Canadian Financial Trading Confirmation Process

Further to a discussion with Mark Taylor, I wanted to confirm our collective
understanding/proposal regarding the legal procedures associated with the
financial trading process in Canada. As you are all aware, all financial
confirms for Enron Canada are now generated and distributed by the confirm
desk in Calgary. However, it seems that there has been some confusion
relating to the legal procedures associated with this process.

In short, I believe that everyone is in agreement that the legal process
regarding Canadian financial confirms will be basically the same as for
Canadian physical confirms. That is, as is currently the process for
physical deals, the commercial people will generate all deal tickets and, to
the extent that the financial transactions are straight forward, the Calgary
confirm desk will generate, have executed and distribute to counterparties
the confirmation letters based upon those deal tickets, with no involvement
of the legal department. However, for any financial transactions that are
out of the ordinary or contain special terms (as well as amendments), just as
with physical transactions, the confirm desk will provide the deal ticket to
Linda or Sharon in Calgary. Linda and Sharon will then prepare the draft
financial confirm based upon the deal tickets, which will be reviewed and
approved by either myself or Mark Powell. Once approved, the confirm will be
initialed by the reviewing lawyer, checked for credit and sent to the
commercial person to review, approve and have executed by McKay, Milnthorp or
Zufferli as appropriate. The executed confirm will then be returned to
either Linda or Sharon, who will attend to distributing it to the
counterparty. Again, this will only be required for transactions which are
out of the ordinary.

With respect to negotiating and implementing, and addressing ongoing legal
concerns with respect to, ISDAs on behalf of Enron Canada, Mark Taylor's
group, and I understand specifically Mary Cook, will continue to have
responsibility for such matters. Therefore, to the extent that we need to
put an ISDA in place with a counterparty or if a counterparty has legal
concerns about the implementation of the ISDA, the process will be the same
as it has been in the past, meaning that those matters will be dealt with in
Houston.

Given that Linda and Sharon will now have responsibility for preparing
initial drafts of atypical financial confirmations, I think it is essential
that Tana spend a few days in Calgary as soon as her schedule permits to run
each of Sharon and Linda (as well as perhaps some of the people in Peggy's
group who will be dealing with financial confirmation matters) through her
ISDA training course and to help Linda and Sharon set up the process in our
legal group to deal with these matters. As well, we will need to ensure that
Linda and Sharon receive (either from Houston or Dianne) electronic versions
of all confirmation precedents (ie. confirm forms, amendment forms, etc.)
necessary for them to properly undertake these activities.

If anyone has any questions or concerns regarding the above, please do not
hesitate to contact me. Otherwise, I think we should implement these
procedures as soon as possible, including having Tana join us for a few crisp
winter days in Calgary.

Thanks

Greg