Chris:

My comments are as follows, and I'd like you to send a letter rather than an 
e-mail:

Dear Jeff,

As a follow up  to your letter dated May 9, 2001, upon the posting of an LC 
in the amount of $965,855 representing 5% of the price of unit 1, we are 
prepared to pay GE the $1,501,885 deducted from our last payment. With 
respect to liquidated damages on delivery of the air filter, we reserve our 
rights under the contract to exercise our offset rights at a later date.

Please let me know when you will be able to have the LC in place, and we will 
make appropriate payment arrangements.

Regards,

Chris Booth
Manager



   
	Enron North America Corp.
	
	From:  Chris Booth @ ENRON                           05/18/2001 02:39 PM
	

To: Ben Jacoby/HOU/ECT@ECT, Kay Mann/Corp/Enron@Enron
cc:  
Subject: GE payments

Kay and Ben,

I would like to send the following to Jeff Darst at GE via e-mail.

Dear Jeff,

Pursuant to you letter dated May 9, 2001 we are prepared to pay the deduct 
for liquidated damages ($536,000) and retention deduct ($965,885) withheld 
from the April 25, 2001 invoice.  Payment of the deduct for the liquidated 
damages claim does not constitute a withdrawal of the claim, hence, we are 
not waiving our rights afforded under the contract.  As stated in our letter 
dated May 3, 2001, we are prepared to pay the final 5% payment for Unit 1 
upon receipt of the Letter of Credit for $965,855 (5% of the price for Unit 
1) and a lien release. 

Regards,

Chris