UPDATE: Sempra and San Diego Gas & Electric Trading Policy

To All:

This update clarify's our trading position with the Sempra relationship on
EOL and over the phone:
-All Sempra entities on EOL should maintain their term of 36 months. This is
approved as a result of the credit controls of EOL.
-Trading over the phone is OK inside 12 months and should be managed between
12 and 36 months accordingly based on the transaction, counterparty current
exposure, contract collateral rights and credit reserve, if any.
-Exposures should be monitored daily by all members of the credit group.

SDG&E Update:
Short Term Power transactions are OK via phone transactions only.

Russell

---------------------- Forwarded by Russell Diamond/HOU/ECT on 02/05/2001
01:18 PM ---------------------------

From: Russell Diamond
02/05/2001 10:27 AM

To: William S Bradford/HOU/ECT@ECT, Debbie R Brackett/HOU/ECT@ECT, Tanya
Rohauer/HOU/ECT@ECT, Nidia Mendoza/HOU/ECT@ECT, Brant Reves/HOU/ECT@ECT,
Russell Diamond/HOU/ECT@ECT, Tracy Ngo/HOU/ECT@ECT, Lesli
Campbell/HOU/ECT@ECT, Molly Harris/HOU/ECT@ECT, Paul Radous/Corp/Enron@ENRON,
Edward Sacks/Corp/Enron@Enron, Tom Moran/HOU/ECT@ECT, Wendi
LeBrocq/Corp/Enron@Enron, Veronica Gonzalez/HOU/ECT@ECT, Darren
Vanek/NA/Enron@Enron, Martin O'Leary/HOU/EES@EES, Andrew
Greer/NA/Enron@Enron, Jane Wilhite/NA/Enron@Enron, Walter
Guidroz/NA/Enron@Enron, Veronica Espinoza/Corp/Enron@ENRON, Jason R
Williams/NA/Enron@ENRON, Rudwell Johnson/NA/Enron@ENRON, Wendy
Conwell/NA/Enron@ENRON, Tim Davies/LON/ECT@ECT, Oliver Harrison/LON/ECT@ECT,
Lee Munden/LON/ECT@ECT, Neil R Anderson/LON/ECT@ECT, Anna Reich/LON/ECT@ECT,
Claire Viejou/LON/ECT@ECT, Karolina Moran/LON/ECT@ECT, Cecile
Fleury/LON/ECT@ECT, John Suttle/HOU/ECT@ECT, Rod Nelson/LON/ECT@ECT, Sonya
Clarke/LON/ECT@ECT, Diana Higgins/LON/ECT@ECT, Allan
Ford/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc:
Subject: Sempra and San Diego Gas & Electric Trading Policy

To All:

Per myself, Jason Williams and Bill Bradford, we have set forth a near term
trading policy with Sempra and SDG&E in light of the California Power
concerns. Please see below:

Sempra trading relationship:
Maintain all trading (any commodity) with in one year. Transactions outside
of one year need to be approved on a one off basis with due analysis and
credit reserve if necessary.

San Diego Gas & Electric (SDG&E):
Financial and Physical Gas- limit trading to inside three months, no
transactions outside of this term.
No Power transactions.

These relationships will be reviewed and updated once the California
Legislature finalizes its Power bid's.

Regards,
Russell