NERC Reliability Legislation

John and I met with the group headed up by NERC that supports reliability
legislation. Included in the group are: NERC, CEA, EEI, APPA, TAPS, ELCON,
EPSA, PJM, Entergy. The group is attempting to reconvene and indicate their
continuing support for the reliability legislation (33 pages) that was
drafted last year. Enron, ELCON and EPSA did not support the final drafted
legislation, although we are told that Enron (through Dan Watkiss) was close
to giving its support.

This group still supports the legislation that was drafted last year and
would like Enron to give its support as well. ELCON has many concerns with
the legislation, and EPSA is still on the fence (waiting to hear from us, I
think). John Shelk and I indicated to the group that Enron is reassessing
the legislation and our position on the legislation. Another meeting
(conference call) is scheduled for June 15. Enron seems to be somewhat of a
linchpin in this debate -- the group thinks the legislation will be effective
if Enron signs on, even without ELCON's support, but they seem to think it
has less effectiveness without Enron. Therefore, the group is very anxious
to hear our position.

John and I are meeting with Dan Watkiss tomorrow to find out from him where
we left off on the drafting. We want to see how comfortable Dan was with
the draft legislation and where he felt that changes were still needed. We
are then meeting with ELCON on Thursday to get a better idea of what their
concerns are with the legislation (it seems to be a pretty long list). I
will send an email to this group on Friday letting everyone know what came
out of these meetings and we can then discuss what position Enron should take
in this group effort.

Please let me know if you have any questions or comments.

Sarah