RE:

-----Original Message-----
From: Mann, Kay
Sent: Thursday, April 19, 2001 1:19 PM
To: Fairley, David; Rorschach, Reagan
Subject:

Gentlemen,

Here are some points which require commercial et al input:

Do we intend to include gas transactions in our calculation of profit?
[Rorschach, Reagan] no

We will be buying electricity to serve their load. How should be be paid for
those costs? How often? [Rorschach, Reagan] We will bill them monthly in
accordance with the master gas and master power agreements. (When can we get
copies of these to MDEA).

Jim Homco questioned whether we should buy the fuel oil. What do you want to
do? [Rorschach, Reagan] Leave the fuel out of the deal.

I've added the definition of Scheduling Equipment Costs. How should it be
used in the agreement? Are we limiting our provision of scheduling equipment
to the equipment listed in the exhibit? [Rorschach, Reagan] The guaranteed
monthly fee we discuss in 13(b)(1) covers the equipment costs. This is an
estimate. If we spend more than that, we need to be able to go backto Marvin
for more money. Rick Broussard is reviewing the equipment schedule for
completeness.

What financial security will be required of them? [Rorschach, Reagan] I will
ask Ed Sacks

Are we attaching Marketing Strategy and Trading/Risk policy, or establishing
a time line? [Rorschach, Reagan] I will pull from "go-bys" from the
Fronterra contract. Table of contents will be made into an exhibit.

How do we deal with the possible cost of establishing a control area? Are we
absorbing it? Will there be additional infrastructure costs?
[Rorschach, Reagan] control area is not contemplated in this agreement--we
will evaluate and recommend. If they want to go with a complete control
area, it will cost more.

Have the exhibits been updated? If so, could I get the latest version?
[Rorschach, Reagan] I will get them today.
Kay