Com Ed Strategy

Based on a series of meetings and discussions with many you, below is an
outline of the proposed strategy for Com Ed. I will be meeting with
Commissioner Harvill and also the Commissioners' assistants on Wednesday to
deliver our message, so if you have any comments on this, please get back to
me as soon as possible. (Com Ed is scheduled to meet with the Commissioners
on Thursday).

The Facts - Customers currently have three rates to choose from: the fixed
price bundled rate, the PPO which is a discount off the Fixed price bundled
rate, or an alternative rate provided by a marketer (ARES). Most of Enron's
customers are on the PPO although some are on the bundled rate. Com Ed sent
a letter to the ICC in which they propose to replace the PPO with a spot
market price plus adder to be effective at the end of 2004. Com Ed also
acknowledges that with rising market prices, some of the industrial customers
are or soon will no longer be paying a CTC. With the relinquishment of the
CTC obligation comes Com Ed's obligation to provide the PPO rate. In
conversations, Com Ed indicated that they would like to replace the fixed
bundled price with a performance based rate at the end of 2004. An internal
analysis prepared by Mark Ulrich sets forth the negative impact of removing
the PPO on our current book of business.

Issues of Concern:

* Protection of our current book of business
* Ability to physically deliver into Com Ed on a competitive basis
* Potential for Default Service deal
* Potential to market individual customers on a one-on-one basis

The Plan:

Our public position will be that without the capability to physically deliver
power into the Com Ed market on a competitive basis, the PPO rate should not
be lifted since customers are left without reasonable options or protection.

Our negotiated position in order of priority is as follows:

1. Protect our current book of business. We should negotiate a rate with
Com Ed that leaves us whole. This could include the provision by Com Ed of
ancilliary services. There is an FRP tariff rate that has expired but that
we believe offered ancilliary services at a rate that allowed other marketers
to physically deliver. We are in the process of obtaining the tariff to see
if that would work for us to negotiate from, even though it has expired. In
essence we want to negotiate a new PPO rate under which Com Ed continues to
supply our existing customers or preferably that enables us to physically
deliver to our customers at the same price as the PPO. Mark Ulrich and Guy
Sharfman are going to develop a rate that we can take to Com Ed for our
entire book of business.

2. Leverage new business opportunities for EES. These opportunites include
acquisition of all or a portion of Com Ed's industrial default customers as
well as individual customer accounts. (We believe that Com Ed wants to free
itself from its obligation to serve industrial customers, so there may be an
opportunity). The concept is to fold these new customer acquisitions into
the same deal negotiated for our current customers, allowing EES to expand
its customer base and potentially its physical delivery capabilities. From
the standpoint of acquiring individual customers, we should advocate a real
time price plus adder starting in 2003 for customers who roll off the CTC.

3. Push for Com Ed support of Enron's positions at the ARTO working level.
Nothing in our agreements, however, with Com Ed should be contingent on the
RTO functioning, such that Com Ed can have an out for its obligations to
Enron under the deal.

Janine.