Update on Wholesale JV Auction

I'd like to send the following from Greg Whalley to North American employees. It is a quick update on the timing of the North American wholesale gas and power business auction. Given the number of media reports out there, groups of employees, particularly those in the Wholesale business, are asking for some info. Before everybody begins to leave for the holidays, we'd like for them to know what's going on with this process.

Hopefully, by sending this out from Greg, we can avoid the longer process of receiving and responding to input from the broader group of legal advisors. I have included everybody, though, and if anybody takes exception to my view, please send me your comments. Otherwise, I'll ask Brian Rosen to approve the following for accuracy. Once I receive his approval, I'll plan to send this out:

There have been several media reports regarding the status of our efforts to preserve the value of our North American natural gas and power business. As we've said, we'd like to form a joint venture with an entity with a strong credit rating so that our trading business can continue to deliver value to our company and our creditors. We'd like to update you on the timing of the process as we currently see it.

This Wednesday, December 19th, we will ask the Bankruptcy Court to approve bid procedures for potential suitors to follow as they proceed to make offers for a joint venture. If we are successful, we will ask the judge to set a bid deadline of January 7th, 2002. Additionally, we will continue to try to close a deal prior to January 7th, which would be subject to competitive bids from other counterparties. The number of counterparties interested in a deal continues to grow. We plan to ask the court to approve the highest and best offer on January 11th, 2002.

Between now and the bid deadline, we will continue to work with all interested parties and assist them in their respective due diligence processes so that they can make the most informed bids. Many of our colleagues will be working very hard over the holidays to move this process along and help ensure that our efforts to come out of bankruptcy are successful. Please give them your full cooperation and support.