ENVIRONMENTAL STRATEGIES

Legislation

Pipeline Safety - The Senate Pipeline Safety Bill (McCain bill, S. 2438) was 
defeated in the House of Representatives on Tuesday 10/10.   The bill was 
brought up under "suspension of the rules" in order to avoid possible 
amendments, a procedure which required a two-thirds vote for passage.  The 
bill fell short by 28 votes, with 232 voting for, and 158 against.   Although 
the McCain legislation imposed a number of new requirements on pipelines, the 
pipeline industry supported S. 2438 as the best achievable legislation, given 
recent accidents and the possible political climate next year.  The 
legislation was defeated in a last minute effort by House Democrats, on more 
political than substantive grounds.   With only a few days remaining in the 
congressional session, the debate will now turn to efforts to possibly attach 
some form of legislation to a fast-moving appropriations bill.   Industry can 
not likely support movement of any legislation other than the Senate bill -- 
anything suggested by House Democrats at this point to make the legislation 
stronger would likely be "deal breakers" for industry.  Jeff Keeler will 
remain active in the legislative process until the issue is resolved.

MTBE - Senate MTBE legislation (S. 2962) which passed the Environment 
Committee several weeks ago is not expected to move on a stand-alone basis, 
but we are watching to see if efforts to move all or portions of the bill 
(such as a simple MTBE ban) will take place in the various appropriations 
efforts.  While we have commitments from various House and Senate leaders 
that an anti-MTBE measure will not be included, the powerful ethanol forces 
are working hard to find a way to pass legislation this year.  We have 
avoided inclusion in Agriculture and VA-HUD (EPA) appropriations bills so far 
-- which were the most likely targets for inclusion.   We are prepared to 
counter any last minute anti-MTBE amendments with amendments providing 
transition funding for MTBE producers, which a number of Senators, including 
ethanol proponents like Tom Daschle, have indicated they would not oppose.   
It is most likely that action on this legislation will take place in the next 
Congress.

Competitive Intelligence

Climate Change - Jeff Keeler continues to participate in activities leading 
up to the COP 6 meeting in November in the Hague, The Netherlands.   Jeff is 
coordinating with EES, ENA, EWC and others within Enron in order to provide 
the best coverage for these business units during the events before and 
during the COP 6 meeting.   At the Hague meeting, Enron will participate in 
activities of the Business Council for Sustainable Energy, Pew Center on 
Climate Change, INGAA, and Emissions Marketers Association.   In particular, 
Jeff is working with several organizations on efforts to develop a response 
to recent U.S. proposals on Clean Development Mechanism "baselines" that 
could potentially disadvantage gas, renewables, and energy efficiency.  On 
October 20, Jeff will be speaking at the Forbes Environmental Superconference 
in Washington, D.C. on a panel addressing "Business Opportunities Resulting 
from Climate Control".  The panel includes Jeff Seabright from Texaco and Dan 
Reicher from DOE.

Landfill Gas projects - Stacey Bolton has been working with ENA East 
Origination on regulations, incentive funding, and tax issues affecting 
potential landfill gas projects. 

Green Power Marketing - Stacey Bolton attended the Mid-atlantic power 
marketers meeting in order to receive information on the latest developments 
that could affect EES, ENA, NPC power marketing efforts.

Clean Air Act (Multi-pollutant legislation) - Jeff attended a meeting with 
Ken Lay at Resources for the Future to discuss future legislative options for 
pollution control in the electric utility sector, including a 
"multi-pollutant" strategy (for NOx, SO2, Mercury, CO2).   This will likely 
be the predominant Clean Air Act issue addressed in the next Congress.  Coal 
utilities and environmental groups have been meeting to develop some initial 
recommendations for the legislation, and Jeff and consultant Joel Bluestien 
have organized a meeting with environmental groups on 10/25 to ensure that 
gas, renewables, energy efficiency are included as solutions in any trading 
or compliance programs.

