May 29, 2001

Dear Ken:

It was great to see you in Denver.  The group of  leaders from the Western
Governors' Association and major businesses  were energized to take control
of their destiny, and your ideas contributed enormously.  I think that you
and I are very much on the same page regarding the President's Energy Report
and the opportunities that it presents.  In addition, Joe Romm and I have
worked  a bit with the Enron Energy Services team on some initial ways to
highlight and quantify the "green" aspects of the EES product.  You are well
positioned to prove what initiatives bring both business and
energy/environmental benefits.

Per our discussion, I have attached below a copy of a confidential
preliminary report on the potential for a "Cooler Houston" initiative.  The
scientific models relating to "urban heat island effects" indicate that
planting trees, lightening the color of roofs and resurfacing pavement with
lighter material can reduce ambient high temperatures in Houston and thus
potentially lead to ozone reductions far cheaper than the cost of the "last
mile" tons indicated in current SIP efforts.  Success requires developing
some technical agreement and common cause among U.S. EPA, TNRCC, the City of
Houston, and business and civic leaders in the City.  Bill White and the
leadership of the Greater Houston Partnership have been spearheading early
work on this.  Our team is working with U.S. EPA and TNRCC to see if they
can agree on the models.

 We would be very interested in your ideas on this.  Moreover, if the
technical people can agree in concept, we would value your support of an
achievable Cooler Houston plan going forward.  Naturally, the plan is
exciting because it offers economic, air quality and broader quality-of-life
benefits to the Houston community.  Ever since we developed the acid rain
trading program, I have enjoyed promoting such ideas!

Please let me know anything else that you need.  I hope to see you soon.  In
the meantime, best wishes to you and the family.

Sincerely,

Hank Habicht

 <<Houston.05-9-01.doc>>

 - Houston.05-9-01.doc