Hedge of South American LDCs

Attached is a memo describing the current structure. My assistant, Joyce
Dorsey (853-3516), will schedule a conference call for Monday afternoon (i)
to discuss the outstanding issues and (ii) to decide which of the alternative
structures described in the memo is the preferred approach.

Please note the following:

1. Sara has separately distributed a first draft of the confirmation. Please
give Sara any comments this week that you may have to the confirm.

2. Does anyone have a final version of the fairness opinion? I'm assuming
that we can provide the fairness opinion to our swap counterparty, given that
there is a confidentiality agreement in place covering this.

3. I understand that Randy Young's group will form the Delaware LLC(s) that
are required by the structure.

4. We need to discuss the mechanics for substituting collateral in the
Ponderosa structure. This will vary, depending on which of the alternatives
described in the memo is selected.

5. We need to confirm our earlier conclusion that there are no contractual or
other legal restrictions that may affect our ability to enter into these
hedges.

6. Please forward this memo to others as appropriate.