Based on a series of meetings and discussions with many you, below is an 
outline of the proposed strategy for Com Ed.  I will be meeting with 
Commissioner Harvill and also the Commissioners' assistants on Wednesday to 
deliver our message, so if you have any comments on this, please get back to 
me as soon as possible.  (Com Ed is scheduled to meet with the Commissioners 
on Thursday).

The Facts - Customers currently have three rates to choose from: the fixed 
price bundled rate, the PPO which is a discount off the Fixed price bundled 
rate, or an alternative rate provided by a marketer (ARES).  Most of Enron's 
customers are on the PPO although some are on the bundled rate.  Com Ed sent 
a letter to the ICC in which they propose to replace the PPO with a spot 
market price plus  adder to be effective at the end of 2004.  Com Ed also 
acknowledges that with rising market prices, some of the industrial customers 
are or soon will no longer be paying a CTC.  With the relinquishment of the 
CTC obligation comes Com Ed's obligation to provide the PPO rate.  In 
conversations, Com Ed indicated that they would like to replace the fixed 
bundled price with a performance based rate at the end of 2004.  An internal 
analysis prepared by Mark Ulrich sets forth the negative impact of removing 
the PPO on our current book of business.

Issues of Concern:
 
 * Protection of our current book of business
 * Ability to physically deliver into Com Ed on a competitive basis
 * Potential for Default Service deal
 * Potential to market individual customers on a one-on-one basis

The Plan:

Our public position will be that without the capability to physically deliver 
power into the Com Ed market on a competitive basis, the PPO rate should not 
be lifted since customers are left without reasonable options or protection.

Our negotiated position in order of priority is as follows:

1.  Protect our current book of business.  We should negotiate a rate with 
Com Ed that leaves us whole.  This could include the provision by Com Ed of 
ancilliary services.  There is an FRP tariff rate that has expired but that 
we believe offered ancilliary services at a rate that allowed other marketers 
to physically deliver.  We are in the process of obtaining the tariff to see 
if that would work for us to negotiate from, even though it has expired.  In 
essence we want to negotiate a new PPO rate under which Com Ed continues to 
supply our existing customers or preferably that enables us to physically 
deliver to our customers at the same price as the PPO.  Mark Ulrich and Guy 
Sharfman are going to develop a rate that we can take to Com Ed for our 
entire book of business.

2.  Leverage new business opportunities for EES.  These opportunites include 
acquisition of all or a portion of Com Ed's industrial default customers as 
well as individual customer accounts.  (We believe that Com Ed wants to free 
itself from its obligation to serve industrial customers, so there may be an 
opportunity).   The concept is to fold these new customer acquisitions into 
the same deal negotiated for our current customers, allowing EES to expand 
its customer base and potentially its physical delivery capabilities.  From 
the standpoint of acquiring individual customers, we should advocate a real 
time price plus adder starting in 2003 for customers who roll off the CTC. 

3.  Push for Com Ed support of Enron's positions at the ARTO working level.  
Nothing in our agreements, however, with Com Ed should be contingent on the 
RTO functioning, such that Com Ed can have an out for its obligations to 
Enron under the deal.

Janine.