---------------------- Forwarded by Kayne Coulter/HOU/ECT on 01/09/2001 04:48 
PM ---------------------------


mbjohns@duke-energy.com on 01/09/2001 03:59:14 PM
To: kayne.coulter@enron.com, dbjohnso@duke-energy.com, 
mbnewman@duke-energy.com, obtadloc@duke-energy.com, alfesper@duke-energy.com, 
wfcatoe@duke-energy.com, kebrown@duke-energy.com, lbcrisp@duke-energy.com, 
rrpadget@duke-energy.com, plsams@duke-energy.com, rtbrown@duke-energy.com, 
jtconrad@duke-energy.com, odalton@enron.com
cc:  
Subject: Selling to ENRON


Yesterday afternoon (1/8/01) during a conference call with ENRON, there was
a discussion regarding issues associated with hourly sales to ENRON in
order to define expectations associated with these hourly sales. Below is a
summary of the expectations and conclusions reached.

Non-Firm Energy Sales:
Duke Power regards a verbal commitment to sell non-firm hourly energy to a
customer as an agreement for Duke to sell/deliver energy to the designated
delivery point and the customer, ENRON, to purchase/receive this energy at
the designated delivery point with ENRON taking the risk of obtaining
transmission paths beyond the designated delivery point and completing
required tags correctly. After a non-firm energy schedule has begun and a
new official TLR event occurs which results in curtailing the schedule,
Duke considers this a Force Majuere event and ENRON will only be billed for
the energy delivered.

Take or Pay Energy Sales:
Duke Power regards a verbal commitment to sell Take or Pay energy to a
customer as an agreement for  the customer, ENRON, to purchase this energy
at the designated delivery point with ENRON taking all risks and accepting
to purchase all energy scheduled.

ENRON expressed the desire to develop  a strong relationship with Duke
built on conducting business "the right way". The ENRON Real-time Desk
Management is committed to this desire and are our contacts for future
problems and concerns.
Kayne Coulter, Mgr., Real-Time Desk  1-713-853-4340
Juan Hernandez, Supervisor, Real-Time Desk  1-713-853-0383