Carol,

Per our conversation earlier regarding American Central Energy, LLC, I spoke 
to Dan Fry at the counterparty and feel the following steps can be taken with 
the current ISDA.  I feel it is not necessary to terminate the contract at 
this point, as they are in negotiations to receive another parent guaranty 
from a new majority owner.  I do feel it necessary though if a letter can be 
drafted stating that the cancellation of their guaranty is an Event of 
Default thus reducing their threshold to zero enabling Enron to margin any 
exposure that exists.  Also, as we discussed, the letter should explain that 
the guaranty is still in effect up until 5 days after notice of cancellation.

Please let me know any comments you may have.

Thank you,

Russell