Sara -

I spoke with Yair about your suggestion to have a "unilateral" approach to
include Affiliates for yourselves but not for us since we are restricted by
PUHCA (as explained by Anthony Wilson, our in house regulatory attorney) and
he is inclined to not agree to your request (our approach is either if
applied to both of us or neither of us).

Let me know if you need to discuss this further - in which case we will get
on a call (Yair, you and myself) to discuss.

Regards,
Michelle

-----Original Message-----
From: Sternberg, Michelle
Sent: Tuesday, October 16, 2001 3:18 PM
To: 'Sara.Shackleton@enron.com'
Cc: Yaish, Yair
Subject: RE: ENRON/ALLEGHENY ISDA


Sara -

I have spoken with our in-house regulatory specialist and she has informed
me that we cannot agree to include our regulated or non-regulated Affiliates
in Set Off under the Public Utility Holding Company Act without getting
approval from the SEC.

Please advise if we can proceed on the ISDA with carving out Affiliates in
Set Off, as per our original request.

Regards,
Michelle

Allegheny Energy Global Markets
Office of General Counsel
909 Third Avenue, 32nd Floor
New York, New York 10022
(T) 212-224-8718
(F) 212-224-8446/8711



-----Original Message-----
From: Sternberg, Michelle
Sent: Friday, October 12, 2001 3:35 PM
To: 'Sara.Shackleton@enron.com'
Cc: Yaish, Yair
Subject: RE: ENRON/ALLEGHENY ISDA


Sara -

I am checking internally if we can agree to the below.  I will get back to
you in the beginning of next week.

Regards,
Michelle

Allegheny Energy Global Markets
Office of General Counsel
909 Third Avenue, 32nd Floor
New York, New York 10022
(T) 212-224-8718
(F) 212-224-8446/8711

-----Original Message-----
From: Sara.Shackleton@enron.com [mailto:Sara.Shackleton@enron.com]
Sent: Tuesday, October 09, 2001 7:38 PM
To: MSternberg@aeglobalmarkets.com
Cc: Marie.Heard@enron.com
Subject: RE: ENRON/ALLEGHENY ISDA


Michelle:

With respect to your setoff request, we cannot agree to eliminate setoff
for your non-regulated affiliates.  Perhaps you could provide us with the
regulated affiliate(s) for a carve out.  I look forward to hearing from
you.  Regards.

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


    -----Original Message-----
   From:   "Sternberg, Michelle" <MSternberg@aeglobalmarkets.com>@ENRON

[mailto:IMCEANOTES-+22Sternberg+2C+20Michelle+22+20+3CMSternberg+40aeglobalm
arkets+2Ecom+3E+40ENRON@ENRON.com]


   Sent:   Wednesday, September 26, 2001 11:14 AM
   To:     Shackleton, Sara
   Cc:     Heard, Marie
   Subject:  ENRON/ALLEGHENY ISDA

   Sara -

   As per Marie's instructions, please find attached a blackline
   incorporating
   the changes that will be required to be made in the final form of ISDA
   (modifications to the Notice and Set-Off provisions).  The attached is
   the
   last version that I have but if the changes are acceptable, I would
   suggest
   that you take the changes and incorporate it into your form of agreement
   since it is the final version.

    <<ENRON ISDA.REVISED 9.26.01.doc>>

   Once reviewed, please let me know if the changes are acceptable - at
   which
   point you can forward to me a revised Schedule (without the signature
   page)
   via e-mail and I can have the agreement countersigned and replace the
   Schedule with your revised Schedule.

   Thank you for your patience.

   Regards,
   Michelle



    - ENRON ISDA.REVISED 9.26.01.doc << File: ENRON ISDA.REVISED
   9.26.01.doc >>



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