Hopefully final comments on Rio Nogales are attached below:

Their item #1 below corrects the pipeline length of the new Rio pipeline.

I do not have a problem with item #2.  Do you have any concerns?  How about 
the word documented? 
 
Item Number 3: I assume that I will respond that the guarantee needs to be in 
our hands before we will execute.  Haden feels the work is in the $100K range 
at best.  I am asking for a corporate guarantee of $300K.  Question: I still 
want the Interconnect to read that they will reimburse us for all our 
"reasonable and documented" expenses, even if it is in excess of $300K.  
Would the guarantee limit me to $300k and I am exposed for the rest?   I 
assume a solid company would pay for the reasonable and documented amount, 
even if it was in excess of $300K.  Should I respond that we will not specify 
an amount?  I may not get the guarantee if I do not indicate an amount.   
Recommendations please.


---------------------- Forwarded by Greg Brazaitis/HOU/ECT on 02/13/2001 
09:24 AM ---------------------------


HanshawS <HanshawS@PaceGlobal.com> on 02/12/2001 02:38:08 PM
To: "'greg.brazaitis@enron.com'" <greg.brazaitis@enron.com>
cc: "'bjanacek@pinnaclenaturalgas.com'" <bjanacek@pinnaclenaturalgas.com>, 
"'dmurray@conpwr.com'" <dmurray@conpwr.com> 
Subject: Interconnect Agreement between RNP and HPL


Please make the following changes to the agreement provided by HPL on
1/30/01.

1) In the third WHEREAS: change 20 to 22
2) Item 3 - "RNP shall reimburse HPL for all":  add reasonable and
documented.
3) Item 12 Notices : insert the following in both sections:
 Rio Nogales Power Project L.P.
 711 Rio Nogales Drive
Seguin, Texas 78156
 (830) 379-7830
 (830) 379-7826 (FAX)


Also, please confirm the amount required by an RNP Parent Guarantee relating
to the Reimbursement of Cost in Item 3.








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