New Market Opportunity:  Industrial Hourly Sales

I was wondering if it made sense to discuss internal to Enron Government 
Affairs the concept of opening the Large Industrial Market to eCommerce.  If 
we think this is reasonable, maybe we can make a pitch to the Enron NetWorks.

It is my recollection that the current regulatory rules related to customer 
switching and marketer enrollment do not allow large consumers to buy energy 
on a less than monthly basis - there is no switching within the month.  LDCs 
have historically prohibitied this to make sure that they were "paid" and 
energy flows were in "balance".

To me, this regulatory "restriction" makes no sense at all.  First, big 
consumers have the capability to buy energy hourly - staff and resources.  
Second, big consumers need to be sure that they are getting the absolute 
lowest price.  Third, big consumers control the load which if proper price 
signals are provided can be used to reduce overall system peaks.  Finally, 
the LDC arguments have always been ridiculous - they buy and sell energy 
hourly.

To initiate this discussion, I was wondering if Jeff Dasovich and Lisa Yoho 
could find out in CA and PA, respectively, if I am correct about the 
regulatory "restrictions".  The other question, for Jeff Brown, is whether or 
not we could construct a framework for Enron Online that provides for the 
purchasing of the large customer full requirements (for example, metering, 
data needs, etc.).

Does this make sense to everyone?  If I am way out in left field, let's not 
do alot of work.  It just seems to me that we should try to migrate big 
consumer load to Enron Online before competitors get into eCommerce.

JDS




---------------------- Forwarded by James D Steffes/HOU/EES on 04/20/2000 
07:42 AM ---------------------------

	ENRON 
	

From: Office of the Chairman@ENRON on 04/07/2000 05:46 PM
To: All Enron Worldwide
cc:  
Subject: Enron Net Works


It is becoming increasingly clear that the development of eCommerce will have 
a significant and continuing impact on the conduct of business in a broad 
array of industries.  Through EnronOnLine, Enron has quickly become a major 
catalyst for the transition to the web in the gas and electric industries.  
EnronOnLine has been an enormous success since its launch.  Since launch, we 
have completed 67,043 transactions on line, with a total dollar value of over 
$25 billion.  EnronOnLine is now the largest eCommerce site in the world.

We believe that the competitive success of EnronOnLine is due to one very 
specific reason.  In addition to providing a web-based platform for 
transactions, Enron acts as principal to provide direct liquidity to the 
site.  We stand ready at all times, in any market conditions, to buy and sell 
at the posted price.  This converts a &bulletin board8 (the more typical 
eCommerce concept) into a true market.  There are very few, if any, 
competitors that can provide this capability.

We are increasingly convinced that this competitive advantage can be 
dramatically expanded to other products and other geographies.  If we are 
correct, this could provide an enormous new opportunity for growth for Enron.

Accordingly, we are initiating a major new effort to capture this 
opportunity.  Effective today we are creating a new business, Enron Net 
Works, to pursue new market development opportunities in eCommerce across a 
broad range of industries.  It is likely that this business will ultimately 
be our fifth business segment, joining transmission & distribution, 
wholesale, retail and broadband services.

Included in this business will be our entire IT and technology group along 
with significant talent and resources in market making and finance.  
Initially, North America will provide primary direct support for staff 
services and back office, however, over time we will be requesting support 
services from virtually all Enron units to ensure continued growth and 
success.  To facilitate the combining of commercial capabilities with these 
new eCommerce platforms, Enron Net Works will work closely with the merchant 
functions of North America, Europe, South America, CALME, Asia and Broadband.

Enron Net Works will be headed by Greg Whalley, Chief Executive Officer; Mike 
McConnell, Chief Operating Officer; and Jeff McMahon, Chief Commercial 
Officer.  These individuals will comprise the Office of the Chairman for 
Enron Net Works and remain on the Executive Committee of Enron Corp.  
Replacing Greg Whalley as President and Chief Operating Officer of Enron 
North America is Dave Delainey, who will also join Enron,s Executive 
Committee.

Global Technology will remain intact but will now be a part of Enron Net 
Works.  It will maintain all of the same businesses and services as it did as 
an Enron global function.  Philippe Bibi will remain the Chief Technology 
Officer for all of Enron Corp. and continues to be responsible for the 
development of worldwide technology standards and platforms.

EnronOnLine, headed by Louise Kitchen, will also remain intact and will now 
be a part of Enron Net Works.  The success of EnronOnLine enables us to 
utilize this site as a model as we explore other markets. In addition, the 
following individuals are included in Enron Net Works along with their 
current eCommerce initiatives: Harry Arora, Public Financial Securities; Jay 
Fitzgerald, New Markets Identification; Bruce Garner, Metals; and Greg Piper, 
Pulp and Paper.

Over the next several weeks we will complete staffing and organizational 
design and will provide full details on this exciting new business 
opportunity.