ASSIGNMENT AND ASSUMPTION AGREEMENT 

This Assignment and Assumption Agreement, dated as of December __, 2000 ("Assignment Agreement") is by and between Enron Energy Marketing Corp. ("Assignor") and Enron Power Marketing, Inc. ("Assignee").  Unless otherwise defined herein, capitalized terms used herein shall have the meanings assigned to such terms in the Master Agreement.
W I T N E S S E T H
WHEREAS, Assignor (successor in interest toformerly known as PG&E Energy Services [Corporation]) and PG&E Energy Trading – Power, L.P. ("Remaining Party") have entered into a number of transactions with respect to the purchase and sale of electricity which are listed in Exhibit A attached hereto (hereinafter referred to as the "Transactions");  [Need to resolve issue with respect to the correct name of former entity.]
WHEREAS, the Transactions are governed by a Master Agreement dated as of September 1, 1998, as the same may have from time to time been modified, amended and supplemented between Assignor and Remaining Party ("Master Agreement");
WHEREAS, Assignor desires to assign and delegate to Assignee all of its rights, duties and obligations in the Master Agreement and the Transactions entered into pursuant thereto, and Assignee desires to accept such assignment and delegation and to assume such rights, duties and obligations, in accordance with the terms hereof; and
WHEREAS, Assignee is an affiliate of Assignor, and the Master Agreement permits the assignment of the Master Agreement and the Transactions to an affiliate of Assignor without the consent of Remaining Party.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor and Assignee, intending legally to be bound, agree as follows:
Section 1.	Assignment and Assumption of PGET Purchase Transactions.  Effective as of and from December [  ], 2000 (the "Assignment Effective Date"), Assignor hereby assigns, transfers and conveys, without recourse, to Assignee all of Assignor's right, title and interest in, to and under the Transactions and the Master Agreement and any relevant credit support documents (including that certain Guarantee issued by PG&E Corporation dated December 13, 2000) (collectively, the "Assigned Agreements"). Assignee hereby accepts such assignment, transfer and conveyance and assumes all of the obligations and liabilities of Assignor under the Assigned Agreements arising on or after the Assignment Effective Date and agrees to perform and observe all of the terms, covenants, agreements, obligations and conditions therein contained on Assignor's part to be performed and observed and to be bound by all of the terms and conditions of the Assigned Agreements on and after the Assignment Effective Date.  Notwithstanding the above, pursuant to the terms of the Master Agreement, Assignor shall not be released from its liability under the Transactions and the Master Agreement.
Section 2.	Representations and Warranties; Certain Covenants.  Each of Assignor and Assignee hereby represents and warrants to the other partiesparty hereto that (i) the execution, delivery and performance of this Agreement by it are within its corporate powers, and have been duly authorized by all necessary corporate or other action and do not violate any of the terms and conditions in its governing documents, any contracts to which it is a party or any law, rule, regulation, order or the like applicable to it, (ii) this Agreement constitutes a legal, valid and binding obligation enforceable against it in accordance with its terms, subject to any equitable defenses, (iii) it is acting for its own account, has made its own independent decision to enter into this Agreement and as to whether this Agreement is appropriate or proper for it based upon its own judgment, is not relying upon the advice or recommendations of any other party in so doing, and is capable of assessing the merits of and understanding, and understands and accepts, the terms, conditions and risks of this Agreement and (iv) it has obtained all consents and approvals of governmental authorities as may be applicable to it with respect to the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby. 
Section 3.	Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original instrument and all of which when taken together shall constitute one and the same agreement.
Section 4.	Governing Law.    THIS AGREEMENT AND THE RIGHTS AND DUTIES OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED, ENFORCED AND PERFORMED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.  EACH PARTY WAIVES ITS RESPECTIVE RIGHT TO ANY JURY TRIAL WITH RESPECT TO ANY LITIGATION ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT.
Section 5.	Binding Effect.  This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.
Section 6.	Severability.  If any provision of this Agreement shall be declared by any court of competent jurisdiction illegal, void or unenforceable, the other provisions shall not be affected, but shall remain in full force and effect. 

IN WITNESS WHEREOF, the parties hereto have executed this Assignment Agreement as of the date first above written.

ENRON ENERGY MARKETING CORP.
By:  _________________________________
Name:  _______________________________
Title:  ________________________________

ENRON POWER MARKETING, INC.

By:  _________________________________
Name:  _______________________________
Title:  ________________________________

EXHIBIT A

(List of outstanding transactions to be inserted here)

Document comparison done by DeltaView on Wednesday, December 27, 2000 18:38:20
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Document 2	::ODMA\PCDOCS\NYC\362809\4 	

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