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Los Angeles Times, July 31, 2001 Tuesday, Home Edition, Page 13, 629 words,
????Commentary; ; The State Will Pay for Davis' Panic, KATHLEEN CONNELL, PETER
????NAVARRO, Kathleen Connell is California state controller. Peter Navarro
is,
????an associate professor of economics and public policy at UC Irvine

Los Angeles Times, July 31, 2001 Tuesday, Home Edition, Page 1, 1300 words,
????The State; ; Davis' Energy Advisors Draw SEC Attention; Probe: Under
review
????is the possible use of inside information to buy power company stocks. GOP
????rival of governor requested the inquiry., WALTER HAMILTON JEFFERY L.
RABIN,
????DARYL KELLEY, TIMES STAFF WRITERS

Salon.com, July 31, 2001 Tuesday, Feature, 1723 words, Gray Davis' Edison
????problem, By William Bradley

The San Francisco Chronicle, JULY 31, 2001, TUESDAY,, FINAL EDITION, NEWS;,
????Pg. A11, 849 words, S.F. to vote on electric power to the people;
????Measures would start public utility districts, Rachel Gordon, San
Francisco

The San Francisco Chronicle, JULY 31, 2001, TUESDAY,, FINAL EDITION, NEWS;,
????Pg. A1, 990 words, Davis' top spokesman bought stock in power firm;
????Adviser denies conflict of interest, Lynda Gledhill, Sacramento

The Associated Press State & Local Wire, July 31, 2001, Tuesday, BC cycle,
????8:40 AM Eastern Time, State and Regional, 317 words, Will BGE split lead
to
????Calif. power problems?, BALTIMORE

The Associated Press State & Local Wire, July 31, 2001, Tuesday, BC cycle,
????7:17 AM Eastern Time, State and Regional, 651 words, Davis press secretary
????confirms buying energy company stock, By ALEXA HAUSSLER, Associated Press
????Writer, SACRAMENTO, Calif.

AP Online, July 30, 2001; Monday, Domestic, non-Washington, general news
????item, 365 words, Calif. Sees $4B Less in Power Refunds, KAREN GAUDETTE,
SAN
????FRANCISCO

AP Online, July 30, 2001; Monday, Domestic, non-Washington, general news
????item, 263 words, Texas Inches Toward Power Deregulation, NATALIE GOTT,
????AUSTIN, Texas

The Associated Press State & Local Wire, July 30, 2001, Monday, BC cycle,
????State and Regional, 471 words, Federal order limits potential state
refunds
????by $3 billion, By KAREN GAUDETTE, Associated Press Writer, SAN FRANCISCO

The Associated Press State & Local Wire, July 30, 2001, Monday, BC cycle,
????State and Regional, 539 words, Developments in California's energy crisis,
????By The Associated Press

Copyright 2001 / Los Angeles Times
Los Angeles Times
July 31, 2001 Tuesday ?Home Edition

SECTION: California; Part 2; Page 13; Op Ed Desk

LENGTH: 629 words

HEADLINE: Commentary;
;
The State Will Pay for Davis' Panic

BYLINE: KATHLEEN CONNELL, PETER NAVARRO, Kathleen Connell is California state
controller. Peter Navarro is, an associate professor of economics and public
policy at UC Irvine

BODY:

??The five-to-20-year power contracts signed in a panic by the Davis
administration have saddled California with billions of dollars of "stranded
costs" that will burden our economy and state budget for years to come.

??Now, Gov. Gray Davis' spin doctors want us to believe that these $43-billion
long-term contracts were both necessary and the impetus for a moderating
energy
market. Here's the real story:

??Last summer, under a flawed deregulation, a handful of large out-of-state
generators effectively cornered California's wholesale electricity market.
This
"sellers cartel" first drained our electric utilities dry. In November, it
became the taxpayers' turn to be victimized, when the Davis administration
gave
carte blanche authority to the Department of Water Resources for energy
purchases. Between November and July, the department burned through $8 billion
in short-term energy purchases, devouring almost the entire state budget
surplus. This required the state Public Utilities Commission to pass the
largest
rate hike in California history and will require the state to issue $12.4
billion in bonds this fall to service this debt.

??In February, with spot market prices at all-time highs and rolling blackouts
rippling through the state, the governor's representatives began to negotiate
long-term contracts with the sellers cartel. This was an ill-advised long-term
strategy to fight a short-run crisis. To understand why, look at the
negotiating
chessboard from the electricity cartel's perspective. The cartel's negotiators
knew that within 18 to 24 months, there would be a huge glut of power on the
market as many power plants were already under construction in California and
throughout the West. Once the new energy resources were available, the cartel
would no longer be able to manipulate the market. This supply glut would drive
prices back to the 1999 range of three to five cents per kilowatt-hour, far
lower than the prices now set in the long-term energy contracts.

??To the cartel members, this looming power glut was a recipe for heavy
losses.
Locking the state into long-term contracts at lucrative rates was their
redemption. The Davis administration walked into this market inferno,
bargaining
from extreme weakness at the top of the market, signing contracts that were
too
expensive. The administration also capitulated on two highly objectionable
clauses. The first requires the state to absorb all costs of environmental
protection for many of the generators. The second holds the generators
"harmless" for any increase in taxes imposed on the generators by the state.
This provision essentially freezes taxes on the generators over the next
several
years, requiring taxpayers to pick up the tab.

??Notwithstanding the administration's spin, the current improvement in our
energy situation may be traced to at least four other factors: This summer has
been unusually cool, Californians have increased their conservation,
recessionary forces have reduced demand and, most important, the Federal
Energy
Regulatory Commission finally imposed price caps on the sellers cartel,
dampening market manipulation.

??The bottom line is this: Long after the rolling blackouts stop, California
still will be saddled with billions of dollars of unnecessary electricity
costs
and high bond debt. These higher costs will hurt consumers and businesses, put
heavy pressure on the state budget for years and inhibit the state's economic
growth.

??There are two lessons from this multibillion-dollar mistake. The first is to
have full public review of major energy decisions. Equally important, the
Public
Utilities Commission must be allowed to retain its rate-making authority so
that
problems are not hidden in a state bureaucracy.

LOAD-DATE: July 31, 2001

??????????????????????????????5 of 50 DOCUMENTS

??????????????????????Copyright 2001 / Los Angeles Times

??????????????????????????????Los Angeles Times

?????????????????????July 31, 2001 Tuesday ?Home Edition

SECTION: California; Part 2; Page 1; Metro Desk

LENGTH: 1300 words

HEADLINE: The State;
;
Davis' Energy Advisors Draw SEC Attention;
Probe: Under review is the possible use of inside information to buy power
company stocks. GOP rival of governor requested the inquiry.

BYLINE: WALTER HAMILTON JEFFERY L. RABIN, DARYL KELLEY, TIMES STAFF WRITERS

BODY:

??The Securities and Exchange Commission has launched a preliminary inquiry
into whether energy consultants advising Gov. Gray Davis used inside
information
to trade stocks of power companies doing business with the state, a source
with
knowledge of the matter said Monday.

??The federal agency began its review late last week, the source said, in
response to a request from California Secretary of State Bill Jones. A
Republican rival of Davis, Jones charged that stock trading by consultants may
have violated federal laws barring buying and selling based on information not
available to the public.

??On Friday, top aides to the governor disclosed that five consultants had
been
fired for possible conflicts of interest between their official positions and
their personal finances.

??As news of the SEC inquiry spread through the capital Monday, Davis
officials
were confronted by a flurry of questions about who in the administration owns
energy stocks.

??Financial disclosure records filed by the governor's spokesman, Steve
Maviglio, show that he owns between $10,000 and $100,000 in a Texas company he
and his boss have accused of making "obscene" profits while California has
been
"on its knees." Maviglio said he bought the shares in Houston-based Enron
Corp.
in 1996.

??"It's not a crime to own energy stock," Maviglio said.

??He also owns 300 shares of San Jose-based Calpine Corp., which has the
largest share of the $43 billion in long-term state power contracts.

??Maviglio placed the order for the stock on May 31, one day after San Jose's
mayor dropped his opposition to a controversial Calpine plant favored by the
governor and others. Under the terms of Maviglio's purchase, the transaction
was
completed about three weeks later when the stock reached $40 a share, a value
of
$12,000. It has since fallen in value.

??"I viewed it as a good long-term investment," Maviglio said, adding that he
purchased the shares for his retirement account based on publicly available
information.

??The Davis administration has spared Calpine the kind of fierce criticisms
that it has leveled at other electricity suppliers, such as Enron. But
California's grid operator has identified the company as one of many energy
merchants to overcharge the state millions of dollars.

??The fired consultants also owned shares in Calpine, ranging in value from
several thousand dollars to more than $100,000, records show.

??Another top Davis administration official, legal affairs secretary Barry
Goode, disclosed in his economic interest statement that he recently held
between $100,000 and $1 million in another out-of-state company accused of
multimillion-dollar price gouging.

??In a statement, Goode said he sold his stock in Williams Co's. a month after
he began working for the governor in February. Goode said the shares were
supposed to be sold before he went on the state payroll, but his broker failed
to do so.

??In light of the recent disclosures, Secretary of State Jones said the
governor must do more to ensure the public that its interest comes first.

??"The governor should direct all of his staff to immediately file updated
conflict of interest statements that reflect current holdings and any activity
since their last statement of economic interest was filed," said Jones, who is
seeking the GOP nomination for governor.

??Word of the SEC's entry into California's energy problems comes as the
governor faces harsh criticism from lawmakers and others for the quick and
broad
hiring of highly paid private consultants to guide him through the crisis.

??In his written request to the SEC, Jones said that recently filed disclosure
documents showed that at least one consultant bought and sold shares of two
energy companies within the same month, raising "a red flag" about the
possibility of insider trading.

??State law prohibits officials from participating in decisions involving
their
personal financial interests.

??The five consultants fired last week were among 11 named in Jones' letter,
delivered to the San Francisco office of the SEC last Wednesday. It was not
clear which individuals are the focus of the SEC's inquiry, or whether the
agency's review would result in any charges.

??Two of the former traders said Monday that they had not been contacted by
federal investigators and knew nothing of an inquiry into possible insider
trading.

??But William Mead, fired Thursday, said it is no mystery why so many of his
colleagues owned Calpine stock.

??Mead said he bought it 2 1/2 years ago and made so much money he recommended
it to his colleagues last year, while they all still worked for the
now-defunct
California Power Exchange in Alhambra. Calpine power was not traded on that
exchange, so there was no conflict of interest, he said.

