Message-ID: <26959563.1075859678448.JavaMail.evans@thyme>
Date: Tue, 28 Nov 2000 01:46:00 -0800 (PST)
From: elizabeth.sager@enron.com
To: mark.haedicke@enron.com
Subject: Quarterly Legal Review -Power
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           Attorney Work Product/Not Discoverable

Top Legal Risks

1.  Power Forms -  Trading contracts in the power industry are very weak.  
Typical problems include, trading under multiple masters, no liquidated 
damages for non-delivery, no events of default or calculation of termination 
damages, broad performance outs.

2. Agency - Several of our major trading partners operate through an agent 
acting on behalf of several operating companies. This creates uncertainty as 
to which entity is liable for which trades.

3. Municipalities - Difficult authorization issues associated municipalities.

4.Complexity of transactions - Power transactions can be very complex as a 
result, in part, of difficult delivery mechanics and volatile pricing.

5.Timing of transactions - Power transactions typically must be completed on 
a very tight time schedule.

6. Lawyer Training - Difficult, time consuming process to train lawyers on 
how to document transactions involving power.

7.Process for approval of transactions - Uncertain procedures for making sure 
everybody understands risks associated with transactions.

Documentation Projects

1.  EEI - cont'd work to make EEI the trading contract for power/lessen 
reliance on WSPP.

2.  One-off Power Form - creation of contract to be used for individual 
transactions that are not part of a master.

3. Product Definition - cont'd work on creating/building acceptance for power 
product definitions.

4. Platform Trading - Encourage use of EEI as trading platform for all 
e-trading.

5. Single master contract for all physical commodities/financial trading  -  
work with ISDA to develop single contract for physical trading and then roll 
that into single contract for physical and financial trading