Update on Cinergy

Dave,

We received a little inside information on Cinergy (no guarantee if reflective of corporate view, but insightful non the less). The feedback indicates that holding firm in our "no run" stance is the best position to take at this time.

Apparently this "run/no run" issue is partly an internal political issue between Houston and Cincinnati, whereby the operators in Cincinnati think Tang and Vivar cut a bum deal on this remedial work issue which allowed these modifications (bearing and silencer at Brownsville, control curves at Caledonia) but did not require any testing. It appears the guys in Cincinnati are posturing such that if the machines break or don't work as planned, the blame would then fall on Tang and Vivar (this helps explain why Tang is so adamant about running). The view was that given this, ultimately the PSA rules and running is not required.

Let me know if you need any more color.

Thanks for your help.

Don