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  0

Interoffice Memorandum

  To Don Black, Rick Buy, Dave Delainey, Janet Deitrich,
John Lavorato, Louis Kitchen, Ted Murphy, David Port,
Cassandra Schultz, Jeff Skilling, Greg Whalley, File Copy
  From: Chris Abel / Kenneth Thibodeaux Department: Risk Management
Subject: Loss Notification Date: May 17, 2001
Please note below the explanation of the loss exceeding risk policy limits as of the close of business May 16, 2001.
Enron Americas - Power Trading

  Notification: Daily Loss Limit
Limit: $54.00 Million
Daily Loss: $225.83 Million
Explanation:

  The daily loss of $225.83MM resulted mainlyy from adjustments in EES' California business. Contracts
with two entities, the University of California and IBM, were unwound and they are now being served by
the utilities. This caused $74MM in losses. Additionally, the PUC in California adjusted the tariffs for
delivery of power for both NP and SP, causing $171MM in losses.

  Approvals:
rader

Risk Assessment and Control

ECTe001820159


EXH033-00249


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  Respect.

Integrity

Communication

Excellence

ECTe001820160


EXH033-00250