I spoke with Marvin today, he has comments on the LOI.  David Hunt will 
finally be available on Wednesday to work with Kay to address legal issues.  
Bob Priest is recommending Enron to his board tonight.    Due to their peaker 
deal with Aquilla, they have been unable to make progress on our LOI, so it 
will not be presented at his board meeting Tuesday night.  He has them on 
notice that special meeting may be called to execute the LOI as early as a 
week from today.  He would like to be in agreement on the LOI issues by the 
end of this week.

He has the following comments on the LOI:

? page 4 paragraph 8, "negotiate" rather than "negotiates"
? we need clarification on the mechanism by which Enron will recover 
infrastructure costs.  He wants to make sure that Enron cost recovery is out 
of our 40% and backed up by a guaranteed monthly minimum calculated as the 
amoritized capital costs over the contract period.
? he wants more detail on the $50k breakup fee.  What are the circumstances 
that would precipitate a payout?
? David Hunt and Kay Mann need to get together (he indicated that David has 
been unavailable) to address the legal issues including limitation of 
liability and arbitration such that they agree with Mississippi law.
? he needs some specifics on the ancilliary services (load following, 
regualtion, and reserves).

On the last issue, he indicated that this is the "deal maker/breaker."  He 
offered that our competition indicated that their regulated side would be 
providing those services.  He needs to know from Enron who we would contract 
with to do it--"we can horse trade on the price later."  I indicated that we 
have not given specifics to the market in searching for ancilliary services, 
and were waiting on the LOI before we asked for proposals.  He wants 
specifics--other than pricing--before he signs the LOI.


After talking with Ozzie and Lloyd, here is the game plan:

? get the Entergy tariff and price the ancilliary services with Entergy as 
the provider
? find out who the high-load-factor IPPs are in the Mississippi area
? put calls in to those IPPs as well as CLECO, LEPA, SMEPA, Cajun, Alabama 
Electric Power Co-op, and Entergy and guage interest and potential pricing 
for providing ancilliary services
? we will need approximately 4 MW of regulation service, load following and 
reserves.  We would send the signal and communicate with the ancilliary 
service provider.
? Once we have gathered some preliminary information, call Marvin on 
Wednesday and let him know that we expect to go with Entergy during the first 
60 days beginning May 1 and select/negotiate/contract with one of the above 
for the balance of the contract.  In no case would the pricing be higher than 
the entergy tariff rates.

I would like to have Christi and Lloyd available for the call to Marvin.

How does all this sound??