Please read the attached summary of Coogler's response to the audit 
findings.  I would like to get the group together later this week to 
determine next steps.  

Jim, Dan and Janet:  I would appreciate you all paying special attention to 
the claims.  Do you all know what Bruce is referring to?  If you all can do 
some research before the meeting, I think we'll be able to get to our next 
steps quicker.  Thanks.
---------------------- Forwarded by Brenda F Herod/HOU/ECT on 09/25/2000 
10:44 PM ---------------------------


richard.j.feldmann@us.arthurandersen.com on 09/18/2000 08:29:49 PM
To: BHerod@Enron.com
cc: danny.d.rudloff@us.arthurandersen.com, 
frederick.g.rhodes@us.arthurandersen.com, 
matthew.l.thomas@us.arthurandersen.com 
Subject: Re: Coogler's Response




Brenda,

Matthew reviewed Coogler's responses and brings up the following questions.

We can do one-of-two things at this point.  We can either add the Reliant
responses to our audit report as "Auditee Responses", or we can have Enron
provide answers and possibly have us do some additional work.  The additional
work is dependent on Enron's answers to the questions.

Please advise.

Rick


To:   Frederick G. Rhodes, Richard J. Feldmann
cc:
Date: 09/18/2000 04:29 PM
From: Matthew L. Thomas, Houston , (713) 237-2629
Subject:  Coogler's Response

Rick and Fred:

I hope things are going well up in Salt Lake City.  I have gone through all of
Bruce's numbers today.  I have come up with a few questions that Enron needs 
to
answer.

1. Reliant claims that in East Texas the cut off for complementary customers 
is
30 Mcf/ day,  does Enron agree?
2. Reliant claims that the "New Technology Contract" overrides  or is an
exception to the Enfolio Master Agreement.  Does Enron agree that this is a
legitimate exception?
3. Reliant claims that all off the industrial mis-classified gas in the 
Houston
Division is under "special contracts" with special pricing, and even though 
they
are using less than 100 Mcf /day they receive a lower price of 2.71 per MMBTU.
Does Enron agree that this is a legitimate exception?
4. In the Houston Division it appears that Louisiana Pacific only uses gas for
heating in the winter, about three months out of the year.  Is there total
divided by three to find their average usage, or is it divided by 12?  Bruce
divided by three, we divided by twelve.  They are a customer all year, and are
not a new customer, or a customer that has left.
5. Does Enron want to give Reliant leeway on the 100 Mcf rule?  What will the
actual cut off be?  Bruce backs out 137,000 Mcf that was close, but not quite
100 Mcf.

These are the issues that I see.  The first three questions are things that
Enron may have to ask Bracewell and Patterson.  We were not notified of any of
the special contracts that he mentions.  Let me know what I need to do.  If 
you
guys have questions for me, it might be easier if we all got on the phone and
spoke about it.  Thanks,

Matthew








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