---------------------- Forwarded by Mark Taylor/HOU/ECT on 11/01/99 03:22 PM 
---------------------------


Louise Kitchen
09/29/99 06:23 PM
To: Paul Quilkey/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, David 
Minns/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Mark E Taylor/HOU/ECT@ECT, Alan 
Aronowitz/HOU/ECT@ECT
cc: David Forster/LON/ECT@ECT, Bob Shults/HOU/ECT@ECT, Marcello 
Romano/LON/ECT@ECT 
Subject: Australia and EnronOnline

In the build up to bringing Australia onto the EnronOnline system with a 
start date of 1st February 2000, I have outlined a kick off plan as a 
suggestion.

The initial work we have done covers the areas outlined belowbearing mind I 
may have missed a few things out.  In order to kick things off I suggest we 
concentrate on the background areas which predominantly will be run by 
legal.  The teams involved in the project so far include the US and Europe - 
where the jurisdictional issues have all been handled are listed at the 
bottom of this note for information but I am to a certain extent assuming 
that legal is run from the US rather than Europe for Australia (I have left a 
voicemail with Alan Aronowitz to chat it through with him).  I would like 
Mark to co-ordinate the work with David and start off immediately - please 
let me know if there are nay problems with this.  From my group Dave Forster 
and myself will be points of contact at this stage bringing in more resources 
as soon as we get the background things rolling.

But firstly we need an idea of what will be traded in Australia, from our 
discussions I am assuming Power, Coal and Weather - is that right?

Background:
(i)  Due diligence from a regulatory perspective
(ii)  Legal review on the framework of our site in its appropriateness to the 
market .
 (i) Drafting of the password application agreements in line with the market
 (ii) Drafting of the electronic trading agreement in line with the market
(iii)  Redrafting of the GTCs to incorporate language to cover web 
transactions.
(iv)  Complete tax review.

Commodities:
(i)  Review with Traders on the products they are to offer
(ii)  Production of short description of each product for publication on the 
web-site quotes page
(iii) Production of long description to be accessed by clicking on the short 
description
(iv)  Trader training on the Stack Manager
(v)  Trader training on the Product Manager
(vi) Trader/originator  training on the Web-site

Customers:
(i)  Collation of customers to be send a marketing pack including password 
application form
(ii)  Credit to process customers to set up the credit limits per product for 
each customer and the appropriate form of GTC profile to be embedded in the  
system.
(iii)  Tax to approve customer profile 
(iv)  Legal to associate customers with any Master Agreements in place.

Support:
(i) Integration of EOL in risk systems
(ii)  Daily data management of traders/customers
(ii)  Maintenance of system

Technical:  
(i)  Bandwidth - Arshak Sarkissian is apparently rolling out bandwidth at the 
current time between Sydney and Singapore to close the link around the  world 
(ie we loop the world).  Between Houston and Sydney we now have 128k line 
which will be increased (approximately doubling the capacity) -  we will 
fortunately have the experience of EnronOnline going live before then to know 
if that will be enough.  Arshak can get a T1 if required in  approximately 
60/80 days.

In order to kick things off I suggest we concentrate on the background areas 
which predominantly will be run by legal.  The teams involved in the project 
so far include (I have left a voicemail with Alan Aronowitz to chat it 
through with him).  But firstly we need an idea of what will be traded in 
Australia, from our discussions I am assuming Power, Coal and Weather - is 
that right?

Point of contacts
Legal   US  Mark Taylor / Europe Justin Boyd
Regulatory US  Legal team plus various members of Steve Kean's team
Tax  Europe Janine Juggins  / US Steve Douglas
Commercial team - Louise Kitchen, Dave Forster, Marcello Romano
Global Control Group - Bob Shults


---------------------- Forwarded by Louise Kitchen/LON/ECT on 29/09/99 23:36 
---------------------------


Paul Quilkey@ENRON_DEVELOPMENT
29/09/99 09:26
To: Louise Kitchen@ECT
cc: David Minns/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT 
Subject: Ergon Internet

