---------------------- Forwarded by Don Black/HOU/EES on 05/31/2001 02:32 PM ---------------------------
   
	Enron Energy Services  From:  Scott Mills                           05/30/2001 10:00 PM	
		


To:	Chris Leonard/HOU/EES@EES, Jeffrey Jackson/HOU/EES@EES, Warren Prihoda/HOU/EES@EES, Neil Hong/HOU/EES@EES, Kenneth Lee/HOU/EES@EES, Wade Stubblefield/HOU/EES@EES, Mary Lynne Ruffer/HOU/EES@EES, Angela Smith/HOU/EES@EES
cc:	Don Black/HOU/EES@EES, Rogers Herndon/Enron@EnronXGate 
Subject:	Power Mid to Offer Reserve (effective 05.30.01)

Starting immediately, the value between mid and offer on all power deals done between EES and the third party will be held in reserve.  A report will be generated by counterparty/deal that will support the value of the reserve (this report will be similar in format to the origination report).  An assessment as to the need for the reserve beyond the 2nd quarter will be made in the next couple of weeks.  In the meantime, the only value that will flow through the DPR will be the MTM value of deals done with EPMI and the curve shift associated with the power positions.  Any questions, please do not hesitate to call.

SRM (x33548)