Duke Situation

Greg,

ACTION - PLEASE CALL TODD REID AT DUKE

BACKGROUND:
Below is the situation with Duke and subs:
Exposure Line Cash L/C
Duke Energy Marketing LP / ECC ($43mm) $10mm $52.35mm $20.5mm
Duke Energy Trading & Marketing / ENA ($56mm) $5mm $61mm
Duke Energy Trading & Marketing / EPMI ($260mm) $20mm $171mm $100mm

The expiration of the letters of credit are 11/30/01. Duke believes that since these L/C's have less than 20 days to expiry their value should be zero and are asking for additional cash collateral. Our view of the contract is that these L/C's are good collateral until expiry and should be counted in our outgoing collateral.

The roll of the letter of credit has been delayed as Haedicke/Mintz get comfortable with the reps under the L/C facility.

Duke credit guys are saying that Todd Reid has not received a return call from you and this holding up a resolution.

Bill and Louise