??Mead and three other energy traders--hired by the state in February and
March--were terminated by the Davis administration for allegedly buying power
for the state from Calpine while owning the company's stock. Fired traders
Herman Leung, Peggy Cheng and Constantine Louie did not list the date of their
Calpine purchases on financial statements that the state required to be filed
only two weeks ago.

??"But I'm sure they bought it while they were still at the power exchange,
because that's when we discussed it," Mead said. "It was kind of like a hobby.
I'm sure it wasn't done with the intent to manipulate."

??Former trader Elaine Griffin, who also owned Calpine stock and resigned two
weeks ago to take another job, said she didn't know she owned energy
securities
until she checked with her financial advisor July 13, just before leaving her
state job.

??Griffin said she and her husband own about $10,000 worth of Calpine stock in
individual retirement accounts managed by their advisor, who bought the stock
Feb. 1 without their knowledge, she said, after research found it to be a good
investment.

??"I kind of feel like we've been used for political reasons," Griffin said.
"We would have disclosed anything right at first, but they never asked."

??As a trader, Griffin said she occasionally bought Calpine power for the
state, but only at market prices.

??Meanwhile, two Democratic political consultants, who helped Davis polish his
image after the ongoing energy crisis caused his poll numbers to plummet, have
agreed to accept no payment for their work as part of an out-of-court
settlement
of a taxpayer lawsuit.

??Tom Hiltachk, a lawyer for conservative anti-tax activist Lewis Uhler, said
the settlement was reached last Friday after negotiations with lawyers for
communications consultants Mark Fabiani and Chris Lehane.

??"Now they will not receive one red cent," said Hiltachk. "Very simply Mr.
Fabiani and Mr. Lehane have agreed to cease all activities for the governor,
to
accept no payments for their services and to basically get out of the
consulting
business with the governor."

??As his part of the agreement, Hiltachk said, Uhler withdrew his lawsuit
Monday morning.

??Uhler had filed a lawsuit against the two consultants and Controller
Kathleen
Connell in June contending that they should not receive any payments because
of
a conflict of interest. The two men also did consulting work for financially
troubled Southern California Edison, which was seeking help from Davis and the
Legislature.

??Connell, a former Los Angeles mayoral candidate who has been at odds with
Davis since he endorsed an opponent, had held up the payments pending the
outcome of the lawsuit.

??Under an agreement with Davis, the men were to have been paid $30,000 a
month
for six months.

??Fabiani and Lehane could not be reached for comment.

??*

??Times staff writers Nancy Vogel and Virginia Ellis in Sacramento and Robert
J. Lopez in Los Angeles contributed to this story.

LOAD-DATE: July 31, 2001

??????????????????????????????6 of 50 DOCUMENTS

????????????????????????Copyright 2001 Salon.com, Inc.

??????????????????????????????????Salon.com

????????????????????????????July 31, 2001 Tuesday

SECTION: Feature

LENGTH: 1723 words

HEADLINE: Gray Davis' Edison problem

BYLINE: By William Bradley

HIGHLIGHT:
The governor struggles to orchestrate a multimillion-dollar bailout of the
utility that has spent big bucks on his campaign.

BODY:

??Ever since his January State of the State address, in which he dwelled on
the
state's power crisis but neglected to mention private utilities' central role
in
devising the deregulation scheme that caused it, California Gov. Gray Davis
has
been searching for a way to bail out the insolvent Southern California Edison,
which has contributed more than $350,000 to Davis' campaign coffers. Now his
drive to save the battered utility, which claims nearly $4 billion in debt and
is no longer creditworthy enough to buy power, has gone into overtime, with no
solution yet in sight. An attempt to bring the California Assembly back from
its
summer recess to vote on a new bailout bill Friday was just the latest such
effort to fall apart.

??The drive to bail out Edison, one of the biggest proposed corporate rescues
in U.S. history, remains very troubled, despite a flurry of high-level
activity
over the past two weeks. The Aug. 15 deadline for legislative approval of some
semblance of the very sweet deal negotiated last spring by Davis looms, yet
the
California Legislature is in recess until Aug. 20. One bill pronounced
unacceptable by Edison, backed by Senate President John Burton, the fiery San
Francisco liberal, and Sen. Byron Sher of Palo Alto, passed the Senate last
week
before the Legislature went on recess.

??This bill would require Edison -- which lobbied through the disastrous
electric power deregulation scheme in 1996 and made billions in profits, which
were transferred to the utility's holding company, before being outmaneuvered
by
the very firms to which it sold its power plants -- to eat more than a billion
dollars in losses. Not surprisingly, Davis and Edison preferred a more
generous
bill by Assembly Speaker Bob Hertzberg of Los Angeles. But that bill, its fate
complicated by an even more straightforward bailout offered by another Los
Angeles Democrat, didn't make it through the Assembly.

??Hertzberg and Davis have just failed in a bid to bring the Assembly back
into
session to pass another bailout bill, this one more generous than the
Hertzberg
bill that stalled last week, omitting the state's acquisition of transmission
lines that would make the transaction a "buyout rather than a bailout," as the
governor's mantra went. The transmission lines are major strategic assets
affording the state more leverage over power generators, which is why their
acquisition by the state is opposed by the Bush-Cheney administration.

??The bailout is a huge priority for Davis, who has populated the top ranks of
his energy team with Edison alumni. Davis' new communications chief, former Al
Gore press secretary Chris Lehane (who had been working for an Edison bailout
at
the same time he worked for the state, until the conflict-of-interest heat
finally got too hot), has said: "The governor and Edison have the same energy
policy" -- a striking point of view, and not at all inaccurate. But the
original
Davis bailout plan -- negotiated, oddly, on behalf of the state by former
Southern California Edison president Michael Peevey -- received little support
beyond that of Edison and the Los Angeles Times, on whose board Edison
International chairman John Bryson, one of the principal backers of
deregulation, once sat. So Davis joined with Hertzberg for slightly tougher
versions of the original deal, only to see them languish, with only the
substantially tougher version backed by Burton, his frequent antagonist,
currently standing.

??Of the $1 million Davis raised from utilities and energy companies since he
started running for governor (he has stopped taking energy money), Edison has
provided by far the biggest chunk, over 35 percent. This is twice as much as
given by now bankrupt Pacific Gas & Electric, a larger company.

??The ties and tilt are obvious. Not only did Peevey head the
administration's negotiation with the utilities, but former Edison executive
Vikram Budhraja has a $6.2 million state contract to manage the state's $43
billion in long-term power contracts. And Davis officials were remarkably mum
on
the woes of Edison's San Onofre nuclear power plant, one reactor of which was
offline for the first five months of the year, despite the fact that the
accident caused blackouts, raised serious questions about the company's
management and maintenance practices, and cost the state a billion dollars for
replacement power. These close ties have been pointed up by the governor's
hiring of two nationally prominent spin controllers, former top Clinton-Gore
operatives who helped Davis finally accede to the obvious and pound away at
the
White House's dense web of connections to the energy industry. Ironically,
their
hiring highlighted the dense web of connections between Davis and Edison.

??Lehane and Clinton damage control counsel Mark Fabiani played a major role
in
implementing the new strategy of bashing Bush and Cheney. But the two brought
an
enormous amount of controversy with them to their roles, both because of
their $
30,000 monthly contract with the state and because they worked concurrently
for
Edison. After some confusing reports several weeks ago suggesting that the duo
had dropped their work for Edison, Lehane brushed them aside and told me that,
yes, they were still working for Edison to gain a state bailout of the company
and that there was no conflict of interest there. "The governor and Edison,"
he
said, "have the same energy policy; there's no conflict in working for both."

??Finally recognizing that that comment was uncomfortably akin to another,
more
hypothetical statement -- "The president and Enron have the same energy
policy;
there's no conflict in working for both" -- Davis redefined his relationship
with the two.

??Davis let Fabiani go, retaining Lehane but cutting his pay by a third, and
requiring him to stop working for Edison. A seemingly fair result, though some
public interest advocates insist that state conflict-of-interest law prohibits
his employment in any event, pointing out that his work for Edison occurred
within the last year. Adding injury to insult, state controller Kathleen
Connell, a fellow Democrat who is sharply critical of Davis' handling of the
energy crisis, refuses to pay Lehane and Fabiani. ?Meanwhile, top Edison
officials said again last week that the utility will go bankrupt without a
bailout. Its parent company, Edison International, whose assets have been
shielded from the utility's woes after being boosted by transfers of billions
from the utility, just posted a big loss. Wall Street had expected a modest
profit.

??Despite the Assembly's failure to reconvene, bailout talks will continue
among an informal working group of top Davis officials, legislators, staffers
and lobbyists. Through the L.A. Times, Edison this week trumpeted its
utility's
recently improved cash flow, which may well stave off moves by creditors to
force the utility into bankruptcy while the politicians try again to sort
things
out.

??But the governor's close ties to Edison continue to rankle many in the
Capitol and elsewhere. Davis has long been aligned with Edison chieftain John
Bryson, who made his reputation as a pro-alternative energy Public Utilities
Commission president in the Jerry Brown administration before becoming a bete
noire to many environmentalists and renewable power advocates in his current
role.

??Consumer advocates, like deregulation opponent Harvey Rosenfield of the
Foundation for Taxpayer & Consumer Rights, oppose any bailout of the utility,
California's second largest, preferring that it join its larger cousin,
Pacific
Gas & Electric, in bankruptcy. Rosenfield promises to mount an initiative
campaign to derail any bailout deal.

??Many legislators feel the same way, noting that the sky did not fall after
PG&E went bankrupt. Sen. Mike Machado, a conservative Central Valley Democrat,
says that bankruptcy court can do a better job of sorting out Edison's
finances
than the Legislature. Some liberals privately disdain Edison for its role in
crafting the state's deregulation debacle. And Republican legislators are
having
a field day sounding like consumer advocates.

??Notwithstanding the struggle over the fate of Edison, California is in
better
shape than most feared a few months ago. Surprisingly mild weather
(California's
hot summer has materialized in Japan, which just set a record for electric
power
usage), coupled with increased conservation, power companies controlling
themselves to save deregulation and retain the credibility with a divided
federal government to enter lucrative new businesses, and federal restraint of
the most egregious price spikes have reduced an across-the-board calamity to a
mere multifaceted crisis.

