Project Why Update

1. Project Why Update April 19 Offsite Meeting & Report on Status of Efforts to Implement E-Commerce Initiatives May 9, 2000

2. Overview • Quickly list ideas generated at Project Why offsite meeting • Focus on four of these Ideas • Use of EnronOnLine for Auctions • Electronic contracting • Development of a Customer Call Center • Collaboration of IT and business units • Allow commercial groups to talk about their implementation plans

3. Project Why Team • Caroline Barnes Lynn Blair Shelley Corman • Scott Coburn Rick Dietz Tina Dunnaway • Dan Fancler John Freeman Steve Gilbert • Steve January Dana Jones Shane Lakho • Bob Martinez Bob McAuliffe Sheila Nacey • Dick Shephard Jim Studebaker Kim Watson • Jo Williams Julia White Steve Hotte

4. Project Why Ideas • Expert Call Center • Internal “Knowledge Dashboard” to support call center • Develop “MyGPGCapacity.com” • Combine operator confirmation process across GPG • Eliminate paper execution and storage of contracts • Develop customer self-guided capacity release process • Electronic service requests • Provide MTD look at invoices during the month • Sell customer load forecasting tools • Marry MIPS/SCADA systems

5. Project Why Ideas (Cont’d) • Deliver measurement information in a web-friendly format • Common Internet/Intranet support • Rethink disaster recovery strategy • Common customer training efforts • Central GISB implementation efforts (single EDI implementation guides) • Phase out EDI in favor of XML • Develop a GPG Portal (basic service & enhanced service for a fee) • Portable Internet Access • Adopt SoCal Imbalance Trading Model

6. Use of EnronOnLine for Auctions

7. Potential GPG “Online” Transactions • Firm Capacity Auctions • Capacity Options Trading • Interruptible Capacity Auctions • Storage Capacity Auctions • Fuel • Capacity Release Program • Imbalance Trading

8. How to Get Started Using EnronOnLine • Select a Few Transactions. Possible candidates: • TW short-term firm capacity • FGT western division FT • TW capacity options • NBPL buying/selling line pack • Imbalance trading • Complete EnronOnLine New Product Forms • Develop the web site that would be behind the EnronOnLine Screens

9. Responsibilities for Making This Happen • Define products & auction rules Mktg/Mkt Serv • Complete EnronOnLine form & website Steve Hotte • Verify that product/rules meet reg. parameters Reg/Legal • Verify marketing affiliate issues Shelley Corman • Establish electronic contracting policies GPG Legal/Contracts

10. Update on Specific Commercial Efforts to Define Products & Auction Rules • Current development phase of TW firm capacity auction • targeting July 2000 roll-out • review draft prototype • Status of other products

11. Electronic Contracting

12. EnronOnLine Contract Framework • Password Agreement • Electronic Trading Agreement • Buy/Sell Arrangements (under master agreements or under short-form GTCs)

13. What are the Legal Issues? • Enforceability • Original Signatures • Statute of Frauds • Authority • Counterparty authority to bind • Internal Signature Authority Issues

14. Enforceability • EnronOnLine Experience • Decided to have agreements build on original signature • Signature on Password Agreement binds the party to enforceability of subsequent agreements • Decided against “Digital Signature” - Hard to add digital signatures to web pages • Moreover, there wasn’t case law saying a “click” is enough

15. Statute of Frauds • Statutes of Fraud laws require a complete writing (including an original signature) for certain contracts (> 1 yr) to be enforced. • Will the Password Agreement signature suffice to make subsequent electronic agreements satisfy SF? • EnronOnLine only received opinion r.e. NY SF laws.

16. Counter-Party Authority Issues • EnronOnLine Experience with Authority Issues • Legal review prior to issuing password • If Password Agreement is signed by an existing customer, no further inquiry • If signatory is unknown, legal calls company to verify employment/title status • EnronOnLine is comfortable with this level of authority given short duration of transactions • GPG Issues • Our contracts are longer term • However, we have a smaller, less transient universe of counter parties

17. Internal Authority Issues • Current policies specify signature authority based on size/type/term of contract • Authority issues can be addressed in part by limitations in password set-up (i.e. no internal signature issues if counterparty is only set up to engage in capacity release) • Internal authority policies will need to evolve prior to accepting IT/FT agreements electronically

18. What Types of Agreements Do We Have Now? • HotTap Password Agreements • Electronic Contracting Agreement (ET&S) • Electronic Trading Partner Agreements (EDI) • Electronic Trading Agreements (FGT Nominations) • Service Agreements (FT, IT, receipt/delivery points) • Other Agreements (e.g. agency, discount letters, OBAs)

19. Next Steps • If we can mark-up our own EnronOnLine agreement (Tony, Maria, Legal Team) • draft combined password/ETA agreement • have agreement cover all GPG electronic contracting (including both EnronOnline & HotTap) • decide on which state law should apply (Texas or Nebraska) and get SF opinion • develop logistics plan to revise existing password/electronic agreements (except EDI)

20. Next Steps (Cont’d) • If we are required to use the EnronOnLine password agreement & ETA • Verify that agreement is Enron Corp., not ENA • Verify that can accept NY choice of law • Prepare a customer electronic contracting packet/memo explaining types of electronic agreements • Get marketing affiliate legal opinion (Shelley) • Need for separate transportation/trading passwords? • Navigation between EnronOnLine & website

21. Knowledge Call Center

22. Knowledge Call Center - Long Range Vision Customers can access a single number for all transactional inquiries (including technical support) Our customer service representatives have computer screens that provide ready access to the information needed to answer questions on the spot Call center provides cross-pipeline support for evening hours and emergency back-up

23. GPG Customer “My GPG Capacity.Com” (Customized Information) Push Info Real-Time (INTERNAL) (INTERNAL) GPG Pipeline Knowledge Center Run Process Market Intelligence Analytical Research To GPG Pricing Desk “Knowledge Based Dashboard” GPG Pricing Desk (Mktg)

24. GPG Knowledge Center Tools • Telephone/Internet Systems • Knowledge based system (a system that contains all the information to answer the questions on a timely basis) • Technical tools to formulate real-time answers to all expert areas • Electronic tools to push information internal/external • Highly trained personnel for Knowledge Center

25. Knowledge Call Center - To Dos • Demo Internet phone routing tools • Initially, NBP, ET&S & FGT may have separate phone numbers • Test ability to re-route to single site for back-up • Develop expectations for our customer call representatives • Develop mock-up of knowledge screens that call center employees need

26. Collaboration of IT and Business Units“Knowlaboration” The process of knowledge-sharing between business and IT professionals within GPG.

27. Why is Knowlaboration Needed? Marketing/Market Services “What’s Possible” Marketing/Market Services “What’s Possible ?” IT “What’s Desired” IT “What’s Desired ?” External Technology InterfaceInternal Technology Interface External Customer Interface Internal Customer Interface

28. Why is Knowlaboration Needed? Both Functions Know What is Needed and Possible Marketing/Market Services IT External Customer Interface Internal Customer Interface External Technology Interface Internal Technology Interface

29. How to Encourage “Knowlaboration” • Company Intranet/Portal/”Digital Dashboard” • Cross-training • Technology “Brown Bag” Sessions • Single number for customer HotTap support & business concerns • Common Intranet/Internet development & posting responsibility