Clement:  We have an add'l issue on the LM  6000's and that is on IDC.  My 
understanding is when we originally structured the sharing of the West LB 
interim interest, we were assuming the turbines would move out of the 
facility to Project Facilities.  Since we have turbines that do not have 
homes, but will continue to incur add'l IDC, we would like to agree on a new 
methodology for accruing IDC per turbine.  We look forward to meeting with 
you soon to discuss this.  Let me know when you are available.  

Thanks, Thomas.
---------------------- Forwarded by Thomas M Suffield/Corp/Enron on 
06/22/2000 03:16 PM ---------------------------


Thomas M Suffield
06/22/2000 01:33 PM
To: Matthew Berry/HOU/ECT@ECT
cc: Billy Lemmons/Corp/Enron@ENRON, Ben Jacoby/HOU/ECT@ECT, Chris 
Booth/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Kay Mann/Corp/Enron@Enron, Bruce 
Golden/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Humberto 
Cubillos-Uejbe/HOU/ECT@ECT, Roseann Engeldorf/Corp/Enron@ENRON, Lisa 
Bills/Corp/Enron@ENRON, Mathew Gimble/HOU/ECT@ECT, Eric 
Booth/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Herman Manis/Corp/Enron@ENRON, 
Roger Ondreko/HOU/ECT@ECT, Stanley Farmer/Corp/Enron@ENRON 

Subject: Re: LM6000 spending vs West LB budget  

Matt:  thanks for the memo.  
As per my discussions with Billy, there is no problem with Austin being on 
balance sheet because we are accounting for our interest as a % of the J.V.  
and will accrue income, not Fair Value it.  
As to the turbine/West L.B. structure moving forward, I have left a message 
with Bruce Golden recommending in our next meeting we include the 
Procurement/Purchasing agent from NEPCO who would be involved in any 
ancillary purchases.  Additionally, accounting should be represented.  

Let us know when next week will work for you.  Thanks, Thomas.



Matthew Berry@ECT
06/22/2000 12:09 PM
To: Ben Jacoby/HOU/ECT@ECT
cc: Billy Lemmons/Corp/Enron@ENRON, Thomas M Suffield/Corp/Enron@ENRON, Chris 
Booth/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Kay Mann/Corp/Enron@Enron, Bruce 
Golden/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Humberto 
Cubillos-Uejbe/HOU/ECT@ECT, Roseann Engeldorf/Corp/Enron@ENRON, Lisa 
Bills/Corp/Enron@ENRON, Mathew Gimble/HOU/ECT@ECT, Eric 
Booth/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Herman Manis/Corp/Enron@ENRON, 
Roger Ondreko/HOU/ECT@ECT 

Subject: LM6000 spending vs West LB budget

Ben,

I want to further discuss a few issues that arose from yesterday's LM6000 
budget meeting. When structuring the Acquisition and Development Agreement 
(ADA) for the LM6000s with West LB, a spending budget for major equipment 
purchases was put together and signed off by Mike Miller and Chris Booth 
which included ancillary equipment items, such as transformers but also 
chillers, stacks and compressors, etc, through November 12, 2000. What I 
heard in yesterday's meeting is that related to the LM6000's, NEPCO plans to 
order not just major equipment but smaller items too.   We need to ensure 
that  (1) the ADA as currently drafted allows for non-major items and (2) 
those items have been budgeted. We will get back to you related to (1).   

More generally, accounting has told us that NEPCO cannot pay directly for ANY 
(big or small) hard costs for which it is not reimbursed (this includes items 
for City of Austin until their units and associated ancillary equipment are 
removed from the West LB structure). Specifically, that means NEPCO must  (1) 
have a contract for all of the items (big or small) it plans to purchase on 
behalf of West LB as its acquisition agent (Kay please provide such language 
to Bruce Golden - he has informed me about an SCR LOI out there) and (2) have 
it in the West LB budget.  It would be helpful if CTG could coordinate with 
NEPCO so that all binding LOIs or contracts be reviewed ahead of time by 
accounting and finance to ensure off-balance sheet treatment. 

I will ask my assistant to put together another meeting to further discuss 
the purchase process and that the current West LB budget truly reflects what 
NEPCO plans to purchase on behalf of West LB.

Thanks,
Matt