Re: Tech Services

Louise,

I'm ok with that arrangement, without the dotted line reporting relationship between the members of the ENA Tech Services Group and the Wholesale Group. Otherwise, my role is somewhat superfluous and cloudy at best. We can still achieve the same result by Brian and I working together.

Brian

Louise Kitchen
03/15/2001 09:55 AM
To: Brian Redmond/HOU/ECT@ECT
cc:
Subject: Re: Tech Services

But isn't the point that its only a dotted line just like Joe Deffner has a dotted line to Andy Fastow.
I can't see them as getting worried over a dotted line. I notice the one alternative you have not mentioned is leaving it as it is today with it all reporting to you and you managing any relationship with Brian - what do you think?

Louise

Brian Redmond
03/14/2001 09:16 PM
To: Louise Kitchen/HOU/ECT@ECT
cc:

Subject: Tech Services

Louise,

I had a brief chat with Mark regarding his plans for Enron Wholesale Tech Services. As I understand him, he sees the ENA Tech Services group reporting into Brian Stanley on a dotted line basis in order to keep these groups coordinated.

You may want to first discuss/sell this reporting relationship with the origination units who will fear another EE&CC. Further, we will have to sell this organizational structure to the members of the ENA Tech Services Group. I'm concerned that we may loose some of our top engineers who will resist being organizationally tied to EAS.

Two possible alternative arrangements:

1. The ENA Tech Services group remains as ENA's development engineering organization. It should be regionalized and report (on a solid line) to the origination groups. This will keep the ENA Tech Services group lean and mean and somewhat independent from the Wholesale Tech Services Group:

a) Bob Virgo/Mike Coleman would report into Presto/Durhan,
b) Wayne Mayes and his team would report into Calger.
c) Mike Coleman would report into Max and would help support ESA,
d) Nick Cocavessis would support the gas and liquids businesses
e) Ron Blackham would support Enron South America

Brian Stanley's group would be seen as a technical resource base to draw from, and as a "friendly" check on the technical assumptions that are used in the pro formas. Brian Stanley's group would provide a review of Enron America's DASH's so as to keep the ENA Tech Services group from becoming too aggressive in its assumptions (whereas Brian's group will tend to be over-conservative in its role as risk manager).

2. Another alternative is to create a broader role for the commercial investment/asset management group that you, Dick and I spoke about. This unit would combine the skill sets of the Restructuring Group and the Tech Services Group. It would have the technical responsibility for ENA transactions throughout their life cycle and would have commercial responsibility for investments and assets that no longer have strategic or ongoing financial value to the origination groups. Specifically:

a) investments and assets that were not projected to earn their cost of capital
b) investments and assets that had little or no strategic value
c) troubled assets/positions/investment that required significant time/attention beyond what the origination groups were willing to spend

As with suggestion (1.) above, this group would use Brian Stanley's organization as a resource base to draw from on an as needed basis, however, there would not be a formal reporting relationship.

Lets discuss,
Brian

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