Subject: Power Trading Audit Meeting
From: [email-masked]
To: [email-masked]
Cc: [email-masked], [email-masked]
Date: Fri, 25 May 2001 07:32:00 -0700 (PDT)

Stacey,

As per our conversation today, enclosed please find a list of  topics we would
like to discuss for our Power Trading Audit:

1.   Understand Nature of Portfolio
?    Nature of portfolio, risk factors, correlation between curves, 
calculation
of correlation factors, off-peak trading, liquidity of portfolio, etc.

2.   Understand Performance Metrics
?    Performance metrics utilized for traders, benchmarking trader 
performance,
results of inadequate performance, bonus determination process.

3.   Organizational Structure

4.   Overall Market/ Newly Traded Markets
?    Traders? assessment of the overall market, including most active regions,
liquidity of peak versus off-peak positions, new markets, etc.
?    Extent of autonomy of the traders with implementing trading strategy 
(i.e.,
whether traders can implement own trading strategies).
?    Reports that are available regarding the number of trades executed on a
monthly or quarterly basis.
?    Changes in management reporting process from prior year (i.e., book
administrator rolls, Schedule B & C, etc.).
?    Extent of use of ExPower (if still utilized).
?    Extent of exotic deals valued outside of EnPower and the related controls
surrounding deal capture, valuation, management reporting, and financial
reporting.
?    Limits placed on trader activity (including position limits, VAR limits,
etc.) by the commodity group and the monitoring of those limits, if 
applicable.

5.   Ancillary Services
?    Type of ancillary services provided to customers and the extent of
ancillary service trading.  Discuss what governmental regulations or ISO
regulations exist   for ancillary services (i.e., specified rates, market 
caps,
etc.), and the impact on the curve.  Understand why the curve typically does 
not
change for ancillary     services.

6.   Monitoring of Long-Term Deals
?    Long-term deals monitoring by risk management, and reports provided to
management regarding the status of long-term deals.
?    Status of NSTAR and other significant long-term deals of which we have
reviewed for proper booking.

7.        Monitoring of Requirements Basis Deals (UI, NSTAR, etc.)
?    Monitoring requirements of basis deals with risk management and document.
?    Nature of changes made, and the reasonableness of the current booking of
the deal compared to current available information.

Please let us know at your earliest convenience if you are the right person to
talk about these topics. If not,  please direct us to the correct 
individual(s).

Thank you for all your help.

Tatiana

*******************Internet Email Confidentiality Footer*******************

Privileged/Confidential Information may be contained in this message.  If you
are not the addressee indicated in this message (or responsible for delivery 
of
the message to such person), you may not copy or deliver this message to 
anyone.
In such case, you should destroy this message and kindly notify the sender by
reply email. Please advise immediately if you or your employer does not 
consent
to Internet email for messages of this kind.  Opinions, conclusions and other
information in this message that do not relate to the official business of my
firm shall be understood as neither given nor endorsed by it.