Below are the assumptions agreed for booking the New Albany spread option:

EPMI East Power Book pays New Albany a fixed demand charge for the next 5 
years as follows:

2001 $4.72/k/mo
2002 $4.63/kw/mo
2003 $4.54/kw/mo
2004 $4.45/kw/mo
2005 $4.36/kw/mo

As consideration for the demand charge, EPMI has the right to "toll" gas 
through the facility and receive power in return at a fixed heat rate 
conversion factor of 12.5 MMBtu/Mwh.   In addition EPMI will pay New Albany 
$1000 per start (for maintenance reserve fund) and $1.00/Mwh for variable 
operating costs.

The New Albany, LLC will receive an 8% return on capital.   Book value will 
be depreciated from $409/kW basis on 1/1/2001 to $336/kW on 12/31/2005.

The facility output assumption is 360 MW with a 95% availability in the 
summer and 75% availability in the winter.

Jenny - Please revise the booking of New Albany in Rogers book effective 
tonight.
---------------------- Forwarded by Kevin M Presto/HOU/ECT on 12/20/2000 
08:41 AM ---------------------------


John J Lavorato@ENRON
12/11/2000 07:47 AM
To: Kevin M Presto/HOU/ECT@ECT
cc:  
Subject: 

The following points refer to the methodology that we are taking to rebook 
the New Albany Plant.  Please send me a note immediately if you disagree.
Assume that NewAlb is a non mark to market entity and Enron is the mark to 
market entity.  However, it is fully owned and operated by us for now.


*  The power mark to market book will pay NewAlb a capacity payment of $4.87 
for 5 years.  We shaped this payment as follows:

2001 - $5.06
2002 - $4.96
2003 - $4.86
2004 - $4.75
2005 - $4.65

*  This payments allows Enron to supply gas to NewAlb and receive power. 

*  Enron will pay NewAlb $1000 per unit start.

*  Enron will also pay NewAlb $2.00/MW hour for varialbe o&m.

*  This will create an entity "NewAlb" that will return 9% assuming a book 
value of $336/kw on 12/31/2005 vs. 409 currently.

*  If NewAlb pays the 9% out that entity should be relatively flat each year 
for the next five.