??But Davis, who after a very slow start deserves credit for at least some of
the good news, is under fire for the huge long-term power contracts his
administration negotiated, which, after months of secrecy, turn out to be more
expensive than advertised and perpetrate a green blackout, ignoring renewable
energy in favor of fossil fuel generation. Not only do the contracts eschew
renewables, a number of them provide the actual financial underpinnings for a
new generation of fossil fuel plants, guaranteeing their profitability for the
companies developing them. A troubling result for the Democratic
administration
of a state that by itself is the world's fifth-largest economy, especially at
a
time when most of the rest of the world is criticizing the Republican
administration in Washington for refusing to deal with the greenhouse effect.

??Ironically, given all the furor over the Bush-Cheney energy plan, it is the
Davis plan that is actually furthering California's dependency on fossil
fuels.
"The state's contracts are the biggest public power project in the country,"
notes Center for Energy Efficiency and Renewable Technologies director John
White, "and yet they are a festival of fossil fuel development."

??Meanwhile, there has been no federal order of refunds for the astonishing
price run-up California has experienced over the past year. With refunds, the
state could bail out Edison and perhaps PG&E as well. But two weeks of
negotiations in Washington earlier this summer between state officials and
power
generators went nowhere. Which is precisely where the Edison bailout remains.

LOAD-DATE: July 31, 2001

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?????????????????Copyright 2001 The Chronicle Publishing Co.

?????????????????????????The San Francisco Chronicle

????????????????????JULY 31, 2001, TUESDAY, FINAL EDITION

SECTION: NEWS; Pg. A11

LENGTH: 849 words

HEADLINE: S.F. to vote on electric power to the people;

Measures would start public utility districts

SOURCE: Chronicle Staff Writer

BYLINE: Rachel Gordon

DATELINE: San Francisco

BODY:
After decades of trying to persuade San Francisco to take control of its
electrical system, advocates of public power now have the issue before city
voters.

???"The timing couldn't be better," said consumer advocate Medea Benjamin,
co-director of San Francisco's Global Exchange.

???"It's not just the threat of blackouts or the highest rate hikes in
history.
It's the fact that PG&E is in bankruptcy. It's the depletion of the state
budget," she said. "This is a hell of an opportunity."

???The opportunity she is talking about centers on two November ballot
measures
that would pave the way for creating a public power system and taking Pacific
Gas and Electric Co. out of the city's electricity market.

???Under the proposed measures, an elected board of directors would set the
rates and have control over everything from the terms for buying electricity
to
whether to use more renewable energy sources, such as wind, hydroelectric and
solar power.

???Public power would base policies "on a more localized basis, where the
values of an individual community can be put into practice," said Ed Smeloff,
a
longtime public power advocate who was recently hired as an assistant general
manager at the San Francisco Public Utilities Commission.

???One proposal, an initiative placed on the ballot by residents, calls for
setting up a municipal utility district in San Francisco and neighboring
Brisbane. The district would be governed by an elected board of directors.

???The other measure, placed on the ballot last week by the Board of
Supervisors, would create a municipal water and power agency and would affect
only San Francisco.

???PG&E has mounted a campaign to defeat the measures, so far pumping more
than
$200,000 into the effort.

???"We think the (ballot proposals) are a bad idea," said Frank Gallagher,
spokesman for the Coalition for Affordable Public Services, the PG&E-financed
group fighting the measures. "They're confusing and do nothing to address the
problem."

???The company has a history of opposing public power proposals, derailing a
plan in Davis in the 1990s and using a legal challenge to stall the start of
Sacramento's Municipal Utility District for two decades.

???For years, private utilities have enjoyed a powerful hold on state and
local
politicians. But the energy crisis has caused widespread public anger and
concern, forcing city and state officials to take another look at public
power.

???A poll conducted this month by the Public Policy Institute of California, a
nonpartisan think tank in San Francisco, found that nearly two-thirds of
Californians support the replacement of private electric companies with
municipal power authorities formed by local governments.

???San Francisco already owns a power system, Hetch Hetchy, which provides
power for city departments. PG&E provides power to residents and businesses.

???The San Francisco Charter amendment placed on the ballot by the supervisors
calls for abolishing the city's existing Public Utilities Commission, which is
run by commissioners and a director appointed by the mayor. The proposed
public
power board would have seven elected directors, but the agency still would
retain some ties to City Hall.

???The supervisors' plan is intended to be used as a backup to the municipal
utility district -- commonly known as a MUD -- which is considered to be more
vulnerable to the expected legal challenges from PG&E.

???"It's a great marriage, and will ensure that we get public power in San
Francisco," said Board of Supervisors President Tom Ammiano, chief sponsor of
the board's measure.

???San Francisco is not alone in looking at public power. San Diego, the first
city to feel the hard pinch of the energy crisis, wants to establish a
regional
public power system in an attempt to pool resources and bring down energy
costs.

???The East Bay Municipal Utility District, which provides water and sewer
service, is considering expanding its reach to power. In the Bay Area, the
cities of Alameda and Palo Alto already have public power. The two largest
public power agencies in the state serve Los Angeles and Sacramento.

???In San Francisco, the pro-public power forces are going to tout the
promised
virtues of turning the electric utility over to a public authority that by law
cannot turn a profit. That, they contend, means lower rates.

???"It's an expectation, but it's also tried and true," said Ross Mirkarimi,
campaign director of MUD Now, the group sponsoring the ballot initiative.

???On average, consumers pay 18 percent less for power from public utilities,
he said.

???Gallagher, spokesman for the opposition campaign, said ratepayers shouldn't
assume that public power means lower energy bills. "There's no way the rates
are
going down," he said.

???He blamed the energy crisis not on deregulation but on a shortage of
electricity, which jacked up prices and undercut reliability.

???"The measures do nothing about supply," Gallagher said. "All this will do
is
cost people money. You can't just take PG&E's assets. You have to pay for
them."

??E-mail Rachel Gordon at rgordon@sfchronicle.com.

LOAD-DATE: July 31, 2001

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?????????????????Copyright 2001 The Chronicle Publishing Co.

?????????????????????????The San Francisco Chronicle

????????????????????JULY 31, 2001, TUESDAY, FINAL EDITION

SECTION: NEWS; Pg. A1

LENGTH: 990 words

HEADLINE: Davis' top spokesman bought stock in power firm;

Adviser denies conflict of interest

SOURCE: Chronicle Sacramento Bureau

BYLINE: Lynda Gledhill

DATELINE: Sacramento

BODY:
Already on the defensive over its energy advisers' financial holdings, Gov.
Gray
Davis' administration came under fresh attack yesterday when his chief
spokesman
admitted buying $12,000 worth of Calpine Corp. stock last month.

???Steve Maviglio, Davis' acting director of communications, denied that his
purchase of the San Jose energy company's stock constituted a conflict of
interest. He said he would sell the stock if Davis or administration lawyers
asked him to.

???"I invested in a growing California company," Maviglio said. "It's sad when
somebody tries to link owning energy stock with a conflict of interest."

???The revelation came the same day that two high-priced consultants Davis
brought in earlier this year to help sell his energy policies to the public
agreed not to take any money for the work they have done. Davis was criticized
for hiring the two, partly because they had also worked as consultants for
Southern California Edison.

???On Friday, Davis fired five energy advisers for possible
conflict-of-interest problems after they helped negotiate state spot-market
purchases or long-term power contracts. Four of the five owned stock in
Calpine,
and the fifth held Enron shares.

???ON THE DEFENSIVE

???Maviglio, who had the task of explaining the firings, was on the defensive
himself yesterday.

???He bought the Calpine stock in June after asking his broker to invest in it
when shares hit a certain price, he said. He said that showed he had made his
decision independently of whatever action he might have taken in the
governor's
office on any particular day.

???Calpine's stock has dropped some in the past month. As of yesterday, the
300
shares that Maviglio bought for $12,000 were worth about $11,100.

???Maviglio said he had spoken out against Calpine as much as other energy
companies. He also owns Enron stock that he bought in February 1996 and has
disclosed on all forms, he added.

???"I've called them pirates and gougers and lumped them in with all the rest
of the generators," Maviglio said.

???Secretary of State Bill Jones, an announced GOP opponent of Davis for
governor in 2002, said Maviglio should be fired.

???"These actions are unethical and unacceptable," said Jones, who called on
the governor's staff to release updated conflict-of-interest statements. "He
had
the power to promote Calpine through press releases. That seems to me to be a
clear conflict of interest."

???Calpine sold the state $14 million worth of power earlier this year and has
a large share of the $43 billion in long-term contracts for electricity that
the
state has entered into.

???Earlier this month, when he threw the ceremonial switch on a new Calpine
plant in Pittsburg, Davis singled out the company as being more cooperative
with
California than out-of-state suppliers that the governor has characterized as
gougers.

???IMAGE-POLISHING

???The Davis administration tried to put another energy-related controversy
behind it yesterday as the two consultants brought in by the governor to
burnish
his image agreed to forgo more than $50,000 in work they did for the state.

???Chris Lehane and Mark Fabiani will receive no compensation and will leave
the Davis administration immediately, under a settlement in a lawsuit filed on
behalf of a national taxpayer rights group.

???Lehane and Fabiani -- nicknamed the "Masters of Disaster" for their work in
getting former President Bill Clinton out of political jams -- started in the
governor's office in May and were originally supposed to be paid $30,000 a
month.

???It was later revealed that they had also worked as consultants for Southern
California Edison, which is trying to swing a deal with the state to avoid
bankruptcy. State Controller Kathleen Connell said she would not pay the two.

???"It really raises the question in my mind, what is it about
conflict-of-interest and other ethical rules that the governor's office
doesn't
understand?" said Lewis Uhler, president of the National Tax Limitation
Committee, which filed the lawsuit.

???In June, Davis said Fabiani was no longer a communications consultant
because his work had been "successfully implemented." Lehane, on the other
hand,
dropped his contract with Edison and signed a new agreement with Davis.

???Lehane's new contract required him to work a maximum of 66 hours a month at
$150 an hour. His payments were to be capped at $76,000 for work from June 26
to
Nov. 20, 2001.

???'OUTRAGEOUS EXPENSE'

???"This was an outrageous expense to taxpayers," Uhler said. "I believe there
was a clear violation of conflict-of-interest laws."

???The consultants decided it was not worth the legal fees to fight the
lawsuit, Maviglio said. The two could not be reached for comment.

???"It's shameful when people have to surrender their jobs in public service
because of a lawsuit," Maviglio said.

???Jones, who filed a complaint with the Fair Political Practices Commission
concerning the two consultants, said, "I think it's clear from recent actions
by
the governor's office that there have been rampant violations of the state's
conflict-of-interest laws. Their attempts to mitigate the damage from these
violations is too little, too late."

