Late last night, BKH requested ENA to guaranty the indemnification obligations of TLS Investors, a wholly-owned subsidiary of ECT and the Member Manager of Southwest Power LLC.  The guaranty will be capped at the adjusted purchase price, presently expected to be in the range of $205 million to $220 million, and will remain in place for 18 months from the Closing Date.

RAC's view is that exposure under such a guaranty would not be materially different from exposure under a direct indemnity provided by ENA if ENA were the actual legal entity selling Southwest Power LLC.  RAC supports the issuance of such guaranty to facilitate completion of the divestiture.

Regards,

Chip Schneider
VP-Commercial Underwriting
713-853-1789
3AC 1418