Perry Gas Companies, Inc.

Rick Buy

I'm expecting more details from Bill re. Perry Gas but I'm quite pissed about
this. I will deal with my traders when I have the details. On the Retail
side, I think this is the problem in trying to set up a separate Wholesale
trading group in retail which is clearly happening. This wouldn't of
happened it they were trading through us.
---------------------- Forwarded by John J Lavorato/Corp/Enron on 09/19/2000
10:37 AM ---------------------------

From: William S Bradford @ ECT 09/18/2000 06:51 PM

To: John J Lavorato/Corp/Enron@Enron
cc: Rick Buy/HOU/ECT@ECT, Tom Moran/HOU/ECT@ECT, Russell Diamond/HOU/ECT@ECT

Subject: Perry Gas Companies, Inc.

John,

As discussed today, I have attached a summary of ENA's credit exposure to
Perry Gas Companies, Inc (approximately $1,800,000). They have filed for
bankruptcy on August 28, 2000. It should also be noted that our July
settlement was not offset by our purchases due to an apparent oversight by
the Settlements group, resulting in an additional $678,000 of credit
exposure. EES's credit exposure is still being researched but is estimated
to be over $5,900,000 of additional exposure. We are working with EES to
resolve these issues as well.

As I mentioned today, Perry Gas Companies, Inc. was not approved for credit
on any of these transactions and was on our Credit Watch List. This company
was not an approved counterparty and was granted a zero credit line.

We are still trying to get the list of trades and traders for the July
transactions.

Let me know if you have any questions.

Bill