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REGARDING THE SETTLEMENT, ASSIGNMENT AND ASSUMPTION AGREEMENT

Tracy Ngo correctly pointed out volumetric ambiguities on the two original
confirmations between Avista Energy and PG&E Energy Trading.

Let me summarize below:

(1) Avista Energy's original confirmation number 404335 showed Total Volume
of 982,400 MWh's.  PG&E revised the Total Volume to 981,600 MWh.  Avista did
not respond with an affirmation of the corrected volume.  Our records show
that the original volume of 982,400 is correct (there was a leap-year day in
year 2000).  The broker confirm and the PG&E revision seem to be both in
error.  Obviously any new confirm that is written between Avista Energy and
Enron will have the proper Total Volume for the remaining MWh's.  Since this
Assignment references the original confirmation, our counsel recommends
language to be inserted under Exhibit B as stated below (see email from
Blair Strong below).  Will this sort of revision be acceptable to PG&E and
Enron? Please advise.

(2) Avista Energy's original confirmation number 403862 showed a Total
Volume of 14,400.  PG&E accepted the confirm "as is."  The broker
confirmation shows total volume correctly as 876,000 MWh's.  Therefore, both
PG&E and AVISTA screwed up.  HOwever, we acknowledge that the total MWh's
should correctly be as per the broker confirmation.  Again, our counsel
recommends language to be inserted under Exhibit B as stated below (see
email from Blair Strong below).  Will this sort of revision be acceptable to
PG&E and Enron?  Please advise.


To reiterate, we realize that there will be new confirmations between Enron
and Avista.  Enron has traditionally written the confirmations (Enron's
confirm's prevail).  Therefore, the new confirms should be acceptable.  We
would like to see those confirms in advance if possible.

Lastly, time is of the essense.  We are scheduling power already for January
deliveries....therefore, we must act quickly on this assignment so as to
prevent any problems with scheduling, etc.  I suppose that we could delay
the start dates to February 1st, 2001 if necessary.  Perhaps not a big
issue.

Thanks,
Nolan Steiner
Ph: 509-495-8199



-----Original Message-----
From: R. BLAIR STRONG [mailto:rbstrong@painehamblen.com]
Sent: Wednesday, December 27, 2000 10:53 AM
To: Nolan.Steiner@avistacorp.com
Cc: G. Nick Bergh
Subject: footnnote each item under Exhibit B


A footenote to be added to Item 1 and Item 2 of Exhibit B

Notwithstanding the contents of Confirmation Number _____, and to clarify
any ambiguity, the Parties agree that the total volume that Avista agreed to
sell to PGET and PGET agreed to purchase from Avista during the Term of the
Confirmation was _______megawatt hours.