Call me about the dynegy thing I have an idea.


 -----Original Message-----
From: 	Shively, Hunter S.  
Sent:	Thursday, May 24, 2001 11:09 AM
To:	Lavorato, John
Subject:	Fines and EOL


Fines:

     I know you have talked with Phillip but I wanted to give my two cents.  I think the fines are a great idea. We must be accountable for VAR.  However the fines do not allow the desks to push the envelope.  The desks need to stay a couple million under VAR to protect against volatility and factor changes.  We do not have the tools to predict our VAR with any strong degree of accuracy but we are penalized for going over a few hundred thousand dollars.  I propose a one day grace period of 10% to 12% over limit.  This would allow the desks to max their VAR and protect against unexpected changes.

EOL:

We continue to have trouble with brokers not working our EOL numbers.

We believe Dynegy has written a program to mirror our cash markets on their system. When we suspend, they suspend and as our markets move, so do theirs.