Re: EOL Power Products

The first market disruption fallback (after a 3 day waiting period) is an
"Alternative Price Source" which would need to be spelled out in the long
description - but that only works if we have an alternative price source to
specify. It's also important to make sure that the feared event is included
in the Market Disruption Event definition. I think this is the relevant
language from the GTC:

7. Market Disruption. If a Market Disruption Event has occurred and is
continuing on any Trading Day, the Floating Price for such Trading Day shall
be determined pursuant to the Floating Price Source specified in this
Transaction for the first Trading Day thereafter on which no Market
Disruption Event exists; provided, however, if the Floating Price is not so
determined within three Business Days after the first Trading Day on which
the Market Disruption Event occurred or existed, then the Floating Price
shall be determined by reference to the Alternative Floating Price Source
specified in this Transaction, if any, which is not subject to a Market
Disruption Event. If no Alternative Floating Price Source is available or
has been specified, and the Market Disruption Event continues for more than
three Business Days, then the parties shall negotiate in good faith to agree
on a Floating Price (or a method for determining a Floating Price), and if
the parties have not so agreed on or before the twelfth Business Day
following the first Trading Day on which the Market Disruption Event occurred
or existed, then the Floating Price shall be determined in good faith by
Enron, by taking the average of two or more dealer quotes.

"Market Disruption Event" means, with respect to a Floating Price Source, any
of the following events (the existence of which shall be determined in good
faith by Enron): (a) the failure of the Floating Price Source to announce or
publish information necessary for determining the Floating Price; (b) the
failure of trading to commence or the permanent discontinuation or material
suspension of trading in the relevant futures contract, options contract or
commodity on the exchange or market (e.g., NYMEX) acting as the Floating
Price Source (the "Exchange"); © the temporary or permanent discontinuance
or unavailability of any relevant Floating Price Source; (d) the temporary or
permanent closing of any Exchange acting as the Floating Price Source; (e)
the imposition of trading limits by the Exchange such that there are limits
on the range within which the price of the relevant commodity may fluctuate
in the prompt month and the closing or settlement price of such commodity on
such day is at the upper or lower limit of that range; (f) a material change
in the formula for or the method of determining the Floating Price; or (g) a
material change in the content, composition or constitution of the relevant
commodity.

Greg Johnston
11/10/2000 12:41 PM

To: John Zufferli/CAL/ECT@ECT, Dianne Seib/CAL/ECT@ECT
cc: Mark Taylor/HOU/ECT@ECT
Subject: Re: EOL Power Products

Further to John's e-mail below, I do not believe that we need to build this
type of language for alternative settlement into the long descriptions for
financial power products, as both the form of ISDA and the GTC that we use
for confirming financial transactions (which contain the legal terms and
conditions that will govern Canadian EOL financial power transactions)
contain market disruption provisions. These market disruption provisions
provide the mechanism for determining the index price if the referenced price
is unavailable or there is a material change in the formula or calculation of
the referenced price, etc. I am just waiting to confirm with Mark Taylor
that the on-line form of GTC applicable to financial transactions is the same
as for the form used for transactions not entered into through EOL.

Thanks

Greg

---------------------- Forwarded by Greg Johnston/CAL/ECT on 11/09/2000 01:47
PM ---------------------------

John Zufferli
11/08/2000 08:09 AM
To: Dianne Seib/CAL/ECT@ECT, Greg Johnston/CAL/ECT@ECT
cc:
Subject: Re: EOL Power Products

We should add some language to the EOL power descriptions to include a
mechanism for alternative settlement in the event that the power pool price
of Alberta becomes defunct. I won't put any language in regarding market
delay though. My intention is to trade this product whether I have a PPA or
not.