----- Forwarded by Jeff Dasovich/NA/Enron on 06/26/2001 06:18 PM -----

Alan Comnes/ENRON@enronXgate
06/26/2001 12:31 PM

To: Ban Sharma/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Jeff
Dasovich/NA/Enron@Enron, Michael Tribolet/ENRON@enronXgate, Tim
Belden/ENRON@enronXgate, Jeff Andrews/ENRON@enronXgate, Jennifer
Thome/NA/Enron@Enron, John Shelk/NA/Enron@Enron
cc:
Subject:

Here are the latest stranded cost numbers.

This analysis is based on internal curves. Please do not release without
approval from Belden or S. Kean. We will try to redo the analysis using
public forward curve numbers but in the mean time ...

The biggest refinement is that I made an adjustment for the fact that many
contracts are gas indexed and their price falls. Both gas and electricity
have fallen since DWR released their numbers in late May. I was able to
replicate the total contract cost of $41 billion, which gives me some
confidence in the approximations I have made.

The bottom line numbers are out at columns AB to AF

Executed only, undiscounted and discounted ($million)
8,098 6,456
Executed and Agreement In Principal, undiscounted and discounted ($million)
13,840 10,639

In otherwords, the $20 billion number I quoted earlier is down to $13.8
billion due to the adjustment for gas costs.

Comments welcome.