RE: EEI Cover Sheet

Carol,

In response to your questions:

#1: legal is fine. done.
#2: I'm fine w/that also. Its basically saying the same thing as the ISDA.
done.
#3: I'm fine w/excluding the Joint Powers Agency (take or pay contracts)
that cp may have. done. I don't recall them excluding it from the ISDA
though...may want to verify and ask them of that.
#4: I'm fine w/posting of 10days...as long as its on a bilateral basis. I
thought the ISDA accomplished that...but I may have misread it to apply to
all margin calls similar to SMUD doing so. Carol, can we have it apply to
all margin calls?

Thanks for handling.

Tracy

-----Original Message-----
From: St Clair, Carol
Sent: Tuesday, May 15, 2001 11:10 AM
To: Rosman, Stewart; Ngo, Tracy
Subject: FW: EEI Cover Sheet

Carol St. Clair
EB 3889
713-853-3989 (Phone)
713-646-3393 (Fax)
carol.st.clair@enron.com
----- Forwarded by Carol St Clair/HOU/ECT on 05/15/2001 01:06 PM -----

Gary Richardson <GRichar@smud.org< 05/15/2001 01:04 PM To: "'Carol St.
Clair'" <Carol.St.Clair@enron.com< cc: Subject: FW: EEI Cover Sheet

Ron noted that I failed to note one change that we would like you to
consider, i.e., an ACH payment from SMUD to Enron in addition to the wire
transfer.

<<RE: EEI Cover Sheet<<

Message-ID: <276F84930F83D211B5880008C75D8491038DD263@e2.smud.org<
From: Ron Jelicich <RJelici@CORPORATE<
To: Gary Richardson <GRichar@CORPORATE<
Subject: RE: EEI Cover Sheet
Date: Tue, 15 May 2001 08:44:45 -0700
MIME-Version: 1.0
X-Mailer: Internet Mail Service (5.5.2650.21)
Content-Type: text/plain; charset="iso-8859-1"

One change that did not get in was on page 1 - adding ach as a payment
method along with wires to Enron.

< -----Original Message-----
< From: Gary Richardson
< Sent: Monday, May 14, 2001 2:39 PM
< To: 'Carol St. Clair'
< Cc: Ron Jelicich
< Subject: EEI Cover Sheet
<
< Ron and I reviewed the credit aspects of the EEI document that you sent.
< Our redlined changes are attached. If you have no objections to these
< changes, we will then forward the document for counsel review.
< 1. We changed the party to notify in the event of default to our General
< Counsel.
< 2. Under Article 5, we changed the Cross Default Amount ratings thresholds
< from "below BBB+" to "below A-" to remedy the gap that otherwise would
< exist from A- or higher and below BBB+.
< 3. Under Section 5.6. we added language to exclude our Joint Powers
< Agencies from setoff provisions. Currently, they do not make sales to
< outside parties since SMUD takes all their output. Since they are separate
< entities with their own bond indentures, we believe it best not to include
< them as if they were corporate affiliates.
< 4. On page 6, "Transfer Date" the time allotted is two days after receipt
< from posting party. As we are currently organized and staffed, we would
< find that timeline difficult to meet especially if we were providing a
< LOC. We would prefer to have the time extended to 10 days.
< << File: SMUD Redline EEI (5.9.01).doc <<