Are we finding value in outsourcing?

Rodney, interesting title- is someone giving you grief on this strategy?

Regards
Delainey
---------------------- Forwarded by David W Delainey/HOU/ECT on 07/17/2000
11:13 PM ---------------------------

Enron North America Corp.

From: Rodney Malcolm 07/16/2000 11:08 AM

To: David W Delainey/HOU/ECT@ECT, Raymond Bowen/HOU/ECT@ECT
cc: James A Ajello/HOU/ECT@ECT
Subject: Are we finding value in outsourcing? - GE Plastics

This week we will begin discussions on structure and pricing with GE
Plastics. At the risk of getting committed to earnings delivery I thought it
would be helpful to give a range of value to us & GE at least before the
economics start to deteriorate in negotiations. Currently the proposal would
require GE to step up to ten year fixed price positions that would create the
following split up of economics:

Savings to GE $33MM PV
Value to Enron $15MM with $10MM of this value in bookable mark to market
$40 MM in capital invested in the Demand Side Management Projects.

I think that this suggests there should be value in our outsourcing efforts.

Thanks,
Rodney