Peter:

This is a tough battle.  It may be worse because your clients are either the same ones or geographically very close.  I would try to address it by pointing out the limitations of the simplier forms and as a fallback emphasize the increased risk (legal and otherwise) when using the shorter forms.

Mark

 -----Original Message-----
From: 	Keohane, Peter  
Sent:	Monday, August 20, 2001 12:22 PM
To:	Haedicke, Mark E.; Elbertson, Janette
Subject:	Canadian Retail and Wholeale Issues

Mark, on the "retail" front, I did not want to get into all of the detail around what is happening in Canadian Retail in the Legal Committee call (did not realize Vicki et al. are now joining our calls), but I am meeting with Vicki later today (4:00 pm central) to review Canadian Retail.  Do you want to join?  The major "retail" issue is the commercial pace to transact outstripping the pace at which we can catch up legally to certain aspects of the business - not so much for transacting between us and the counterparties - but more in terms of understanding and mitigating "distribution" risks with and behind the LDC under applicable tariffs, T&Cs, policies and procedures.

On the related but "wholesale" front, I would also like to talk to you for 5-10 mins. to get your thoughts on transacting within the cross-over between "retail" and "wholesale".  More precisely, wholesale traders/originators have more and more pressure to transact at or behind the LDC rather than around a wholesale "hub" - particularly when it comes to power or Eastern gas.  This introduces "retail" type issues into the wholesale transacting process, with implications for our transacting/forms procedures.  Since the distinction here between retail and wholesale has developed around commercial "turf", and not the nature of the counterparty, the wholesale traders/originators are looking more and more at transactions that are "retail" in nature.  The result is the wholesale traders/originators pushing to use the "simpler" or less rigorous contracting procedures and forms developed for our "retail" market for these "wholesale/retail" deals, which I am not sure is always appropriate, but for which I am having difficulty drawing the line.  I have an idea, which is to create wholesale products under our Master Agreements which address "retail" type issues.  The problem is where to draw the line and the resistance to what is perceived by wholesale traders/originators as a more rigorous standard, as compared to both internal Enron Direct "competitiors" and external competition.

Peter.  

____________________________________
Peter C.M. Keohane
Vice President, Assistant General Counsel
and Secretary
Enron Canada Corp.
Phone:	(403) 974-6923
Fax:	(403) 974-6707
E-mail:	peter.keohane@enron.com