I was informed late last week that EOL is looking to me to determine whether 
U.S. counterparties should be permitted to trade European power products via 
EOL.  According to Edmund Cooper and Tana Jones, the London office is 
deciding whether European counterparties should be permitted to trade U.S. 
power products via EOL.  I believe that this allocation of counterparty 
review responsibility (with regard to power products) should be reversed.  
The legal team for U.S. power is in the best position to determine whether a 
counterparty, domestic or European, has the requisite legal authority to 
trade U.S. power, and I believe that the London office is better positioned 
to determine whether a counterparty, U.S. or other, has the requisite 
authority to trade a European power product.

As we have discussed during the last week, a counterparty must have specific 
federal regulatory authorization in order to trade U.S. power.  I cannot 
identify any foreign counterparties from my lists of federally authorized 
entities and think it highly unlikely that a foreign counterparty will have 
the necessary authority to trade U.S. power.  Jim Fallon has expressly 
instructed me that in the event we do not currently trade U.S. power with a 
counterparty and cannot otherwise confirm that a specific counterparty 
possesses regulatory approval to trade power, a counterparty should NOT be 
permitted to trade U.S. power via EOL.  Accordingly, I return to my initial 
position that except for those foreign counterparties with whom we are 
currently trading over-the-counter (if any), all foreign counterparties 
should be granted read-only access to U.S. power products.  In the event a 
specific counterparty requests access to U.S. power trading, we can examine 
whether that specific party possesses the necessary authority to trade 
power.  

Edmund Cooper and Justin Boyd are reviewing whether a similar bar should 
apply to the trading of European power by U.S. counterparties, and I will 
defer to their judgment on that issue.

Please call me at *36121 with any questions or comments.

Regards,

Leslie Hansen