EnTouch Newsletter

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United Way 2001

As of 11:00 am this morning, EWS had reached $1,257,644.44 in pledges, whic=
h is 98.58% of our campaign goal of $1,276,000 and our participation rate i=
s 75.12%. While yesterday was the official end of the campaign, EWS and En=
ron, as a whole, remain short of our goals, so the online United Way pledgi=
ng system will remain open through Friday, August 31.

If you have made your contribution, THANK YOU! However, there are still ov=
er 1,000 EWS employees who have yet to log on to https://hrglobal.enron.co=
m =20
and indicate a decision. If you are one of these employees, please take a =
few minutes to impact the Greater Houston area in a positive way through a =
contribution to the United Way. Further, if you have problems accessing th=
e system or don't have time, please call or e-mail Eric Thode (ext. 3-9053)=
with your decision and he will log it in for you. The system will then se=
nd you a confirmatory e-mail that you can check for accuracy and keep for y=
our records.

Below are the pledge totals and participation rates by business unit/functi=
onal group:

=09GROUP=09=09=09PLEDGES=09% Participation
=09EA=09=09=09$214,106=0979.56%=09=09(121 employees unaccounted for)
=09EBS=09=09=09$161,760=0945.20%=09=09(376 employees unaccounted for)
=09EEOS=09=09=09$79,117=09=0993.60%=09=09(13 employees unaccounted for)
=09EEL=09=09=09$37,377=09=0979.17%=09=09(5 employees unaccounted for)
=09EGM=09=09=09$174,663=0982.53%=09=09(64 employees unaccounted for)
=09EIM=09=09=09$95,246=09=0991.53%=09=09(16 employees unaccounted for)
=09ENW=09=09=09$269,346=0975.28%=09=09(403 employees unaccounted for)
=09EWS Bus. Analysis=09$39,743=09=09100.00%=09(COMPLETE)
=09EWS Bus. Dev.=09=09$17,198=09=09100.00%=09(COMPLETE)
=09EWS HR=09=09$20,869=09=0987.32%=09=09(9 employees unaccounted for)
=09EWS Legal=09=09$68,928=09=0997.70%=09=09(2 employees unaccounted for)
=09EWS Research=09=09$24,913=09=09100.00%=09(COMPLETE)
=09EWS Treasury=09=09$17,981=09=09100.00%=09(COMPLETE)

From a corporate perspective, EWS is in 2nd place in % of goal reached and =
3rd place in participation rate. Here are the other groups' totals:

=09GROUP=09=09=09PLEDGES=09% Participation=09=09% of Goal
=09ETS=09=09=09$301,386=0994.83%=09=09=0987.11%
=09Corporate=09=09$775,390=0974.30%=09=09=0998.78%
=09EES=09=09=09$463,697=0979.50%=09=09=0994.06%
=09Enron-wide=09=09$2,796,721=0977.39%=09=09=0996.40%

BUSINESS HIGHLIGHTS

Enron Global Markets
Enron's Emissions Group is a market leader in many regional and national em=
ission cap and trade programs including the national SO2 market and the Hou=
ston-Galveston Cap and Trade Program. The Emission group is developing int=
o a business that entails Enron's core skill sets. The Emission group is d=
eveloping origination, mid-marketing, and finance as well as continuing to =
focus on the trading side of the business. =20

On January 1st, 2002, the Houston-Galveston Mass Emission Cap & Trade Progr=
am begins in our backyard. This program is designed to reduce the emission=
s in the Houston-Galveston area by 90% by the year 2007. The program incl=
udes Harris county and the surrounding seven adjacent counties. Enron has =
emerged early as the dominant player in this cap and trade program. Enron =
has already become an active player by making the initial trades in NOx DER=
Cs (Discrete Emission Reduction Credit) market. Enron has almost made nume=
rous trades in the NOx ERC market. =20

Trevor Woods and Michael Taylor have recently joined the Emissions Trading =
Group. The group, which includes trader John Massey, looks to become a pri=
ncipal player in many regional and national emission cap and trade programs=
, including San Joaquin County and NOx SIP CALL. =20

Enron Engineering and Operational Services (EEOS)
ACCRO Phase III - IV =20
We are pleased to announce that final acceptance has been received by our c=
lient Accroven SLR (50%Enron) from PDVSA-Gas (Venezuela's National Gas Comp=
any) for the facilities built and performance tested by our Accro Project T=
eam. Thus completing the final major milestone on what must be considered t=
o be one of EEOS's most successful projects.=20

