Attorney-Client Information

As you requested in our meeting today, below is a description of the four 
methodologies for measuring Enron's contingent liability:

Utilize the Megawatt Daily 16 hour wtd. avg. index ($/Mwh) as a proxy for the 
value of the energy that would have been scheduled by TVA.
Utilize the above index and apply a scalar adjustment to approximate the 
value of energy across the 8 hour period (HE1300-HE2000).
Utilize hourly liquidation prices (track bids & offers in the hourly market) 
in the SERC region to value the energy that would have been scheduled by TVA.
Based on our projection of TVA's load on a day-ahead basis, estimate the 
marginal cost of TVA's own generation that would be utilized to replace the 
energy that would have been scheduled by TVA.  For example, depending on 
TVA's load and availability of generation resources, TVA's replacement cost 
would likely vary from $15/Mwh (coal) to $70/Mwh (oil-fired CT's).

Note:
Since the MOPA has been terminated, and TVA may not actually schedule energy, 
the valuation above will require making assumptions on what days TVA would 
have scheduled energy under the MOPA.  In addition, the valuation must take 
into account the limited number of Mwh's that TVA can schedule for the summer 
and winter period, respectively.