Elizabeth and Mark Taylor of Houston derivitives fame, not the other guy 
whose name shows up on the directory,  whomever that may be, 

Here is documentation that you need to look at in preparation for the call I 
am trying to organize with both of you. ----cgy



 -----Original Message-----
From:  Choi, Paul  
Sent: Thursday, May 24, 2001 11:03 AM
To: Yoder, Christian
Subject: FW: pacificorp



 -----Original Message-----
From:  Hoog, David  
Sent: Thursday, May 17, 2001 4:22 PM
To: Tim Belden/HOU/ECT@ENRON; Choi, Paul
Subject: pacificorp

this is the term sheet that was produced by pacificorp for the outage 
protection.  it looks like it was developed with input from aquila and swiss 
re.  swiss re is generally not interested in doing anything in the est now, 
so that could be the reason behind their ridiculous bid of $200m (which is 
still just heresay).

there is some price, eg $100m, at which this risk is manageable through a 
combination of advance hedging and dynamic hedging as their system 
experiences outages.  we have 8 days notice before having to deliver, so the 
weather-related spike risk is not that severe.

we are doing stochastic modeling of the risk now, and we expect the "fair 
value" to be less than $50m.

this is a 3-year deal, and one of the benefits is that they may pay the 
premium up front and expense it by year.

this is a complex structure, so let me know if you have questions.