Richard:

My view is that TVA will likely use the FERC ruling to attempt to
retroactively bless their treatment of the Enron control areas last summer.
Although my understanding is that Entergy used a different method than that
employed by TVA to restrict the use of a no-load control area, TVA will
argue that the result is the same and that NERC has, thus, approved
differing treatment for load and no-load control areas.  The FERC ruling
will likely create a greater sense of unease on the part of the judge to
enforce the rules of NERC, a voluntary association, in the face of what
appears at first blush to be a contrary position taken by FERC, a federal
agency.

Bob

P.S. T.O. Helton has suggested that he sit in on the upcoming depositions of
Richard Shen and the 30(b)(6) rep. on TVA's alleged damages to get a better
feel for the case.  Please let me know your thoughts on this.

-----Original Message-----
From: Richard B Sanders [mailto:Richard.B.Sanders@enron.com]
Sent: Wednesday, August 16, 2000 8:03 AM
To: Christi L Nicolay; rmadden@Gibbs-bruns.com
Cc: Donna Fulton; Elizabeth Sager; Joe Hartsoe; Sarah Novosel
Subject: Re: Entergy s&s




If we appeal and win it will be helpful to our claim against TVA  related to
the
control area dispute. . While we have not heard it yet, TVA will argue that
although TVA did not use the same rational as Entergy to deny parking, Enron
has
no damages because of the  FERC ruling. What are our chances of winning?

 By copy of this e-mail I will ask our outside counsel, Bob Madden, to
comment
on how he thinks the FERC ruling can and will be used against us.


|--------+----------------------->
|        |          Christi L    |
|        |          Nicolay      |
|        |                       |
|        |          08/10/2000   |
|        |          04:27 PM     |
|        |                       |
|--------+----------------------->

>---------------------------------------------------------------------------
-|
  |
|
  |       To:     Joe Hartsoe/Corp/Enron@Enron, Sarah
Novosel/Corp/Enron@Enron,|
  |       Donna Fulton/Corp/Enron@ENRON, Elizabeth Sager/HOU/ECT@ECT,
Richard B|
  |       Sanders/HOU/ECT@ECT
|
  |       cc:
|
  |       Subject:     Entergy s&s
|

>---------------------------------------------------------------------------
-|



Do you think we should appeal Entergy source and sink FERC order?  While I
think
it is a poorly written order that shows a lack of understanding of the
issue,
I'm not sure that we can win on appeal or that it is worth appealing, since
we
would not recover our damages against ComEd and TVA for this summer while
the
order is in effect.  It would be helpful next summer to be able to park in
ComEd
and TVA, since the RTOs will not be running in all likelihood.

Elizabeth/Richard -- Is there a reason in the TVA litigation  that we need
to
appeal the decision?

Otherwise, Joe, should we get Dan W. to draft a memo on chances of success
or
other reasons for filing an appeal?