Subject: Re: Litigation and Other Contingencies Disclosure
From: [email-masked]
To: [email-masked]
Cc: [email-masked], [email-masked], [email-masked], [email-masked], [email-masked]
Date: Sun, 22 Oct 2000 23:52:00 -0700 (PDT)

I have no changes to the Intratex case description.

	Gary Peng@ENRON
	10/19/2000 06:13 PM
		 
		 To: Charles Cheek/Corp/Enron@Enron, Robert Eickenroht/Corp/Enron@Enron, 
Richard B Sanders/HOU/ECT@ECT, Frank Smith/Corp/Enron@Enron
		 cc: Rex Rogers/Corp/Enron@Enron, Jan Johnson/GPGFIN/Enron@ENRON
		 Subject: Litigation and Other Contingencies Disclosure

Find below the Litigation and Other Contingencies footnote from the the June 
30, 2000 Form 10-Q.  Please update the section of the disclosure for which 
you are responsible for inclusion in the third quarter 2000 Form 10Q .  Also, 
please let me know if there are any new items that should be considered.

Please respond no later than Monday October 30.

Gary
3-6841

3.  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 its 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,8 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 
suits have been settled and 20 cases have been set for trial in the federal 
court beginning in February 2001. 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, Portland General Electric 
Company (PGE) ceased commercial operation of the Trojan nuclear power 
generating facility (Trojan).  In April 1996 a circuit court judge in Marion 
County, Oregon, found that the Oregon Public Utility Commission (OPUC) could 
not authorize PGE to collect a return on its undepreciated investment in 
Trojan, contradicting a November 1994 ruling from the same court.  The ruling 
was the result of an appeal of PGE,s March 1995 general rate order which 
granted PGE recovery of, and a return on, 87% of its remaining investment in 
Trojan.  The 1994 ruling was appealed to the Oregon Court of Appeals and was 
stayed pending the appeal of the OPUC,s March 1995 order.  Both PGE and the 
OPUC separately appealed the April 1996 ruling, which appeals were combined 
with the appeal of the November 1994 ruling at the Oregon Court of Appeals.  
On June 24, 1998, the Court of Appeals of the State of Oregon ruled that the 
OPUC does not have the authority to allow PGE to recover a rate of return on 
its undepreciated investment in Trojan.  The court upheld the OPUC,s 
authorization of PGE,s recovery of its undepreciated investment in Trojan.

 PGE and the OPUC each filed petitions for review with the Oregon Supreme 
Court.  On August 26, 1998, the Utility Reform Project filed a petition for 
review with the Oregon Supreme Court seeking review of that portion of the 
Oregon Court of Appeals decision relating to PGE,s recovery of its 
undepreciated investment in Trojan.  On April 29, 1999, the Oregon Supreme 
Court accepted the petitions for review.  On June 16, 1999, Oregon House Bill 
3220 authorizing the OPUC to allow recovery of a return on the undepreciated 
investment in property retired from service was signed.  One of the effects 
of the bill is to affirm retroactively the OPUC,s authority to allow PGE,s 
recovery of a return on its undepreciated investment in Trojan.

 Relying on the new legislation, on July 2, 1999, PGE requested the Oregon 
Supreme Court to vacate the June 24, 1998, adverse ruling of the Oregon Court 
of Appeals, affirm the validity of the OPUC,s order allowing PGE to recover a 
return on its undepreciated investment in Trojan and to reverse its decision 
accepting the Utility Reform Project,s petition for review.  The Utility 
Reform Project and the Citizens Utility Board, another party to the 
proceeding, opposed such request and submitted to the Oregon Secretary of 
State sufficient signatures in support of placing a referendum to negate the 
new legislation on the November 2000 ballot.  The Oregon Supreme Court has 
indicated it will defer hearing the matter until after the November 2000 
elections.  Enron cannot predict the outcome of these actions.  Additionally, 
due to uncertainties in the regulatory process, management cannot predict, 
with certainty, what ultimate rate-making action the OPUC will take regarding 
PGE,s recovery of a rate of return on its Trojan investment.  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.

 The Environmental Protection Agency (EPA) has informed Enron that it is a 
potentially responsible party at the Decorah Former Manufactured Gas Plant 
Site (the Decorah Site) in Decorah, Iowa, pursuant to the provisions of the 
Comprehensive Environmental Response, Compensation and Liability Act (CERCLA, 
also commonly known as Superfund).  The manufactured gas plant in Decorah 
ceased operations in 1951.  A predecessor company of Enron purchased the 
Decorah Site in 1963.  Enron,s predecessor did not operate the gas plant and 
sold the Decorah Site in 1965.  The EPA alleges that hazardous substances 
were released to the environment during the period in which Enron,s 
predecessor owned the site, and that Enron,s predecessor assumed the 
liabilities of the company that operated the plant.  Enron contests these 
allegations.  To date, the EPA has identified no other potentially 
responsible parties with respect to this site.  Under the terms of 
administrative orders, Enron replaced affected topsoil and removed impacted 
subsurface soils in certain areas of the tract where the plant was formerly 
located.  Enron completed the final removal actions at the site in November 
1998 and concluded all remaining site activities in the spring of 1999.  
Enron submitted a final report on the work conducted at the site to the EPA.  
Enron does not expect to incur any additional expenditures in connection with 
this site.

 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.