???Jones said Davis should immediately require all of the consultants hired
during the energy crisis to file financial statements. There are 21 advisers
involved in power purchasing whom Davis has exempted, he said.

???All the contractors who are required to file reports have done so, said
Maviglio.

???In a related development, the Los Angeles Times quoted a source as saying
the Securities and Exchange Commission has launched a preliminary inquiry into
whether energy consultants advising Davis used inside information to trade
stocks of power companies doing business with the state.

???The federal agency began its review late last week, the source said, in
response to a request from Jones.E-mail Lynda Gledhill at
lgledhill@sfchronicle.com.

LOAD-DATE: July 31, 2001

??????????????????????????????9 of 50 DOCUMENTS

???????????????????The Associated Press State & Local Wire

The materials in the AP file were compiled by The Associated Press. ?These
materials may not be republished without the express written consent of The
Associated Press.

???????????????????????July 31, 2001, Tuesday, BC cycle

?????????????????????????????8:40 AM Eastern Time

SECTION: State and Regional

LENGTH: 317 words

HEADLINE: Will BGE split lead to Calif. power problems?

DATELINE: BALTIMORE

BODY:

??Whether Baltimore Gas and Electric can remain profitable after spinning off
its power generating and marketing efforts to create a new company is the
subject of a three-day before state regulators this week.

??Regulators are hoping to avoid the problems that followed the deregulation
of
the electricity market in California, where skyrocketing power prices led to
blackouts and financial problems for utilities unable to pass on higher costs
to
consumers because of rate regulations.

??The Public Service Commission will decide whether BGE, the largest utility
in
the state, can remain profitable if it is allowed to leave Constellation
Energy
Group Inc. later this year.

??Regulators are concerned about the utility's ability to provide electricity
to consumers at rates frozen until 2006 under last year's deregulation
agreement.

??Constellation announced plans in October to split into two publicly traded
companies. Constellation Energy Group would become a fast-growth national
power
producer and marketer, and BGE Corp., would be a slow-growth company that will
include the regulated utility.

??Testimony filed by the state people's counsel, which represents consumers
before the PSC, pointed to concerns about the $2.4 billion in debt BGE will
carry after the split.

??A consultant to the people's counsel warned that such a high debt level
could
make it difficult for the utility to handle unexpected problems such as severe
ice storms, hurricanes or spikes in the price of electricity.

??Constellation has submitted extensive confidential information to the PSC
about the separation, but it is still unclear what could happen if the
commission seeks to alter or block the plan.

??Although Constellation has fully cooperated with the PSC, company officials
maintain that the state has no authority over the transaction.

??The hearing, which begins Monday, runs through Wednesday.

LOAD-DATE: July 31, 2001

??????????????????????????????10 of 50 DOCUMENTS

???????????????????The Associated Press State & Local Wire

The materials in the AP file were compiled by The Associated Press. ?These
materials may not be republished without the express written consent of The
Associated Press.

???????????????????????July 31, 2001, Tuesday, BC cycle

?????????????????????????????7:17 AM Eastern Time

SECTION: State and Regional

LENGTH: 651 words

HEADLINE: Davis press secretary confirms buying energy company stock

BYLINE: By ALEXA HAUSSLER, Associated Press Writer

DATELINE: SACRAMENTO, Calif.

BODY:

??Gov. Gray Davis' press secretary recently purchased the same energy stock as
five consultants the governor fired last week, he disclosed Monday.

??Steve Maviglio confirmed that on June 20, he bought 300 shares of stock in
Calpine Corp., a San Jose-based power generator that has received about $13
billion in state contracts to supply electricity for up to 20 years.

??Maviglio's disclosure comes after Davis' office hastily ended the contracts
of five consultants who helped negotiate state power contracts and held stock
in
energy companies.

??In a related development, an anonymous source told the Los Angeles Times on
Monday that the Securities and Exchange Commission has launched a preliminary
inquiry into whether the consultants used inside information to trade the
energy
stocks.

??About two dozen Davis energy consultants were required to fill out financial
disclosure statements after complaints of conflict of interest by Republicans
and consumer groups.

??"When we reviewed them, we found possible violations of the law and took
swift action," Maviglio said Monday before Secretary of State Bill Jones
issued
a press release calling for his termination.

??Jones, a Republican, is a candidate for the GOP nomination to challenge
Davis
in November 2002.

??Maviglio defended his purchase, saying that he "owns several stocks in
companies in all fields that are growing and are based in California."

??Maviglio said Monday that he requested on May 31 to purchase the stock if it
dipped to $40 a share, which it did two days after a June 18 ruling by federal
energy regulators restricting wholesale electricity prices in California and
10
other states.

??Maviglio served as Davis' chief spokesman urging the Federal Energy
Regulatory Commission to impose price ceilings on electricity wholesalers.

??He also said he owns between $10,000 and $100,000 stock in Houston-based
Enron Corp. He said he purchased the stock in 1997 and has reported it on
financial disclosure forms. He said that it is "closer to $10,000."

??Meanwhile, two energy consultants to Davis have agreed to forgo more than $
50,000 in work they did for the state.

??Chris Lehane and Mark Fabiani will forgo the payments as part of a
settlement
with a Sacramento-area resident who filed a lawsuit objecting to their hiring,
calling it a conflict of interest.

??Fabiani could not be reached for comment Monday. In the settlement, they
admitted no wrongdoing.

??Lehane issued a statement through the governor's office, calling it "simply
not worth the bother to challenge the controller in court."

??Davis has come under fire for his May hiring of Lehane, former press
secretary for Vice President Al Gore, and Fabiani, a deputy campaign manager
for
Gore's presidential run.

??They were hired to help shape Davis' response to the energy crisis, and
helped craft Davis' aggressive attack on Texas-based energy companies and
President Bush.

??Both also have advised Southern California Edison, which is negotiating for
state help in avoiding bankruptcy. Financial disclosure forms showed they have
each received at least $10,000 from Edison in the past year.

??Davis announced at the end of June that Fabiani terminated his contract, and
Davis scaled back Lehane's role with the state.

??State Controller Kathleen Connell then said she would not pay Lehane and
Fabiani for any of their work and now the two have agreed they will not fight
her decision, Maviglio said.

??Lewis K. Uhler, the Placer County man who filed the lawsuit, said the
settlement "accomplished our objectives."

??"We wanted to block the egregious use of taxpayer funds for essentially
political spinmeisters," he said. Uhler is president of the Roseville-based
National Tax Limitation Committee.

??Maviglio said that Fabiani and Lehane "did good work for the state" and
helped the state win victories with federal regulators.

LOAD-DATE: July 31, 2001

??????????????????????????????12 of 50 DOCUMENTS

???????????????????????Copyright 2001 Associated Press

??????????????????????????????????AP Online

????????????????????????????July 30, 2001; Monday

SECTION: Domestic, non-Washington, general news item

LENGTH: 365 words

HEADLINE: ?Calif. Sees $4B Less in Power Refunds

BYLINE: KAREN GAUDETTE

DATELINE: SAN FRANCISCO

BODY:

???California will receive refunds for overpriced electricity, but not as much
as it had asked for.

??A closer reading of last week's order from federal energy regulators shows
the amount the state will receive could be slashed to just under $4 billion
less
than half what the state requested.

??Gov. Gray Davis plans to appeal the Federal Energy Regulatory Commission
decision Monday, state officials said. Refunds could help prevent the state
from
raising electric rates to cover its power buying costs, which are now beyond
$8
billion.

??''We found a number of disturbing things that lead us to believe FERC may
not
be so pro-refund as they want Californians to believe,'' said Nancy McFadden,
an
adviser to Davis.

??For months, Davis and other state officials have asked the commission to
rule
electricity prices charged since May 2000 to be unjust and unreasonable prices
which climbed 10 times higher than past years.

??The state stands to lose a portion of the billions it has spent buying
electricity for Pacific Gas and Electric Co. customers and two other
financially
ailing utilities. Power companies maintain they did not work together to drive
up power prices to unreasonable levels.

??The commission's 40-page decision confirms it will only order refunds for
power bought since October 2000, rather than May 2000. That means $2 billion
less than the state, utilities and others could hope to receive, McFadden
said.

??In addition, the commission also said it will not issue refunds for power
the
state Department of Water Resources bought directly from power companies. FERC
only will recognize purchases through the state's now-defunct power market or
from the manager of the state's power grid.

??That stripped another $3 billion off the potential refund amount, reducing
the refund by a total of $5 billion. State officials had hoped to receive up
to
$9 billion in refunds.

??A call to FERC for comment was not immediately returned Sunday.

??The commission has ordered an evidentiary hearing, to be completed within 60
days, to determine the size of the refund from providers of wholesale power.

??___

??On the Net:

??http://www.ferc.gov

??http://www.water.ca.gov

LOAD-DATE: July 30, 2001

??????????????????????????????13 of 50 DOCUMENTS

???????????????????????Copyright 2001 Associated Press

??????????????????????????????????AP Online

????????????????????????????July 30, 2001; Monday

SECTION: Domestic, non-Washington, general news item

LENGTH: 263 words

HEADLINE: ?Texas Inches Toward Power Deregulation

BYLINE: NATALIE GOTT

DATELINE: AUSTIN, Texas

BODY:

???After several delays, the entrance of Texas into the deregulated
electricity
market is set to begin Tuesday.

??Under a pilot program, officials of the state's electrical grid will begin
switching some customers to new power providers at 12:01 a.m. Tuesday.

??The Legislature created the pilot program to give power companies several
months to test their systems before full-scale deregulation, which is
scheduled
to begin Jan. 1 in most of the state.

??Industry officials have promised that deregulation will be smoother in Texas
than in California, where it has been blamed for rolling blackouts and
skyrocketing utility rates. They say the recent construction of several new
power plants in Texas will help the state avoid supply shortfalls that have
plagued California.

??The Electric Reliability Council of Texas, which manages the state's grid,
gave the go-ahead for the pilot program last week.

??Deregulation allows customers to choose their power provider much like they
select a long-distance telephone carrier. Under the Texas pilot program, up
to 5
percent of electric customers can switch power companies.

??The pilot program is getting under way nearly two months after its first
scheduled start date of June 1. Numerous delays were caused by computer
problems.

??While the delays were unfortunate, ''we think waiting until all the systems
are ready will let us provide good customer service,'' said Eleanor Scott,
spokeswoman for Austin-based Green Mountain Energy.

??___

??On the Net:

??Electric Reliability Council of Texas: http://www.ercot.com

LOAD-DATE: July 30, 2001

??????????????????????????????14 of 50 DOCUMENTS

???????????????????The Associated Press State & Local Wire

The materials in the AP file were compiled by The Associated Press. ?These
materials may not be republished without the express written consent of The
Associated Press.

