Re: Aquila

My understanding ( as of last week) was that trades done Online were binding
to the counterparty holding the ID under which the trade was transacted, and
that confirms (if needed) would we done in that name. A follow up procedure
was discussed for written assignment to the "correct" counterparty. This was
not the case yesterday, where the deal was changed internally to the
"correct" counterparty without a written assignment.

Mark, Jeff, please comment on the the legal aspects of doing these moves
internally without a written assignment. Does a verbal OK from each
counterparty (assignor and assignee) suffice?

Thanks,

Debbie

Kathryn Cordes
12/13/99 05:15 PM

To: Bob Shults/HOU/ECT@ECT, Debbie R Brackett/HOU/ECT@ECT, Jennifer
deBoisblanc Denny/HOU/ECT@ECT, Mark Taylor/HOU/ECT@ECT, Jeffrey T
Hodge/HOU/ECT@ECT
cc: Brent A Price/HOU/ECT@ECT
Subject: Aquila

We need to know what the resolution plan is to getting Aquilia straight for
trading Physical and Financial products. Today we saw Aquilia Risk trade
Next Day Physical Gas again and we were asked to move the deal to Aquilia
Energy. What is being done to get Aquilia Risk from continuing to enter
Physical trades on line? My concern for this trade was that we brought it to
Credit's attention this morning and did not get final word to move the deal
to Aquilia Energy until late in the day (4.45pm) which affects Logistics
ability to nominate for next day business. Logistics has been made aware of
the late nom and will be working with the Pipe to get the nom in. If there
are issues with this late nom from the pipeline we will let you know.

I'm not comfortable with the internal process of counterparty name changing
of EOL deals and would like to get comfortable with how we are going to set
this process up. I think there should be legal review of all deals that we
change and would suspect that some form of communication would need to be
conveyed to the counterparty.

KC