Sara,

I talked to Chuck Kaufmann and Randy Beevis at Cinergy Marketing.  We have 
come to a resolution on the guaranty issues, and I want your thoughts on 
this.  

1) With respect to their guaranty to Enron, we are going to keep the dollar 
amount at $10MM, and decrease their collateral threshold in the ISDA to 
$8MM.  This way they have $2MM in cushion for Cinergy Capital and their 
physical gas business.  In addition, their current guaranty includes Enron 
Canada Corp, although they would like this removed as a guaranteed entity.

2) With respect to the guaranty Enron provides to Cinergy, the dollar amount 
should be increased $15MM, leaving the collateral threshold at $10MM.  Also, 
several of the Enron entities on the guaranty should be removed.  These are:  
Enron Canada, HPL Resources and Louisiana Gas Marketing.  Houston Pipe Line 
Company should be added as an additional guaranteed counterparty. 

So in summary, we are lowering the collateral threshold for Cinergy to $8MM, 
ENA's will stay at $10MM, and the above amendments need to be made to the 
guaranty's.

I will bring copy's of these guaranty's up to you and we can discuss when you 
have had a chance to digest all this.

Thanks

Russell