Outstanding Duke EnronOnline Transactions

Dianne, further to our conversation this morning, this e-mail will confirm
the following:

1. The current form of Master Physical Gas Agreement with Duke is an older
master which indicates that transactions must be confirmed in writing and
arguably provides that such confirms are not binding until executed by both
parties. However, the EnronOnline Electronic Trading Agreement indicates
that, where a confirm is issued, it is deemed accepted unless objected to
within three business days. There is no indication in the EOL Electronic
Trading Agreement how a conflict between the provisions of that agreement and
any master agreement will be resolved, but I think that for the purposes of
the EnronOnline transactions, we can rely on the terms of the Electronic
Trading Agreement and, if Duke has not objected to the terms set forth in the
EOL confirm within three business days, determine that such confirms are
valid and binding upon the counterparty.

2. However, with respect to any physical gas transactions entered into with
Duke under the Master but not through EnronOnline, we still need them to
execute and return the confirm.

3. Regarding financial deals entered into through EnronOnline and made
pursuant to the electronic form of GTC, the terms of the Electronic Trading
Agreement will govern and, unless Duke objects to the terms of the confirm
within three business days, the confirm is deemed to be valid and binding on
Duke.

4. Notwithstanding the above, I think we should still try to maintain our
practice with other counterparties of obtaining executed confirms back from
such counterparties.

Mark, if you have any concerns with these conclusions, can you please let me
know at your earliest convenience. Duke currently has approximately 350
outstanding confirms entered into with ECC through the facilities of
EnronOnline that they have not executed and returned and they have told us
that they are relying on the Electronic Trading Agreement as providing there
is no requirement to execute and return these confirms.

Thanks

Greg