Mr. Wise,
Below are responses to your comments on the proposed Confidentiality Agreement.

Stephanie Panus
Senior Legal Specialist
Enron Wholesale Services
1400 Smith Street, EB3803C
Houston, Texas  77002
ph:  713.345.3249
fax:  713.646.3490
email:  stephanie.panus@enron.com

 -----Original Message-----
From: 	Tim Wise <TWise@gasbiz.com>@ENRON  
Sent:	Wednesday, October 17, 2001 1:11 PM
To:	Panus, Stephanie
Cc:	Lebrocq, Wendi
Subject:	RE: Confidentiality Agreement with Enron

Dear Ms. Panus,

I have reviewed the Confidentiality Agreement which you supplied with our
in-house legal staff and we have highlighted proposed changes in blue with
reference to the following issues:

1)  Description of "Representative" was too broad.  We feel accessing
information by employees and officers of Enron's Treasury Department should
be satisfactory for purposes of reviewing the credit.

[Panus, Stephanie]  While the definition of "Representative" is broad, it is limited to those persons who will evaluate, negotiate, and finalize the Transaction.  There may be persons working on this who are from different departments/affiliates.

2)  We do not see a reason why the information cannot remain confidential
indefinitely.
[Panus, Stephanie]  
We can agree to a two year term.  Pursuant to the terms of the Agreement, you can request the return of all documents submitted to Enron.  The information to be submitted does not retain its value indefinitely.

3)  Since California Energy Exchange Corporation is the Disclosing Party,
the jurisdiction governing this agreement should be California.

[Panus, Stephanie]  We cannot agree to California law, but can agree to New York law.

4)  It is our experience that an Arbitration requirement is not typical for
a Confidentiality Agreement.

[Panus, Stephanie]  We use arbitration for settling all issues other than for injunctive relief.

Let me know if the proposed changes are acceptable.  If you could fax back a
signed copy today, I can send financials to you via Federal Express for
delivery to Wendi Lebrocq by tomorrow.

Thanks and best regards,

Timothy O. Wise, VP Finance
California Energy Exchange Corporation
2981 Gold Canal Drive
Rancho Cordova, CA  95670
Direct	(916) 463-0304
Main		(916) 859-4710
Fax		(916) 859-4747
E-Mail	Twise@gasbiz.com


-----Original Message-----
From: Panus, Stephanie [mailto:Stephanie.Panus@ENRON.com]
Sent: Wednesday, October 17, 2001 7:13 AM
To: Twise@gasbiz.com
Cc: Lebrocq, Wendi
Subject: Confidentiality Agreement with Enron

Mr. Wise,
Attached for your review is the form of Confidentiality Agreement which
Enron prefers.  Such Agreement provides more protection for the
Counterparty and limits the Agreement to a term of one year.

If such Agreement meets with your approval, we will prepare execution
copies.  If you have any questions or comments, please contact me via
email or at the number below.

 <<031CA(calif en xchg).doc>>

Stephanie Panus
Senior Legal Specialist
Enron Wholesale Services
1400 Smith Street, EB3803C
Houston, Texas  77002
ph:  713.345.3249
fax:  713.646.3490
email:  stephanie.panus@enron.com



**********************************************************************
This e-mail is the property of Enron Corp. and/or its relevant affiliate and
may contain confidential and privileged material for the sole use of the
intended recipient (s). Any review, use, distribution or disclosure by
others is strictly prohibited. If you are not the intended recipient (or
authorized to receive for the recipient), please contact the sender or reply
to Enron Corp. at enron.messaging.administration@enron.com and delete all
copies of the message. This e-mail (and any attachments hereto) are not
intended to be an offer (or an acceptance) and do not create or evidence a
binding and enforceable contract between Enron Corp. (or any of its
affiliates) and the intended recipient or any other party, and may not be
relied on by anyone as the basis of a contract by estoppel or otherwise.
Thank you.
**********************************************************************


 - edited 031CA(calif en xchg).doc << File: edited 031CA(calif en xchg).doc >>