Thanks for the response - You both have the approprate person at Merced to 
contact to get clarification with respect to authorization.  They are aware 
that you may call.  At this point they are fully hedged in the near term so 
future deals will be back years (precisely the term we may be concerned with).


Stewart


From: Sara Shackleton on 09/01/2000 12:41 PM CDT
To: Christian Yoder/HOU/ECT@ECT, Stewart Rosman/HOU/ECT@ECT
cc: Mark Taylor/HOU/ECT@ECT 
Subject: Re: merced  

The ISDA Master  does not circumscribe the trade term or trade parameters. 
The issue which we discussed is authority.  The Merced resolution of March 
16, 1999 specifically authorizes the general manager "...to develop and 
provide appropriate information, and certifications for completing Master 
Trading (ISDA) Agreements with energy vendors and execute Master Trading 
(ISDA) Agreements and appropriate vendor Schedules to the ISDA Agreement for 
the purpose of acquiring energy and stabilizing energy costs.  Such 
executions are subject to Counsel review of the agreement and schedules as to 
form."  There is no specific mention of authority to enter into transactions 
(by Merced's traders).
Intuitively one could draw the conclusion that the ISDA Master contemplates 
transactions, Merced authorized the ISDA Master and therefore Merced 
authorized transactions under the ISDA Master.  Since Merced is a 
governmental entity, the safer view is that we should not assume that Merced 
authorized transactions.  Merced probably intended to authorize transactions, 
and if so, should not have an issue with specifically providing a clarifying 
resolution.  
Sara




	Christian Yoder
	09/01/2000 11:22 AM
		 
		 To: Sara Shackleton/HOU/ECT@ECT
		 cc: Stewart Rosman/HOU/ECT@ECT
		 Subject: merced

Does our ISDA with Merced contain wording that gives us legal comfort if we 
do an 18 month trade?---cgy
---------------------- Forwarded by Christian Yoder/HOU/ECT on 09/01/2000 
09:17 AM ---------------------------
From: Stewart Rosman on 09/01/2000 08:13 AM
To: Christian Yoder/HOU/ECT@ECT
cc:  
Subject: merced

You need to call Jim Day 916-441-0131 to discuss any authority issues 
concerning Merced trades. He can discuss charter particulars.

Stewart
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