Subject: Changes to DPR and Loss Notification Reporting, Limit Changes, etc.
From: [email-masked]
To: [email-masked], [email-masked], [email-masked], [email-masked], [email-masked]
Cc: [email-masked], [email-masked]
Date: Tue, 12 Dec 2000 05:06:00 -0800 (PST)

Please see the BOD approved limit changes and notification level changes 
currently in effect for today's business, 12/12/00: 1) see Risk Mgmt memo for 
summary of changes to policy, see Policy for summary of limits in effect 
except for Temporary Limits noted below (I sent you these same documents a 
week ago, so you're probably already familiar with them).  As you make these 
changes, I'd suggest revising the order of the commodity listings on the DPR 
to conform more closely with the management / trading responsibility 
organization structure announced November 8th (let me know if you do not have 
the e-mail from Skilling/lay with the attached org. charts.)  Also see the 
assignment of Head Traders to specific commodities below - the EWS memo below 
was approved by Greg Whalley yesterday.

So I'd suggest deleting the South America and Asia Africa subtotals and 
putting under Enron Americas and Enron Europe, respectively.

Other changes we've discussed:
removing Structured Derivatives reporting as that P/L should be aligned 
against power or gas risk limits

Other DPR Issues to address: 
The Risk Management policy requires Loss notification monitoring and 
reporting to be measured without the effect of change in prudency and without 
origination:
Reporting changes in prudency - we'd like this to be a bit more transparent, 
there's Lavorato's "Management Book", and Schedule C, and we're not clear 
what drives the changes, so it's more rather than less difficult to 
measure/evaluate trading results
Developing a consistent approach among commodities to report origination vs. 
trading - - - few commodity groups report origination separately, yet the 
area at the bottom of the DPR that says "US and International Originations" 
implies that the amounts reported above exclude origination when that in fact 
is not the case
Need to get EES and the UK to report earlier so we can see preliminary DPR 
with all risk and P/L by 8 a.m. Houston time

Temporary Limits and Discretionary VaR Allocations approved by the BOD, but 
not reflected in the Policy above:

    12/7 - 12/22  Permanent
Aggregate VaR Limit  $140 MM  $100 MM

NA Gas    $110 MM  $60 MM  ($60 permanent limit, + $15 Discretionary VaR on 
12/6 + $35 Temporary VaR)

UK Power   $20.3 MM  $15.3 MM ($15.3 limit until 1/1/01 + $5MM Temporary VaR)

Other Limit Issues - I'll let you know if these are extended or modified:
EES's $2MM of Discretionary VaR expires Friday, the 15th
After 12/22, we'll need to re-evaluate the $15MM Discretionary VaR allocated 
to NA Gas

Regards,
Cassandra.