Spreadsheet: david_delainey__8091__Technical Book 092000
Sheet: Risk

ENRON NORTH AMERICA
TECHNICAL RISK REPORT - 9/20/00
Business Unit | Project Name | Responsible  Party | Project Type | $$ Exposure | Assessment of Risk | Updated | Update/Comments
OEC | New Albany | Dobler | Operation | $0.25 - $0.5 MM | Low risk of bucket failure during peaking season.  Low to medium risk of generator failure during peaking season. | 2000-09-11 00:00:00 | Schedule slippage on delivery of 2 replacement sets of turbine buckets.  Potential removal and repair of 2-3 generator rotors due to magnetism.
 | Caledonia | Dobler | Operation |  | None present | 2000-09-11 00:00:00
 | Brownsville | Dobler | Operation |  | TN Air Pollution Board allocation of Nox credits. | 2000-09-11 00:00:00 | Federal court mandated delay of State implementation prompted TN to delay rulemaking from May 2003 to May 2004.  Similar reaction expected from IN, IL, GA.
 | [NAME] | Dobler | Operation | ? | Medium to high risk on public relations issues stemming from low frequency noise.  Low risk to availability on exhaust plenum and duct failures due to improper construction.  Medium risk to increased MW rating on FD machines. | 2000-09-11 00:00:00 | Met with SWPC on 9/11/00 to discuss low frequency noise issue and increase power rating.  SWPC willing to "deal" on trading LD's for increased rating from 182 to 188 MW and addressing noise issues by re-tuning combustion process.  Communication plan being developed for roll-out to community.  ENA to pursue recourse through EECC/NEPCO on duct constuction issues.  Potential ST4 bucket redesign available through SWPC which achieves 215 MW per unit (net 66 MW site increase).
 | Wheatland | Dobler | Operation |  | None present | 2000-09-11 00:00:00
 | Lincoln | Dobler | Operation | ? | Low risk to implement revised combustor design.  Low risk on Brush generator design. | 2000-09-11 00:00:00 | GE planning roll-out of combustion hardware modifications beginning in September 00.  RCA not yet completed on generator failure, suspect installation casue not design.
 | Doyle | Dobler | Operation | $ 1 - $ 2 MM | H2 cooled generator leakage rates.  Mist eliminator opacity issues.  High seal air flows to #2 bearing, unit 1. | 2000-09-11 00:00:00 | Turbine inspections to begin week of 9/18/00.  Owner decision to not install H2 seals and leave unit off line for remainder of off-peak season.  Mist eliminator replacement has mitigated the opacity levels, however, seal replacement is required to eliminate both opacity issue and high seal air flows to bearing cavity.
West | Alpine | [NAME] John | Operation |  | Small preferred position, minimal risk | 2000-09-06 00:00:00 | Natural Gas Distibution system constructed, currently signing up customers.  To date [NAME] has met all construction milestones, and will meet their customer signup rate for the year 2000.  After fully subscribed exit strategy is to sell the equity.
 | [NAME](LVCLP) | [NAME] | O&M |  | 1) The trips and alarms caused by the Mark V LM Control System have been resolved.                                                                   2) Loose nuts in STG which could potentially destroy stator | 2000-09-06 00:00:00 | 1)  Nine months since replacement of the Control System and it did not interfere with this summer's high running schedule (plant ran non-stop generating merchant revenues for many days rather than the normal on/off cycle of the PPA)  Trips have been resolved by replacment of PROM's.                       2)  Inspection scheduled for10/17 to look at fleet problem of loose nuts in STG. Outage will be 24 hours. If problem found, outage will continue 5 days for repair
 | Priscilla (LVCII) | [NAME] [NAME] | [NAME] |  | 1) Bid player options limited. Two bidders involved. Med risk. 2) Site boundary noise level - Low risk 3) HRSG long lead items - Med risk | 2000-07-20 00:00:00 | 1) High level of involvement in bid scope preparation and bidder response preparation. 2) Permitting going well, noise level issues are being worked through and remain low risk 3) Engineer/designer now on project so long lead items (HRSG) can be ordered.
 | Pastoria | Wehn/Russell/Calger | [NAME] |  | No current Risk | 2000-09-20 00:00:00 | Project focus currently on permitting, no technical issues at this time.
