Subject: Upcoming Discretionary VaR Limit Changes
From: [email-masked]
To: [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked],
Cc: [email-masked]
Date: Sat, 16 Dec 2000 14:46:00 -0800 (PST)

Per discussion with Ted Murphy and Rick Buy, the following policy limit 
changes are anticipated.  Note:  these are subject to change given market 
volatility.

EES - $2MM Discretionary VaR expiring on 12/22/00  ------------------------> 
EXTENDED THROUGH 1/5/01

Aggregate VaR Limit of $140MM - $40MM expiring on 12/22/00 ----------> 
EXPIRES AFTER 12/22/00 - reduced to permanent Aggregate VaR Limit of $100MM

NA Gas - $35MM Discretionary VaR expiring on 12/22/00 ------------------> 
EXPIRES AFTER 12/22/00 (with reduction in Aggregate VaR Limit to $100MM)

UK Power - $5MM Discretionary VaR expiring on 12/22/00 ----------------> 
EXPIRES AFTER 12/22/00 (with reduction in Aggregate VaR Limit to $100MM)

NA Gas - $15MM Discretionary VaR expiring on 12/22/00 -----------------> 
EXTEND $10MM THROUGH 1/5/01

       -----------------> REALLOCATE $5MM to UK Power THROUGH 1/5/01.

Therefore, the following VaR limits are/will be in place:

   now - 12/22/00  12/23/00 - 1/5/01 1/6/01
EES    $7MM   $7MM  $5MM

NA Gas    $110MM  $70MM  $60MM

UK Power   $20.3MM  $20.3MM $15.3MM

Aggregate VaR Limit  $140MM  $100MM $83MM

Vlady/Frank - Ted told Lavorato the NA Gas information on Friday.

Vlady/Minal - nothing to my knowledge has been communicated to EES yet.  You 
can check with Ted to see if he did already.

Oliver, please communicate the anticipated limit changes for UK Power to the 
commercial and risk management/energy ops people who need to know.  If an 
extension is needed in the Discretionary VaR, at this point an analysis and 
presentation will be required to justify the extension to get Rick Buy and 
Ted Murphy to approve.

Feel free to call me with any questions.  I'm out on vacation this week, but 
can be reached at home or on my cell phone.

Happy Holidays,
Cassandra.
home  936 321 2185
cell 713 858 2618