Energy Trading Paper

FYI
----- Forwarded by Elizabeth Sager/HOU/ECT on 11/30/2000 09:03 AM -----

Alan Aronowitz
11/01/2000 10:34 PM

To: Elizabeth Sager/HOU/ECT@ECT
cc: Mark E Haedicke/HOU/ECT@ECT
Subject: Energy Trading Paper

FYI. This is a pretty paper on legal/risk aspects of power trading. I think
it would help in training future lawyers/staff.

Alan
----- Forwarded by Alan Aronowitz/HOU/ECT on 11/01/2000 10:32 PM -----

Jane McBride@ENRON
10/16/2000 02:43 AM

To: Alan Aronowitz/HOU/ECT@ECT, Mark Evans/Legal/LON/ECT@ECT, Joseph P
Hirl/AP/ENRON@ENRON, Michael Grimes/AP/Enron@Enron, Nicholas
O'Day/AP/Enron@Enron, Darren Delage/AP/Enron@Enron, Mark
Crowther/AP/Enron@Enron
cc:
Subject: Energy Trading Paper

I have received this note (for free) from Baker & McKenzie, which was
prepared by one of their US offices.
Feel free to distribute this to anyone within Enron who you think find it
interesting.
Jane

----- Forwarded by Jane McBride/AP/Enron on 10/16/2000 04:41 PM -----

Paul.TYO.Davis@BakerNet.com
10/16/2000 03:53 PM

To: Jane.McBride@enron.com
cc:
Subject: Energy Trading Paper

Dear Jane,

Further to our discussions on Friday, I attach a copy of the Energy Trading
Paper prepared by our Washington office.

The paper is relevant to what we are focussing on now with EPSA, and
discusses:
what is happening in the US and English markets, the legal issues in merchant
power sale contracts, the EEI agreement (on which Enron's EPSA is largely
based,
or was it vice versa), and compliance issues.

A few of points I found particularly interesting:

* The way in which many of the risks are born seems to be reasonably
settled in the US market/EEI form. The issue is to what extent Japan
will/should follow the same allocation, on which subject the Enron EPSA seems
to
be setting the pace, at least for the moment.

* We cannot discount the danger that some of the counterparties in Japan
will in fact become insolvent or choose not to perform. We have attempted to
cover this in EPSA.

* The treatment of force majeure, particularly non-performance by the
back-to-back supplier/customer, will need more attention as specific fact
situations arise.

* The need for a commercial/legal response system to be in place to
immediately address any failures.

I hope you find the paper useful and, as discussed, I rely on you to
distribute
it to other persons within Enron who are likely to be interested.

Best regards

Paul Davis
<<Energy Trading Paper.doc<<

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- Energy Trading Paper.doc