Philadelphia Gas Works ,
 To All:

This is in response to the article in Gas Daily last week that mentioned the 
need for a short term working capital loan from the City of Philadelphia to 
cover their cash crunch due to higher natural gas prices.  Veronica and I 
spoke today to Tom Smyth, Controller of Philadelphia Gas Works, to understand 
this situation and gain comfort in their current credit situation.  Tom 
confirmed that a rate hike has been proposed to cover the increase gas costs 
associated with current market conditions.  Their last rate hike was in 1992, 
at a time when natural gas prices were in a more stable environment.  He 
reiterated that this rate hike will alleviate the cash crunch that the entity 
has experienced and will provide enough cash flow to operate in this 
environment.   Further confidence in the stability of Phil Gas Works is 
derived from the fact that the entity is a political sub-division of the City 
of Philadelphia and is the only gas supplier to residents and businesses in 
the city.  Currently ENA is selling between 10,000-15,000 mmbtu/d to the 
counterparty incurring a 30-day receivable risk of $1.5 to $2.3MM, which is 
under their current credit limit.

Regards,
Russell
william.bradford@enron.com, tom.moran@enron.com, tammi.depaolis@enron.com, 