Colleagues:

Stella Chan, Pat Keene and Harry Kingerski would like to communicate a 
streamlined process to  provide Government and Regulatory support to URM 
(Utility Risk Management).  The process strives to bring GA in the different 
regions, in Houston and URM much closer to each other to provide and 
implement GA service as completely, and cost-effectively as possible.  The 
suggested process includes four steps, namely:   
Curve validation Process, 
Quantifying of Regulatory Risks/Change, 
Coordination of Strategy Development, and 
Coordination of Strategy Implementation.  
A description of these functions are as follows:
Curve Validation Process:  This process aims at reviewing, and validating, 
every 90 days, the regulatory inputs of: a) the largest 60 curves in Enron's 
books, and b) the new deals that are under approval during the review 
period.  The curve validation process is currently in progress and  GA 
personnel in Houston and the regions are already  involved.  
Quantification of Regulatory Risks/Change:  This process aims at 
quantifying--in dollars terms--the impact of the change in the regulatory 
inputs on a specific position.  The model is now in place, and test is in 
progress.  This process will involve initiation by GA regional personnel 
(also possibly by URM) with potential regulatory changes that may impact EES 
positions.  The quantification exercise will be done jointly by URM and GA.   
Coordination of Strategy Development:  The outcome of curve validation and 
quantification of regulatory risks--functions 1, and 2 above--will likely 
call for a group of regulatory measures and action items. The function of 
Stella and Pat is to coordinate and facilitate strategy sessions in 
association with the owner of the curve in URM, and her/his counterparts in 
Midwest/Midsouth, Atlantic Seaboard, the Western Region, and Texas & Oklahoma 
Ercot, and SPP.   The strategy sessions shall come up with suggested action 
items, probability of success, and likely associate costs for 
implementation.  Stella and Pat shall be responsible for seeking the buy-off, 
and approval, of  the strategy from URM and securing the needed budget, if 
necessary.
Coordination of Strategy Implementation:  Once the strategy is approved, it 
shall enter the implementation stage.  The role of Stella and Pat is to 
coordinate between URM requests/positions and their counterparts in the 
regions.  As the case now, they shall continue supporting the regions in the 
implementation as needed.   

To facilitate these functions Stella and Pat shall emulate the coverage lines 
of the URM.  Stella shall coordinate the Eastern Region, while Pat shall 
coordinate the Western Region.  These regions do not follow the conventional 
wisdom, and need to be specifically defined.  They are:
 Eastern Region:  ME, NH, VT, NY, MA, RI, CT, NJ, PA, MD,  DE, VA, WV, NC, 
SC, GA, AL, TE, KY, and FL. 
 Western Region:  The remaining states (including OH in the east).

From the Regional perspective, the process will naturally be overseen by the 
Regional Directors  (i.e., Steve, Janine, Jean, and Paul), meanwhile, Harry 
shall oversee it from Houston side.  The process, however, is designed to 
give regional managers and GA in Houston as much autonomy as possible and 
shall make the least possible demand on the time and work load of the 
regional directors (usually in the final sprint for approvals).  

Stella, Pat, and Harry shall visit you shortly to discuss the details of the 
processes outlined above and listen to your comments and advise.   I shall 
contact you to take your suggestion for the most appropriate time for you and 
your group.

Of course, please let me know if you have any question and/or advise.

Brgrds

AI
713-853-3037