European Weather

John,

Here is a brief email on a possible resolution for the European/Oslo weather
situation. Mark sent this draft to me last weekend but i haven't had time to
review it this week. Personally, I think that this is the wrong answer from
a Corporate perspective but this issue keeps hanging around and isn't worth
any more of our time. For what it is worth, I think our communication
strategy did make a big difference but didn't get us exactly where we needed
to be. These groups will be expected (and held accountable) for good and
consistent communication on an ongoing basis as well. For a P&L that is
this small (and negative) we are all spending too much time on this. There
is more to this story but I think we should just drop it and move on to
bigger and better things.

I am certainly not wedded to any of this but would rather focus on all the
other issues and problems on my plate. Let's discuss upon your return on our
weekly call.

Thanks and I hope your vacation was relaxing.

Mike

ps-this hasn't been shared outside the group on the email.

---------------------- Forwarded by Mike McConnell/HOU/ECT on 05/25/2001
07:50 AM ---------------------------
From: Mark Tawney/ENRON@enronXgate on 05/18/2001 03:06 PM
To: Mike McConnell/HOU/ECT@ECT, Jeffrey A Shankman/ENRON@enronXgate
cc:
Subject: European Weather

I propose to structure Weather Risk Management in Europe as follows:

I have responsibility and authority for all weather related activities
including: trading (incl. EOL), structuring, origination, research, etc...
for all of Europe with the exception of Finland, Norway and Sweeden. I will
run Europe out of the London office with people reporting directly to me.
Accordingly, I will allocate V@R and delegate trading authority to personnel
in the London office.

I anticipate having Paul Murray run our activities in London. Janine Juggins
in the London Tax department is establishing the necessary entities and
addressing the relevant tax issues. Simon Thurbin in London who reports to
Todd Hall is identifying a book administrator for our group. Cindy Horn
again in London is securing space for an initial 8 to 10 individuals. We
have hired an assistant who is multilingual to assist in the setting up of
our activities. We are working with Stuart Reed in Houston IT and Brian
Hudson in London IT (coordinating with Oslo) to ensure that we have the
infrastructure necessary to trade weather.

In addition to Paul Murray, Ross McIntyre, and the assistant, Catherine
Woolgar will return to London. We have also identified an individual in
London to provide research support. For sturcturing, we will send one
individual for the Houston group and hire one new employee already identified.

Paul Murray will focus on the management of the office, relationships within
Europe and the execution of large structured trades. All other individuals
in the London office will have dual reporting with a dotted line to Paul and
a direct line to the group leaders in Houston to ensure continuity and
accountability.

With respect to Scandinavia, I propse that those activities be treated as
completely separate with their own V@R and trading authority. Their
activities should be limited only to Scandinavia. The Houston group will
share infomation and knowledge in the same way that we would with other desks
within Enron. Should any of the groups reporting to me wish to take on a
Scandinavian position, they will have to do so through the Oslo weather
group. Likewise, should the Oslo weather group wish to take any weather
positions outside of Scandanavian, they will need to do so through me.

Paul Murray and I will develop a new budget for Europe taking into
consideration the time needed to establish our activities. Oslo will retain
responsibility for the European budget as originally proposed by Thor Lien.