*           David W Delainey
	     0311512001 01:26 pM                                             I

To:
cc:
Subject. Confidential

Gene Lockhart/HOUIEES§EES

   Gene, as you may be aware, the risk management function ih EES was running a wholesale proprietary
   trading function up until about a month or so ago. Enron mahagment had determined that this W25 not
   appropriate given EES's businessand charter. Given the volatility in the current power market, I
   corn~letelj agr6e with this stanc~. ESS, and Iwould argue New Power as well, neither have the systems;
   people or processes to prudently manage activeproprietary trading in the wholesale power markets: With
   the change in philosophy a numberof people from the risk management group in EES have left to New
   Power. These same people had indicated that they believe that New Powerwas going to run a spec
   trading desk and as such preferred to work at New Power. Gene, this could be a lot of hallway talk, but I
   wanted to give you a heads up. Ignore ortake whatever action you feel appropriate.'

   Regard~
   Delainey

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