Thanks Chris - I assume you are speaking about credit risk on the thirty day 
deal when you refer to the $2M exposure on $100 - has Tim spoken to John 
about this?  I am supportive of this proposal and approach.  Like our 
discussion, we have to find a way to be supportive to the re-development of 
this market without creating un-acceptable credit or market losses.  We also 
have to support Lay's efforts in California.

Regards
Delainey
---------------------- Forwarded by David W Delainey/HOU/ECT on 02/19/2001 
10:50 AM ---------------------------


Christopher F Calger
02/16/2001 06:11 PM
To: David W Delainey/HOU/ECT@ECT
cc:  
Subject: Freeman and CDWR

Dave,

I just spoke with Freeman to let him know that we can provide him a letter 
proposal which I can send out Monday.  In general, we will offer 50MW NP-15 
Peak from February 22 - March 31 at a fixed price (currently $265) with 
payment due every 7 days.  This would be documented under the form of EEI 
that they have agreed to and is subject to (i) payment of outstanding amounts 
due Enron; (ii) execution of EEI and confirm; (iii) confirmation that they 
will pay the amounts due; (iv) good faith obligation to put together 
creidtworthy structure; (v) good faith look at term deal which can be 
back-dated to blend with this current deal, Pastoria and Demand Management.  

It took some time to nail down the settlement numbers on our side.  Legal 
spent some time with Freeman's attorney but got agreement on the EEI Form.  
Credit likes this a lot.    Tim will have Lavo wear the market exposure - 
$2MM if the market falls $100.  David Freeman said he would look at it Monday 
but it sounded good.  

I will pull it together and copy you over the weekend.

Chris