This year has been a year of change for Enron and GPG: Enron,s stock split, 
we implemented a Continuous Improvement program, and we underwent a major 
reorganization.  These changes have all had a positive impact on our company, 
increasing our competitive advantage in the marketplace and challenging a 
well performing organization to perform at an even higher level.  All of this 
translates to raising the bar for increased performance.  

As GPG begins its annual year-end process of appraising performance and 
allocating variable pay and merit increases, there are a number of changes to 
the process I would like to communicate.  These changes will impact all GPG 
employees, except those of you receiving Skill Based Pay.  These changes will 
help us take a more focused look at individual and overall company 
performance and are intended to ensure consistency and equity in the process 
across GPG.  The following details these changes:

Vice Presidents and Higher
All employees with the title of vice president or higher will be reviewed 
Enron-wide, using common performance criteria and performance ratings.  The 
officers will be reviewed and ranked within peer groups.  These groups are 
Commercial, Commercial Support, Commercial Support Specialist and Technical. 

All Other Non-Skill Based Pay Employees
All other non-Skill Based Pay employees will be evaluated using the current 
GPG performance criteria and performance levels within their respective 
company or business unit.  This will not be an Enron-wide activity.    

For directors or director-equivalent employees there will be an additional 
step, which will be a GPG-wide cross-calibration by the GPG Management 
Committee in early December. 

We are taking a more focused look at performance.  In our efforts to 
challenge a well-performing organization to achieve an even higher level of 
performance, we are establishing the following distribution as a guideline:

Level 1 - Consistently Exceeds Expectations  10%
Level 2 - Often Exceeds Expectations  30%
Level 3 - Meets Expectations   50%
Level 4 - Needs Improvement and
Level 5 - Seldom Meets Expectations  10% 

In the case of non-Skill Based Pay team employees in Operations, this process 
will lead to two ratings: a team rating, which will determine the level of 
variable pay, and an individual rating that will be used to determine merit 
increases.

This represents a change in our performance management process.  GPG is the 
premier natural gas transmission company because of our ability to accept and 
demand change.  We were one of the first companies to implement a Skill Based 
Pay Program and self-directed work teams.  We implemented Best Practices and 
Continuous Improvement.   This new approach to performance management is an 
effort to strive for the top level of performance in our industry.   I want 
to be clear that we have raised our performance expectations for the company 
as well as for individuals. 

Variable pay and merit increases will be impacted by these changes as well.  
GPG will use market data, job grade and individual and company performance to 
set target bonus payout levels.  Payouts will reflect performance.  Division 
heads will no longer receive a pool of dollars to allocate to their 
employees.  This method will eliminate significant differences in variable 
pay for similar positions, job levels and performance levels across the 
organization.  

Merit increases will continue to be determined as they were in the past.  
Each business unit will have a pool of dollars, which is funded as a percent 
of payroll.  Merit increases will be based on a variety of factors including 
individual performance.  

Variable pay will be distributed in early February and merit increases are 
effective Feb. 1, 2000.

To continue to be a leading energy transportation company in a highly 
competitive market, it is imperative that we continue to strive for 
excellence in all we do.  I appreciate your continued support as we go 
through this change, as you have accepted and supported other changes we have 
undergone.  Please do not hesitate to call your supervisor or your Human 
Resources Representative if you have any questions.