Holli:

We need to talk about status.
I spoke yesterday with three EWEB lawyers and Dick Varner.
I have to comment back on the Schedule to the master agreement.  EWEB has not 
yet reviewed the Credit Support Annex and needs to submit their proposed 
legal opinion.  EWEB is reserving discussion of the confirmations pending 
resolution of the master agreement.

Most important, however, is the EWEB legal opinion which will be limited by 
the capacity of EWEB's traders to enter into financial trades at any given 
point in time.  EWEB is insisting that we assume the obligation of knowing 
whether an EWEB trader is authorized to act and how that EWEB trader is 
authorized to act under EWEB's trading policy because, under Oregon law (and 
the law of all states), financial trades executed by unauthorized persons 
(employed by governmental entities) are completely void.  

Your two trades (which began as physical deals and were transformed into 
financial deals) were authorized by EWEB's recent board resolution.  However, 
you cannot rely fully on this resolution for future trades.  Before you ever 
trade with EWEB again, you will not be able to rely upon your past 
relationship with an EWEB trader.  You will first have to conduct some due 
diligence with respect to the EWEB trader and the EWEB trading policy.

ENA has never agreed to this type of arrangement.

Let's schedule a time to discuss the agreement further.  Thanks.  Sara