Subject: Summary version
From: [email-masked]
To: [email-masked], [email-masked]
Cc: [email-masked]
Date: Fri, 26 Oct 2001 09:25:15 -0700 (PDT)

Peggy, this is a summary version of the original information from Richard Ring. Richard's input about the below was that
it might not be suitable for direct distribution to customers but that it was acceptable for internal reference or talking points.
I don't think it can be condensed any more without losing important information.

SUMMARY

Upon becoming a NEPOOL member, EESI chose to satisfy the Financial Assurance Policy requirement by issuance of Performance 
Bond(s) via Fireman's Fund Insurance Company, which issued a Performance Bond in the amount of $8,000,000. 

On or about October 12, 2001, EESI received a letter from ISO New England dated October 10, 2001, indicating that EESI's current 
Performance Bond was insufficient and that EESI needed to increase the amount to $11,703,018.75 to cover EESI's current activity level.  

In telephone conversations with ISO-NE, EESI was informed that in order to avoid Financial Assurance Default the matter needed to be
 resolved within ten (10) days of the date of the October 10, 2001 letter (October 19, 2001). 

By October 16, EESI had requested a bond increase in the EESI NEPOOL Performance Bond to $20,000,000, but encountered delays in 
working with the bond company.

EESI Credit Department personnel sent ISO-NE personnel on October 19, 2001, via FAX, a copy of the request to the bond company for
 revisions to the Performance Bond, and indicated EESI was working diligently to resolve the matter.

EESI was unable to comply with the October 19, 2001 deadline to resolve the Financial Assurance Default due to delays with the bond company 
as mentioned above. 

On October 19, 2001 another letter was sent to EESI by NEPOOL indicating that because EESI had not maintained the required level of financial 
assurance for 10 days or more, and this had occurred in combination with two other technical defaults, that this information was being forwarded 
to the NEPOOL Membership Subcommittee for action.  

Following resolution of delays with the bond company, a bond increase was issued by the bond company on October 23, 2001, executed 
by EESI on October 23, 2001 and forwarded via FAX and Overnight Mail to ISO-NE on October 23, 2001.  

However, according to Protocol for the Initiation of Membership Termination Proceedings the issue should be resolved with the receipt on 
October 24, 2001 of the Performance Bond by ISO-NE.