Although contracted as one $320MM project, the work had to be managed as fo=
ur distinct jobs. The prime site, at Jose, consists of a grassroots 50,000 =
bpd NGL's Fractionation Plant plus Offsite Refrigerated Storage; the latter=
facilities, being contained entirely within PDVSA's existing live plant, h=
ad to be built entirely under PDVSA's Hot-work Permitting system. In addit=
ion, the site was under constant threat of disruptive action by very vocal =
and active Unionized workers. Thanks to the negotiating skills of our Site =
Manager, Tony Burke, they were shut-down only 25% as much as three adjacent=
major projects .The secondary sites, at Santa Barbara and San Joaquin, con=
tained two grassroots 400MMSCFD Propane Extraction Plants. Not only did the=
ir remoteness cause significant logistical problems for equipment delivery,=
but also both had significant labour relations problems peculiar to their =
own locations. San Joaquin suffered many days of Force Majeure delay caused=
by the disruptive action by several local community groups protesting lack=
of work.

Despite all the impediments of the local labour, logistics, and the usual c=
ustoms clearance issues, the construction was essentially finished on sched=
ule.

Commissioning and start-up brought new challenges with erratic feedstock qu=
alities testing both the design and the expertise of our start-up crews. It=
is a tribute to both, that all performance tests were passed within 48 hou=
rs of receiving a reasonably stable supply and the design flow rates, and t=
hat the plants have remained online since, or available, with minimal hiccu=
ps, generating significant income for our client.

Congratulations Accro Project Team!
Bob Meckna, Tony Burke, Andy Trevino, Dennis Zitterkopf, Bill Johnson and t=
he rest of the team at site, in Houston, and from Teesside for achieving a =
remarkable success for which all participants can be proud; not only has th=
e client gotten plants that exceed performance, the team was able to bring =
home double the budgeted profit.

IN THE NEWS

Enron All-Employee Meeting: At the All-Employee Meeting on August 16, Ken L=
ay, Enron president and CEO, provided employees with a general overview of =
Enron's performance to date and his expectations for the remainder of the y=
ear. Lay stated that Enron has faced a number of challenges including the C=
alifornia situation and Dabhol, but the company is facing and overcoming th=
em. According to Lay, the Enron business model and strategy are sound and t=
he exceptional employees at Enron will accelerate the company to becoming t=
he "world's leading company." The All-Employee Meeting video will be posted=
on the Enron home page within the next few days.=20

WELCOME
New Hires
EGM - Royden Loucks, Brenda Foley, Darrell Dalton, Tim O'Neal, Dana Nelson
EIM - Carisa Arthur
ENA - Anne Eastwood

NUGGETS & NOTES

Congratulations to Tracie and Dave Hill, senior specialist in HR! They are=
the proud and busy parents of twins born on Tuesday, August 14 at 10:00 PM=
. They had a boy, Joseph Thomas, who weighed 5 lbs. 5 oz. and a girl, Ann=
alise Francis, who weighed 4 lbs. 2 oz. =20

EnronOnline Figures
Below are the latest figures for EnronOnline as of August 21.

?=09Total Life to Date Transactions < 1,350,000
?=09Life to Date Notional Value of Transactions < $ 778 billion

Enron Wholesale Services Best Practice Tips
Use Contingent Staffing Solutions for Best Pricing on Temporary Labor
Rates for temporary clerical and administrative support are up to 10% lower=
through Enron Contingent Staffing Solutions (CSS). CSS is managed by Core=
staff for all of Enron's temporary clerical and administrative support staf=
fing needs. Negotiations are in progress to include accounting, engineerin=
g, and legal services by year-end. Agencies included in the existing contr=
act include: Adecco, BestStaff Services, Brooke Staffing, Burnett Staffing,=
Corbett Personnel, King Staffing, and Talent Tree. Currently, pricing and=
service is established in Houston and is being implemented in Omaha. Nego=
tiations for service in Portland and Seattle are in progress.

