I believe this will be helpful in your analysis.

---------------------- Forwarded by Michael Anderson/HOU/AZURIX on 08/22/2000 
08:35 AM ---------------------------
From: Keith Harris/WSX/AZURIX@Exchange on 08/03/2000 01:40 PM GDT
To: Michael Anderson/HOU/AZURIX@AZURIX
cc: Colin Skellett/WSX/AZURIX@Exchange 

Subject: FW: Amended Index Graph


Michael

I have got CSFB working on the amendment you asked for.

In the meantime we have produced a graph which shows, as indices, market 
values of the water companies and the RAB of the industry since 
privatisation.  The following points come out
1 Market values overtime have been 1.1x RAB
2 The result is significantly skewed by the period between Mid 1997 and end 
1998 when the ratio was c1.5x.
3 The premium to RAB is only found at a time when political uncertainty has 
been removed the companies are able to outperform the regulatory deal 
significantly.  Those days are gone - a fact witnessed by the decline in 
share prices in the last year

Just to note that the graph we have produced here is a weighted average of 
water companies - whereas the figures we did yesterday on the RAB market 
value ratio is a straight average.  Obviously that influences the numbers a 
little.

On CustomerCo.  CSFB have contacted around 7 energy companies.  The result 
has been positive and they are prepared to enter our journal exercise.  I 
await a revised fee proposal but CSFB have been advised that it should be 
more modest than the last one !

Keith 




 -----Original Message-----
From:  David Kitchener  
Sent: 03 August 2000 13:27
To: Keith Harris
Subject: Amended Index Graph