Louise
Received the click trade folders...thanks.
We would like to get going on the details for implementation.
Can you send me a list of the key people to interface with?
For your information, our lawyer is David Minns.
I have attached an article regarding a local retailers internet initiatives.  
You may be interested in the two points in bold.
Cheers
Paul
---------------------- Forwarded by Paul Quilkey/ENRON_DEVELOPMENT on 
29-09-99 06:37 PM ---------------------------


Paul Quilkey
28-09-99 08:52 PM
To: Paul Quilkey/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc:  

Subject: Ergon Internet

28Sep1999 AUSTRALIA: Computers - Power supplier seeks vital spark on net. 
By Mandy Bryan.
e-Strategy

As electricity retailers prepare for deregulation, Ergon Energy chief Kim 
Griffith is looking to the internet for competitive advantage.
Around this time next year, NSW and Victorian consumers will be able to 
choose their own electricity suppliers, ushering in a period of massive 
change for Australia's 30 electricity retailers.
Among them will be Queensland's Ergon Energy, which now services 550,000 
customers and earns 50 per cent of its revenue from the consumer market.
Ergon chief executive Kim Griffith has chosen to make the internet a key part 
of his survival plan as he jostles for mind share.
"There really isn't an established way of doing this because electricity has 
always been a monopoly and suddenly 10 million contestible customers will 
appear in an industry that is probably turning over $10 billion in sales a 
year," he says.
While studies show Australian utilities are lagging behind overseas 
counterparts in moving operations online, Ergon Energy is considered to be at 
the forefront of internet adoption by an Australian utility.
Ergon's website allows customers to connect and disconnect their electricity 
service and submit complaints and enquiries.
"If you look at electricity retail, it is fundamentally an information-based 
business and we will survive based on the information we can gather about 
customers," says Griffith.
He also hopes that by 2001 customers will also be able to pay their bills and 
select from more flexible pricing billing arrangements, as well as buy 
products and services online.
"The internet is an obvious way of doing business because it also allows you 
to increase interaction with customers at an appropriate cost. We are now 
selling a commodity with low margins, so a cost-effective channel to market 
is key."
The $3 to $4 cost of over-the-counter transactions is more than 10 times the 
cost of an internet transaction, Griffith says.
As electricity margins shrink, he says Ergon will increasingly diversify into 
non-electricity and electricity-related services and products.
"We are looking to add value and differentiate in areas other than price. We 
are releasing a number of products into our domestic market related to 
electricity and electricity consumption such as energy-efficient light 
bulbs," he says.
"The next big challenge I've put to my people is to put significant product 
on to the site and to generate real revenue."
But he acknowledges that winning in this market is not as simple as being 
first on the web.
Ergon faces competition not only from traditional electricity retailers but 
also nimble virtual electricity brokers such as Exco Energy (www.exco.com.au) 
and possibly banks and supermarkets. Woolworths, for instance, has flagged an 
interest in electricity retailing.
Yet Griffith believes that these same organisations also present 
opportunities to utilities given the reach of their established customer 
bases.
"If you look at electricity, and particularly the mass market, there really 
isn't a channel to market," Griffith says. "In the future, companies will be 
out there trying to create national brands as well as looking to alliances 
with established brands and channels to markets."
In addition to seeking such alliances, Ergon is building up its own customer 
database to hold and analyse the information it gathers from its website.
"Each time a customer hits our website, we can gather more information and 
continue to build business based on that information."
For the time being, though, the major challenge lies in drawing people to its 
site.
"We are offering a number of freebies on our site to get people used to 
visiting it," he says.
Ergon also has comprehensive educational information on its site relevant to 
the school curriculum which it is building up into a full virtual power 
station tour.
"If we want people to keep visiting, we have to keep increasing the value of 
the site to existing and potential customers," Griffith says.
"There are two groups, the ones that will not want to change suppliers in 
2001 and those that do, and they are the people who will be on board with 
technology."
Copyright John Fairfax Holdings Limited 1999. Not available for 
re-dissemination. 

Sources:AUSTRALIAN FINANCIAL REVIEW 28/09/1999 P29