I would like to further clarify our interpretation of what happend on this 
particular deal, just so that all the Enron people understand the 
circumstances leading up to our losing access to these agreements.

Here's my summary/understanding of what happened:  
The transportation contracts for IP/Union Camp were listed on the Exhibit 
between CES and ENA as assets ENA would have rights to through March 2001.  
We had an agreement with CES that if any parties would not sign agency or 
assignment letters on any deals, we would paper the deal through CES, but 
would still have access to the contracts.  We understood that all assets 
listed on the Exhibits were assets CES owned or controlled for the term 
designated on those Exhibits.

Apparently on this particular contract, CES didn't own or control the assets 
for the term--they expected to continue to be the supplier past March 2000, 
when its fuel supply agreement with IP ends.  However, IP adamantly refused 
to allow Enron to step into CES' shoes, and elected to designate a new fuel 
supplier effective April 1.  IP also controls its own transportation 
agreements and those are being assigned by IP to its new supplier effective 
April 1.  Consequently, ENA has no further rights and/or obligations on the 
IP/Union Camp agreements past March 2000.

For Feb and March, we need to go ahead and nominate on CES' behalf, even 
though IP refuses to sign any agency arrangements.  This means we really 
should have a transition employee do this particular nomination--I'll leave 
it up to Joan V. how to manage this.   If you have any questions, please 
advise.





kjames@columbiaenergygroup.com on 02/17/2000 09:51:26 AM
To: " - *Lombardo, Fred" <flombar@columbiaenergygroup.com>
cc: " - *Joan.Veselack@enron.com" <Joan.Veselack@enron.com>, " - *Flewellyn, 
Melissa" <mflewellyn@columbiaenergygroup.com>, " - *Lombardo, Fred" 
<flombar@columbiaenergygroup.com>, " - *Chris.Germany@enron.com" 
<Chris.Germany@enron.com>, " - *Scott.Goodell@enron.com" 
<Scott.Goodell@enron.com>, " - *Colleen.Sullivan@enron.com" 
<Colleen.Sullivan@enron.com> 
Subject: Re: International Paper/Union Camp - PLEASE READ


Fred and everyone else on the string of E-mails I received:

OK - since I received numerous copied and forwarded E-mails on this
International Paper issue, I felt it best to copy everyone.  As I understand
what is going on -  CES has an obligation to deliver gas to International 
Paper
through March, 2000.  I agree with Colleen that CES is obligated by the terms
of our agreement to purchase this gas from Enron through March, 2000.  As far
as the Energy Management functions, these duties are not part of the Enron
Retail contract.

The real problem that has arisen with International Paper is that they have
some ill feelings towards Enron for some reason.  We have attempted to smooth
this over but it appears that the gentleman at International Paper has a big
burr in his saddle that I nor anyone at CES can remove.  International Paper
refuses to execute any paperwork required by the pipelines to allow Enron to
nominate gas.  Since this is such a short term deal, I would recommend that a
CES transition employee nominate the gas and work out the logistics with Enron
to get the gas to International Paper and keep them happy.  Whatever CES and
Enron need to do from an accounting standpoint to make sure Enron is made 
whole
can be handled fairly easily I would assume.

As far as business after March, 2000, International Paper has no obligation to
purchase gas from CES.  So if they do not purchase gas from CES, then Enron
will not be affected after March 2000.  If International Paper does execute an
extension to their gas purchase agreement or enter into a new purchase
agreement then we will definitely need to get this agency problem worked out.
Please feel free to call me at 713-693-2552 should any of you have any
questions regarding the foregoing.  Thank you.

Kendrick