Jim and Jeff,

The P& L numbers represented below includes a reserve of $40 million attributable to the FERC Refund exposure specific to wholesale.   

Thanks,
Wanda

 -----Original Message-----
From: 	Tribolet, Michael  
Sent:	Friday, November  16, 2001 3:34 PM
To:	Dasovich, Jeff; Steffes, James D.; Mellencamp, Lisa; Curry, Wanda
Subject:	FW: PG&E settlement offer



Ken Lay called Rick Buy and I up to his office talk about settlement just now.   He would like to settle for liquidity/good news.   Rick Buy is going to discuss with Whalley.

 -----Original Message-----
From: 	Tribolet, Michael  
Sent:	Friday, November 16, 2001 3:30 PM
To:	Buy, Rick
Subject:	PG&E settlement offer

	
Below are the proposed discounts we discussed with Ken Lay this afternoon:

USD millions:       
                          Cash from 85       P+L with 85 cent 
             Discount   cent sale of claim    sale of claim

Enron      $ 85.0 (17%)       $361.8             +$129.1      
PG&E       $237.0 (46%)       $232.6             -$  0.1 
Midpoint   $161.0 (32%)       $297.2             +$ 64.5



If the midpoint (value between PG&E and Enron settlement offers) is acceptable from a liquidity and P+L standpoint, propose countering at a discount of $123 million (move half way to midpoint) to provoke a counter offer.   Intent is to settle at midpoint discount of $161 million.  The Excel file is attached.   




 << File: m011116.xls >>