Trading, Risk Management and Back-office Overview DRAFT COPY Trading, Risk Management and Back-office Overview July 2000

Table of Contents 1. Overview 2. Trading Organization 3. IT Applications

1. Overview

Summary Services: Strengths: Overview Enron North America Corp. (“ENA”) will design and populate NewCo’s trading organization with key personnel ENA, for a fee, will enter into a services agreement with NewCo for IT applications including back-office and risk management services and other IT services Strengths: ENA is the largest power marketer in the country, trading over 400,000,000 MWh in 1999 Forbes A-List of Companies: “Top Power Company in the World” Forbes Global Business Magazine, January 11, 1999 ENA’s trading and marketing expertise extends into natural gas, power, coal, liquids, emissions credits, pulp and paper and other energy intensive products

2. Trading Organization

Risk Management & Trading Trading Organization Trading and risk management infrastructure to replicate the Enron model ENA to contribute key trading and marketing personnel NewCo’s trading will utilize ENA’s back office systems and risk management capabilities (services agreement) Risk management and trading to focus on asset optimization and spread option value, not speculative trading

Trading and Marketing Org. Chart Trading Organization Trading and Marketing Org. Chart

Trading Resources Trading Personnel: Required Skills: Trading Organization Trading Resources Trading Personnel: ENA would nominate NewCo’s Head Trader The Head Trader would fill additional spots with a combination of FPLE, ENA and if needed, outside employees Required Skills: Knowledge of forward energy markets and derivatives Experience with the physical power grids and gas pipelines Ability to manage the plant’s spread option value and asset optimization

3. IT Applications

IT Applications Services Agreement ENA proposes to provide the following contracted IT services to NewCo for a 24 month period (with evergreen option) Back-office and risk management applications utilizing ENA’s proprietary systems for deal confirmation, risk management, invoicing/collections/payment and global contract/global counter-party management EMS/Real Time Monitoring applications for NewCo’s facilities Additional applications for IT infrastructure needs During the term of the services agreement, NewCo would explore all of its options regarding: maintaining existing contractual arrangement with ENA; or replacing with own proprietary systems

System Diagram IT Applications EnPower System Unify System CONFIDENTIAL IT Applications System Diagram Deal Confirmation Trade Information EnPower System Electronic Trade Blotter Customer NewCo Trading Trade Trade Information Trade Information Invoicing/ Collections/ Payments Risk Management (Valuation/Daily P&L) Portfolio Data Unify System Customer Data Global Contracts Global Counter-party

Experienced in over 375,000 deals IT Applications Back-office Services Deal Confirmation Prepares customer confirmations, customer contracts, performs broker check-outs and reviews deal integrity EnPower System allows for automated confirmation preparation and auto-faxing to expedite customer service Nightly check-out and reconciliation of all deals executed Risk Management Calculates daily profit & loss of portfolio Reconciles new deals and portfolio changes Independent verification of commodity, volatility curves Fully automated, EnPower System System provides flexible reporting tools Invoicing/Collections/Payments Daily check-out with counter-parties Fully automated Unify System Reconciliation of invoicing/payment to general ledger system Automated aging of accounts Cash management Accounting applications provided via SAP Global Contracts/Counter-party Manages contract and customer information Automated feed for downstream processing Allows for counter-party data management and customization Experienced in over 375,000 deals

Additional IT Services IT Applications ENA can also provide the following services: The use of ENA’s network, servers and desktop software including Microsoft Office and Exchange applications Initial deployment and support for desktop PC’s and printers Unix, DBA, NT and Help Desk support for ENA’s applications and infrastructure The use of ENA’s Lucent and Trading IPC phone networks Internet access for NewCo’s employees Interfaces between NewCo’s and ENA’s applications ENA’s Standard Market Data feeds for NewCo’s traders Custom software enhancements