Tom , I appreciate the e-mail - sorry for the delay in response.

I am on-side with all your points.  On the New Albany retrofit, I want to 
ensure that I am not replacing one patent problem with another so a clear 
"title" up front on the new equipment will be important.  However, I will be 
interested in hearing your solution especially if it can further reduce NOX 
and increase our operating hours.

I share your interest in the FT-4 project hopefully we can take that to the 
next level.

Please stay in contact.

Regards
Delainey
---------------------- Forwarded by David W Delainey/HOU/ECT on 09/06/2000 
03:39 PM ---------------------------


"Tom K. Churbuck" <tchurbuck@powermfg.com> on 08/31/2000 10:21:54 AM
To: "'David.W.delainey@enron.com'" <David.W.delainey@enron.com>
cc:  
Subject: Houston Meeting


Dave,

Thank you for taking the time to discuss the issues and opportunities facing
our companies. I did not expect to have such an audience. I came seeking
business advice on the litigation and feel I accomplished a lot more. I
apologize for not contacting you directly, but I was unaware that you were
now responsible for all of the groups within ENA.   Congratulations !!!!!

Here is what I came away with:

Litigation
GE has proposed a settlement that includes a proposed press release
unacceptable to PSM. I have our attorneys working on drafting a response to
GE and pursing the possibility of eliminating the joint press release
altogether. If common ground cannot be reached we will pursue other legal
options.

Private Placement
The book has been released to Enron & Calpine. I understand your position
concerning participation and the question of the ongoing litigation. I am
very open to the additional warrant option. Mike Miller talked to me about
it after the meeting and we will discuss it next week.

New Albany Retrofit
I have asked my engineers to formulate a plan to upgrade the units at New
Albany with our latest 6 ppm liners and fuel nozzles. We are currently
manufacturing a full set for a 7EA machine. We haven't firmed up the test
dates but we need to seek approval by ENA & OEC to use one of the Doyle
machines. This is a significant leap in technology that many of our clients
are extremely interested in. We now have the only single digit dry low Nox
system that can be used on multiple machine types to include Westinghouse
501D5A, ABB 11 N1/N2, GE F6 / F7.

FT4 Mobile Unit
I understand from Mike Miller you want to slow the pace down on the first
ten units to "Learn out" the manufacturing and business process. This will
ease our pain level on schedule. My engineering staff is very excited with
this program because it involves aircraft engines and they can apply their
true skills. We just hired the program manager named George Kirsby. He is
currently in charge of the $4 billion Joint Strike Fighter engine design
program for Pratt Whitney / Boeing. I figure he should be able to manage the
mobile unit project. At some time in the near future I would like to arrange
a program presentation for you in Houston. I need to give Kirsby a few weeks
to get his arms around the project and will propose dates for you in the
future. We need to expedite the formation of the Joint Venture company as we
are already being approached with deals to place these units.

I really value your support and you can always count on our loyalty to
Enron.


Best Regards,


Tom Churbuck
President
Power Systems MFG., LLC
Tel:  561-347-2408 Ext 208
Fax: 561-347-2257
Cell: 561-213-5161
tchurbuck@powermfg.com
www.powermfg.com