Requests for temporary staffing may be made by calling the Contingent Staff=
ing Solutions team, located in the Three Allen Center, 12th floor, at 713-3=
45-6899. Requests may also be made online. A link to the Contingent Staff=
ing Solutions site is located at the iBuyit portal (ibuyit.enron.com)

NEWS FROM THE GLOBAL FLASH

EES Europe Clinches Long-Term Outsourcing Deal With Guinness
EES Europe has signed a 15-year agreement to own and operate energy assets =
at the Park Royal Guinness Brewery in London. The deal means EES will sourc=
e gas and electricity to provide steam, compressed air, chilled water and o=
ther industrial commodities to one of the largest breweries in Europe. EES =
will also have responsibility for managing a series of energy reduction mea=
sures at the plant, designed to improve performance and reduce costs. These=
measures will include investment in new boiler, refrigeration, compressed =
air and effluent treatment plant.

Stuart Rexrode, Vice President of EES Europe, said: "Closing this deal was =
an outstanding effort by the entire team and is another example of the type=
of innovative energy partnerships we are forming in the marketplace. This =
transaction, coupled with the Sainsbury's deal, has caused the industry to =
start taking notice of EES, and I am confident more customers will be knock=
ing on our door looking for similar structures."
Congratulations to everyone on the team for their dedication!

Enron signs first long-term dry bulk shipping freight origination deal with=
major Japanese player
Enron's shipping freight team has signed a 10-year time charter deal for a =
178,000 tonne capesize vessel with Lepta Shipping (with a performance guara=
ntee from Mitsui & Co Ltd, Tokyo, Japan). The agreement has a notional valu=
e of USD60 million and a mark-to-market value of USD 5 million. The new ag=
reement gives Enron the option to buy the vessel in Japanese yen after the =
third year and the time charter period itself can be extended by us by up t=
o an additional four years, if required. The agreement takes effect from t=
he latter part of 2003 when the ship itself, currently being manufactured i=
n the Imabari shipyard in Japan or any similar substitute vessel, becomes a=
vailable. "We are already in the process of onselling the first three year=
s of our time charter above the curve," announces Pierre Aury, who heads up=
Enron's dry bulk freight team. "This deal gives us a strategic long "days=
" position and we now expect to close further deals as a result of our driv=
e to commoditise more time charter transactions." The team is already expl=
oring new time charter deals in the scarcer cape-size and handy-size vessel=
market. A combined effort between the legal, tax, credit, transport suppo=
rt and structuring teams was instrumental in helping to book this deal just=
in time for Q2. The shipping freight team is already working on a new str=
uctured deal with a major UK bank, so watch this space for future announcem=
ents...

Enron Credit Closes Deal with Enron's Shipping Desk
On 8 August, 2001 Enron's shipping desk bought a Digital Bankruptcy Swap (D=
BS) from Enron Credit in order to buy protection against a Japanese industr=
ial/trading counterparty. Under the terms of the deal the shipping desk wi=
ll receive pay-out from Enron Credit when this counterparty becomes insolve=
nt under Japanese laws and therefore hedges the counterparty risk that the =
desk holds when transacting with this Japanese counterparty. When the leve=
l of the shipping desk's mark to market profit rises above a certain amount=
, the desk will also have the ability to buy additional DBS protection. Si=
milarly, if the desk's contract with the Japanese counterparty terminates e=
arlier, the desk can sell back any unused DBS cover to Enron Credit.

"We needed to increase our credit capacity with this counterparty in order =
to do more deals and then realised that Enron Credit could help us," said P=
ierre Aury who heads up the freight team. "Another driver was that we felt =
we needed to set a foot in the DBS market in order to go up the learning cu=
rve and develop shipping specific DBSs for the near future." "The hedge bet=
ween these two commercial groups is another milestone in Enron's internal r=
isk management. With each commercial group having to optimise its capital =
at risk, the services and tools Enron Credit has on offer are an excellent =
complement to our already sophisticated RAC process," commented Ted Murphy,=
Head of RAC in Europe.

Congratulations go to Andrew Feachem who originated the deal for Enron Cred=
it and Pierre Aury.

Got a Great Idea for the EnTouch? Do you have great news you want everyon=
e in EWS to know about? Something interesting going on in power and gas mar=
kets? Or in industrial or global markets? Send your ideas to Kathie Grabst=
ald via email or call x 3-9610.

LEGAL STUFF
The information contained in this newsletter is confidential and proprietar=
y to Enron Corp. and its subsidiaries. It is intended for internal use onl=
y and s

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