As we are nearing the deadline for the Book-split project, I want to give you 
a status update.

BOOK-SPLIT

Completed
Separate Cash & Term books have been setup in Enpower and Global databases 
for every country
Pablo Pissanetzky has written code to successfully transfer over 99% of the 
deals into their proper regional books
Two dozen deals (mainly annuities) have been modified in Production to 
transfer according to Pablo's code
All deals requiring manual intervention on Go Live date have been identified
Initial position report has been developed and tested for accuracy

Uncompleted
Communication to Commercial of positions (Wed. April 26)
Presentation of the Position Report which allows Commercial to view monthly 
peak/off-peak volumes by region (Wed. April 26)
PCS by deal for each portfolio
Separate DPRs and associated reports for the Pool and Bilateral portfolios
Modifications necessary for the Settlements invoicing system


TRANSMISSION

We are making progress on this effort although you have not seen any hard 
evidence.  Zhiyong Wei is the IT Director in Houston who is responsible for 
Enpower development.  We are working with Pablo and Zhiyong on several 
possibilities.  As we have previously discussed, there is not the current 
capability to value the spreads as options, but we are testing the other 
scenarios. 

Buy/Resale
This deal type has been disabled
We are waiting for Zhiyong's response as to its future functionality if any

Transmission
Pablo tested in the Stage environment today after receiving minor assistance 
from Zhiyong
Ability to book Transmission deal without Annuity leg
Ability to liquidate demand charge daily
Reflects long and short positions at the appropriate regions (as Forwards not 
Options)
Does not value the forward spread between the regional curves (still testing)
Variable cost treatment is still being tested

Forwards
If deep in the money, we could enter intra-desk/inter-desk deals to reflect 
positions and P&L 

Much time and IT development resources have been spent to make use of the 
Transmission functionality.  After speaking with Zhiyong, there evidently was 
a big push last year for the MTM of Transmission.  The latest version has 
been in the test environment for some time, but no one is currently testing 
it.  It will take some attention to test it properly and will not be complete 
by the book-split deadline.

As we established in our last meeting, the MTM of transmission is a separate 
project from the book-split.  Due to the complexity and amount of data 
involved in the book-split project itself, it is advisable that we 
incorporate the transmission second.  Further testing of the transmission 
will continue this week and by the end of the week we should have a decision 
on the most effective way to currently book transmission.  

Please call or come by if you have any questions,
Todd Hall