As you know, exceeding this limit would require contacting the Enron Board of 
Directors.  Jeff Skilling is keenly interested in this measurement.  In 
conversations with Ted Murphy today, Jeff has asked that he receive a daily 
report from Ted on component V@R.  Ted called me about 3:00 pm today (Houston 
time) to let me know about this requirement.  Obviously, we want to meet 
Skilling's request with information that is as timely, accurate and  complete 
as possible.  Therefore, we were concerned about feeds from London that over 
the past several weeks have caused one London commodity or another to be 
excluded from the first run of component V@R.  (Mike:  I assume that you are 
very familiar with these feed problems from your representative that you send 
to the daily 8:30 meeting.)  

I pulled Steve Stock out of a pre-PRC meeting to meet with Ted, Shona, Ramesh 
and me at 4:00 today.  Realizing that the time was very late in London, we 
tried to reach you both at home numbers and by cell phone to include you in 
the meeting.  Since we could not do so, we continued without you given that 
Skilling will want to see this report daily starting tomorrow.  

Here is the key fact to know:  It takes 3 hours to run the component V@R 
calculations, once all inputs have been received and processed.  The 
Component V@R calculations are kicked off at 6:30 am Houston time, producing 
an approximate completion time of 9:30 am Houston time.   With this 
timeframe, our goal would be to have the component V@R report to Jeff by 
approximately 10:00 am Houston time.  


Given current calculation times, in order to consistently calc component V@R 
including all London feeds, London books (UK power, UK gas and Nordic power) 
will have to be completed, calculated and officialized by 4:00 am Houston 
time (10:00 am London time).  If this time frame is not met, then component 
V@R reports for Jeff will be incomplete.  We had hoped to discuss this with 
you today so that you could work with your operations staff, systems support 
and traders to insure that you could consistently meet a 10:00 am London 
requirement for officialized books.  

The other immediate action to take is to ask Mike to work with David Hardy on 
what we understand to be an almost-completed task of including UK spread 
options in V@R calculations using the V@R engine.  Those V@R calculations 
that are done through Excel calculations are not captured and included in the 
component V@R calculations.  While there are other commodities that will 
currently be excluded from component V@R reports, they are deemed to be less 
material than the UK spread options.  Ramesh felt that it is only a matter of 
days before this is completed.  Mike, we would like for you to stay on top of 
this from an operations perspective to insure that this happens.  

I should note that the firm 10:00 am deadline for officializing books in the 
UK will only result in producing a report for Jeff by 10:00 am Houston time.  
We don't know what Jeff's expectation will be regarding timing.  It is 
probably safe to say that we should be actively looking at process and 
systems changes that could result in the ability to deliver such a report 
earlier in the morning.  

Mike, I will call you during my morning commute on Thursday to see whether or 
not you have any questions or if there are concerns about consistently 
meeting the 10:00 am deadline in London.