Clean Air Act (California offsets) -  Mary Schoen is working with ENA West 
Origination and EGM Emissions Trading on strategies for finding emissions 
offsets for Enron power projects planned in several air quality districts in 
California.  Offsets are scarce, due to hoarding by PGE and So. Cal Edison 
from their utility days.   Mary is working on solutions including offsets 
generated by energy efficiency and diesel engine retrofits on mobile sources.

Clean Air Act (NOx State Implementation Plans) -  Mary continues to negotiate 
with TVA and the TN air pollution control board over the allocation of 
allowances for Enron facilities in Tennessee.   TVA has agreed that Enron 
should be granted 500 tons of NOx (our permitted levels), but there are still 
details being worked out in the amendment to Tennessee's SIP which Mary is 
attending to so that our deal remains in tact.

Power Quality - Jeff and Mary will be working with EES' new "power quality" 
group to provide regulatory intelligence on environmental issues that affect 
the power quality, reliability and distributed generation markets, including 
opportunities for federal and state financial incentives.   Jeff is setting 
up meetings with DOE and EPA on October 19 for EES in Washington, D.C.

Regulatory Compliance:

Environmental Disclosure/Labeling - Stacey Bolton is working w/ EES on two 
disclosure issues involving their quarterly label in California and 
Massachusetts.

Renewable/Disclosure Credit Trading - Stacey Bolton worked out a potentially 
problematic issue with environmental groups in New England that could have 
prevented the credit trading information system from moving forward in NEPool.

ASSET OPERATIONS

Administrative

EH&S Manager, South America - Edgar Zuleta will now be responsible for EH&S 
activities in S. America.  Edgar completed the Smith System Trainer course 
and received Certification.

OEC/ North America

Military Base Projects (Texas, Air Force and Navy) - Scott Watson contacted 
Allen Rose (Black & Veatch) to ensure environmental issue costs such as 
asbestos abatement, lead paint blasting and transformers (PCB,s) were all 
addressed in the bid package.

Enron Corporation,s Safety Management System - Scott Watson met with Gary 
Allen ETS Safety to discuss the integration of ETS computer based safety 
audit system into the overall corporate project.  Scott is supervising the 
completion of this project.

Enron,s petition to EPA to waive NSPS stack testing at Wheatland power - Gus 
Eghneim received official approval from the EPA of our petition to waive NSPS 
stack testing at Wheatland power. This petition saved Enron approximately 
$500,000 as per EES OEC's Mark Dobler,s assessment.

Enron,s petition to MDEQ - Gus Eghneim submitted a petition to the 
Mississippi Air pollution Control department to waive stack testing 
requirements currently mandated in the new source review permits of Caledonia 
and New Albany Power.

Permit Revisions for Doyle Power - Gus Eghneim is currently working with the 
Georgia department of environmental Quality to revise the new source review 
permit for Doyle power to relax the opacity requirement and make the permit 
consistent with current plant operations. Georgia DEQ agreed to increase the 
opacity limit from 20% to 40% on gas turbines.

State Inspection at New Albany Power - New Albany power was subject to a 
state inspection on October 2, 2000.  No noncompliance issues were identified.

EPA,s acid rain reports for the 2000 peakers - Gus Eghneim and Ramiro Garcia 
are working with Lincoln, Gleason, and Doyle, to ensure submittal of the 
first acid rain EDR reports to the EPA by October 30, 2000.

Asia/India

Marianas Power Plant, Guam - Bal Wong submitted the US EPA PSD Permit,Fuel 
Switching Protocol  3rd Quarter 2000 reporting.

Marianas,Batangas Power Corporation and Subic Power Corporation 1999 
Greenhouse Gas 

Emission Data Report - Bal Wong responded to clarification required by Arthur 
D Little.

SK Enron - Translation of Enron EH&S Guidelines into Korean language has been 
initiated by Bal Wong. 

