Mesquite has an internal approval process which cannot be completed until 
late this week or early next.  We have slowed our approval process to 
parallel theirs.  We will sign doc's when we have both received all necessary 
internal approvals.  Signing is now expected to be early next week.

In addition we have resolved the two minor commercial issues mentioned in 
last update.  The final price has been adjusted slightly - impact on 
transaction value is minimal.   See the attached excel spreadsheet for the 
new Annex 1.02 numbers for the Mesquite swaps (also the assumed closing date 
has been moved to 27-Dec).  The Merlin issue has been resolved with an 
indemnity from ENA in the unlikely event El Paso must pay a make whole 
premium on the refinancing of Merlin's $30mm participation (maximum exposure 
approx. $675k).

One additional issue has arisen concerning a consent right by the Bayonne 
minority partners in the event the Managing Venturer is no longer an Enron 
affiliate.  This consent right was granted at the time of the McNair 
acquisition and was not part of the primary project documents.  This right 
was not recognized in V&E's initial review of consent requirements for this 
transaction.  Of the three minority partners, Mission will be acquired in the 
next few days by ECP and ECP is in final negotiations to acquire Calpine's 
interest by year end.  Consent from the remaining partner, ANP, is not 
expected to be a problem.  This or some other work around will be added as a 
condition precedent to closing.  While we still expect to close by year end 
this new development adds an unwelcome uncertainty to our process.

We will recirculate the DASH, adjusted as necessary for these changes, as 
soon as practical.