Yes, but I think we may lose that rating.  What is the impact if that were to occur?  Seems like we should (a) identify our situation given today's environment and (b) identify the impact of one further downgrade.

Jim

 -----Original Message-----
From: 	Ibrahim, Amr  
Sent:	Thursday, November 01, 2001 5:07 PM
To:	Kingerski, Harry; Ogenyi, Gloria
Cc:	Steffes, James D.
Subject:	Texas - Credit worthiness for retail delviery service

Harry: 

Gloria and I agree that the situation in Texas could be currently described as "reasonable" for the time being; this taking into consideration the "Triple B" from S&P of today.  Here is the analysis.

1.	The Tariff for Retail Delivery Service, Art. 4.5.1.1  purports that a deposit for a competitive retailer shall not be required provided that the retailer has not defaulted within the past 24 month.  If it defaults, then a deposit is required.  Gloria and I understand that we did not default. 
2.	The Tariff for Retail Delivery Service, Art. 4.5.1.2 purports that the size of deposit is 1/6 of the estimated annual amount to be billed under the tariff.
3.	The Tariff for Retail Delivery Service, Art. 4.5.1.2 purports that a form of deposit is any affiliate guaranty from an affiliate with long-term unsecured credit ratings of not less than "BBB-" or "Baa3" (or equivalent) from S&P or Moody's, respectively.  It is important to mention that other forms of security may be mutually agreed to.  

Kindly advise if you have any question.

Brgrds

AI