???????????????????????July 30, 2001, Monday, BC cycle

SECTION: State and Regional

LENGTH: 471 words

HEADLINE: Federal order limits potential state refunds by $3 billion

BYLINE: By KAREN GAUDETTE, Associated Press Writer

DATELINE: SAN FRANCISCO

BODY:

??California will receive refunds for overpriced electricity, but not as much
as it had asked for.

??A closer reading of last week's order from federal energy regulators shows
the amount the state will receive could be slashed to just under $4 billion -
less than half of what the state requested.

??Gov. Gray Davis plans to appeal the Federal Energy Regulatory Commission
decision Monday, state officials said Sunday afternoon. Refunds could help
prevent the state from raising electric rates to cover its power buying costs,
which are now beyond $8 billion.

??"We found a number of disturbing things that lead us to believe FERC may not
be so pro-refund as they want Californians to believe," said Nancy McFadden,
an
adviser to Davis.

??For months, Davis and other state officials have asked the FERC to find
electricity prices charged since May 2000 to be unjust and unreasonable -
prices
which climbed 10 times higher than past years.

??The state stands to lose a portion of the billions it has spent buying
electricity for Pacific Gas and Electric Co. customers and two other
financially
ailing utilities. Power companies maintain they did not work together to drive
up power prices to unreasonable levels.

??The FERC's 40-page decision confirms the commission will only order refunds
for power bought since October 2000, rather than May 2000. That means $2
billion
less than the state, utilities and others could hope to receive, McFadden
said.

??In addition, the FERC also said it will not issue refunds for power the
state
Department of Water Resources bought directly from power companies. FERC only
will recognize purchases through the state's now-defunct power market or from
the manager of the state's power grid.

??That stripped another $3 billion off the potential refund amount, reducing
the refund by a total of $5 billion.

??The DWR bought most of its megawatts directly from power companies after a
FERC ruling in December abolished the Power Exchange, the state's key entity
that bought and sold power. The Independent System Operator, keeper of the
state's grid, then began adding a surcharge on big purchases, McFadden said.

??All told, the most the state could expect to get back would be roughly $3.9
billion, said Barry Goode, a legal secretary to Davis. And despite the
overcharges, some of that money has to pay power companies for past power
deliveries at a price FERC determines is just and reasonable.

??State officials had hoped to receive up to $9 billion in refunds.

??A call to FERC for comment was not immediately returned Sunday afternoon.

??The FERC has ordered an evidentiary hearing, to be completed within 60 days,
to determine the size of the refund from providers of wholesale power.

??---

??On the Net:

??http://www.ferc.gov

??http://www.water.ca.gov

LOAD-DATE: July 31, 2001

??????????????????????????????15 of 50 DOCUMENTS

???????????????????The Associated Press State & Local Wire

The materials in the AP file were compiled by The Associated Press. ?These
materials may not be republished without the express written consent of The
Associated Press.

???????????????????????July 30, 2001, Monday, BC cycle

SECTION: State and Regional

LENGTH: 539 words

HEADLINE: Developments in California's energy crisis

BYLINE: By The Associated Press

BODY:

??Developments in California's energy crisis:

??MONDAY:

??- After several delays, the entrance of Texas into the deregulated
electricity market is set to begin Tuesday. Under a pilot program, officials
of
the state's electrical grid will begin switching some customers to new power
providers at 12:01 a.m. Tuesday.

??- The third largest bankruptcy in U.S. history is also becoming the most
complex. As Pacific Gas and Electric Co. wades through its pile of debts, many
of the legal and financial teams representing the utility and its creditors
often run into conflicts of interest.

??- The state has been joined by natural gas industry players in accusing
Houston-based El Paso Corp. of restricting the flow of natural gas into
California to drive up its price and ultimately the cost to ratepayers. The
gas
shippers that lease the pipeline space now also say El Paso is to blame for
soaring California energy prices. Those accusations came following a federal
regulatory hearing in May, the San Francisco Chronicle reported Sunday.

??- California will receive refunds for overpriced electricity, but not as
much
as it had asked for. A closer reading of last week's order from federal energy
regulators shows the amount the state will receive could be slashed to just
under $4 billion - less than half of what the state requested.

??SUNDAY:

??- Gov. Gray Davis plans to appeal the Federal Energy Regulatory Commission
decision, state officials say. Refunds could help prevent the state from
raising
electric rates to cover its power buying costs, which are now beyond $8
billion.

??WHAT'S NEXT:

??- The deadline for the Legislature to approve Davis' rescue deal for
Southern
California Edison is Aug. 15.

??THE PROBLEM:

??High demand, high wholesale energy costs, transmission glitches and a tight
supply worsened by scarce hydroelectric power in the Northwest and maintenance
at aging California power plants are all factors in California's electricity
crisis.

??Southern California Edison and Pacific Gas and Electric say they've lost
nearly $14 billion since June 2000 to high wholesale prices the state's
electricity deregulation law bars them from passing on to consumers. PG&E,
saying it hasn't received the help it needs from regulators or state
lawmakers,
filed for federal bankruptcy protection April 6. Electricity and natural gas
suppliers, scared off by the companies' poor credit ratings, are refusing to
sell to them, leading the state in January to start buying power for the
utilities' nearly 9 million residential and business customers. The state is
also buying power for a third investor-owned utility, San Diego Gas &
Electric,
which is in better financial shape than much larger Edison and PG&E but is
also
struggling with high wholesale power costs.

??The Public Utilities Commission has approved average rate increases of 37
percent for the heaviest residential customers and 38 percent for commercial
customers, and hikes of up to 49 percent for industrial customers and 15
percent
or 20 percent for agricultural customers to help finance the state's
multibillion-dollar power buys.

??---

??On the Net:

??Track the state's blackout warnings on the Web at
www.caiso.com/SystemStatus.html.

LOAD-DATE: July 31, 2001


---------------------- Forwarded by Raquel Nunes-Thomas/USLGN/USLUM/ABB on
01/30/2002 11:06 AM ---------------------------
|------------->
|(Embedded    |
|image moved  |
|to file:     |
|pic30460.pcx)|
|             |
|------------->
  >------------------------------------------------------------------------|
  |Thomas F Sawyer/USLGN/USLUM/ABB                                         |
  |01/29/2002 03:06 PM (Phone: +1 713 821-4100, Dept.: PIPING DESIGN)      |
  >------------------------------------------------------------------------|

To:   Raquel Nunes-Thomas/USLGN/USLUM/ABB
cc:
Subject:  FW: Engineers

Security Level:?         Internal

Comprehending Engineers: Take One

Two engineering students were walking across campus when one said,
"Where did you get such a great bike?"

The second engineer replied, "Well, I was walking along yesterday minding my
own business when a beautiful woman rode up on this bike. She threw the bike
to the ground, took off all her clothes, and said, "Take what you want."

The second engineer nodded approvingly, "Good choice; the clothes probably
wouldn't have fit anyway."

Comprehending Engineers: Take Two

To the optimist, the glass is half full, to the pessimist, the glass is
half-empty, to the engineer, the glass is twice as big as it needs to be.

Comprehending Engineers: Take Three

A pastor, a doctor and an engineer were waiting one morning for a
particularly slow group of golfers.  The engineer fumed,  "What's with these
guys?  We must have been waiting for 15 minutes!"

The doctor chimed in, "I don't know, but I've never seen such ineptitude!"
The pastor said, "Hey, here comes the greens-keeper. Let's have a word with
him."

"Hi George.  Say, what's with that group ahead of us?  They're rather slow,
aren't they?"

The greens-keeper replied, "Oh, yes, that's a group of blind firefighters.
They lost their sight saving our clubhouse from a fire last year, so we
always let them play for free anytime."

The group was silent for a moment.  The pastor said, "That's so sad. I think
I will say a special prayer for them tonight."

The doctor said, "Good idea, and I'm going to contact my ophthalmologist
buddy and see if there's anything he can do for them."

The engineer said, "Why can't these guys play at night?"

Comprehending Engineers: Take Four

There was an engineer who had an exceptional gift for fixing all things
mechanical. After serving his company loyally for over 30 years, he happily
retired.

Several years later the company contacted him regarding a seemingly
impossible problem they were having with one of their multimillion-dollar
machines.  They had tried every thing and everyone else to get the machine
to work but to no avail.  In desperation, they called on the retired
engineer who had solved so many of their problems in the past.  The engineer
reluctantly took the challenge.

He spent a day studying the huge machine.   At the end of the day, he marked
a small "x" in chalk on a particular component of the machine and stated,
"This is where your problem is."

The part was replaced and the machine worked perfectly again.  The company
received a bill for $50,000 from the engineer for his service.

They demanded an itemized accounting of his charges.  The engineer responded
briefly:

        One chalk mark-----------------$1.00
        Knowing where to put it---$49,999.00

It was paid in full and the engineer retired again in peace.

Comprehending Engineers: Take Five

What is the difference between Mechanical Engineers and Civil Engineers?
Mechanical Engineers build weapons.  Civil Engineers build targets.

Comprehending Engineers: Take Six

Three engineering students were gathered together discussing the possible
designers of the human body.  One said, "It was a mechanical engineer.  Just
look at all the joints."

Another said, "No, it was an electrical engineer.  The nervous system has
many thousands of electrical connections."

The last said, "Actually it was a civil engineer.  Who else would run a
toxic waste pipeline through a recreational area?"

Comprehending Engineers: Take Seven

Normal people believe that if it ain't broke, don't fix it.
Engineers believe that if it ain't broke, it doesn't have enough features
yet."

Comprehending Engineers: Take Eight

An architect, an artist, and an engineer were discussing whether it was
better to spend time with the wife or a mistress.  The architect said he
enjoyed time with his wife, building a solid foundation for an enduring
relationship.

The artist said he enjoyed time with his mistress, because of the passion
and mystery he found there.

The engineer said, "I like both."

"Both?"

The Engineer said, "Yeah. If you have a wife and a mistress, they will each
assume you are spending time with the other woman, and you can go to the
office and get some work done"

Comprehending Engineers: Take Nine

An engineer was crossing a road one-day when a frog called out to him and
said, "If you kiss me, I'll turn into a beautiful princess."

He bent over, picked up the frog and put it in his pocket. The frog spoke up
again and said, "If you kiss me and turn me back into a beautiful princess,
I will stay with you for one week."

The engineer took the frog out of his pocket, smiled at it and, returned it
to the pocket.

