I have a huge problem with this - If he can in fact terminate this agreement based for below mentioned reasons - and I am financially penalized for our operational negligence - I will be pushing very hard for someone's termination -

 -----Original Message-----
From: 	Woods, Trevor  
Sent:	Wednesday, November 14, 2001 11:05 AM
To:	Boomer, John; Massey II, John; Schultz, Michelle; Bruce, Robert; Taylor, Michael E
Subject:	FW: HGA NOx DERCs

can he do this and if so why did it come to this?
 -----Original Message-----
From: 	"Arcone, Anthony" <anthony.arcone@neg.pge.com>@ENRON  
Sent:	Wednesday, November 14, 2001 10:11 AM
To:	Massey II, John; Woods, Trevor; Boomer, John
Subject:	HGA NOx DERCs

I am hereby providing notice to you that PG&E Energy Trading-Power, L.P. is
ending its efforts to negotiate and finalize the contract for the purchase
of 250 Houston-Galveston Area NOx certified discrete emission reduction
credits (DERCs) from Enron North America.  The deal was verbally agreed to,
pending execution of a mutually agreeable contract (because there is no
master agreement governing DERCs between PGET & Enron), through Evolution
Markets on August 15, 2001, specifically for the immediate delivery of
Certified NOx DERCs, which Evolution's confirm states.  It has now been
approximately 90 days since this date and a contract has not been executed,
despite PGET's efforts to have the final agreement reflective of the terms
of the original deal.

The draft of the agreement that Enron finally provided on October 25, 2001
contained language specifically stating that Enron had "registered" DERCs,
rather than "certified" DERCs, and would be unable to immediately deliver
certified NOx DERCs upon contract execution.

On October 29, 2001 PGET provided the following comments reiterating that
the deal was for immediate delivery of certified DERCs:
 - redlined/deleted the above referenced language
 - inserted other language where appropriate assuring the immediate delivery
of certified DERCs
 - requested that a letter from the TNRCC to Enron stating that Enron had
certified NOx DERCs in its possession, be attached to the contract as an
exhibit.  I was told by you that Enron has such a letter.
 - redlined/deleted language limiting either party's liability to the total
purchase price

Enron has failed to respond affirmatively to any of these points despite
follow up phone calls I have made specifically seeking reassurance of the
quality of the NOx DERCs Enron is in possession of.


Sincerely,
Anthony G. Arcone
Emissions Trader



PG&E National Energy Group and any other
company referenced herein that uses the PG&E name or
logo are not the same company as Pacific Gas and
Electric Company, the regulated California utility.  Neither
PG&E National Energy Group nor these other
referenced companies are regulated by the California Public
Utilities Commission.  Customers of Pacific Gas and Electric Company
do not have to buy products from these companies in order
to continue to receive quality regulated services from the utility.