Kay, attached is the letter from NLR regarding our proposal.

Summary of the Cities of NLR and Benton, Arkansas deal:

  _____  


assist Cities with network transmission service agreements with Entergy
assist with initialization of OASIS, TSIN, and JTSIN transmission reservation accounts
telemetering load from NLR SCADA and Benton's meters to Enron control room
perform load forecasting
manage NLR's Murray Hydro facility to serve NLR load
deliver wholesale energy to match NLR and Benton loads inclusive of losses as an "into Entergy" product
deliver wholesale energy such that network transmission can be used to sink energy to NLR and Benton native loads
provide real time, day ahead, and term trading; scheduling and transmission reservations/services; volume management; settlements; and control room services
arrange for ancillary services related to native load inlcuding Entergy OATT Schedules 1 through 6
provide NLR and Benton with a fixed price for energy and ancillary services through the life of contract
provde NLR and Benton with option to extend agreemetn for 3 additional years.

NLR Issues with Enron Proposal: 
  _____  


Your price is greater than 15% from the best price offer.  A substantial improvement in price would be necessary to receive further consideration.
You have identified no resources inside of Entergy's control area.  If you can point to resources inside of Entergy's control area you may improve your position
You did not utilize dynamic scheduling for the scheduling of generation to match load.  You may improve your position by offering dynamic scheduling.
The Cities desire a fixed cost over the term of the contract.  You may improve your position by including any increases in the Cities' cost for Network Transmission Service over the term of the contract in your costs.
The Negotiation Committees are alarmed by the recent developments concerning Enron's losses and the downgrading of Enron's securities.  Significant financial assurance would be required before the Negotiating Committee's would further consider Enron. 

What We'd Like to Do With Dynegy:
  _____  

Provided we can win the project, we'd like to do the following:

name generation to satisfy point #2
use Dynegy base load generation assets to dynamically schedule the NLR and Benton loads
name Dynegy assets as network resources

Note that we have not talked with Dynegy about any of this and any deal would be subject to mutual agreement and negotiation.


Reagan C. Rorschach
Enron North America
1400 Smith Street
Houston, Texas 77002
713.345.3363


-----Original Message-----
From: Gertsch, Joe [ <mailto:JGertsch@nlrelectric.com>]
Sent: Monday, November 12, 2001 5:10 PM
To: Rorschach, Reagan
Subject: NLR & Benton Purchase Power RFP




Reagan:

Attached is the letter I promised regarding Enron's position relative to the
other proposals.

Joe Gertsch


 <<Enron  LTR.doc>>