The frog then cried out,  "If you kiss me and turn me back into a princess,
I'll stay with you and do ANYTHING you want."

Again the engineer took the frog out, smiled at it, and put it back into his
pocket.  Finally, the frog asked, "What is the matter? I've told you I'm a
beautiful princess, and that I'll stay with you for a week and do anything
you want.  Why won't you kiss me?"

The engineer said, "Look I'm an engineer. I don't have time for a
girlfriend, but a talking frog...that's cool!"

 - pic30460.pcx


Trailblazer has completed the draft for the FERC filing.  They are sending it
out to the Trailblazer partners for review/approval this week.  Assuming the
partners don't take issue, the FERC filing will occur next week.

chris
x31666


I would like to go Monday through Wednesday.  Thanks.

 -----Original Message-----
From: 	Comnes, Alan
Sent:	Wednesday, October 03, 2001 3:32 PM
To:	Crandall, Sean; Belden, Tim; Scholtes, Diana
Subject:	FW: RTO Week Panel Makeup
Importance:	High

Sean,

I recommend comming out for first 2-3 days.  My hunch is that diminishng returns will kick in after that.

Sarah offered to help set up meetings with FERC staff too; we could talk about that.

I'm still working on the reading materials.

GAC

 -----Original Message-----
From: 	Novosel, Sarah
Sent:	Wednesday, October 03, 2001 3:25 PM
To:	Shapiro, Richard; Palmer, Mark A. (PR); Denne, Karen; Philipp, Meredith; Alamo, Joseph; Allegretti, Daniel; Allen, Joe; Alvarez, Ramon; Arefieva, Maria; Assaf, Lisa; Bellas, Kirsten; Benson, Eric; Bolton, Scott; Boston, Roy; Briggs, Tom; Buerger, Rubena; Burns, Stephen; Canovas, Guillermo; Cantrell, Rebecca W.; Comnes, Alan; Connor, Joe; Cooney, Carolyn; Dasovich, Jeff; Decker, Larry; Dernehl, Ginger; Dressler, Jean; Floris, Vinio; Frank, Robert; Fromer, Howard; Fulton, Donna; Guerrero, Janel; Hamilton, Allison; Hardy Jr, John; Hawkins, Bernadette; Hemstock, Robert; Hetrick, Nancy; Hoatson, Tom; Huang, Karen; Hueter, Barbara A.; Hunter, Bevin; Huson, Margaret; Ibrahim, Amr; Kaufman, Paul; Kean, Steven J.; Keene, Patrick; Kingerski, Harry; Kishigami, Kikumi; Knight, Laurie; Landwehr, Susan M.; Lassere, Donald; Lawner, Leslie; Leibman, Lara; Leonardo, Sam; Levy, Alberto; Lindberg, Susan; Linnell, Elizabeth; Mara, Susan; Maurer, Luiz; McVicker, Maureen; Migden, Janine; Miller, Terri; Montovano, Steve; Moore, Bill; Nersesian, Carin; Neustaedter, Robert; Nicolay, Christi L.; Nord, Sue; Noske, Linda J.; Ogenyi, Gloria; Palmer, Germain; Perez, Carmen; Perrino, Dave; Petrochko, Mona L.; Pharms, Melinda; Rishe, Frank; Rizzo, Helen; Roan, Michael; Robertson, Linda; Robinson, Marchris; Rodriquez, Andy; Ryall, Jean; Shelk, John; Shortridge, Pat; Staines, Dan; Steffes, James D.; Stransky, Joan; Stroup, Kerry; Sullivan, Kathleen; Sullivan, Lora; Thome, Jennifer; Tiberi, Fino; Twiggs, Thane; Walton, Steve; Warner, Geriann; Yeung, Charles; Yoho, Lisa
Cc:	Hiltabrand, Leslie; Radford, Pat
Subject:	RTO Week Panel Makeup
Importance:	High

We have learned (through EPSA -- no FERC issuance has been made yet) that FERC plans to have the follow panels for RTO Week, October 15-October 19:

Monday:	Market Design 			am
		Ancillary Services, etc.		pm

Tuesday:	Congestion Management	am
		Transmission Planning
		and Expansion			pm

Wednesday:	Standard Tariff			am
		Cost Recovery (license plate
		vs. postage stamp)		pm

Thursday:	States Representatives		am
		GISB/EISB/NERC		pm

Friday:		Market Monitoring		am
		Market Mitigation		pm

Attendance on these panels is by invitation only.  Invitations are being extended by FERC Staff now.

Please call me if you have any questions.

Sarah

 -----Original Message-----
From: 	Dernehl, Ginger   On Behalf Of Shapiro, Richard
Sent:	Wednesday, October 03, 2001 11:37 AM
To:	Palmer, Mark A. (PR); Denne, Karen; Philipp, Meredith; Alamo, Joseph; Allegretti, Daniel; Allen, Joe; Alvarez, Ramon; Arefieva, Maria; Assaf, Lisa; Bellas, Kirsten; Benson, Eric; Bolton, Scott; Boston, Roy; Briggs, Tom; Buerger, Rubena; Burns, Stephen; Canovas, Guillermo; Cantrell, Rebecca W.; Comnes, Alan; Connor, Joe; Cooney, Carolyn; Dasovich, Jeff; Decker, Larry; Dernehl, Ginger; Dressler, Jean; Floris, Vinio; Frank, Robert; Fromer, Howard; Fulton, Donna; Guerrero, Janel; Hamilton, Allison; Hardy Jr, John; Hawkins, Bernadette; Hemstock, Robert; Hetrick, Nancy; Hoatson, Tom; Huang, Karen; Hueter, Barbara A.; Hunter, Bevin; Huson, Margaret; Ibrahim, Amr; Kaufman, Paul; Kean, Steven J.; Keene, Patrick; Kingerski, Harry; Kishigami, Kikumi; Knight, Laurie; Landwehr, Susan M.; Lassere, Donald; Lawner, Leslie; Leibman, Lara; Leonardo, Sam; Levy, Alberto; Lindberg, Susan; Linnell, Elizabeth; Mara, Susan; Maurer, Luiz; McVicker, Maureen; Migden, Janine; Miller, Terri; Montovano, Steve; Moore, Bill; Nersesian, Carin; Neustaedter, Robert; Nicolay, Christi L.; Nord, Sue; Noske, Linda J.; Novosel, Sarah; Ogenyi, Gloria; Palmer, Germain; Perez, Carmen; Perrino, Dave; Petrochko, Mona L.; Pharms, Melinda; Rishe, Frank; Rizzo, Helen; Roan, Michael; Robertson, Linda; Robinson, Marchris; Rodriquez, Andy; Ryall, Jean; Shapiro, Richard; Shelk, John; Shortridge, Pat; Staines, Dan; Steffes, James D.; Stransky, Joan; Stroup, Kerry; Sullivan, Kathleen; Sullivan, Lora; Thome, Jennifer; Tiberi, Fino; Twiggs, Thane; Walton, Steve; Warner, Geriann; Yeung, Charles; Yoho, Lisa
Cc:	Hiltabrand, Leslie; Radford, Pat
Subject:	Teams for Upcoming FERC Proceedings

As you know, the Commission last week issued several important notices and papers regarding various policy initiatives that the Commission plans to address over the next few months.  These issues are extremely important to Enron and we have been urging FERC to address and resolve (most) of these issues for many years.  There is now a Commission in charge that looks like it is ready to act, and we need to be ready to respond.

In an effort to coordinate our efforts, we have developed coverage teams to respond to these FERC initiatives.  The Washington advocacy group will also work closely with all of these teams.  If someone is interested in a particular issue and was not included on that team, please feel free to call the Project Lead to have your name added to the team.  All assistance is welcome.  As you will see on the attached chart, many of the deadlines for responding to these initiatives are within the next few weeks, so the teams need to mobilize and establish a game plan for our responses very quickly.

On the attached chart, we have listed in the left column each of the FERC initiatives that will be starting or are currently underway.  A "Project Lead" has been named for each initiative.  The Project Lead will be responsible for developing and initiating a game plan for how Enron will respond in the proceeding.  The Team Lead will be contacting each of you within the next couple of days to set up processes and procedures for moving forward.  The team will be responsible for the initial determination of what issues should be addressed, what is the best way for Enron to respond to them, and producing draft comments.  Once draft comments are prepared, the comments will be circulated to a much wider group of Government Affairs and commercial people to ensure that the team has captured all of Enron's important issues.

There is a column of "Inside Counsel" and "Outside Services."  In some areas, we plan to use outside counsel or consultants and in others we do not.  Where we do not list outside counsel, we will rely on our inside counsel to draft the comments (with significant input from the team members).  Please remember, however, that even if outside services are listed, the RCR process must still be followed.  If applicable, Project Leads should submit the necessary RCR request as soon as possible.
The following is a brief description of each proceeding and the Project Lead named for each proceeding:

RTO Meetings and Comments to NOPR:  Sarah Novosel and Christi Nicolay will be the Project Leads in this proceeding.  The RTO meetings will be held in Washington from October 15-19, and we hope to have an executive from Enron make a presentation on one of the panels.  Comments will be submitted to FERC regarding the appropriate market design for RTOs.  This team will also be responsible for these comments.

Standards of Conduct NOPR:  Lisa Yoho will be the Project Lead.  Comments are due in approximately 45 days.  Several issues are raised in this proceeding, including a proposal to apply the standards of conduct to a utility's marketing affiliate buying and selling power to serve native load.  This is a significant action for FERC and we will strongly encourage the Commission to adopt this bold proposal.

