Gil, could you please review the NDA for Jeff.  Thanks

Robin L. Hill
Legal Specialist
Enron Broadband Services
(713)853-3255
(713)646-8537 fax
Robin_Hill@Enron.net

----- Forwarded by Robin Hill/Enron Communications on 05/08/00 09:34 AM -----

	Jeff Dasovich@EES
	05/05/00 02:06 PM
		 
		 To: Dan Minter/Enron Communications@Enron Communications, Jean Mrha@ECT, 
Robin Hill/Enron Communications@Enron Communications
		 cc: Susan J Mara/SFO/EES@EES, Paul Kaufman@EES, Dave 
Parquet@ENRON_DEVELOPMENT
		 Subject: NDA for Potential Opportunity with the California ISO

All of the following should be considered confidential information.  In 
addition to the information, the ISO prefers to keep the simple fact that 
they are meeting with us confidential.

As you recall, we met the CIO/EVP of the California ISO regarding the ISO's 
excess broadband capacity.  The ISO is very interested in determining if EBS 
can devise a solution.

The ISO's outside counsel has reviewed the NDA we provided and made 
comments.  The redlined version is included below for review.  Still 
uncertain if there's a deal here.  The idea is to get the NDA signed in order 
to get considerably more info from the ISO and then determine whether there's 
an opportunity.  Please review the proposed changes and let me know if there 
are any issues/problems.  The ISO's big concern is ensuring that it doesn't 
get crossways with MCI w.r.t. confidentiality, but they've told me they've 
cleared that hurdle. Here is the note the ISO outside counsel used to 
describe the changes:

Jeff:

Attached is a revised version of the proposed NDA, together with a redline
showing changes from the Enron version.  The main reasons for changes were
to (1) limit data to the Enron telecom entity, and (2) assure compliance
with ISO's  MCI agreement.

Let me know if there are any remaining issues.

Jim

I've also include some info that Dan Minter and I culled from the initial 
meeting with the ISO.

The Network
MCI built the system.
The ISO currently shares its private, dedicated network 50-50 with the 
California Power Exchange, though the ISO like to take control of 100% of the 
asset.
The network consists of 4 OC-12s  and as part of the contract, the ISO has a 
call to upgrade at no or very little cost to 4 OC-48s.
This "scalability" was built in to accommodate what California believed would 
be a very large and rapidly growing number of users (mostly scheduling 
coordinators), but California greatly underestimated the number.  So the ISO 
is left with considerable excess capacity.
About 1/2 the capacity is currently used by the PX, but the ISO would like to 
terminate that relationship as quickly as possible (if possible).
It's an ATM switched network with 11 A-PoPs and 4 B-Pops and it runs from 
Folsom (Sacramento) to Alhambra (around Pasadena).  The B-PoP locations are 
Hayward, Sacramento, Long Beach, and Claremont.


The Contract
The ISO pays about $30-35 million/yr under the contract---significantly above 
market.
The contract ends at the end of 2003.
The contract includes a costless, or very low cost, option to upgrade from 
OC-12 to OC-48 (we'd need to find out "how costless," and how long it would 
take to upgrade if the ISO exercised the option).
The contract also permits interconnection to the network (by MCI) for $485, 
irrespective of difference from the grid.  Access to the network is defined 
as DS1.

The Goals of the ISO's EVP/CIO

Reduce costs immediately.   Needs to take a plan designed to mitigate the 
costs to the Board in 60 days.
Wants to maintain some flexibility in the event usage grows.
"Would like to do a short term deal, for "nonfirm" service and get  a high 
price," but would do a long-term, firm deal if it reduced his costs 
significantly.

 - Redline  Enron -- CA ISO NDA.DOC