August 8, 2000

Colorado River Commission

Attention:  Bill Miller

	Re:	Verification of Trading Authorization

Ladies and Gentlemen:

<. 

In recent months, Enron Power Marketing, Inc. (“EPMI”) and the Colorado River Commission (“CRC”) have enjoyed an expanding level of business activity. The parties’ business relationship has reached a point in terms of total revenue and complexity where EPMI would like to invoke the standard trading business practice of pausing to clarify the issue of trading authorization. The issue we would like to focus on is whether or not CRC has the authority to trade in ways that go beyond merely hedging its own load. For example, does CRC have the authority to trade at points other than the natural delivery location of its load based on the relative values of energy at such points, or trade for profit maximization? 

You have asked us to clarify exactly what we would like to receive from CRC to meet our> Pursuant to our discussions, set forth below is the outline of the issues we would request you address to satisfy our compliance and risk management requirements.  <We would like to receive the typical risk management/control device used in the trading business to clarify issues of authorization, namely, a legal opinion. EPMI routinely requests such opinions from counterparties. In this case, we would need> In light of the issues we have raised, we would request an opinion from the Attorney General Office of the State of Nevada or another official of the state who has the authority and responsibility to interpret applicable provisions of Nevada law relating to the trading authority of the Colorado River Commission.  The opinion should <include> address the following points:

1.	That the person signing the opinion is authorized to interpret the applicable statutes and regulations and the basis for that authority.

<Citations and, where appropriate, quotations from the applicable statutes and regulations that provide the basis for the opinion.>

2.	That the Colorado River Commission is authorized to engage in trading in the power markets for purposes beyond its purchasing or selling needs and beyond its need to hedge its load.  Specifically, the opinion should include the representation that pursuant to applicable statutes and regulations the Colorado River Commission is authorized to trade for profit in the power markets.

3.	Citations and, where appropriate, quotations from the applicable statutes and regulations that provide the basis for the opinion.

We <We hereby ask you to provide us with an opinion in the form set forth above and > look forward to further discussions about this issue.  

						Sincerely,

						Paul Choi
						Manager, Mid Market

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