 | Columbia        (Port of Longview, WA) | [NAME] [NAME] | [NAME] | Development Budget Amount | 1) Verify the quantity of water the Port can provide under its current water right.  2) Interconnection - Need to get ahead of Avista-Steag 3) Determine if the project can go through the Washington Energy Facility Siting Council's (EFSEC) expedited process. 4) Determine if a full year of ambient air data collection is required. | 2000-07-20 00:00:00 | 1) Pursue options with the City of Longview if quantity is not available at the Port. 2) BPA backed up on transmission interconnection studies but are now moving. 3) Meeting scheduled with EFSEC to discuss expedited process. 4) Purchased Local air data                                                                                                                                                  5)  Have now moved ahead of Avista in project permitting queue.  Siting for 249 MW.
 | Black Mtn Power/Saguaro  (Cactus) | [NAME] | Operational Review |  | No current Risk | 2000-08-03 00:00:00 | The facility is currently over 95% available and ENA's ownership is 15%.  The plant availability has to fall below 90% for capacity payments to decrease substantially.
 | Bighorn (Colstrip) | [NAME] | Operational Review |  | No current Risk | 2000-08-03 00:00:00 | Big Horn's historic availability exceeds 92%.
East | [NAME] | Virgo | [NAME] |  | Normal Construction Risk | 2000-09-06 00:00:00 | No current issues, normal interface at site
 | Linden 6 | Virgo/Mike Coleman | [NAME] |  | 1) Construction risk - quarantees and liquidated damages with EPC contractor (NEPCO) 2) Machine - GE guarantees  East Coast Power has a capable project manager following this project. | 2000-09-08 00:00:00 | Under consturction no problems identified.  Orders have been placed for major equipment.
 | East Coast Power       Linden   Camden   [NAME] | Dobler | O&M |  | None present | 2000-09-11 00:00:00 | OEC will be participating in monthly operator mtgs.  OEC preparing O&M proposal for ECP, for potential implementation beginning June 01.
 | Ada Cogeneration | [NAME] Pine    [PHONE] | O&M |  | Ongoing problems with both boiler feedpumps have been resolved. | 2000-09-08 00:00:00 | One new motor has been ordered and installed. Currently assessing its operational performance and once it has successfully passed, the remaining feed pump motor will then be overhauled to like new condition.  The plant is now ten years old and components are starting to reach their useful life. The ongoing preventative maintenence programs will continue, which allow the plant to catch these incidents before failure.
 | Ada Cogeneration | Dobler | O&M |  | Ongoing problems with both boiler feedpumps have been resolved. | 2000-09-11 00:00:00 | OEC has made contact with Owner's rep and will begin offering assistance, where practical, to project.
 | Michigan Power | [NAME] Pine    [PHONE] | O&M |  | None present | 2000-09-08 00:00:00 | The plant is running very well with Annual Availability exceeding 97%.
 | Michigan Power | Dobler | O&M |  | None present | 2000-09-11 00:00:00 | OEC has made contact with Owner's rep and will begin offering assistance, where practical, to project.
 | Tenaska IV Texas Partners  ([NAME]) | [NAME] Pine    [PHONE]  Virgo | O&M |  | Inherent risk exposure to Westinghouse 501 F technology machines and the transition/transition seal design deficiencies. | 2000-09-08 00:00:00 | Outages have resulted because of this transition/transition seal design failure.. A new transition seal design is scheduled to be installed during the next outage beginning 9/25/00.  ENA is funding the retention of Power Systems to prepare a root cause diagnostic of the transition piece and seal failures, should take about 90 days.  Passed a technical boroscope inspection & comes down for a significant rebuild on Sept. 24.  WH will install a new transition seal then.
 | Tenaska IV Texas Partners  ([NAME]) | Dobler | O&M |  | Inherent risk exposure to Westinghouse 501 F technology machines and the transition/transition seal design deficiencies. | 2000-09-11 00:00:00 | OEC has made contact with Owner's rep and will begin offering assistance, where practical, to project.  OEC discussed issue with SWPC and is to provide plans for redesign  of TP and TP seals.
Mexico | Vitro | Virgo | Development/ Construction |  | 1) Engineering and design of project - will assign an engineering manager to work with contract engineer during critical early stages of project. 2) Construction risk - will assign a construction manager from ENA to monitor project through completion. | 2000-09-08 00:00:00 | Hiring ENA engineering manager and will utilize ENA construction management team.  Core team will be complemented by EE&CC or other resources on specific issues.  [NAME] has daily interface with EECC on project.  Machine storage is set up.  Weekly meetings with [NAME].
