Would a meeting between one or both of you with Gov. Geringer of Wyoming make 
any sense given attached memo?
---------------------- Forwarded by Richard Shapiro/NA/Enron on 05/31/2001 
07:43 PM ---------------------------
From: Paul Kaufman/ENRON@enronXgate on 05/31/2001 04:45 PM
To: Richard Shapiro/NA/Enron@Enron, Lisa Yoho/NA/Enron@Enron
cc:  

Subject: Wyoming

Wyoming Governor Geringer has been a leader on energy issues in the West 
since (at least) the end of 2000 (when California's energy crisis pushed the 
Western Governor's Association to hold an emergency session in Denver).  
Based on discussions with his staff, it appears that the Governor likes our 
company and supports our efforts to open markets.  His public comments, which 
are developed by the Governor's office with little outside influence, match 
both the direction and intent of many of our own policy objectives.

You asked that I summarize my observations from yesterday's meeting of the 
Wyoming Energy Commission.  

I participated in the first session of the Wyoming Energy Commission at the 
Governor's invitation.  (We were invited as the keynote speaker for the 
session).  The Commission was created by the Wyoming legislature to look at 
Wyoming's energy future from the standpoint of both consumers and the 
producers.  The Commission was given a $1 million budget and authority to 
take legislative and regulatory positions on behalf of the state.  

In conversations with the Governor's staff; it appears that they are familiar 
with commodity markets--particularly ag products.  They understand the 
concept of basis and also understand that energy commodity markets work best 
when there is adequate transmission capacity, gas pipeline capacity and rail 
capacity.  They also understand that their are some contraints on the 
transmission system (a complete constraint moving east, off-peak constraints 
moving north, south, and west), limited take away capacity on the one major 
pipeline serving the state (Kern--perhaps due to downstream constraints), and 
some problems with the cost of rail transportation (if not a constraint).  
While they have a working understanding of all these things, they haven't 
been able to put it all together in a cohesive way.  They want our help in 
putting together the various pieces of the energy puzzle.  

I can't help but think that there is opportunity for Enron in Wyoming either 
as an advisor (for a fee) or as a business partner--e.g., there has to be 
some room for combining the energy markets--i.e., arbitraging the value of a 
coal-fired kWh and a gas-fired kWh or providing some incremental improvement 
to the market for their sale of commodity out of state.  There also may be 
some opportunity to develop coal-fired or gas-fired plant.

Indeed, Wyoming is a major producer of natural gas (including coal-bed 
methane) and coal.  They want to produce more, but want to avoid the boom and 
bust cycle of a resource dependent state.  (For example, the state moved from 
a $250 million deficit in FY 1999 to an approximately $750 million surplus in 
FY 2000).  They also want to diversify the state's economy and bring economic 
development.  For example, a major focus of the state's Business Council has 
been to recruit "server farms"--because of their load and high load factors.  
They talked about co-locating server farms and generation along the southern 
tier of the state (which has a large amount of fiber optic bandwidth 
available).  While it is unclear, the bandwidth they are mentioning may be 
EBS fiber.

Let me know how you want to proceed.  It's rare when you get a Governor that 
has some understanding of commodity businesses and wants to provide 
leadership on energy issues.