Subject: Property Deductible Buy-down Option
From: [email-masked]
To: [email-masked], [email-masked], [email-masked], [email-masked]
Cc: [email-masked], [email-masked]
Date: Thu, 8 Mar 2001 08:35:00 -0800 (PST)

Attached from Jim Bouillion is the latest proposal from insurers for North 
American power gen assets.
Please review and adivse of your interest in pursuing this further.

---------------------- Forwarded by David Marshall/HOU/ECT on 03/08/2001 
04:31 PM ---------------------------

James L Bouillion
03/07/2001 04:58 PM
To: David Marshall/HOU/ECT@ECT, Terry Yamada/Corp/Enron@Enron, Paul E 
Parrish/NA/Enron@Enron, Nigel Beresford/EU/Enron@ENRON, Rino T 
Manzano/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Roberto 
Figueroa/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Mariella 
Mahan/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc: Per Sekse/NY/ECT@ECT, Paul Clayton/HOU/ECT@ECT, Jonathan 
Davis/HOU/ECT@ECT 
Subject: Property Deductible Buy-down Option

We have an indication for a deductible buy-down as outlined on the attached 
exhibit.  The premium due the underwriter is $3 million plus we must assume 
the first $4 million in losses in the aggregate above a combined deductible 
for property damage and business interruption of $1 million.  In order to 
have funds available to pay losses, we propose to house the $4 million 
aggregate in Enron's captive where it would be available to pay claims excess 
of the $1 million combined deductible as stated above.  After the $4 million 
is expended, the insurance underwriter will assume payment of losses subject 
to a per loss deductible of $1 million property damage plus a 30 day waiting 
period for business interruption.

This premium allocation is only valid if all 11 listed assets participate.  
We are not likely to get premium reductions equal to the allocated amounts if 
certain assets elect not to participate.  Once the incurred losses have been 
completely quantified, we contemplate returning the unused portion of the $4 
million loss fund to the assets participating at the end of the policy term 
proportionately based on property values subject to the following exceptions:

Any asset having a loss would receive no loss fund refund.
Any asset exiting the program early would receive no loss fund refund.

Please indicate by noon central standard time on March 9, 2001, your decision 
relating to this proposal.