Alberta Election Results

As you are aware a provincial general election was held yesterday in
Alberta. When the election was called the governing Progressive
Conservative Party led by Ralph Klein held a strong majority of 63 of the 83
seats in our Provincial Legislature. The Liberals had 18 seats and the New
Democrats (socialist) had 2 seats.

The two issues that dominated the election campaign were: #1 health care, and
#2 electricity restructuring. The PC's faced considerable criticism
regarding their handling of restructuring. The Liberals came out with a
policy platform on electricity restructuring that envisioned the government
taking back the PPAs "by negotiation or legislation, if necessary" at a price
below market and using this supply to provide cost-based power to residential
and commercial customers. Only customers with load greater than 5 MW would
be exposed to market prices. The ND's policy platform was to scrap
electricity deregulation entirely.

Throughout the campaign the PC's defended their electricity restructuring
policy and pledged to continue to protect Alberta consumers from the effects
of rising natural gas and electricity prices. To date, this protection has
taken the form of natural gas and electricity rebate payments funded from the
sale of the PPA's and from the provincial treasury.

I'm pleased to report the PC's enjoyed a landslide victory last night that
appeared to even surprise them. They increased their number of seats to 74
of the 83 seats in our Legislature while the Liberals were reduced to 7 seats
and the ND's retained the 2 seats they had. With this new and significant 5
year mandate, I am optimistic the PC Government will now be less focused on
depressing short-term wholesale power prices and will be more prepared to
focus on longer-term policy decisions and initiatives that will: i) attract
new generation, iii) attract new retailers, and iii) give electricity
restructuring a chance to actually deliver on the benefits it promised.

We are well positioned to influence the Alberta Government going forward and
I will be requesting further internal and external resources to help me
develop and communicate our market design proposals further. If Enron can
help Alberta overcome the serious supply and retail market problems it
presently faces, I can see a day when Alberta is held out as an electricity
restructuring success story.

Regards,

Rob