve roughly 2/3 of this amount which came to about $21 million. In September a FERC Adminitrative Law Judge heard the case and submitted a draft decision to the FERC. The draft decision recommended against any refunds. This draft decision is supposed to come in front of the FERC commissioners for approval before the end of the year. If this draft decision is approved, it would be appropriate to remove these reserves.
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A: Northwest Reserves

Q: Tracy, Please find attached the EREC 2002 Business Plan and Operating Budget presentation prepared for the review with Ken Lay originally scheduled for Nov. 8th. Please contact me if you have any concerns. Thank you.
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A:
EREC '02 Plan Presentation