ICAP Inquiry:  Christi Nicolay will be the Project Lead.  Chairman Wood has indicated that he is not very familiar with capacity and reserve requirements, whether they are needed, and what impact such requirements have on the market.  Enron has been a strong opponent of ICAP for many years, and we plan to show FERC that ICAP requirements are not needed.  We will submit expert testimony on this issue.
California Audit and Westwide Price Cap Mitigation:  Alan Comnes will be the Project Lead.  Commissioner Brownell is leading a FERC audit of the California ISO.  Although we do not have details of what the audit is intended to cover or how expansive it will be, we need to carefully monitor this proceeding and have input into the audit process where possible.  Furthermore, a request for rehearing is pending before the Commission regarding the current price cap mitigation measures.  The Commission implemented these caps in an effort to limit price spikes in California.  California's summer peaking season is over, but the Pacific Northwest's winter peaking season will be starting soon, and the mitigation measures currently in effect could discourage power sellers from selling power to the Northwest, where it will be needed this winter.  This team will be responsible for both of these proceedings.
Transmission Constraint and Energy Infrastructure Issues:  Steve Walton is the Project Lead.  FERC staff is studying two significant transmission constraints - California's Path 15 and the Central East Interface in New York  -- and plans to have the study completed later this year.  The Commission plans to forward the study to DOE.  The Commission stated that this is a high priority for it.  In a relating proceeding, the Commission has stated that it will hold four open meetings in different regions of the country to identify energy infrastructure issues.  The team will also oversee the progress in these proceedings.
Revised Public Utility Filing Requirements:  Susan Lindberg is the Project Lead.  The Commission has issued a NOPR proposing to require market participants to provide more information than is currently required, including at least seven additional data points per transaction.  This will have a significant administrative burden on Enron and could require the disclosure of commercially sensitive information.  Comments are due on October 5.
California Refund Proceeding:  Ray Alvarez is the Project Lead.  The Commission has ordered power sellers to pay refunds for sales made to the California ISO from October 2, 2000 through June 20, 2001, and has established a hearing proceeding to resolve issues of material fact.
Pacific Northwest Refund Proceeding:  Bob Frank is the Project Lead.  The Judge in this proceeding issued an initial decision recently finding that refunds are not warranted in the Pacific Northwest.  Briefs will be filed in response to the decision, and the Commission will review the Judge's order.
Midwest/Alliance RTO Proceeding:  Mike Roan is the Project Lead.  Various filings are pending before the Commission regarding establishment of two RTOs in the Midwest - the Alliance RTO and the Midwest RTO.  Enron is advocating, consistent with the Commission's recent pronouncements, one single RTO in the Midwest.  The Commission is expected to act on these filings shortly.  Proceedings may be ordered.
Northeast RTO Proceeding:  Sarah Novosel is the Project Lead.  Mediation to create a single Northeast RTO has concluded and the Judge's report is pending before the Commission.  A Commission order is expected on or before October 31.  Additional proceedings may be ordered.
Southeast RTO Proceeding:  Christi Nicolay is the Project Lead.  Mediation to create a single Southeast RTO has concluded and the Judge's report is pending before the Commission.  A Commission order is expected on or before October 31.  Additional proceedings may be ordered.

 << File: Coverage of Upcoming FERC Proceedings.doc >>


Having worked with you on the Perfect project, I now know that your power
point skills are legendary.  Would you mind volunteering to coordinate
putting all the stuff in to power point?

	Anil Sama <asama@yahoo.com>
	04/16/2001 04:24 PM

		 To: "Vavrek, Carolyn \(US - San Francisco\)" <cvavrek@deloitte.com>,
Jeff.Dasovich@enron.com, "'Mark Guinney'" <Mark_Guinney@watsonwyatt.com>
		 cc:
		 Subject: RE: OAT Valuation Model

Nice job Jeff!
I can meet Tuesday evening, Sat PM, or Sunday.
-Anil
  "Vavrek, Carolyn (US - San Francisco)" <cvavrek@deloitte.com> wrote:
Jeff - Thanks for putting so much work into this. Excellent job!

I agree that we should figure out when we can meet again. I can meet
tonight, during break on Tuesday and basically anytime on Saturday or
Sunday. During break on Thursday I volunteered to help Diane with a new
student's reception, but I can cancel that if need be. What does everyone
else's schedule look like?

Carolyn M. Vavrek
Manager - Human Capital Advisory Services
Deloitte & Touche
50 Fremont Street
San Francisco, CA 94105

phone: 415-783-5137
fax: 415-783-8760
e-mail: cvavrek@deloitte.com

-----Original Message-----
From: Jeff.Dasovich@ENRON.com [mailto:Jeff.Dasovich@ENRON.com]
Sent: Monday, April 16, 2001 8:56 AM
To: 'asama@yahoo.com'; 'Mark Guinney'; Cvavrek
Subject: OAT Valuation Model

----- Forwarded by Jeff Dasovich/NA/Enron! on 04/16/2001 10:53 AM -----

Jeff Dasovich

Sent by: Jeff To: "Sama, Anil"

Dasovich cc: "'asama@yahoo.com'"
,
Jeff.Dasovich@enron.com, "'Mark
Guinney'"

04/16/2001 Subject: OAT Valuation
Model(Document link:
10:52 AM Jeff Dasovich)

OK folks. It's about 80% of the way there. My brains are oozing out
looking at cells, so I want to get this around so Mark can get started on
refining assumptions and other folks can examine as well. I'll continue to
check it and de-bug it. Mark, you and I should talk, too. (You'll note
that at this point, the valuation is in the $30s, so there's work to do.)
Apologies in advance for any errors (and I'm sure they're there).

If anyone has any questions on the model, just let me know.

I think we ought to get together to meet this week as much as possible to
start g! etting the power point presentation together. And perhaps we should
think about meeting this weekend?

In the meantime, I'm pulling together the data on Buffet (Berkshire
Hathaway) stock performance, etc., and will also do the financial ratios,
including Dupont, for OAT.

Does this work for folks? Other thoughts?

Best,
Jeff
(See attached file: OAT Valuation 0416.xls)

This message (including any attachments) contains confidential information
intended for a specific individual and purpose, and is protected by law. If
you are not the intended recipient, you should delete this message and are
hereby notified that any disclosure, copying, or distribution of this
message, or the taking of any action based on it, is strictly prohibited.

Do You Yahoo!?
Yahoo! Mail Personal Address - Get email at your own domain with Yahoo! Mail.


Greg,  Attached is the form of guaranty to use for the Brazos Valley
Project.  Let me know if you have any questions.


Done.

Janet H Wallis
06/02/2000 10:23 AM
To: dfarmer@enron.com
cc: pam.leigh@southernunionco.com
Subject: 98-1601

Please extend the sale at Lockhart  to Southern Union for two extra days at
the same price.

Thank you,
Janet
---------------------- Forwarded by Janet H Wallis/HOU/ECT on 06/02/2000
10:16 AM ---------------------------

Jackie Young
06/02/2000 09:32 AM
To: Janet H Wallis/HOU/ECT@ECT
cc:
Subject: 98-1601

Can you please extend deal #254839 to cover flow for 5/20 and 5/21?  On the
20th, 578 decatherms flowed.  On the 21st, 109 decatherms flowed.

Thanks
-Jackie-
3-9497


Louise,

Theresa Vos will ask you to authorize a wire request for $100,000 for the Roseville.  This payment is required to keep the agreement with the muni alive which protects $5MM - $15MM of value for the creditors.  A plan for monetization of this and other West positions is being pursued (we have $1.1MM coming in this month for ERC sales).  I recommend we fund this $100,000 payment.

Chris Calger
503-464-3735


I guess we survived the "Crashing" of the systems.  Excellent !

Have a good evening.

Anne


Dear Errol Mclaughlin Jr,

Congratulations! You'll notice a credit line increase on your
Citibankc?statement. You are one of Citibank's best customers, so we
have awarded you a credit line increase. That means you now have more
purchasing power in your hands--and it's a better time than ever to
reward yourself at www.citiplaza.com.

You Deserve It

What could be easier than clicking over to www.citiplaza.com, where
your Citibank card earns you special deals from some of the Web's
finest retailers? And now, because you are such a good customer, you
will have extra spending power when you shop there!

Congratulations once again. On behalf of everyone at Citibank--it is a
pleasure doing business with you.

Sincerely,

Kendall E. Stork
President and CEO
Citibank (South Dakota), N.A.

If you have difficulty linking to any of the above urls, simply cut
and paste this url into your browser:
http://citibank1.m0.net/m/s.asp?HB2892137731X857297X47213X

Notice: If you do not wish to receive future email updates about the
exciting offers and services available to you as a Citibank
cardmember, go to:
http://citibank1.m0.net/m/u/ctb/c.asp?e=errol.mclaughlin%40enron.com

This message is for information purposes only. For account related
questions, use the Secure Message Center in Help/Contact Us at:
www.accountonline.com.

Please understand that we cannot respond to individual messages
through this email address. It is not secure and should not be
used for account related questions. If you have forgotten your
sign-on information, just reset your User ID and Password by
visiting www.accountonline.com.

, 2000 Citibank (South Dakota), N.A.
All rights reserved.
Citibank is a registered service mark of Citigroup.
Citiplaza is a registered service mark of Citigroup.


Will -

I've passed your phone number along to Bill Williams, the Real Time group
manager here in Portland. He should be contacting you shortly to discuss
problems with and changes to the Scheduling Activity Report. I've checked
with other groups on the floor and found that the report is only used by Real
Time, and less frequently by groups assisting Real Time, so I believe Bill or
someone in his group could most suitably test the new application. Let me
know if there's anything else I can do, and thanks for all your help today.

Kate


Dear Ms. Beck and Ms. Apollo,
It was a sincere pleasure to meet with you yesterday. The information I  learned during the interview served to confirm the feelings I have always had  about Enron. Unfortunately I received the disappointing news that Enron was not  pursuing employment possibilities with me further.
I feel strongly that Enron and its  products and services have an exciting growth ahead, and  I  definitely would like to be considered for opportunities available in the  future.
Again, I appreciate your time and  consideration, and hope to hear from you in the near  future.
Sincerely,
Ariel  Sandin


Bill,
Are you the original owner of that laptop or is it a redeployed sysem?  Also, what model?

 -----Original Message-----
From: 	Wendt, Richard
Sent:	Wednesday, November 21, 2001 7:40 AM
To:	LaGesse, Denise
Subject:	RE: Laptop accessories

Not knowing exactly what model Compaq laptop Bill has makes this an educated guess on my part.  First of all, all new laptops came with both CD and floppy drives so if he is the orginal owner have him check in the bag.  If it was a redeployed system he may not have received all the pieces.  With that said, an internal floppy drive will run about $75 for the Compaq M700 laptop. Other models may vary in price a bit but probably not by much.

 -----Original Message-----
From: 	LaGesse, Denise
Sent:	Tuesday, November 20, 2001 4:33 PM
To:	Wendt, Richard
Subject:	FW: Laptop accessories

I'm sending this to you in Karon's absence . . .

 -----Original Message-----
From: 	LaGesse, Denise
Sent:	Tuesday, November 20, 2001 4:31 PM
To:	O'Gorman, Karon
Cc:	Rapp, Bill; Sellers, Emily
Subject:	Laptop accessories

Bill Rapp's laptop (Compaq) is not equipped with the device that allows a 3.5" diskette to be loaded.  He can run CDs, but not diskettes.  What do we need to order and how much will it cost?  Thanks.

