Koch Energy Trading

can you handle?
----- Forwarded by Sara Shackleton/HOU/ECT on 08/28/2000 01:29 PM -----

Larry Joe Hunter
08/28/2000 11:43 AM

To: Sara Shackleton/HOU/ECT@ECT, Mary Cook/HOU/ECT@ECT
cc:
Subject: Koch Energy Trading

Sara/Mary,

Koch Energy Trading, Inc. has contacted me several times over the past couple
of weeks in order to request that we change our Confirmation procedures.
Currently, per the Master Agreement, we send our form of Confirmation and
they sign and return those to us. With the volume being well over 50 deals
per day with Koch, they are now seeing this as cost prohibitive on their end,
as they are doing all of the work related to Confirmations (Comparing details
to their system and return faxing). Now, Koch would like to go to both
Counterparties sending confirms, comparing each other's paper to the system
and notifying only in the case of discrepancies. I suggested to Koch that we
might try using a system similar to Sempra's in which we send our Confirms
and they return a one-page fax which lists our deal numbers and their
agreement or disagreement with those deals. Still, they considered this to
be very manual on their end and leaves them responsible for notifying of any
discrepancies. I'm sure the legal departments will be getting involved soon,
so I wanted to get your thoughts on changing our current process before it
comes to that.

Thanks,
Joe