Upstream | Nautilus | Cocavessis | Engineering/    Procurement/  Construction |  | Have reduced contingency by $250,000 to cover additional environmental mitigation costs. | 2000-09-13 00:00:00 | Have incurred additional $250,000 in costs to mitigate environmental risk associated with disposing pipe cleaning wastes.  Overall Project Cost Estimate is about $6MM.  The project includes $2.4MM for the Spinnaker deal (reimbursed by Spinnaker) and the balance for cleaning the South Padre 20".
 | [NAME] | Kuehler | Engineering/    Procurement/  Construction |  | Project was completed. | 2000-09-13 00:00:00 | $276,000 budget.
 | Solvay Polymers | Kuehler | Engineering/    Procurement/  Construction |  | Project was completed. | 2000-09-13 00:00:00 | Came substantially lower than the budget; will claim $100,000 in profit.
 | BASF Port Arthur | Kuehler | Engineering/    Procurement/  Construction |  | Performed detailed estimate.  Low risk. | 2000-09-13 00:00:00 | $361,000 budget.
 | SW-Speaks Loop | Kuehler | Engineering/    Procurement/  Construction |  | Performed detailed estimate.  Low risk. | 2000-09-13 00:00:00 | $310,000 budget.
 | Constellation Power - Rio Nogales Plant | Cocavessis | Engineering/    Procurement/  Construction |  | Risk mitigation was based proposal on several material and construction bids and a detailed scope provided by the client. | 2000-09-13 00:00:00 | This is a third party EPC opportunity.  ENA is negotiating a construction contract.  The value of the project is $20,000,000 with about 12% in construction profit.
 | ANP Chambers County Plant | Cocavessis | Engineering/    Procurement/  Construction |  | Risk mitigation was based proposal on several material and construction bids and a detailed scope provided by the client. | 2000-09-13 00:00:00 | This is a third party EPC opportunity.  ENA appears to be the chosen contractor. The value of the project is $3,000,000 with about 12% in construction profit.
 | Crescendo (NG Resources) | Cocavessis/ Mays | Engineering/    Procurement/  Construction |  | Exposure is approximately $1MM for the process plant.  The contractor has a limited overrun liability because of the way the contract was negotiated.  There may be additional exposure in the event discussions between ENA and the gas gathering company collapse and ENA is required to provide its own gas gathering system (cost is about $4,000,000) | 2000-09-13 00:00:00 | Overall Project Cost Estimate is $8.65MM.
 | Project Neptune (LIPA) | Cocavessis/   Virgo | Development/ Construction |  | Exposure is approximately 5% or about $0.9MM.  We have a firm price for the barges but not on the installation.  There are approximately $100,000 in contingency. | 2000-09-18 00:00:00 | Overall project capital cost is about $19.2MM.
Energy Capital Resources | Bonne Terre Exploration | Pruett / Fox | Operational Review |  | Exploration Risk | 2000-09-18 00:00:00 | 3-D Interpretation in progress. Multiple prospects identified,  selldown to industry in progress. Lease saving operation on Miami Fee area pending. $10 MM DASH signed.
 | CGAS | Pruett / Fox | Development/ Construction |  | Exploration/Development Risk | 2000-09-18 00:00:00 | Exploration program success rate >80 % in last 8 months. Allowing management to implement original exploration strategy.  Interested parties reviewing data relative to possible sale.
 | Cypress Exploration | Pruett / Fox | Operational Review |  | Exploration Risk | 2000-09-18 00:00:00 | Rozel Energy 3-D Interpretation shop engaged, +/- $5MM interim DASH signed. Anticipate additional drillable prospects to be forthcoming in next 12 months. Negotiating program selldown or prospect-by-prospect selldown to reduce ENA exposure.
 | [NAME] | Fox | Exploration / Development Risk |  | Exploration Risk | 2000-09-18 00:00:00 | Spudding 3rd well, currently drilling.
 | Sapphire Bay | Pruett / Fox | Operational Review |  | LLC - development risk/27 wells by 9/2000 | 2000-08-03 00:00:00
 | [NAME] | Pruett / Fox | Operational Review |  | [NAME] interest - Exploration risk/3D seismic & drilling | 2000-09-18 00:00:00 | Drilling remaining high potential prospect in S. Texas. Reviewing options to get [NAME] prospect (Blue Water)
[NAME] | Anson VPP | Neyman | Production Risk |  | VPP ending, no technical risk | 2000-09-06 00:00:00 | Some potential for reservoir and mechanical risk on any production payment but we're collateralized such that risk is minimal
 | EnSerCo | Vass / Lydecker |  |  | Sale in progress | 2000-09-06 00:00:00 | Funding anticipated by 9/15/00
 | Hanover Compressor | [NAME] | Operational Review |  | Minority Public, no technical risk | 2000-08-03 00:00:00 | Hanover is a natural gas compressor service outsourcing company, there is no technical risk.  The value is strictly driven by the market.  Attempting to sell by year end.
