fyi  No action required.
---------------------- Forwarded by Kay Mann/Corp/Enron on 12/14/2000 11:52 
AM ---------------------------


Scott Laidlaw@ENRON_DEVELOPMENT
12/14/2000 11:46 AM
To: Ben Jacoby/HOU/ECT@ECT
cc: Dan Shultz/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Kay Mann/Corp/Enron@Enron 

Subject: westinghouse 501D5A - update

confirming today's calls, westinghouse is asking enron whether we'd consider 
the following settlement of the "north america peaker/panama/electrocities" 
gtg issue, particularly as it relates to the damaged generator (again, plz 
understand that this is not a formal offer at this time; will come within 
days depending on our response.  westinghouse does not want to go to their 
senior management with a "settlement" offer without knowing that enron will 
respond favorably when formally presented; i.e., just a waste of time for all 
concerned):

westinghouse will re-imburse enron asap with money's paid to date by enron to 
westinghouse.  note - westinghouse is willing to consider taking back the gtg 
for what enron paid westinghouse, BUT NO addl monies will be offerred or 
considered.  this is a "ceiling."
money to be wired within days of settlement agreement.
westinghouse takes back the unit "as-is."
no further claims/rights of action between the parties on this gtg/contract.
this potential of an offer from westinghouse has a life span of just a few 
days (i.e., this week).  westinghouse is "long" on D5A machines and for them 
to take this one back into the fold will present them with marketing 
challenges in 2001.

pros
brings cash back to enron on the balance sheet before end of year.
we don't currently have a use for this gtg in an enron project.  (i.e., 
unless an idc treatment can be agreed, project's now can't typically afford 
this unit).
we don't currently have an anticipated use for this gtg in the next 6 to 9 
months in an enron project.
we don't have to pay for storage; i.e., such costs are already accruing.
dispute resolution (per contract) consists of senior management meeting 
seeking to settle; if unable, the remedy is the n.y. courts.  therefore, we 
can avoid lawsuit.  therefore, we'll save on outside legal costs.
as part of settlement, we can possibly secure an option forward or first 
right of refussal on a "f" or "g" machine for projects in 2002.
by settling now, this avoids further month by month increases in idc.

cons
idc costs to be written off by ena (or elsewhere?).

for ben - plz advise.  dan shultz, kay mann (hopefully) and scott laidlaw are 
available to meet today on this issue.  regards.  scott.