Melanie

In general, Enron would prefer all matters with respect to power go to 
arbitration for all issues.  When we first started trading power we limited 
arbitration because we were uncertain where/how the market was going.  
Accordingly, we limited arbitration to financial matters only.  I only raised 
the issue last week because the scope of arbitration came up in another case 
and we were uncertain whether an issue of proper termination would be subject 
to the arbitration provision or not.  In conclusion, based on today's 
policies (arbitrate everything), I would not think that there would be any 
reason for us to be concerned with preserving  an argument of limited 
applicability of the arbitration language found in the PCA Master.

I briefly reviewed your draft answer and will fax the comments to you shortly.

Thanks
Elizabeth