Europe

Site visit to Marmara, Turkey -  Reviewed operations and Quality Assurance 
Audit Report.  Working with plant management to determine what assistance is 
required and provide support to operations in implementation of EH&S 
Guidelines. 

Acquisition of MG plc Metal trading company - Alan Stringer conducted EH&S 
reviews of European owned facilities and  identified required improvements in 
HSE culture.  US and Indonesia facilities will be audited for safety and 
environmental issues in mid-Oct/2000.  Limited baseline assessments may be 
required in the UK and Rotterdam.

Acquisition of Metal Recycling Facility in Essen and Nuremberg, Germany - 
Essen to be leased and recommended baseline investigation at Essen and at 
Nuremberg to London Engineering Team who are managing this project.  
Supporting the UK engineering team in the development of SPC plans to protect 
indemnities and warranties.

New Power Project in the UK - Alan Stringer is working  with the Engineering 
Team to determine level of support and review required, including building 
relationships with project stakeholders.

Regulatory Database - Alan  Stringer is developing current legislation 
database for Turkey and Poland power plants.  This database will summarize 
regulations these plants  should be complying with.

CALME

San Juan Gas (SJG) Remediation - The Puerto Rico EQB sent SJG a letter 
addressing issues related to our proposed waste characterization plan. Bill 
Curra and ThermoRetec developed various technical approaches to address 
concerns from the PR EQB.    A meeting with PR EQB will be set up  in the 
next couple of weeks to discuss the issues.

Panama, San Francisco Site  -  Bill Curra will travel to Panama next week to 
coordinate the remediation work of the site under a Type I EIA established in 
the Panamian regulations.  The project is expected to take two to three weeks.

Fire Protection at BLM Plant in Colon - There is no reliable fire protection 
system for Units 2,3,4.  BLM personnel will provide design guidelines to 
Houston EH&S Department and  to fire protection consultants for review.  

BLM Plant in Colon - Secondary containment around fuel storage tanks is 
inadequate to prevent a spill from the storage tank and existing controls to 
prevent hydrocarbons from entering the stormwater channels is not functioning 
allowing hydrocarbons to travel to the ocean.  Enron EHS will review 
preliminary design and provide recommendations to BLM. 

Regulatory Technical Analysis

Natural Gas Star Workshop - Marc Phillips is attending the Natural Gas Star 
Workshop on October 12 and 13.

OSHA Stakeholder Meeting - Russell Tucker attended and addressed the record 
during the OSHA Stakeholder meeting on Confined Spaces in Construction, a 
proposed rule in the design stage coming under the 29 CFR, Part 1926 
Construction Standards. Current format for the new regulation is to mirror 
the existing General Industry standard on Permit Required Confined Space 
contained in 29 CFR 1910.146. Statements centred on the areas of concern in 
amended 1910.146 that resulted in API filing a still unsettled suit in the 
D.C. Circuit Court, which reflect the same concerns for all Enron companies 
performing permit required confined space tasks.

TXOGA Pipeline Environmental Committee - Jim Peterson is preparing 
information on water and waste rulemakings for use at the TXOGA Pipeline 
Environmental Committee Meeting next week.

ENVIRONMENTAL COMPLIANCE

Greenfield Capital Projects

Cuiaba II -  Joe Kolb reports that there is some confusion over the amount of 
gas needed at Cuiaba.  As a result, an additional compressor station may be 
required.  Another option is to install a booster station at the power plant 
until the volume in the pipeline increases enough to justify a permanent 
station.

Cuiaba I Pipeline - Joe Kolb's trip was postponed by one week to October 28 - 
November 8 as the request of GOB management.

Lagos EPP - Joe Kolb has nothing new to report.

RioGen - Joe Kolb reports that indeed the proposed pipeline route that will 
serve RioGen will need some rerouting because a portion of it is under a 
now-paved road and through a congested area.  The RioGen EIA includes the CEG 
pipeline route and it mentions going through a Class III area.   He does not 
know yet why this problem was not discovered earlier in the project and will 
confer with Cristiane Ronza (Enron SA) on revisions to the EIA.

