============= Page 1 of 27 ============= 2001 - 2003 Operating & Strategic Plan E0004392427 =XH005-02601 ============= Page 2 of 27 ============= E0004392428 America Enron North f / a . C EXH005-02602 ============= Page 3 of 27 ============= Board Presentation • Financial Review • 2000 Accomplishments • Market Snapshot • Regulatory Challenges E0004392429 E' . 9 =XH005-02603 ============= Page 4 of 27 ============= Board Presentation • Financial Review - Third Quarter/Year to Date Snapshot y~oy/ E0004392430 =XH 005-02604 ============= Page 5 of 27 ============= Growth Continues, Driven by Commodity Services EBIT $ millions 1,000 900 800 700 600 500 400 300 200 100 0 4Q'99 4Q'00 Plan 4Q'00 Forecast Fourth Quarter 1999 2000 Plan Full Year E0004392431 1,145 2000 Forecast =XH005-02605 ============= Page 6 of 27 ============= Capital Deployed ($ millions) 3,000 2,500 $27443 $2,371 Strategic Assets --65 Net PRM Merchant Assets 431 Subtotal Net PRM ~` 63 Working Capital 2,000 477_ Off Balance Sheet Assets mmommi Oth,erAssets Total 36 6 7- 1,500 Other Assets:, 701 Gas Assets 500 1,000 Gas Assets 1+065 500 929 Powe :Pants Power Plants 0 12/31/99 12131/00 Strategic Assets $1,053 $710 12131/99 12131100 Merchant Assets $830 Projected 12131199 12/31/00 $2,443 $2,371 1,053 710 $3,496 $3,081 830 __ 998 $4,326 $4,079 $998 12131199 12/31/00 Off Balance Sheet Assets E0004392432 :XH005-02606 ============= Page 7 of 27 ============= Enron's Leading Market Position Third Quarter 2000 (TBtue/d) Power 47.8 Source: Gas Daily, Power Markets Week - Gas E0004392433 0 :XH005-02607 1999 2000 Duke PGE Aquila Dynegy Reliant AEP Southern Coral El Paso Enron Enron ============= Page 8 of 27 ============= Physical Electricity Sales Volumes (Million MWh) 390 y~oy/ E0004392434 =XH005-02608 3Q99 3Q00 YTD3Q99 YTD3QOO ============= Page 9 of 27 ============= Natural Gas Physical Volumes (Bcfld) I Canada us 25.2 3Q99 3Q00 YTD3Q99 Y usuuu f,. y~oy/ E0004392435 EXH005-02609 ============= Page 10 of 27 ============= Rapidly Increasing Utilization of EnronOnhifle (North America Gas and Power Transactions) El Traditional  EnronOnline 4AAO/ 100% 100% 100% E0004392436 y~oy/ i EXH005-02610 Q1 Q2 Q3 W14 ============= Page 11 of 27 ============= EnronOnline Average Transactions/day (North America Gas & Power) 0 Non-EOL 4,613 ~-- 1999 2000 E0004392437 :XH005-02611 Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov ============= Page 12 of 27 ============= Board Presentation • Financial Review • 2000 Accomplishments E0004392438 =XH005-02612 ============= Page 13 of 27 ============= 2000 Accomplishments Utility outsourcing is a key proposition in our strategy to augment the network with flexible resources 2000 Progress: • Power Transactions • Gas Transactions - NSTAR (BECO) • Closed six month all requirements transaction - Oglethorpe • "Virtual Utility" deal - ENA manages: • Assets • PPA's • Gas Supply Agreements • Load Requirements • Transaction discussions in progress -AGLNNG • Full requirements load • Two year term commencing December 1, 2000 • 30 BCF/year sales - PSEG • Full requirements load • ENA manages 20%of contractual assets • ENA supplies 20%of native load • 60 BCF/year sales • MOU in progress E0004392439 y~oy/ XH005-02613 ============= Page 14 of 27 ============= 2000 Accomplishments Significant success achieved in our generation strategy Strategy < Control large bank of sites that provide optionality < Profit opportunities < Provide liquidity to network E0004392440 :XH005-02614 Project Type MW $ millions 1999 Peakers (merchant) SC 1,300 $ 416 2000 Peakers (merchant) SC 1,700 592 Oglethorpe (PPA) SC 340 117 Austin Energy (PPA) SC 178 88 Pastoria (merchant) CC 750 543 Vitro (PPA) CC 245 185 PSCo (PPA) SC 240 112 LV Cogen II (merchant) CC 225 180 Total 4,978 $__2,.233 Enron MWs • In Operation 3,340 O Development Project 1,638 • Site Secured/Prospects Sales Pending 2000 Peakers Pastoria Caledonia & Brownsville Total Type MW $ millions SC 1,700 $ 1,028 CC 750 580 SC 950 500 3,400 $ 2,108 ============= Page 15 of 27 ============= 2000 Accomplishments Significant expansion of our Mexican business Risk Management 1999 2000 % Increase 8 Counterparties 63 Counterparties 687% $13 MM Notional Value $203 MM Notional Value 1,485% 11.7 Bcf Gas 58.2 Bcf Gas 397% ----------------------------------------------------------------------------------------------------------- Cross-Border (Tex Industrial Generation (Vitro) le Public Board les on • 300 MW HVDC tie between ERCOT & Mexico • 15 Year - 112 MW PPA with DeAcero Industrial • COD 2002 • 245 MW facility • 3 PPA's with Mexican Industrials • COD 2002 E0004392441 ~ 1 XH005-02615 ============= Page 16 of 27 ============= 2000 Accomplishments Significant expansion in our Canadian power business Transactions: • British Energy - 3 year PPA upon Ontario Market Opening (by Q4 2001) - 500 MW Firm RTC - U.S. $25/MWh • NUG Contract Management - Awarded RFP to