Boston Netback Deal Existing Transaction Nova TCPL Gas

Boston Netback Deal – Existing Transaction Nova /TCPL Gas @ Empress Gas @ Nova + Nova Empress Tolls Calpine Market TM 3 + Boston Differential Gas @ Boston (7500 MMBtu/d) Gas @ Empress + all required Fuel Gas @ Boston (7500 MMBtu/d) Enron 1) Tetco M 3 + Boston Differential (7500 MMBtu/d) Plus 2) 10. 73% Nova Empress Tolls Less 3) 89. 27% of TCPL/Iroquois/ Tennessee Tolls Less 4) Enron Fee ($. 015 US/MMBtu) Gas @ Empress + Full Tolls + all required Fuel 10. 73% of Full Tolls (Nova to Boston) Pipelines 1) TCPL: Empress to Iroquois 2) Iroquois: Boston Gas Iroquois to Wright 3) Tennessee: Wright to Boston

Deal Unwind Objectives Ø Calpine wishes to unwind their obligation in the Netback Transaction with the following objectives: w Unwind to be effective Nov 01, 2001 for the remainder of the term (to March 2007) w Calpine to take assignment of TCPL/Iroquois/Tennnessee transport at full tolls w Calpine to free up gas at Empress and at Boston w Monetize the Present Value of: 1. Enron Fee ($. 015 US/MMBtu) 2. 10. 73% tolls discount for remainder of the term 3. Purchase cost of replacement gas in Boston to unwind market commitment

Issues to Netback Deal Unwind Ø Tolls Risk w Boston Gas will continue to pay 10. 73% of Full Tolls to Enron, therefore we are exposed if tolls fall from the current value, the desk needs to be comfortable with the tolls risk w Tennessee Tolls are fixed for the term of the deal (no risk) w Iroquois Tolls Expected to decline until Jan 04 according to a schedule that was a established during a rate settlement Expected to decline by 1 -2 cents US/MMBtu per year after that (Julie Gomez to provide additional info) Ø What is the offer for replacement gas in Boston from Nov 01 to Mar 07? Ø How does the Boston City Gate Index get set? Who uses it? How will the replacement gas be priced? Ø Is there any value to Enron holding the segments of pipe that will be lost when the pipe is assigned to Calpine? (uncertain at this point if we will be managing/nominating the capacity)