Subject: RE: EES
From: [email-masked]
To: [email-masked], [email-masked]
Date: Wed, 28 Feb 2001 07:08:26 -0800 (PST)

It is critical that RAC speak as one here. Be sure to coordinate with Tribolet and Hachen on this stuff. Rick

 -----Original Message-----
From: 	Port, David [mailto:IMCEAEX-_O=ENRON_OU=NA_CN=RECIPIENTS_CN=NOTESADDR_CN=[email-masked]] 
Sent:	Tuesday, February 27, 2001 6:37 PM
To:	Buy, Rick
Cc:	Gorny, Vladimir; Murphy, Ted
Subject:	EES
Sensitivity:	Private

I had a meeting today with Janet Dietrich, Wanda Curry and Sally Beck in connection with the forthcoming "Doorstep" reviews of EES. 

In an attempt to head this off, Wanda'a group had prepared a quick summary of the state of their world. From a risk management standpoint it appears to me that urgent tactical fixes required are as follows:

Characterization and representation of EAM options in the risk system;
Tarriff curves required;
No intra - month books;
J C Penney deal to go in tomorrow;
Inability to track roll - off of MTM value into actual cash paid or received;
Potentially inaccurate credit exposure numbers due to inconsistent counterparty data in their systems

Obviously Janet is very keen to manage expectations in this area, and I think one of the key points is their value at risk, which I think could jump as points 1 to 4 above are tackled.

The heads - up here is that I believe some discretionary VAR may be required shortly.

DP