assume role of Contract Manager for the Ontario NUG's on behalf of OEFC (Ontario Electricity Financial Corp.) - 1,700 MW's, 64 IPP's - 3 year term commencing with Ontario market opening • ENERconnect ESA (Electricity Services Agreement) - Exclusive provider of back office services/portfolio management to 54 MEU's - Represents over I MM customers & 3,000 MW load - 3 years upon Ontario market opening, C$12MM gross revenue • Alberta PPA's - 700 MW Acquisition - Coal fired PPA, 20 year term E0004392442 y~oy% - 70% of full build in May ($37/MWh vs $47/MWh at 16% RoR) =XH005-02616 ============= Page 17 of 27 ============= 2000 Accomplishments Completed the monetization of Wind River/Powder River assets • ENA acquired interest in 3 strategic gathering systems in Wyoming from 1998 - 1999 • Northern Border recognized potential strategic value to their operations in 1999 and discussions ensued • Q3 2000 Sale of Wind River/Powder River Assets to Northern Border - $204 MM sales price - $76 MM gain on sale • ENA captures future value in both basins with: - Risk Management - Commodity services - Outsourcing services E0004392443 O :XH 005-02617 ============= Page 18 of 27 ============= Board Presentation • Financial Review • 2000 Accomplishments • Market Snapshot - Power market • Key Fundamentals • Pricing - Gas market • Key Fundamentals • Storage situation • Pricing E0004392444 XH005-02618 ============= Page 19 of 27 ============= Key Fundamental Events Power Market • Significant year on year core demand growth (5%) Economic expansion - Intomet/technolo gy explosion • Warmer than normal summer in the west - cooler than normal summer in the east t . • Significant decrease in hydro generation in the West • Minimal capacity additions in the West • Significant increase in new gas fired capacity in the East • Resulting price volatility E0004392445 'yp0 XH005-02619 ============= Page 20 of 27 ============= U.S. Power Price Volatility Mid-Columbia Prices (average daily peak) 300 I 1 1 t I 250 I 1 I 1 I 200 1 I 1 1 150 I 1 1 I I 1 100 I 1 I I 50 i I 1 I i 0 I I Jan Mar May Jut Sep Nov Jan Mar May Jul Sep' Nov 1999 2000 --~ t ($/MWh) t I t 300 250 200 150 100 50 0 Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov ~------ 1999 00 2000 -~ ($/MWh) O E0004392446 V XH005-02620 California Prices (average daily peak) ============= Page 21 of 27 ============= U.S. Power Price Volatility ~A Cinergy Prices (average daily peak) Nepool Prices (average daily peak) 350 300 250 200 150 100 5Q 0 .Jan', Mar May Jul Sep Nov Jan Mar May Jul Sep Nov .- 1999 2000 -.1 ($/MWh) i i 350 300 250 200 150 100 50 0 Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov ~- 1999 2000 ---+ ($/MWh) 0 E0004392447 :XH005-02621 ============= Page 22 of 27 ============= Key Fundamental Events Gas Market • US natural gas supply has been relatively flat over past 24 months • Canadian natural gas supply growth has stalled recently despite significant pipeline expansions • Virtually all power demand growth has been met with natural gas • Summer 2000 was very warm in California leading to storage falling below historical levels • Overall storage levels in the US are currently 23% behind last year • Early cold weather brings concerns over late winter deliverability (particularly in California) E0004392448 =XH005-02622 ============= Page 23 of 27 ============= Current U.S. Gas Inventory Levels (Bcf) 3,200 , 2,800 2,400 2,000 1,600 1,200 5 Year Average 1999 -2000 800 -j - --- - - - - .. - --- - - -. - - .._ .._-- .. _. . . ._ _ - - - - . _ T~ r r r r r r i T r r r , r - , , i 7 r r r - r r. , r i , , r -T--r---r. _.r.- r _ - -r-r--r --T --~ 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 WEEK E0004392449 y~ "c '" O =XH005-02623 ============= Page 24 of 27 ============= California Storage Levels -SoCal 2000 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 - SoCal 1999 E0004392450 ~ =XH 005-02624 1 12 23 34 45 56 67 78 89 100 111 122 133 144 155 166 177 188 199 210 221 232 243 254 265 276 287 298 309 320 331 Days ============= Page 25 of 27 ============= 12 10 8 6 4 2 0 1/4/2000 Gas Price Volatility SoCal Prices vs HH Prices 4A rl•m.r rnllir.n wn E0004392451 40 35 $35 SoCal 30 25 20 15 10 $10 HH 5 0 Dec 7, 2000 14~1 ~oy% r. =XH005-02625 3/4/2000 5/4/2000 7/4/2000 9/4/2000 11/4/2000 $/M M Btu ============= Page 26 of 27 ============= Board Presentation • Financial Review • 2000 Accomplishments • Market Snapshot • Regulatory Challenges E0004392452 0 =XH 005-02626 ============= Page 27 of 27 ============= Regulatory Challenges • California Power Market Crisis - Price cap for parties selling into Cal ISO and Cal PX - FERC Order on Market Reforms - Class Action Lawsuit • FERC Order 2000 RTO Implementation - Scheduled completion Dec. 2001 • Delays in Market Openings - Ontario Market still not committed to "date certain" - Significant Public Policy questions related to continued opening E0004392453 :XH005-02627