Canadian Form of Physical Power Master Agreement

----- Forwarded by Elizabeth Sager/HOU/ECT on 09/18/2000 11:25 AM -----

Greg Johnston
09/15/2000 05:42 PM

To: William S Bradford/HOU/ECT@ECT, Aleck Dadson/TOR/ECT@ECT, Derek
Davies/CAL/ECT@ECT, Paul Devries/TOR/ECT@ECT, Chris Gaffney/TOR/ECT@ECT, Bill
Greenizan/CAL/ECT@ECT, Peggy Hedstrom/CAL/ECT@ECT, Robert
Hemstock/CAL/ECT@ECT, Jeffrey T Hodge/HOU/ECT@ECT, Eric LeDain/CAL/ECT@ECT,
Jonathan McKay/CAL/ECT@ECT, Mark Powell/CAL/ECT@ECT, Elizabeth
Sager/HOU/ECT@ECT, Laura E Scott/CAL/ECT@ECT, Andre Templeman/CAL/ECT@ECT,
Garrett Tripp/TOR/ECT@ECT
cc: John J Lavorato/Corp/Enron@Enron, Rob Milnthorp/CAL/ECT@ECT, Mark E
Haedicke/HOU/ECT@ECT, Peter Keohane/CAL/ECT@ECT
Subject: Canadian Form of Physical Power Master Agreement

Please find attached for your information/review the final form of the
Canadian Physical Power Master Agreement to be implemented and used by Enron
Canada to trade physical power in Canada. This form has been created using
the EEI form of master used by Enron North America, the Canadian gas master
and the British Energy Power Purchase Agreement. Wherever possible and
particularly with respect to many of the procedural provisions, such as
billing, confirming, triggering events and the miscellaneous provisions, I
have used the language from the current form of Canadian gas master both to
create consistency between our Canadian gas and power businesses for our
operations, systems and accounting groups and to hopefully make it easier for
our commercial people to market the power paper to counterparties, as it will
be very similar in many respects to our form of gas master with which many
counterparties will already be familiar.

Regarding the power products tradeable under this master, further to a
discussion Peter and I had with Jeff Hodge and Christian Yoder, the products
described in Schedule A have been created based upon an amalgam of the EEI
products and the WSPP schedules of products. Given the uncertainty of how
exactly the two Canadian markets that are set to open in 2001 will look, it
was determined best to have a minimum of broadly defined products, which will
be further defined over time as the markets develop, rather than trying to
introduce a large number of complex products that may end up neither
applicable nor appropriate and which would only serve to make negotiations of
the form with counterpartys more difficult.

I would ask each of you to review the form and provide me with any final
comments you may have at your earliest convenience so that Enron Canada can
commence marketing the paper to counterparties. In performing your review,
please keep in mind that this master is intended to be an agreement that is
cross-jurisdictional and, therefor, general in scope and nature and will be
equally applicable to power trades in Alberta as in Ontario (or any other
province over time). Any jurisdictional specific provisions will be built
into the confirms on a trade by trade basis. Nevertheless, particularly for
Rob Hemstock and Aleck Dadson, I do want to ensure that we have not included
any provisions that may cause Enron Canada any concerns in Ontario or Alberta
based upon our current understanding of how those two regulatory regimes will
unfold.

Thanks for your assistance on this matter and I look forward to any comments
you may have on the document.

Greg