Gentlemen -

The MSEB letter below is an unfortunate event.  MSEB is positioning itself to 
claim that it owes no money to DPC for approx. 3 months of billings because 
it has a mis-declaration claim against DPC.  

In our initial review, our lawyers, both in-house and outside counsel, 
believe that DPC will prevail on this issue.  We are currently preparing a 
more detailed legal analysis.  But it will likely affect DPC's cash flow and 
may affect DPC's ability to complete Phase II.

It is also disappointing that MSEB has chosen to start a brawl before the 
results of the Review Committee are announced and the parties have the 
opportunity to meet to discuss the results.

Bruce

---------------------- Forwarded by Bruce Lundstrom/ENRON_DEVELOPMENT on 
03/01/2001 10:53 AM ---------------------------


Paul Kraske
02/28/2001 08:17 AM
To: Bruce Lundstrom/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Sandeep 
Katwala/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Gail 
Brownfeld/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Robert 
Mathis/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Suhas 
Tuljapurkar/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc: christopher.walker@linklaters.com, jonathan.inman@linklaters.com, 
lbrasher@skadden.com 

Subject: MSEB letter you wanted scanned

Legal team-
Attached is a copy of the letter delivered to us earlier tonight by MSEB 
claiming payment of 400 crores from DPC on account of availability 
mis-declarations.  We will likely respond to the letter tomorrow referring 
the matter to dispute resolution under the PPA and pulling the MSEB letter of 
credit for the amount still outstanding under the December bill.  Feel free 
to call me if you have any questions regarding the foregoing or the 
attached.  Regards,
Paul
---------------------- Forwarded by Paul Kraske/ENRON_DEVELOPMENT on 
02/28/2001 07:24 PM ---------------------------
From: Mrudula Gadade on 02/28/2001 07:19 PM
To: Paul Kraske/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc:  

Subject: MSEB letter you wanted scanned



Regards,
Mrudula.