RE: Enron MW/Peoples Master

Gregg/Richard, great work on getting Peoples to work with us. I will look for a copy of their letter requesting assurance that you mentioned. Please let me know what PGL decides about buying the NSS inventory (13.5 Bcf).

Until we hear from them, please do the following:
(1) Identify alternative Jan/Feb NSS markets for as much as you can withdraw. Hopefully PGLC will buy the inventory as planned, but if they do not we need to have alternatives worked out.
(2) Detail your plans for liquidating the inventory in the PGL Hub (3.78 Bcf - enovate 1.08 Bcf and EMW 2.7 Bcf). As part of that, please provide details on the total already committed to (a) physical baseload sales, (b) physical option sales and © remaining inventory. Regardless of the hedges that were in place, we need to get any uncommitted gas out of the ground and sold (preferably pre-pay) as soon as possible.
(3) Forward copies of the documents which evidence our rights and obligations under the three storage agreements (EMW/NSS, EMW/ PGL Hub and enovate/PGL Hub). If no documents exist, please forward any documentation (correspondence, emails, copies of invoices, etc.) which would evidence Enron's to the to the inventory. Please fax any such documentation to me at 713-646-3460.

Please complete the above in time for us to discuss sometime Friday. If you have any questions, please ask.
Regards,
Ed

-----Original Message-----
From: Penman, Gregg
Sent: Wednesday, December 26, 2001 11:30 AM
To: Luce, Laura; McMichael Jr., Ed; Hodge, Jeffrey T.
Cc: Tomaski, Richard
Subject: Enron MW/Peoples Master

As everyone is aware, Peoples provided notification to Enron MW, L.L.C. of its desire for credit support or termination effective December 28th of the Master Physical Agreement between EMW and PGL. Richard and I met with Raulie, Dave and Tim this morning to discuss the implications of the termination and our ability to continue to fulfill our obligations regarding the deals that are subject to the Master. After much discussion, they (PGL) have agreed to delay any termination until either the end of January or February (they are going to discuss internally which makes more sense). Therefore, unless a higher power overturns our agreement, PGL intends to issue a letter amending their previous notification/assurance letter. If anyone has any questions or comments, please let Richard or me know at your earliest convenience.

Thanks - Gregg