Message-ID: <8997374.1075854440190.JavaMail.evans@thyme>
Date: Mon, 17 Jul 2000 16:19:00 -0700 (PDT)
From: david.delainey@enron.com
To: rodney.malcolm@enron.com
Subject: Are we finding value in outsourcing? - GE Plastics
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Rodney, interesting title- is someone giving you grief on this strategy?

Regards
Delainey
---------------------- Forwarded by David W Delainey/HOU/ECT on 07/17/2000 
11:13 PM ---------------------------
   
	Enron North America Corp.
	
	From:  Rodney Malcolm                           07/16/2000 11:08 AM
	

To: David W Delainey/HOU/ECT@ECT, Raymond Bowen/HOU/ECT@ECT
cc: James A Ajello/HOU/ECT@ECT 
Subject: Are we finding value in outsourcing? - GE Plastics

This week we will begin discussions on structure and pricing with GE 
Plastics.  At the risk of getting committed to earnings delivery I thought it 
would be helpful to give a range of value to us & GE at least before the 
economics start to deteriorate in negotiations.  Currently the proposal would 
require GE to step up to ten year fixed price positions that would create the 
following split up of economics:

Savings to GE $33MM PV
Value to Enron $15MM with $10MM of this value in bookable mark to market
$40 MM in capital invested in the Demand Side Management Projects.

I think that this suggests there should be value in our outsourcing efforts.

Thanks,
Rodney