Since I did not get a chance to meet with you yesterday, I would like to lay 
out a few thoughts in this email:

1. Additional areas that might require immediate attention:

? Consider existing "Bets" and large positions already in the books and ways 
of adjusting these bets, if necessary (excluding CA):
  - NY: large short positions behind Central Hudson and ConEd (IBM deal and 
others)
  - Carolinas: Standard Offer timing (Springs, Eli Lily, others)
  - Illinois: concentration of short regulated positions

? Quick handle on option positions: do we need to switch customers in some 
areas? what options we ought to exercise tomorrow? next week? etc.
  - options embedded in the deals
  - regulatory switch options
  - retail index options
  - EAM options

? Managing value from restructuring legacy deals: in the process of reviewing 
the 13 deals, we discovered some provisions in the contracts that were not 
captured and managed properly - they might require immediate attention to 
minimize losses in these deals.

2. Managing Regulatory Exposure

? Approximately 80% of EES regulatory exposure is behind 40 utilities
? In the process of rate case decomposition, we need to identify the main 
components of each rate structure - create a rate case formula
? These components will fall into two categories: hedgeable (gas, coal, 
heating oil fuel costs, inflation, etc.) and "unhedgeable" (CTC timing, 
standard offer, etc.)

  Hedgeable Component      Unhedgeable Component
Strategy: Manage within the respective commodity books   Capitalize on 
portfolio diversification across the country
          Look for "macro" hedges and focus activities of EGA

Pricing:  You know best       Risk-based: higher premiums for greater 
uncertainty

Policy:  Internal authorizations only on who, how and when to hedge Develop a 
limit framework and propose a limit to the BOD

Exposure: Existing VaR model will suffice     Develop and implement stress 
scenarios to quantify exposure

3. Other Considerations

? Curve management: clear responsibilities, periodic review and validation
? Interaction with the EAM world: EAM projects create long positions, pricing 
bundled deals with an EAM component
? Flash-to-actual catch up: liquidations validate curve assumptions
? Attention to EES-Canada: currently executed a power deal and a few gas deals
? Process for pricing smaller mid-market deals: sacrificing quantity for 
quality - force originators to develop standard deal structures

I could elaborate further on these points. Vlady.