We are pulling this together and will talk with Marcus Nettleson as appropriate.

Jim

 -----Original Message-----
From: 	Nicolay, Christi L.  
Sent:	Tuesday, November 06, 2001 1:52 PM
To:	Steffes, James D.
Subject:	FW: Credit Rating Isuses - ISOs

Is there anything that the wholesale group needs to be doing for this?  I have not heard back from Ed Sacks or Elizabeth.  Thanks.

 -----Original Message-----
From: 	Ibrahim, Amr  
Sent:	Thursday, November 01, 2001 12:06 PM
To:	Nicolay, Christi L.; Allegretti, Daniel; Fromer, Howard; Mara, Susan; Twiggs, Thane; Hoatson, Tom; Ryall, Jean; Hemstock, Robert
Cc:	Steffes, James D.; Sacks, Edward; Sager, Elizabeth; Shapiro, Richard; Canovas, Guillermo; Levy, Alberto; Gottfredson, Bryan; Migden, Janine
Subject:	Credit Rating Isuses - ISOs



I am concerned with the credit worthiness issues with the various ISOs, and I am seeking your comments/advice on the appropriate action items that GA should take to assist the various sections in Enron to comply with the requirements in an expedient, proactive,  and cost-effective manner.    
1.	Perhaps I should start by mentioning that in NYISO, and PJM (and I assume the same for the rest), there is an obligation on the market participants for informing the ISO (some in writing, within 5 business days as the case in PJM) of any Material change in its financial condition.  The issue here should GA assist in communicating this change.   
2.	Does the Team agree that there is a need to determine exactly what are the conditions for posting a financial instrument.  How the instrument size is calculated (hence the total additional obligation)? how does it change with the change in our business volumes, or credit rating? are the terms for the financial instruments applied consistently to all market agents or just on Enron?
3.	What is the best approach to assist RAC in prioritizing which financial instrument should be dealt with first, if there is a prioritization process.  

I do have language for PJM, and NYISO if you would like to have access to them.  

I look forward for your comments and suggestions

Many thanks and Brgrds


AI
713-853-3037

PS:  Material change is a defined term in PJM, and includes a downgrade of a long or short term debt rating by a major rating agency; being placed on a credit watch with negative implications by a major rating agency.