** PRIVATE **

Comments:

1.  The Schedule refers to these listed contracts "as each may be amended, 
revised or modified from time to time."  In our negotiations, we had talked 
about whether we would be able to modify these without the other party's 
consent and (I believe) decided that we shouldn't be allowed.  Since this is 
a "kings under bridges" point ["The Law, in its majestic equality, forbids 
the rich, as well as the poor, to sleep under the bridges, to beg in the 
streets, and to steal bread." -- Anatole France], I defer to your commercial 
judgment as to whether Enron would be better served with or without a mutual 
right of review for amendments, extensions, etc.

2.  As for the disclaimer language, I propose:

The inclusion of any contract listed below on this schedule is not, nor shall 
it be deemed to be, an admission that the execution or performance of that 
contract would constitute an EMW Restricted Activity.

3.  I'd change,

"Agreements, . . . that Enron MW, LLC and EMW Restricted Affiliates may, 
pursuant to Section 6.7.2(d) of the Agreement, perform without violating 
Section 6.7.2 of the Agreement,"

to

"Agreements, . . . that Enron MW, LLC and EMW Restricted Affiliates may, 
pursuant to section (c) of the definition of EMW Permitted Activities in the 
Agreement, perform without violating Section 6.7.2 of the Agreement."

4.  Peoples' list of contracts is extensive and somewhat cryptic.  I never 
understood that we were automatically agreeing that the arrangements they had 
in place (whatever they may be) would be deemed approved, without question or 
effect on our transaction.  It seems to me that commercial due diligence is 
required to ascertain whether grandfathering these arrangements -- without 
any participation or profit-sharing by the Hub -- is appropriate. We ought 
also to have some mechanism to ensure that the scope of these arrangements is 
not expanded.  Do you agree?

I look forward to discussing this with you.  DT

>>> <Gregg.Penman@enron.com> 08/24/00 10:56AM >>>
Hello - attached are copies of Schedule A (Enron MW) and Schedule B
(Peoples MW) to the MEH LLC Agreement.  Peoples has included a few projects
they are working on that don't have existing agreements.  Enron's list is
much shorter, 3 agreements to be exact.  The third agreement is a storage
deal with Nicor that would technically be a permitted activity under the
trading exclusion.  However, I believe we decided to include it, but we
need to also include the disclaimer language that inclusion on the Schedule
does not imply a restricted activity.  I have asked Hunter Shively, Central
Desk Director, if he knows of any other "middle-market" deals that we
should include and he said no.  I have also had our back office run the
counterparties through our trading systems to identify any term
transactions that may currently be in place.  Other than the Nicor deal
listed, there were only standard trading buy/sells with Nicor in the
system.  Which brings up my last point, do we need to disclose the
existence of Master Purchase Agreements with a Covered Gas Utility?
Trading uses these Agreements for standard physical buy/sells.  Anything
more complicated would be done under a separate agreement.  The Nicor deal
was done under a separate agreement, not the existing Master.  If my vote
counts, I say let's not include them.  But, I defer to the experts.

Let me know your thoughts on the attached,

Thanks,

Gregg

(See attached file: MEH Schedule A 8-21-00.doc)  (See attached file: MEH
Schedule B 8-02-00.doc)