Stewart:

Just wanted to chat quickly about the amendment we're sending to Merced.  The major changes are credit related:  raising our Threshold to $40million and their's to $8million and giving giving us a "regulatory out" for Merced's legal inability to collect rates to cover O&M.

Whenever we prepare an amendment, we usually add other document "upgrades" (i.e., our form changes).  We have made some important changes since 1999.  I just wanted to alert you to these so that we don't "surprise" your customer.

Give me a call if you have a chance.  Thanks.

Sara Shackleton
Enron Wholesale Services
1400 Smith Street, EB3801a
Houston, TX  77002
Ph:  (713) 853-5620
Fax: (713) 646-3490