Current negotiations with AALLP has provided us " a new look " at the current 
lease model.  It has loosened up somewhat to our benefit.  AALLP has agreed 
to a "two bucket" approach as indicated on the attached matrix.  Note that we 
may operate under this model until the EITF provides definitive guidance 
which is expected in December 2001.  

We should now focus on the O&M aspect of an existing or development project.  

If we pass bucket one as it relates to O&M and offtake limits of 95% or less, 
we will not be in a lease and do not proceed to bucket 2.  Bucket two is 
essentially where we have been up to now.  

In a nutshell, if Enron does not operate, does not have the ability to hire 
and fire the operator (must have less than 50% voting on this), does not set 
or approve operating policies and procedures and takes 95% or less of the 
offtake, we should not be in a lease and we stop there.  If we supply the 
fuel and take 95% or less of the offtake and pass O&M criteria, the fuel 
supply agreement must have significant LD's.  See specifics for Bucket 1 on 
the attached.

NOTE:  Please keep us in the loop on new deals as we roll out this new 
model.  We still need to scrub the deals in order to keep AALLP informed.




Please distribute to those I have missed.


R. Herman Manis

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