My comments on the floating price source language follows:

US NG     BasisSwp Chicago  The floating price is shown to be equal to the 
"monthly average" price published in NGI's Bidweek        Survey.  The 
floating price is more appropriately described as the "Bidweek Average" 
price.  This        appears to be an oversight on Dynegydirect's part since 
their description for US NG     BasisSwp         SCalBrd correctly describes 
the price as the "bidweek average" price.   
Any Gas Daily daily midpoint price description The floating price is shown to 
be equal to the "midpoint price published in the applicable issue".  
Gas        Daily is not published on weekends or holiday, therefore the 
question arises as to the pricing mechanism        Dynegydirect will use for 
those days.  We add the phrase to our floating price description as follows 
to        answer that point:  "if a calendar day is not a businress day then 
the price for such day will be the Midpoint        price published on the 
next succeeding business day"  





From: Brent Hendry@ENRON on 11/29/2000 12:28 PM
To: Leslie Hansen/HOU/ECT@ECT
cc: Mark Taylor/HOU/ECT@ECT, Bob Bowen/HOU/ECT@ECT 
Subject: DynegyDirect

Leslie,

The following comments are with respect to all Basis Swap product 
descriptions on the DynegyDirect trading web site.

1.  The reference to the "fixed price" is incorrect as it references the 
basis spread price specified on the trading screen rather than the second 
floating price which should be one of the NYMEX futures contracts.  This is a 
structural error that was carried through all the basis swap definitions and 
should be fixed to avoid ambiguity or future arguments over what was 
intended. 

2.  In the new definition of "fixed price"  all references should be made to 
either the NYMEX Henry Hub or Permian Basin futures contracts for the 
applicable Determination Period rather than to the "appropriate NYMEX futures 
contract".   Otherwise it will not be clear which natural gas futures 
contract is being referred to.

3.  While there is a default definition in the Master Agreement it would be 
preferable to define "Determination Period" in the product description by 
adding the following sentence, "Each calendar month during the term of the 
Transaction will be a Determination Period."

4.  The sentence specifying the definition of the "Price" should specify that 
the "Price is the differential between the Floating Price and the Fixed Price 
(or Fixed Price and the Floating Price).  

5.  The sentence relating to payment dates should specify that the amounts 
owed should be paid no later than "five business days after the Floating 
Price and the Fixed Price are published."

 I would suggest that Dynegy borrow the language from our long product 
descriptions on EOL. 



The following comments are with respect to the  "FP Swap NYMEX" product 
descriptions.

1.  In the definition of the "floating price" all references should be made 
to either the NYMEX Henry Hub or Permian Basin futures contract for the 
applicable Determination Period rather than to the "appropriate NYMEX futures 
contract".   It is not clear which natural gas futures contract is being 
referenced.

2.  While there is a default definition in the Master Agreement it would be 
preferable to define "Determination Period" in the product description by 
adding the following sentence, "Each calendar month during the term of the 
Transaction will be a Determination Period."



As we do not have a master agreement in place with Dynegy Liquids Marketing & 
Trade I would not approve trading in the liquids financial products including 
the "C2 Swap Fix OPIS C2 MON" and "NC4ISO Swap Fix OPIS NON MON" products 
until either a master is agreed to or the GTC form of master is approved.  
Please let us know if the commercial team wants to pursue trading these 
products.


Bob has agreed to review the definitions of the floating prices to ensure 
that they correctly identify the floating price sources.  I will forward him 
copies of the long form descriptions today.  Other than having Bob check the 
floating price source language I do not have any comments on the two 
swingswap definitions.

Please let me know if you have any questions or comments.
Regards,
Brent