Auction

FYI

Attached is the preliminary outline of the proposed emissions auction,
developed by Zal..

Please advise on the CFTC issues raised.

Thanks,
---------------------- Forwarded by Harry M Collins/HOU/ECT on 02/15/2000
12:19 PM ---------------------------

Zal Masani
02/14/2000 03:55 PM
To: Harry M Collins/HOU/ECT@ECT
cc: James B Fallon/HOU/ECT@ECT, Greg Woulfe/HOU/ECT@ECT, Leonard
Tham/HOU/ECT@ECT, Doug Gilbert Smith/Corp/Enron@ENRON
Subject: Auction

Harry:

Attatched is a document containg the basic structure of the auction as we
envision it. Please keep in mind that it is a work in progress and will be
modified as we develop a better idea of the auction.
Below are certain questions we need clarification on.

Structure:
Do we have any CFTC exposure?
By the nature of the auction structure, are we not implicitly matching? If
yes then how does this affect the previous answer?
Do we have exposure to the lottery commission if we offer a free gift during
the auction?

Contract:
To limit our exposure due to failure of the system etc. what sort of Force
Majure clause can we incorporate in the contract?
To what extent are electronically signed contracts enforceable?

Internal:
Can other trading desks at Enron other than the emissions desk participate in
this auction?
What limitations can be placed on the emissions desk as far as information
sharing and usage are concerned? both during and after the auction?

Thank You

Zal