 | Hancock Mezzanine Partners | Lydecker |  |  | Investment vehicle, no technical risk | 2000-09-06 00:00:00 | Currently working to dispose of asset.
 | Inland Resources | Lydecker |  |  | Preferred minority interest, no technical risk | 2000-09-06 00:00:00 | Company has risk in exploitation of reserve base and could be some refining technical issues when the company merges with Flying J (privately held refiner), however ENA bears no direct technical risk.  Currently working to dispose of the asset.
 | [NAME] | Lydecker | Operational Review |  | Ltd Partnership, production/development risk. | 2000-09-06 00:00:00 | Potential buyout of interest by [NAME] (principal), bid/offer spread defined, working to expedite a transaction.
 | Mariner Energy | Melendrez/ [NAME]/[NAME] | Operational Review |  | Private - Development risk, most of the company's activity is in deep water Gulf of Mexico. | 2000-09-08 00:00:00 | [NAME] (ENE) sits on the BOD, outside engineering is performed by [NAME] and technical risk is reviewed by [NAME].
 | Masada | Lydecker | Operational Review |  | Equity position; Solid Waste Conversion that extracts enthanol from garbage. Pre-development phase, no financing and no EPC. | 2000-09-06 00:00:00 | [NAME] has obtained insurance coverage from Hartford Steam Boiler for construction and threshold performance criteria.  No direct technical risk to ENA at this time.  Projected revenue will come from "tipping".  Currently working to dispose of the asset, however a challenge due to the venture capital nature of the project.
 | Swift Energy | Neyman |  |  | VPP ending, no technical risk | 2000-09-06 00:00:00 | Some potential for reservoir and mechanical risk on any production payment but we're collateralized such that risk is minimal
Principal Investing | AMPS | Vetters/Kitgawa/Virgo | Generation Technology |  | Advanced Mobile Power Systems - Jet engine technology   PSM lacks a track record for reverse engineering complete power gen systems (but has reverse engineered turbine parts for ENE)  PSM expects to hire ex-Pratt & Whitney engineers who worked on the original mobile design. | 2000-09-20 00:00:00 | Termsheet with Power Systems has not yet been signed by ENE
 | DAC | ?? |  |  | Days Analytic Co. [NAME] project | 2000-09-20 00:00:00 | Option on Public Markets
 | Destec | Kuykendall | Coal Reserves |  | Coal Position - Contract monetization: no technical risk | 2000-09-06 00:00:00 | Only thing remaining is the reserves.  Destec no longer exists.
 | Encorp | Vetters | Generation Technology |  | Private Minority Interest, no technical risk.  Leading edge technology for controls communictions and grid interconnection for auxilary and emergency power generators. | 2000-09-06 00:00:00 | Outperforming original expectations.  Market is lagging behind their technology and not expected to catch up before a potential IPO in Q1 or Q2 of '01.
 | First World | Kuykendall | Operational Review |  | Basis is $0, currently own 3MM warrants, slightly above water. | 2000-09-06 00:00:00 | Service provider, only market risk, no technical issues.
 | Metering Technology Corp | Kuykendall | Operational Review |  | U.S. Private; no technical risk. | 2000-09-06 00:00:00 | ENA offering market introductions for Metering Technology.  The meters are standardized and as they are launched into a new Market (for example India) they are configured to meet "market standards" and have to receive approvals (timing only, not technical)
 | Power Systems MFG | Vetters | Generation Technology |  | U.S. Private - warrants.  Power generation spare parts. | 2000-09-06 00:00:00 | Possible incremental investment in AMPS project.  Jet engine technology for tractor trailers.
 | Solo | Vetters | Generation Technology |  | Micro turbine technology | 2000-09-06 00:00:00 | Finalizing field test; next phase beta test at SCANA.  Meeting with Morgan Stanley to assess opportunity for IPO in Q1 '01 versus raising private $$.
 | Syntroleum | Vetters | Technological Review |  | Australian Synfuels project | 2000-09-06 00:00:00 | Stone & Webster retained for technical due diligence, recommendation expected in 10/00.  Upon favorable report potential LOI for incremental $20MM in capital.
 | Utiliquest | Kuykendall | Operational Review |  | Locates pipe & wires subsurface, no technical risk | 2000-09-06 00:00:00 | Low tech service business. Strictly operational review.