Chris/Steven -

As a recap to the meeting today with Dennis Benevides, I have a few points
to confirm with you guys.

General
1.	There are approximately 200 contracts in the CA market, of varying
types and structures (discounted frozen tariffs [~80%] and outsourced
commodity [~20%]), including penalty terms (e.g., positive differences on
underage and overage), start/end dates, maturity of contract (e.g., 2001 is
the 3rd year of a 5 year agreement), and bandwidths.
2.	The CA market contracts are typically 3-4 year terms, with most
having 1-2 years to go for expiration.  Also, a lot of these have bandwidths
of +/- 10%, tied to an annual consumption amount.
3.	The CA market contracts have undergone a true-up process over the
last 6-12 months, with the books (i.e., RPS) being updated concurrently.
However, actual usage was not tested against these true-up values.  Mike Kim
has information regarding usage and baselines.
4.	The other markets are NY, NJ, Maine, and Illinois, with NJ and
Illinois typically employing regional commodity transactions and +/- 10%
bandwidths and positive differences on settlements.
5.	Dennis mentioned that a lot of the contracts may not be settled as
yet, due to the terms, which hold that the tail-end of the contract
experiences most of the financial impact.  This will have to be confirmed to
assist with scoping our settlement project.

Action Items - Validation/Reconciliation
1.	Understand the different types of contracts, both chronologically
and regionally.  
2.	Define the minimal requirements for contract validation and
reconciliation procedures.
3.	Implement these parameters into the Access database solution.
 ----- Validate/Reconcile contracts -----
4.	Determine the contracts in the CA pool (delivered by Ian McAbeer)
that match with the RPS data dump (to be delivered by Monday hopefully),
then get with Karen Cordova in legal to retrieve the balance of the
contracts.
 ----- Validate/Reconcile contracts -----

Action Items - Settlements
1.	Contact Dennis Benevides again to get the list of his top 40 CA
contracts; compare these with the 200 paper contracts delivered by Ian
McAbeer to gauge the exposure.
1.	Contact Mike Kim to discuss his insight into usage information; use
this information to determine what exactly has been done to
bandwidths/baselines as a result of the true-up project.
2.	Determine the minimal requirements for establishing, correcting,
and/or settling off of a baseline.
3.	Implement these parameters into the Access database solution.

kpmg LLP  Information Risk Management
Joshua P. Galv?n
Senior Associate
700 Louisiana, Ste. 3200
Houston, Texas  77002
713/319-2082 (wrk)
713/256-8499 (mob)
jgalvan@kpmg.com


**********************************************************************
The information in this email is confidential and may be legally privileged.
It is intended solely for the addressee. Access to this email by anyone else
is unauthorized.

If you are not the intended recipient, any disclosure, copying, distribution
or any action taken or omitted to be taken in reliance on it, is prohibited
and may be unlawful. When addressed to our clients any opinions or advice
contained in this email are subject to the terms and conditions expressed in
the governing KPMG client engagement letter.
**********************************************************************