I won't be able to be on the 11:30 call this morning.  I have given Elizabeth 
a copy of the 'omnibus' document we probably used if the put options sold to 
Puget Sound were derivatives and described the arguments we could make that 
the imposition of the proposed price cap would be a Market Disruption Event.  
If it is a Market Disruption Event the most likely outcome under the contract 
(since it will last more than 3 days and we presumably will not be able to 
negotiate an agreed price) is that "the Floating Price shall be determined in 
good faith by ENA, by taking the average of two or more dealer quotes."  I'm 
not sure what dealer quotes would get us under these circumstances.  Can 
dealers quote prices in excess of the price cap?



	Richard B Sanders
	10/29/2000 09:01 AM
		
		 To: Christian Yoder/HOU/ECT@ECT
		 cc: Elizabeth Sager/HOU/ECT@ECT, Mark E Haedicke/HOU/ECT@ECT, Mark 
Taylor/HOU/ECT@ECT
		 Subject: Re: Puget Sound requests NW price caps

I have set up a conference call at 11:30 on Monday to discuss.



	Christian Yoder
	10/27/2000 12:15 PM
		 
		 To: Elizabeth Sager/HOU/ECT@ECT, Mark Taylor/HOU/ECT@ECT, Richard B 
Sanders/HOU/ECT@ECT, Mark E Haedicke/HOU/ECT@ECT
		 cc: 
		 Subject: Puget Sound requests NW price caps

In the days immediately before the application for a price cap, Puget came to 
us and asked us to enter into several put options.  We did so. I am advised 
by the traders that if this price cap were to actually be in effect,  our put 
option transactions would not make sense for us economically and we would 
never have entered into them had we known of their intention to make this 
filing.   I am under some pressure  to explain two things:  (i) whether the 
fact that they knew they were going to file for the cap when they did the 
options is some kind of fraud, and (ii) whether the WSPP Agreement or our 
ISDA swap agreements have any clauses in them to address this kind of 
thing,ie. is this some kind of "illegality" issue?  I am working on the 
second issue and have discussed it with Mark Taylor, but on the first issue, 
I need advice from Richard and anyone else who can help.----cgy 
---------------------- Forwarded by Christian Yoder/HOU/ECT on 10/27/2000 
09:59 AM ---------------------------


Mary Hain
10/27/2000 09:50 AM
To: James D Steffes/NA/Enron@Enron, Marcie Milner, Joe Hartsoe@Enron, Sarah 
Novosel/Corp/Enron@ENRON, Richard Sanders, Christian Yoder/HOU/ECT@ECT, 
Portland West Desk
cc:  
Subject: Puget Sound requests NW price caps

Puget Sound has filed a complaint against all jurisdictional sellers of 
wholesale energy and/or capacity in the Pacific Northwest, including parties 
to WSPP agreement.  Puget Sound requests FERC to impose price cap on 
wholesale sales of energy and capacity in the Pacific Northwest equal to the 
lowest price cap "established, ordered, or permitted by the Commission for 
wholesale purchases by the Cal ISO or Cal PX . . . ."  Puget requests an 
effective date of December 25,2000.