Subject: Revised NSTAR WPSA
From: [email-masked]
To: [email-masked], [email-masked]
Cc: [email-masked], [email-masked], [email-masked]
Date: Thu, 28 Sep 2000 03:33:00 -0700 (PDT)

Elizabeth and Bill - As you are aware the NSTAR transaction has been split 
into a one year deal with a potential long term (3 year) deal to follow as 
NSTAR felt the structure of the long term deal was complex and would require 
certain regulatory approvals (which had long lead time and were potentially 
difficult to obtain).  The one year deal will not require such approvals and 
will be structured like the current 6-month deal with which NSTAR is 
comfortable.

This structure eliminates certain issues including the physical/financial 
netting issue.  This is because the financial swap and put is eliminated and 
in its place is simply a fixed energy offset amount which reduces the volumes 
Enron is required to deliver.

The short term structure was set up whereby EPMI would be obligated to supply 
each of the NSTAR operating subs (Boston Edison, Cambridge, and Commonwealth) 
under one agreement.  There are embedded cross defaults in the agreement 
(e.g. a ratings drop by any NSTAR sub results in a MAC).  However, the 
agreement also included a provision that each of the NSTAR subs is severally 
but not jointly liable.  Thus, in a NSTAR default termination scenario EPMI 
would likely need to stream volumes and calculate 3 separate termination 
payments and subsequently pursue each sub separately notwithstanding the 
obligation to pay the termination payment is set up as a collective 
obligation of the NSTAR subs.

Unlike the 6-month deal, the attached draft provides that NSTAR is obligated 
to deliver a parent guarantee.  This was resisted by NSTAR on the short term 
deal as each of the NSTAR subs has an above investment grade (I believe A-) 
credit rating.  I will leave it to Bill to determine whether a parent 
guarantee is required or appropriate; however, provision of the guarantee 
would provide somewhat of a fix to the several liability structure.

I have been advised that NSTAR has a board meeting on Monday and would like 
to see the draft tomorrow.  In this regard it would be greatly appreciate if 
you could provide comments on the document by tomorrow morning.

Regards
CJG 

---------------------- Forwarded by Chris Gaffney/TOR/ECT on 09/28/2000 10:01 
AM ---------------------------

"MICHAEL W E DIDRIKSEN" <[email-masked]> on 09/27/2000 11:21:48 PM
To: <[email-masked]>, <[email-masked]>, <[email-masked]>, 
<[email-masked]>, <[email-masked]>
cc: "JOHN G KLAUBERG" <[email-masked]> 

Subject: Revised NSTAR WPSA

Per the request of John Klauberg, attached please find a marked copy of a new 
version of the NSTAR WPSA, revised to reflect the changes to the transaction 
following your meeting with NSTAR.  I have marked the draft to show changes 
from the original six month transaction.  Please be advised that John 
Klauberg has not yet reviewed the draft, but is receiving it at the same time 
as you are.

Please call me if you have any questions.  I can be reached at the number 
below.

Mike Didriksen

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Michael Didriksen
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
125 West 55th Street
New York, NY  10019
(212)424-8352
fax:  (212)424-8500
[email-masked]

 - NSTAR WPSA redline 9-27.doc