Your comments
----- Forwarded by Mark E Haedicke/HOU/ECT on 03/28/2001 03:33 PM -----

	Mark E Haedicke
	03/28/2001 12:31 PM
		 
		 To: Mark Frevert/NA/Enron, Greg Whalley/HOU/ECT, John J Lavorato/Corp/Enron, 
Louise Kitchen/HOU/ECT, Rick Buy/HOU/ECT, Bradford Larson/HOU/ECT, Tim 
Belden/HOU/ECT, David W Delainey/HOU/EES, Steven J Kean/NA/Enron, Richard 
Shapiro/NA/Enron
		 cc: 
		 bcc: 
		 Subject: Proposed Changes Based on California Energy Shortages

Over the past several months, we have reviewed in detail our trading 
contracts and the companies through which we conduct our trading business in 
California.  In order to reduce Enron's non-market risks ( e.g. legal, credit 
and regulatory) in the volatile commodity markets in California or any " 
future California", we propose the following changes:

1.    Mandatory Uniform Set-Off Provisions in All Trading Contracts for All 
Commodities -- set-off language varies commodity by commodity in trading 
contracts.  Set-off is one of the most critical tools available to Enron in a 
major default situation and it is critical to have set-off language and to 
have it be uniform commodity to commodity so that Enron can get the best 
advantage from set-off and not just the least common denominator.

2.     Mandatory Master Netting Agreements For Counterparties With Multiple 
Masters With Significant Opposite Exposures -- where it is necessary to have 
multiple masters with a counterparty, a "bridge" should be put place between 
the masters whenever there is significant opposite exposures under the two or 
more masters.

3.     Merge EPMI into ENA -- power trades are done through EPMI.  Merging 
EPMI into ENA and conducting power trades through ENA is much more efficient 
from both a credit and legal point of view.

4.     No Automatic Termination for a Bankruptcy Event -- 

Let me know if you have any other proposed changes to our trading contracts 
or entities through which we conduct our trading.  I believe these changes 
will (i) improve efficiency, (ii) reduce risks, (iii) develop the opportunity 
to do more business with certain counterparties and (iv)substanially improve 
Enron's position in the next California type market.  The long range goal is 
conduct as much as possible of the trading business through a single entity 
and a single or limited number standardized agreements.