Eletrobolt PP (Brazil) - Joe Kolb has nothing new to report.

Metgas Pipeline - Joe Kolb reports that the new schedule has a target of a 
NTP in Sept. '01 and begin construction in Dec. '01.  The main problem is 
acquiring all of the right-of-way.  The Ministry of Forestry (MOF) has made 
it clear that we will not get permission to cross any forestry lands unless 
GAIL (Gas India Limited) is made a partner.  The EIA review panel is expected 
to constituted in October along with a panel to run the public hearing.  
Expect hearing to be in late November or early December.

Venezuelan LNG - Joe Kolb has nothing new to report.

Transredes Looping  - Joe Kolb made contact with Tony Henshaw (new VP of EH&S 
for Transredes) who will arrange for updates on the Looping project while Joe 
is in Bolivia in early November.

Project Dolphin - Joe Kolb had nothing new to report.

Powertel - Joe Kolb has made contact with Annat Jain (Enron India) seeking to 
understand what environmental planning, studies, and clearances were done for 
this project and what role Enron plays in the Joint Venture.  Joe's efforts 
to arrange a  meeting with Mr. Jain during his time in Houston this week were 
to no avail.  Joe will continue to seek the desired information between now 
and Mr. Jain's next visit to Houston, which is in two weeks.

Acquisitions

Privatenel (Nicaragua) - Don Stevens has been informed that Enron submitted a 
$0 bid for the two Gencos on Oct. 10.  The other two bidders (Coastal and 
Amfels) did the same thing.  ENEL declared void the privatization of 
thermoelectric generators Geosa (115MW) and Gecsa (121MW).  Now the burden of 
improving the deal is firmly in the hands of the government and we fully 
expect our suggestions to be given full consideration and in large part to be 
implemented.  As there is intense pressure on Nicaragua from the World Bank, 
to sell these Gencos, we believe these modifications are already being 
carried-out and that there will be a new bid date set shortly.

Project ISAGEN (Colombia) - Sandy Verma has informed Don Stevens that the 
project is currently on hold.

Project Crane (Quebec, Canada and Port Angeles, Washington) - Don Stevens has 
been informed that we are still moving ahead to submit a non-binding bid on 
Oct. 16 for only the Quebec City facility. We may be required to bid on both 
assets but have no interest in retaining the Port Angeles mill. The goal is 
to make our bid attractive enough to move to the next round and gain access 
to more detailed data and information in phase II due diligence.

Project INGA (California and Pennsylvania) - Don Stevens spoke with Bill 
Keeney regarding EPA Section 112 issues.  EPA has begun preliminary data 
acquisition regarding mercury emissions from coal fired utilities in order to 
draft proposed regulation.  Bill Keeney is attempting to understand the risks 
involved should the proposed regulations become final in the near term.  At 
the request of Chip Schneider (RAC), Susan Worthen provided an environmental 
risk summary for the DASH .

Project Dragon (Southeast Asia) - Don Stevens has been informed that we have 
terminated any further efforts on this transaction.

Termoflores (Colombia) - Don Stevens has not heard any news this week on the 
project status.  Closing date was last targeting for November.

Military Base Privatization (Texas AFB) - Don Stevens assisted Charlie 
Thompson (EES) in a meeting with Michael Tribolet (Underwriting) regarding 
the issue of need for environmental insurance.  Don, Susan Worthen, and Frank 
Smith have all conferred that potential environmental liabilities can be 
identified through existing baselines and further clarified by limited 
sampling near those utilities that EES will take over.

Military Base Privatization (Maxwell AFB/Gunter Annex) - Don Stevens has not 
heard any news this week on the project status.

