Status of core/noncore proposal
Buzz about the proposal in Sacramento is still significant and growing.
Our name is being tossed about, but in the context (apparently) of "some 
parts of Enron's core/noncore proposal."
Hertzberg is slated to meet with his caucus this evening to discuss the plan.

Conversation with Governor's Financial Advisor
Talked to Michael Hoffman today (one of Governor's financial advisors)
They've run Hertzberg's version of the core/noncore model (i.e., noncore eats 
IOU past due) using their MOU numbers.
They said that the model "can work" if noncore can contract for $80/MWH (this 
is pretty consistent with our analysis).
Hoffman's guys are doing a final scrub on the numbers and Hoffman will fax me 
the results tomorrow AM.
Hertzberg is coming up with "additional" twists, however.
The twists include increasing the bond issuance to ~$20B (to keep core rates 
down).
Hoffman and Co. are concerned that the market can't/won't swallow $20B of 
additional debt (the MOU would issue about $13B).
In addition, Hertzberg wants to stretch it out for 20 years (the MOU would 
issues 15-year paper)----Hoffman and Co. are concerned that the market won't 
buy 20-year paper.
Hoffman & Co. continue to work on the DWR creditworthiness issue (if not done 
by July, they'll lose the contracts they've signed, which have out clauses in 
the event that credit isn't in place by July)

Conversation with the Chamber
The Chamber of Commerce called and I re-iterated (again) the key features of 
our core/noncore proposal (as opposed to other features being tossed about, 
e.g., cost-shifting).
They were very appreciative, liked the features of our proposal (again) and 
we agreed to stay in close contact.

Finally, I have a call into Hertzberg to see what else I can learn.

Best,
Jeff
Enron Emails
Enron Emails