Keyspan

Janet, between you, Laura and Frank/Gil you should be able to field a one
Enron team on this one. I am at your disposal otherwise.

Laura/Frank - this is an important one for the team - please work together
constructively. Gil should continue in his current role as main relationship
manager unless you guys change your mind.

Regards
Delainey

---------------------- Forwarded by David W Delainey/HOU/ECT on 01/01/2001
06:47 PM ---------------------------

Janet R Dietrich
12/29/2000 01:36 PM
To: David W Delainey/HOU/ECT@ECT
cc:
Subject: Keyspan

Quick update on Keyspan: Gil Muhl flew to New York yesterday to spend the
afternoon with Chuck Devario. It sounds like their meeting went very well as
they spent a few hours discussing Keyspan's situation in the Northeast market
and how an Enron/Keyspan "JV" would work. They actually outlined a lot of
ideas on the white board and it basically sounds like Chuck is very
interested in pursuing this JV that would focus on optimizing Keyspan's gas,
power, and fuel oil portfolios. Chuck is now planning to come to Houston in
mid-January to sit down with us and further these discussions. If the Houston
visit goes well we will then plan to take him to Chicago to show him
first-hand the Enron/People's JV (trading floor, office set-up, discussion of
general contractual arrangements between the reg. utility and unreg.
affiliate, etc.). Chuck knows Tom Patrick and it would be a great way to show
him how well our Chicago JV has worked for both People's and Enron. Obviously
this visit and meeting will need to be tightly finessed but I'm confident
that with Laura Luce/Bill Morrow and Gil, Chuck, and myself, it will work.

We may want to consider getting out with Keyspan and People's together in a
more social setting sometime in March (maybe the Master's would work). I
think Keyspan has the ability to get out of the Coral relationship early if
they really wanted to (it currently goes through April, 2002) although I
think it will probably take the better part of next year to formulate the
entire structure around this JV. I think the potential is to have a
commercial structure in place and effective going into next winter or
coinciding with the termination of the Keyspan/Coral relationship in April
2002.

Okay, now the players needed to make this happen....Gil needs to be
intimately involved. His knowledge of that market and company and his
relationship with Devario, Anderson, Fazio, the operational folks, etc. is
extremely good. If you decide that you do not want to have Gil involved in
this (not a good decision) you need to move him out of his current role.
Given the fact that we are using the People's JV as a showcase, Laura Luce
can be very closely connected to Gil and Keyspan in a very natural and
genuine way. Gil will need to lean on Laura's expertise in how she set up the
Chicago JV throughout the process. I plan to insert Michael Brown into the
deal team to focus on the power and fuel oil components. Michael has
excellent relationships with all the folks at Keyspan and his knowledge of
Keyspan's power portfolio and that power market will be critical. Ed
McMichael will lead all the structuring effort (gas and maybe power too), and
we'll need Bob Superty from the operational side.

Although it is still unclear as to whether Keyspan will decide to request
proposals from several players, it is clear that with our overall
capabilities and genuine desire to be flexible on the commercial structure in
what we put together with them, Chuck Devario is very interested in pursuing
more detailed discussions in the very near future.

I'd like you to be available to spend some time with Chuck and I when he
comes to Houston in January ( maybe a late morning meeting and lunch) and
I'll coordinate with Kay on that.

Let me know if you want to talk about this ahead of time. I'll be here all
next week.