CWT Thermo-Depolymerization - Don Stevens has attempted to contact Bruce 
Stram to discuss environmental issues.  Bruce is out of the office until Oct. 
16.  Don Stevens discussed various issues with Gene O'Gorman regarding air 
emissions from the proposed project.  Don and Susan Worthen will meet with 
Bruce upon his return next week.

Project Delta - ENA is investigating the possibility of buying underground 
storage facilities under various stages of development  in the U.S. with the 
potential of turning over the asset before they become operational.  As a 
follow-up to a meeting last week with John Allario (ENA), Don Stevens is 
reviewing Dames & Moore's Preliminary Environmental Reviews of four potential 
underground natural gas storage well locations.  The proposed locations are 
in the states of Washington, Utah and New Mexico.

Combined Cycle Plant (Brooklyn, NY) - Don Stevens has been contacted by Wayne 
Mays regarding permit timing for the installation of 2 each 500,000 lb/hr 
natural gas fired boilers at an existing combined cycle plant in Brooklyn, 
NY.  The project is to install two auxiliary boilers so that during peak 
hours all capacity can be shifted to electrical generation.  The current 
target date for installation of the boilers is June 2001.  Enron would be a 
partner in the plant.

HVAC Company - At the behest of Dave Nutt, Kyle Roblee (EES) contacted Susan 
Worthen about potential due diligence support on a HVAC company EES is 
reviewing.  Originally, Pilko Associates was slated to perform the assessment 
at an extremely high cost.  Kyle has not returned any e-mails or voicemails; 
therefore, little else is known.

Dept. Projects

Quantitative Risk Module - Don Stevens received ThermoRetec's 'red-lined' 
Agreement for Project Services and delivered copies to Lanie Borgman.  
Failure to secure a contract for the project within the next week will affect 
the current completion schedule.

Environmental Professional Services Agreements - Susan Worthen sent Global 
Strategic Sourcing's Contracts group  the environmental professional service 
agreements obtained from ETS and EE&CC.  She was not successful in obtaining 
such agreements from ENA or EES.  This initiative is the result of Susan's 
experience that rate structures are not consistent among the business units 
and the desire to streamline the system.

New Hire Orientation - The EHS/Social Responsibility booth will be ready for 
Monday, October 16.  Orientation is every Monday.  Various documents have 
been assembled for participants to take.

e-TV - Susan Worthen is coordinating the production of corporate 
responsibility videos to be featured on e-TV.  Kelly Kimberly and Mike 
Terraso will invite executives to participate.

Annual Report - The Annual Report has been distributed internally to selected 
recipients and senior management.

Intranet Site - The deadline for the content on the EHS web site was on 
October 11th. There was good participation in information provided for the 
site, however, we are still lacking information/content in some areas.  Once 
the IT group receives all documents, development will begin on the site. The 
web site is still expected to be functional by November 15th regardless of 
the status of missing content.  Two third party vendors, CPI and ELR, have 
submitted their proposals/contracts and they are currently being scrutinized 
by the legal department. CPI and ELR will provide EHS legislative and 
regulatory information for the United States on the EHS web site. 

Globalization - Gavin Dillingham completed research regarding whether Enron 
should develop a policy or statement concerning free trade and 
globalization.  His research indicates that we should .  Lauren Goldblatt, 
Kelly Kimberly, Mike Terraso, and Susan Worthen will meet the week of the 
23rd to determine next steps.
 
Volunteer Activities/Community Relation

Buffalo Bayou Challenge - Gavin Dillingham is currently working with Joe Kolb 
on developing the Buffalo Bayou Challenge. The proposal will be discussed 
with Mike Terraso and then a follow-up with Community Relations.

Other

Clean Energy Incubator - Gavin Dillingham is researching the possibility of 
Enron developing a clean energy technology incubator and will report his 
findings to Mike and Susan.

Susan Worthen
Director
Environmental Compliance, Enron Corp
713/646-6579  713/345-6164 fax
3AC 1525