Contingent Call Options for Power

Given Enron's focus on what is core vs non-core, David Hoog and I would like to spend some time with you early next week (Monday or Tuesday) to go over the unit contingent call option product (CCO) and why we believe it should be considered a core activity for Enron's power desk.

The attached summary briefly descibes this past year's activity, what has changed in the market place, and our strategy for 2002. Our experience managing the CCO portfolio of trades this past summer confirmed we can successfully manage the price risk through the purchase of power options and swaps. The support and cooperation of the power traders and originators was also critical to our success. In addition, excess reinsurance to cover the P100 risk was available, but not as economic as using derivative hedges so we declined the cover. Excess reinsurance is a viable risk management tool and one we are currently putting in place for the 2002 season.

Let me know if meeting makes sense to you and I'll book a time for Monday or Tuesday. If those dates don't work, we'll work around your schedule.

Thanks.
Per

-----Original Message-----
From: Hoog, David
Sent: Monday, November 19, 2001 10:57 PM
To: Shankman, Jeffrey A.; Mcconnell, Mike
Cc: Sekse, Per
Subject:

the attached file is a summary of what i wanted to go over with you as a review of this year and our forthcoming strategy. it has been modified slightly for the current situation. let me know when you have time to go over it. it shouldnt take long.