FYI -- Here is the e-mail we discussed regarding the most current versions of 
each policy.

Gregg
---------------------- Forwarded by Gregg Penman/Corp/Enron on 08/11/2000 
10:21 AM ---------------------------
   
	
	
	From:  Gregg Penman                           08/09/2000 05:23 PM
	

To: j.pokorny@pecorp.com
cc:  
Subject: MEH Policies

Welcome back.  I am sure you have been looking forward to getting all these 
documents, so here they are.  Attached are the following:

1)

Current draft of the MEH Risk Policy.  Kay, Mary and I have discussed the 
current draft line by line and are at the point where your review is needed 
to proceed.  Vlady has reviewed the current draft and has no significant 
changes.  

2)

Current draft of the Risk Procedures and Control Guidelines and accompanying 
flowcharts.  Brent Price and his team have reviewed the Procedures and have 
provided revisions where appropriate.  Linda and Mary have also provided 
input which has been incorporated.  I need to circulate the draft to all 
parties one more time to make sure everyone is comfortable with the last 
updates and that there are no inconsistencies.

3)

Current draft of the credit policy as last revised by Aparna.  The draft was 
sent last night to Molly Harris at Enron for her review and I am currently 
waiting to hear from her.  If there are any changes to this draft I will 
notify you promptly and forward the newest draft.

4)
Current draft of the proposed cash management policy.  Jim Burns has reviewed 
the proposed cash management policy and is in general agreement with the 
procedures.  We will be drafting a Facility Agreement shortly which will 
cover the specifics of the Enron Revolver to MEH.

As for reports and a general understanding of limit development, modeling, 
stress testing, etc., there have been several meetings over the last week.  
Brent Price and his team were in Chicago last week to go over the daily 
reports with Linda, Tim, Maria, Kay and Mary and discuss the development of 
the Daily Position Report (DPR). To my knowledge, the only outstanding report 
is the DPR.  The DPR you received on Tuesday was not an MEH only DPR and was 
not scrubbed before it was sent out.  It was intended to show the format, but 
they inadvertently pulled numbers into it.  I am expecting that a scrubbed 
DPR will be sent out end of this week (Since the EMW and MEH books are 
currently "flat", the DPR will not show any open positions or VAR - we can 
discuss in more detail if you want).  Regarding risk management 
methodologies, Mary has had discussions with Vlady and our research staff and 
I have received positive feedback regarding the sharing of information.  

I realize this is a large amount of information to digest, but I would like 
to get together as soon as you have a chance to review the policies and talk 
to Mary, Kay, Linda, etc. in order to come up with a list of any remaining 
issues.  I acknowledge that this should and will be a evolutionary process, 
but I also want to have a clear direction of what is necessary to approve the 
policies.   Just let me know when you are available and I will make myself 
available.

Thanks,

Gregg