IN: All, Recently I have taken over as Director of the Volume Management Group. Wit= h Murray O'neil and Chris Stokely leaving, as well as other key members, I = am becoming increasingly aware that the group is not currently providing th= e value to your desks as it has in the past. My hope is that over the rema= inder of this year we can make a concentrated effort to bring the current g= roup up to speed so that we can restore the level of service provided in th= e past. We are currently initiating training both interally and externally= to increase the groups understanding level. We are also Implementing new t= ools that should increse our effectiveness and efficiency. Additionaly, I= would like to personaly invite your feedback on how indivduals and our gro= up is performing and progessing during this transition. Your feedback is c= ritical to our success and I consider it critical to shaping this new group= . I want to know if we are performing the core acitities well, and if we = are developing a reputation as experts of how our markets works as well as= providing valuable analysis. Personally, I will be introducing myself to= you over the next week or two and would like to sit with each of you to ga= in an appreciation for your roles and how we can play a role in aiding you.= as a parting shot Murray has asked most of the team to do the same so don= 't be suprised if you are suddnely enundated with requests to shadow you. I= look forward to working with you all.=20 Regards,

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OUT: Greetings

IN: Melissa: I started with Sempra. It's one of the more unusual masters ( a "Master Master" covering both physical and financial) and it's not the typical "ECT Master". Further, it contains no rounding or correction to published prices provisions. We'll have to review these masters on a case by case basis.

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OUT: Sempra Energy Trading

IN: Talked to Dave. In a nut shell, here are the problem areas in the bill as he sees it. It was a very brief conversation, but I think I've captured the key points: Based on an expectation that the "expedited siting" bill would help site plants, Dave's group had six plants on the drawing board. The 5 ppm requirement kills 4 of the 6, i.e., the 4 can't meet the 5 ppm requirement. The requirement that the plants would either be 1) shut down after 3 years or 2) replaced with a combined-cycle plant kills the other 2 because a) shutting down the plants in 3 years kills the economics, and b) the sites for the two LM-6000s can't accomodate combined cylces (i.e., Dave couldn't get siting). In addition,the generator would be required to sign an exclusive with the ISO (which the EOB would have to approve), which takes away the optionality of going to the market, thus killing the economics. On the labor side, it's complicated, but in essence, by requiring that "...it be shown that the applicant has a contract with a general contractor and has contracted for an adequate supply of skilled labor to construct, operate, and maintain the plant," it forces Dave to negotiate a labor deal before he knows what the project is (i.e, before the project has been approved), and, it effectively prevents Enron from having the option to use internal resources (this issue is very specific to Enron; I can explain more if folks prefer). In short, bullets 1-3 would seem to affect both Enron and the market, while the last bullet is, according to Dave, very Enron specific. Point 2 in bullet 4, according to Dave is sensitive and should not be made public. If any questions, let me know. Bruno has emailed the price cap and the "general-funds-to-help-finance-the-cap" bills, and faxed the siting bill. Best,

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OUT: Conversation with Dave Parquet re: siting bill

IN: " To dream anything that you want to dream - that is the beauty of the human mind. To do anything you want to do - that is the strength of the human will. To trust yourself to test your limits - that is the courage to succeed." " Embrace hard things and your mind will blossom." "This is America ENRON. We can do anything here." -- Ted Turner Sunil Dalal

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OUT:
A barrage of Inspiration