----- Forwarded by Stanley K Horton/HOU/Dynegy on 05/28/02 02:49 PM -----
                                                                                                                                                    
                      RJ EnergyGroup                                                                                                                
                      <RJEnergygroup@ec        To:       "'RJ Customer'" <rj@rjf.com>                                                               
                      m.rjf.com>               cc:                                                                                                  
                                               Subject:  We Don`t Buy the Falling Natural Gas Demand Story                                          
                      05/28/02 10:20 AM                                                                                                             
                                                                                                                                                    
                                                                                                                                                    






 <<iEne052802b_16201.pdf>>

Raymond James Energy Stat of the Week, published 5/28/2002.

Over the past several weeks, numerous analysts' reports have suggested
there has been a massive destruction of gas demand, as gas prices have
recently moved above $3.50/mcf. We believe the foundation for many of these
reports is both poor analytical methodology and bad data. To conclude that
weather-adjusted natural gas demand has fallen by 5 to 10 bcf per day
implies a demand deterioration level similar to what we saw in early 2001,
when prices soared to near $10 per mcf. Unlike then, today's fuel-switching
incentives still favor natural gas. Secondly, there is little economic
incentive for today's industrial consumers of natural gas to shut down
plants in an improving economic environment. The current economy is very
different than the deteriorating economic environment in early 2001.


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John Freeman    James Mullins           Grant Daunheimer

                        Matt Meloy                      Angela Guo





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Jon Kyle Cartwright

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727-573-8366

Investment Banking Team

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Howard House    Allen Lassiter          Naveen Dargan

Steve Grant             Mark Huhndorff          Ed Bereznicki

Ron Montalbano  Scott McNeil            Jason Holtby

Michael Ames    Wes Martin                      David McGorman

John Sterling   Kevin Palma                     Igor Falaleyev

Gig Hordes                                              Caroline Troy

Vikram Singh                                    Kevin Smith



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(See attached file: iEne052802b_16201.pdf)