All fixed priced deals (esp. Calpine) have their risk assigned to the Price 
Book.  Dutch Quigley confirmed that these deals were more than likely hedged 
(although it is difficult to hedge 20 year deals since we are one of the few 
playing out that far).  If we are under the assumption that we will be able 
to transfer all hedges along with the deal(s), then these deals are not 
underwater.  However, there will be some costs associated with transferring 
the hedges.  When I get a better idea of these costs I will relay them to 
you. 

Dave


   
	Enron North America Corp.
	
	From:  Brenda F Herod                           08/25/2000 06:26 PM
	

To: Patrick Wade/HOU/ECT@ECT, Thomas A Martin/HOU/ECT@ECT, Edward D 
Gottlob/HOU/ECT@ECT, Jim Schwieger/HOU/ECT@ECT, Brian Redmond/HOU/ECT@ECT, 
Jim Coffey/HOU/ECT@ECT, Wes Colwell/HOU/ECT@ECT, Steve Jackson/HOU/ECT@ECT, 
David Baumbach/HOU/ECT@ECT
cc: Sally Beck/HOU/ECT@ECT, Yvette G Connevey/Corp/Enron@ENRON 
Subject: Project Triple Lutz

To date, my primary duties have been to oversee the internal valuation of the 
contracts, and their unwind costs in our Risk books.  I have also been 
involved with the Entex contract valuation.  Dave Baumbach has been the real 
key to providing the data, and has all of the information.  Steve Jackson is 
talking with Ed McMichael of Structuring on Monday to get some additional 
eyes and resources looking at this also.  I feel we have done a thorough job, 
but we do need everyone thinking of "what if's."  Our risk books are complex, 
with many hand-offs internally.  Obviously our goal is to ensure that all of 
the stones have been turned, and there are no surprises at the end of the 
day.  I think Structuring will really be helpful in this arena.  After our 
meeting yesterday, I believe everyone is much more comfortable in our 
approach.  There were a couple of things that Dave was going to follow-up on 
(Fixed-price deals, especially Calpine).

FYI:  I will be out of town on another project all of the week of 8/28 - 9/1, 
and Tuesday, 9/5 and Wednesday, 9/6.  I have made arrangements to ensure that 
I am in Houston on Thursday, 9/7 and Friday, 9/8 for the first visit to the 
Triple Lutz data room.  

In my absence next week, I want to reiterate to each of you that I am 
available, and will have the Triple Lutz data with me.  If any issues come up 
that you feel I can be helpful, please contact yvette Connevey @ 
713-853-5953, and she will get in touch with me.  Once again, DO NOT HESITATE 
TO CALL ME!!!  I do not want anything falling through the cracks!