Gallup One Time Payment

pls print. thanks df
---------------------- Forwarded by Drew Fossum/ET&S/Enron on 04/10/2000
05:59 PM ---------------------------

Steven Harris
04/10/2000 02:54 PM
To: Drew Fossum/ET&S/Enron@ENRON
cc:

Subject: Gallup One Time Payment

FYI
---------------------- Forwarded by Steven Harris/ET&S/Enron on 04/10/2000
02:53 PM ---------------------------

James Centilli
04/10/2000 02:35 PM
To: Rod Hayslett/FGT/Enron@ENRON, Steven Harris/ET&S/Enron@ENRON
cc: David Foti/ET&S/Enron@ENRON

Subject: Gallup One Time Payment

Please find attached an explanation of how the $2.8M was negotiated from Dave
Foti and myself. The other file attached is the calculations per the
contracts we executed with ESC and the earnings impact, if we agree with ESC
new one time payment.

The economic benefit to be derived from this change may or may not be
achieved, because it is dependent on ESC and TW ability to avoid the peak
demand charge. ESC has an obligation in the contract to assist TW in
developing a system to monitor and avoid the peak demand charge. If ESC
receives this benefit in the one time payment, TW may lose any leverage we
have. The demand payment includes full payment of these peak demand charges
with ESC rebating the
cost on a monthly basis, if these charges are avoided.

If we need to develop our negotiating strategy before we meet with ESC on
Wednesday, please advise.

Dave Foti & James Centilli