Wind Company

While I understand that the Wind Co is clearly a "non-core" asset for Enron=
, I am very concerned about the apparent decision in Houston not to provid=
e short-term liquidity for our operations (I have heard that the wind co is=
on its own for cash going forward). While I am probably more eager than a=
nyone to have the Wind Co regain its financial independence, I can not do i=
t overnight and am worried about the potentially devasting impact which a l=
ack of short-term capital will have on our business and, quite directly, th=
e value of this asset to Enron.

As you know, our lenders on IMI/Clear Sky have refused to fund a construct=
ion loan (they will not take Enron equity bridge risk) - this construction =
loan was the most important piece of our working capital/cash funding for Q=
4. AEP and its lenders on IMI/Clear Sky are also expressing serious concer=
n about the Enron warranty guaranty (we will likely have to reserve cash to=
secure our warranty obligations, further exacerbating our cash position). =
FPL and AEP have in essence put on hold their deals with Enron Wind pendin=
g some clarity on how Enron's liquidity difficulties may affect Enron Wind.=
AEP has gone as far as saying the Enron Wind is probably BK without worki=
ng capital support from Enron, and are understandably asking why should the=
y be comfortable with our performance risk? Our European vendors, still mi=
ndful of Tacke's bankruptcy in 1997, are extremely concerned about our fina=
ncial condition. And a number of our counterparties who owe us money but a=
re also owed money by Enron affiliates are seeking to set-off those obligat=
ions. While I will have better numbers over this weekend, without the IMI/=
Clear Sky construction loan, I will need between $30-35mm through the end o=
f the year (until the AEP sale closes) in order to meet our working capital=
needs. Without that support, I can almost guaranty you I will not be able=
to sell IMI/Clear Sky to AEP and am worried about our short-term financial=
survival. =20

Stan - this clearly has serious implications for the value of Enron Wind an=
d our sales effort. I am meeting again with my finance team (such as it is=
) over the weekend and on Monday morning. I will set up some time with you=
on Monday or Tuesday to discuss. I know there is no desire to support the=
Wind Co medium to long-term, but a decision to cut us off now could be fat=
al. =20

Adam