I had a long conversation with Sylvia Dooley this afternoon.  She contacted me about finalizing the Con Ed ISDA Master Agreement and the "related" Consolidated Edison Energy (same lawyer, different commercial) master.  Sylvia is preparing a new version.

We have a lot of open issues, most appearing on the open issue list that I just circulated to you both.  However, Sylvia and I identified some significant credit issues which we should address now.

Ed:  In addition to finalizing the credit matrix, the big ticket issues include the following items and (according to Sylvia) you should probably call Triche Douglas right away to resolve as she is being moved to another project and may not be available for ISDA negotiations much longer:

(1)	credit event upon merger:  Con Ed coming back with newer definition of "materially weaker". Con Ed rejects ENA's proposal

(2)	Con Ed is still rejecting our setoff language.  I will send our newer language but the substance is the same as before.

(3)	will not agree to our transfer language (i.e., always want to consent for purposes of transfer and no carve out for guaranteed affiliates)

(4)	want an extra day for delivering L/C's

(5)	issue about notification time for requesting collateral.  Con Ed wants 1 pm NY time; we countered with 11 am NY time.

(6)	are insisting that parties obtain consent for substitution of collateral

(7)	major issue with respect to holding/using collateral.  Con Ed will propose that with respect to ENA, only Enron Corp. can hold collateral and Enron Corp.'s eligibility to hold collateral will be tied to credit rating of BBB

(8)	major issue defining MAC: no one has come up with a MAC

Given my conversation of this afternoon, please let me know how you would like to proceed.  Rob, will you be handling both Con Ed entities? 

Sara Shackleton
Enron Wholesale Services
1400 Smith Street, EB3801a
Houston, TX  77002
Ph:  (713) 853-5620
Fax: (713) 646-3490