Guys, keep the pressure on these guys; but, I think Adam is in a corner and 
does not have a lot of flexibility.

Regards
Delainey
---------------------- Forwarded by David W Delainey/HOU/ECT on 08/25/2000 
08:59 AM ---------------------------


Adam Umanoff@ENRON
08/22/2000 06:59 PM
To: David W Delainey/HOU/ECT@ECT
cc:  
Subject: Re: Indian Mesa  

Thanks for the message.  I appreciate your responses to my August 8 memo and 
agree that the deal you are currently proposing looks alot closer to the deal 
we had been discussing with TXU.  As far as negotiating approach is 
concerned, my intention was not to retrade our deal, but frankly your team's 
approach up until your recent response certainly suggested that you were.  As 
we considered our options, we used the time to scrub our economics and as I 
think Jim Noles told you, have discovered that our economics have 
deteriorated (significantly).  Not your fault/problem, but a real issue for 
me.  I have my people looking at the deal again to see if we can offer some 
creative suggestions to improve the deal for us (without killing you).  At 
the end of the day, I want to do this deal; but I can't do an uneconomic 
deal. By the way, the other parties who signed up with TXU all did so in the 
$26-27.5 range (energy and RECs), suggesting that our deal for you is way 
under market.  I am committed to pushing hard to get this deal done!  Let's 
talk later this week once my team hooks up with yours to see if we have a way 
forward.  Adam



David W Delainey@ECT
08/21/2000 09:49 AM
To: Adam Umanoff/EWC/Enron@ENRON
cc: Mark Frevert/NA/Enron@Enron, James L 
Noles/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT 
Subject: Indian Mesa

Adam, I believe that we have formally responded to all your issues as per 
your memo to me of August 8, 2000. In all or almost all cases, we have 
accepted your position.  The agreement should look and behave very closely to 
what you would have signed with the competing utility. In addition, ENA is 
paying a higher price, sharing credits and have voluntarily increased the 
term to twelve years from ten.

I do not understand what is holding up completing this transaction other than 
a complete re-trade on the original transaction. I hope this is not the 
case.  The ENA team worked hard to facilitate this transaction for Enron 
Wind.  In fact, we were originally solicited by Enron Wind to help build the 
merchant wind market and we had to coax Enron Wind to do this transaction 
with ENA versus TXU.

I look forward to finding a solution to this current impasse.

Regards
Delainey