TO:  All EGM and EIM employees affected
FROM: Sally Beck, Managing Director of ENW-Global Risk Management Operations

Last fall, the Enron Wholesale Services organization was created and 
announced in an organizational memo from Jeff Skilling.  All wholesale 
companies (Enron Americas, Enron Europe, Enron Global Markets and Enron 
Industrial Markets) plus Enron Net Works and Enron Global Assets were 
included in the Enron Wholesale Services umbrella.  In that organizational 
memo, the Energy Operations team (now Global Risk Management Operations) was 
moved into Enron Net Works to align our operational services, information 
technology and e:commerce platforms in order to offer the best quality 
services to Enron wholesale customers.  This alignment also positions us to 
evaluate the prospect of packaging these services for other customers as 
well.  With this reorganization, we continue to maintain dedicated operations 
teams that support each of the wholesale businesses.

Since this reorganization occurred so close to year end, I suggested that we 
wait until January 1, 2001 to move employees under Enron Net Works.  Senior 
management, accounting and HR agreed with this date for effecting the move to 
Enron Networks.  Unfortunately, however, the January conversion to Networks 
did not get fully executed.  

To correct this, effective April 01, 2001, all EGM and EIM  employees  and 
non-employees who provide risk management operations services and ultimately 
report in to Brent Price and Brenda Herod, respectively, will be transferred 
to ENW - Global Risk Management Operations under  company 083E.   Starting 
April 1st, you should start using new cost centers for coding and timekeeping 
purposes.  This will formalize the ENW-Global Risk Management Operations' 
structure.

There are some direct effects that surround the conversion to Enron Net 
Works. Because you are transferring between Enron payroll companies, IRS 
requirements state that FICA withholding must start over.  This applies only 
to the OASDI (6.2%) which has a maximum wage base withholding of $80,400.00 
for 2001.  Medicare tax withholding of 1.45% has no cap and therefore does 
not start over but continues as usual.

The excess OASDI withholding that you incur for the year will credit to you 
on your 2001 tax return as withholding.  Therefore, to alleviate the burden 
of starting over, you can adjust your Federal income tax withholding down by 
filing a new Form W-4 and claim additional allowances which will reduce the 
withholding to adjust for the excess OASDI withholding.  Be sure to ask your 
tax advisor what additional steps you can take to balance out these changes.  
You may also contact the Payroll Department @ 713/345-5555 to assist you with 
any questions.  

We will continue to have dedicated HR reps who will work directly with you 
and your team and who will coordinate among themselves to share best 
practices that can positively impact all teams.  If you have questions, 
please call the HR representative who supports your organization, as 
identified below relative to the business unit to which your team is 
dedicated:  

Business Unit HR Contact Phone#
EGM  David Hill 713/853-4218
EIM Kathy Neal 713/345-7803
EA/Global Services Frank De Jesus 713/345-3662
EA/Global Services Hector McLoughlin 713/853-6703

Thanks for your continued hard work and dedication to the success of Enron 
Wholesale Services.