Subject: Re: Litigation Disclosure
From: [email-masked]
To: [email-masked]
Cc: [email-masked], [email-masked]
Date: Sun, 29 Apr 2001 23:36:00 -0700 (PDT)

The Intratex disclosure looks fine. Check with Rex Rogers about what he wants 
to do about disclosing California litigation risk.

	Gary Peng/ENRON@enronXgate
	04/26/2001 10:04 AM
		 
		 To: Charles Cheek/ENRON@enronXgate, Robert Eickenroht/ENRON@enronXgate, 
Richard B Sanders/HOU/ECT@ECT
		 cc: Rex Rogers/ENRON@enronXgate
		 Subject: Litigation Disclosure

Find below the Litigation and Other Contingencies footnote from the the 
December 31, 2000 Annual Report.  Please update the section of the disclosure 
for which you are responsible for inclusion in the first quarter 2001 Form 
10Q .  Also, please let me know if there are any new items that should be 
considered.

Please respond no later than Wednesday May 2.

Gary
3-6841

14  LITIGATION AND OTHER CONTINGENCIES

   Enron is a party to various claims and litigation, the significant items 
of which are discussed below.  Although no assurances can be given, Enron 
believes, based on its experience to date and after considering appropriate 
reserves that have been established, that the ultimate resolution of such 
items, individually or in the aggregate, will not have a material adverse 
impact on Enron's financial position or results of operations.

   Litigation.  In 1995, several parties (the Plaintiffs) filed suit in 
Harris County District Court in Houston, Texas, against Intratex Gas Company 
(Intratex), Houston Pipe Line Company and
Panhandle Gas Company (collectively, the Enron Defendants), each of which is 
a wholly-owned subsidiary of Enron.  The Plaintiffs were either sellers or 
royalty owners under numerous gas purchase contracts with Intratex, many of 
which have terminated.  Early in 1996, the case was severed by the Court into 
two matters to be tried (or otherwise resolved) separately.  In the first 
matter, the Plaintiffs alleged that the Enron Defendants committed fraud and 
negligent misrepresentation in connection with the "Panhandle program," a 
special marketing program established in the early 1980s.  This case was 
tried in October 1996 and resulted in a verdict for the Enron Defendants.  In 
the second matter, the Plaintiffs allege that the Enron Defendants violated 
state regulatory requirements and certain gas purchase contracts by failing 
to take the Plaintiffs' gas ratably with other producers' gas at certain 
times between 1978 and 1988.  The trial court certified a class action with 
respect to ratability claims.  On March 9, 2000, the Texas Supreme Court 
ruled that the trial court's class certification was improper and remanded 
the case to the trial court.  The Enron Defendants deny the Plaintiffs' 
claims and have asserted various affirmative defenses, including the statute 
of limitations.  The Enron Defendants believe that they have strong legal and 
factual defenses, and intend to vigorously contest the claims.  Although no 
assurances can be given, Enron believes that the ultimate resolution of these 
matters will not have a material adverse effect on its financial position or 
results of operations.

   On November 21, 1996, an explosion occurred in or around the Humberto 
Vidal Building in San Juan, Puerto Rico.  The explosion resulted in 
fatalities, bodily injuries and damage to the building and surrounding 
property.  San Juan Gas Company, Inc. (San Juan Gas), an Enron affiliate, 
operated a propane/air distribution system in the vicinity, but did not 
provide service to the building. Enron, San Juan Gas, four affiliates and 
their insurance carriers were named as defendants, along with several third 
parties, including The Puerto Rico Aqueduct and Sewer
Authority, Puerto Rico Telephone Company, Heath Consultants Incorporated, 
Humberto Vidal, Inc. and their insurance carriers, in numerous lawsuits filed 
in U.S. District Court for the District of Puerto Rico and the Superior Court 
of Puerto Rico. These suits seek damages for wrongful death, personal injury, 
business interruption and property damage allegedly caused by the explosion.  
After nearly four years without determining the cause of the explosion, all 
parties have agreed not to litigate further that issue, but to move these 
suits toward settlements or trials to determine whether each plaintiff was 
injured as a result of the explosion and, if so, the lawful damages 
attributable to such injury. The defendants have agreed on a fund for 
settlements or
final awards. Numerous claims have been settled. Although no assurances can 
be given, Enron believes that the ultimate resolution of these matters will 
not have a material adverse effect on its financial position or results of 
operations.

   Trojan Investment Recovery.  In early 1993, PGE ceased commercial 
operation of the Trojan nuclear power generating facility.  The OPUC granted 
PGE, through a general rate order, recovery of, and a return on, 87 percent 
of its remaining investment in Trojan.

   The OPUC's general rate order related to Trojan has been subject to 
litigation in various state courts, including rulings by the Oregon Court of 
Appeals and petitions to the Oregon Supreme Court filed by parties opposed to 
the OPUC's order, including the Utility Reform Project(URP) and the Citizens 
Utility Board (CUB).

   In August 2000, PGE entered into agreements with CUB and the staff of the 
OPUC to settle the litigation related to PGE's recovery of its investment in 
the Trojan plant.  Under the agreements, CUB agreed to withdraw from the 
litigation and to support the settlement as the means to resolve the Trojan 
litigation.  The OPUC approved the accounting and ratemaking elements of the 
settlement on September 29, 2000.  As a result of these approvals, PGE's 
investment in Trojan is no longer included in rates charged to customers, 
either through a return on or a return of that investment.  Collection of 
ongoing decommissioning costs at Trojan is not affected by the settlement 
agreements or the September 29, 2000 OPUC order.  With CUB's withdrawal, URP 
is
the one remaining significant adverse party in the litigation. URP has 
indicated that it plans to continue to challenge the OPUC order allowing PGE 
recovery of its investment in Trojan.

   Enron cannot predict the outcome of these actions.  Although no assurances 
can be given, Enron believes that the ultimate resolution of these matters 
will not have a material adverse effect on its financial position or results 
of operations.

   Environmental Matters.  Enron is subject to extensive federal, state and 
local environmental laws and regulations.  These laws and regulations require 
expenditures in connection with the
construction of new facilities, the operation of existing facilities and for 
remediation at various operating sites.  The implementation of the Clean Air 
Act Amendments is expected to result in increased operating expenses.  These 
increased operating expenses are not expected to have a material impact on 
Enron's financial position or results of operations.

   Enron's natural gas pipeline companies conduct soil and groundwater 
remediation on a number of their facilities.  Enron does not expect to incur 
material expenditures in connection with soil and groundwater remediation.