It is my understanding that five AEP employees will in Enron's offices starting May 15th or 16th to get a better understanding of how to do the HPL trading and to direct the HPL bidweek activities for June (assuming close occurs for June).  To protect Enron's proprietary trading information for May and June I would like the AEP employees not to be allowed in the offices until after 10:30 AM for the duration of their stay.  From 7:30 - 10:30 AM is when the May business occurs and it is also when the communication occurs with HPL employees.

Another issue is what happens if we believe that close is going to occur June 1 and then late in bidweek it gets delayed until July;  who wears the risk positions?  My suggestion is that if AEP is going to set up HPL activities for June then they should wear the risk positions.  The way to accomplish this is to do the following:

	1.  The initial core term index physical position plus all thirty day index deals will be swapped out at gas daily index at the nearest relevant gas daily index 	     point (ie. HSC or Waha) after considering any volumes to be targeted for storage injections.

	2.  Volumes targeted for storage injections up to 400,000/d purchased on IFGMR HSC index related pricing will be sold to AEP in the ground at June index 	     + actual storage costs.  Volumes targeted for storage are those volumes that can phyically get to Bammel storage.

Examples

Case 1
Core term index position    100,000/d long  (50,000/d Waha, 50,000/d Texoma)
Thirty day index position    200,000/d long  (volumes at Thompsonville and Katy)
Total Index Position           300,000/d long

Vols. targeted for storage   200,000/d

Enron sells AEP 200,000/d in storage at June IFGMR HSC index plus storage costs.  Any additional volumes would be sold to AEP at July index.  Enron sells 50,000/d gas daily swap at IFGMR Waha and 50,000/d gas daily swap at IFGMR HSC.

Case 2
Core term index position     200,000 short (50,000/d Waha, 150,000/d HSC)
Thirty day index position     400,000 long   (50,000/d Waha, 100,000/d Agua Dulce, 100,000/d Thompsonville, 150,000/d Katy)
Total Index Position            200,000 long

Vols. targeted for storage    200,000/d

Enron sells AEP 200,000/d in storage at June IFGMR HSC index plus storage costs.