---------------------- Forwarded by Kay Mann/Corp/Enron on 08/31/2000 08:22
AM ---------------------------


Laura Luce
08/30/2000 06:11 PM
To: Kay Mann/Corp/Enron@Enron
cc:

Subject: Re: Manlove Monetization

Perfectly replayed.

Let me know if you need anything further to proceed immediately.

Thanx,
Laura





From: Kay Mann 08/30/2000 05:01 PM


To: Laura Luce/Corp/Enron@Enron
cc: Sheila Tweed/HOU/ECT@ECT
Subject: Manlove Monetization

Since the time frame is short, I wanted to give you an outline to mark
up/correct.

Here's how I understand the deal:

People's has the Manlove gas storage facility. We have presented to People's
a nonphysical method to monetize it, similar to what was done with Bammel.
Since this is a regulated asset, regulatory approval will be required, and
the consumers will receive part of the benefit of the monetization. The
essence of our deal is that Enron will receive 50% of the net earnings, up to
$25mm, as our fee. In consideration for this fee, Enron takes the financial,
legal, accounting and engineering lead. Peoples and Enron will work together
on the regulatory strategy formulation and implementation.

We want to present a draft MOU to Peoples this week. The basic goals are:

Define scope of the agreement
Define our lead role in the 4 stated areas
Create exclusivity for Enron
Define financial arrangements (cost/profit)
Get an acknowledgement that what was presented to them was proprietary, and
covered by our confidentiality agreement.
Define term (5 years)

Each party bears their own internal costs, and third party costs are split
50/50, with prior approval. In that regard an immediate concern is getting
the engineering work kicked off.

We want the agreement broad enough to cover physical withdrawals. We do not
want it specific to this field, since we want the benefit of the use of our
methodology.

Please correct/supplement, etc.

Thanks,

Kay