Denise LaGesse
Enron Transportation Services
1400 Smith Street (77002-7361)
P.O. Box 1188
Houston, Texas 77251-1188
denise.lagesse@enron.com
ph 713-853-6704
cell 713-822-7736
fax 713-853-5425


Jeff,

Thanks again for your help.  I appreciate it.

Regards,

Lara

Jeff Dasovich
09/06/2000 03:02 PM
To: Lara Leibman/HOU/EES@EES
cc:
Subject: Rick's Panel on Wholesale/Retail Market Power Issues

Lara:  I have rather hastily put this list together.  For that I apologize.
Hope it is helpful.  The things on the list are ones that you've likely
already considered.  Nevertheless, some of the issues we face in California
include:

1. POWER PLANTS
The utilities' subs are building power plants; competitors (like Enron) are
also trying to develop plants to sell power into both wholesale and retail
markets.
The utilities control the interconnection of plants to the grid.
The interconnection rules are currently so vague and ambiguous, that the
utility could quite easily favor its generation sub over competitors.
This would have an effect on prices at both the wholesale and retail level
(i.e., how do we know we've gotten the best generation deal if the utility
can favor its subs plants via interconnection?).

2. DISTRIBUTED GENERATION
And the same goes for DG:  in California many are pointing to DG as a viable
solution to the price spikes.
If the utility loses sales because a customer has installed DG on her
premises as a hedge against price spikes, the utility will have an incentive
to thwart interconnection of the DG unit.  (Recall that in many places,
recovery of distribution costs is derived from kwh sales; and if sales go
down, so can recovery of the utilities' distribution-related costs).
In addition, if someone attempts to install DG at the grid level (as opposed
to on-site DG) and sell the DG power in wholesale and retail markets, the
utility has the ability to frustrate the DG project via interconnection.
This permits the utility to retain bundled service customers.  Utility
control of DG Interconnection can also permit the utility to favor its DG
subs.

3. INTERCONNECTION/VOLTAGE BUY-UP
And the same goes for the retail level---remember how SDG&E used
interconnection to thwart our deal with South West Marine in San Diego.
(Obviously, we're not doing these deals any more, but the interconnection
caused us ultimately to lose the commodity deal, too.)

4. TRADING
PG&E and Sempra have developed significant trading units.
Now that the utilities have been granted authority to buy outside the PX, the
trading subs are getting more aggressive and vocal about the opportunity to
sell the utility power via short and long term power contracts.
Again, any sort of favoritism could do considerable harm to consumers and
competition (through the shareholders of the utilities' parent would surely
profit).

5. DISTRIBUTION
In general, the utilities control over distribution is complete and it's a
problem (see DG, above, for example).
Shouldn't state and federal policy makers at least consider doing the
equivalent of FERC Order 888 (i.e., open access) at the distribution level?
Right now, distribution is a real black box.

6. RETAIL
In California, the utility effectively controls customer sign-up, switching,
information, and turn back.  The problems have been significant.

7. MARKET INSTITUTIONS
Finally, a big mistake in California was to replace one monopoly--the
utility--with another--the PX.
Because the utility has been forced to buy from the PX, and because the
market structure in California gives customers no incentive to switch, the
utility continues to control the overwhelming majority of the load in
California.
This gives the utilities monopsony power.  With that power, they can
influence PX prices.
Solution:  1) Don't make the PX a monopoly. 2) Create a system that provides
customers with the incentive to switch.

If you have any questions, or if there's anything else I can do to help,
don't hesitate.

Best,
Jeff


You know when you get older the first thing to go is the mind/ eyes.  Hear
they are.  Sorry!

Debra Perlingiere
Enron North America Corp.
Legal Department
1400 Smith Street, EB 3885
Houston, Texas 77002
dperlin@enron.com
Phone 713-853-7658
Fax  713-646-3490


please click on the following link:

http://www.cei.org/OnPointReader.asp?ID=1335


After our discussion yesterday, I've updated the doorstep budget.  I'm
working on the schedule (starting 9/2000) and hope to get that to you soon as
well.

Best regards

Shona


Becky:

In response to the second point below, the substation will be owned by FPL.
We do not view that as a result of interconnection that there would be any
liabilities with respect to the FPL system. I would definately like for you
to have your legal counsel review the agreement, however, on this point, and
would like any other legal / commercial comments at your earliest
conveneince. We plan to meet with FPL early next week on this agreement, and
would of course like to incorporate TECO's comments as well.

Regards,

Ben

-----Original Message-----
From: "Becky Alex" <rtalex@tecoenergy.com>@ENRON
Sent: Tue 6/5/2001 2:11 PM
To: Jacoby, Ben
Cc:
Subject: Re: FW: Draft FPL Construction & Connection Agreement

Ben,

Nester Martinez in our transmission group reviewed Draft FPL Construction &
Connection Agreement and below are his comments:

? No major concerns with the project or its interconnection. It appears that
this is a basic ring bus design and the 500KV line is adjacent to where the
Midway Energy Center substation will be built. Connecting the station will
require a number of upgrades on the FPL system and the Dynamic Stability
Study indicated no adverse affect to the FPL system.

? The EMPP substation will now be an integral part of the reliability of the
500KV- FPL transmission line (since it will be looped through our
substation). Does EMPP have liabilities associated with the failure of our
equipment that could take the line out of service etc.?  Who will own the
substation?

Could you please respond to the second point.  Thanks, Becky

>>> "Jacoby, Ben" <Ben.Jacoby@ENRON.com> 06/05/01 01:10PM >>>
Becky:

Any update on this?

Thanks,

Ben

-----Original Message-----
From: Jacoby, Ben
Sent: Thu 5/31/2001 5:42 PM
To: '"Becky Alex" <rtalex@tecoenergy.com>@ENRON'
Cc: Mitro, Fred
Subject: RE: Draft FPL Construction & Connection Agreement

Thanks much!

  -----Original Message-----
 From:  "Becky Alex" <rtalex@tecoenergy.com>@ENRON
[mailto:IMCEANOTES-+22Becky+20Alex+22+20+3Crtalex+40tecoenergy+2Ecom+3E+
40ENRON@ENRON.com]
 Sent: Thursday, May 31, 2001 2:36 PM
 To: Jacoby, Ben
 Subject: Re: Draft FPL Construction & Connection
Agreement

 Ben, I have forwarded the Construction and Connection Agreement
to our transmission interconnect "guy" and he is currently reviewing.
He said he should have comments (if any) by Friday June 1.  I will
forward on his comments as soon as I have them.

 Thanks, Becky

 >>> "Jacoby, Ben" <Ben.Jacoby@ENRON.com> 05/30/01 04:06PM >>>
 Becky:

 As promised, attached is the draft agreement. We would
appreciate your
 review of this document at your earliest convenience as we would
like to
 provide FPL with comments as soon as possible. Thanks.

 Ben

  <<FPL Construction & Connection Agreement Generic.doc>>


Trader on this deal is Bert Meyers. I've left him a message to come in a little early for the meeting today so we can settle this. However, it looks like everything on our side has been taken care of - Virginia says both Montana and Tacoma agree HE 3 should be zeroed out, which is what we show in Enpower. It appears we've been charged for the change in sale volume, but not credited for the change in purchase volume - am I right?

So at this point do we need to bother the trader with this? And what do you mean by "it" being "in or out"? Another deal? We shouldn't need one.

Let me know when you get a chance.

Thanks,
Kate

 -----Original Message-----
From: 	Williams III, Bill
Sent:	Monday, July 09, 2001 11:09 AM
To:	Symes, Kate
Subject:	FW: PMA's

Kate could you check with the trader on this.  I really don't care if it is in or out.  Let's try to wrap it up before or after the meeting.
Thanks,
Bill

 -----Original Message-----
From: 	Chang, Fran
Sent:	Tuesday, July 03, 2001 1:59 PM
To:	Williams III, Bill
Cc:	Thompson, Virginia
Subject:	RE: PMA's

Good point Bill.  Now that we are sure what happened to #549162.1 is correct, I am following up with Settlements group in Houston regarding the other side of the deal, i.e. #549160.  Somehow that latter deal was not captured during their processes of creating the prior month adjusments details.  I will get back to you as soon as I hear from them, but at least we know now the loss you got was not due to change of counterparty.

-Fran

 -----Original Message-----
From: 	Williams III, Bill
Sent:	Tuesday, July 03, 2001 10:43 AM
To:	Chang, Fran
Cc:	Thompson, Virginia
Subject:	RE: PMA's

Fran,
If this deal was zeroed out (and it has been after the fact), then we should also have received a credit for no longer buying from MPC (the other side of the deal,
deal #549160). We should only lose $40 (the net difference). Any ideas?

Thanks,
Bill

From: 	Chang, Fran
Sent:	Tuesday, July 03, 2001 10:05 AM
To:	Williams III, Bill; Thompson, Virginia
Subject:	RE: PMA's

Virgina and Bill:

During our month-end processes I have researched deal #549162.1.  The counterparty did change as Bill pointed out, but what makes you suffer a loss in the prior month adjustments was due to the volume being zeroed out for HE 3.  Originally the deal liquidated with HE3 (40MWh*$135), HE4(15MWh *$135), and HE5 (20MWh*$135), but on 4/19/2001 the volume for HE3 was zeroed out in scheduling, which means originally you were given too much $ for the sale and therefore we are now taking that revenue you made in HE3 back.

Thanks,
Fran
x7973

 -----Original Message-----
From: 	Williams III, Bill
Sent:	Tuesday, July 03, 2001 6:31 AM
To:	Thompson, Virginia
Cc:	Dunton, Heather; Chang, Fran
Subject:	PMA's

Virginia,

I have one question on this month's PMA and some questions from last month.  First, for deal #549162, this deal was originally put in incorrectly as counterparty TacomaSupp.  This counterparty was then changed to Tacomapubuit.  Why does a change in counterparty result in a loss of revenue?  Are we being charged for each counterparty again (like EES and ST-Cali last month), if so, we need to fix this flawed tool.

Second, for last month, we determined that the WBOM book needs a $108,000 PMA for change in price.  The appropriate price is in Enpower, but the revenue has never appeared (Deal #590753). Remember, this deal was originally input as a buy at $320 and a sell at $30 and liquidated at these prices. The deal is now at $320 and $300.  What do we need to do to get this trued up?
Please come see me with questions.

Thank you for your help.
Bill


Hi everyone:

I am attaching an updated Research (and Research Alumni) list.

I thought you might like to have it.

Hope everything is going well for everyone!

Shirley


Attached please find the following documents:

Thank you,
Lisa Upchurch
713-345-8701


The following items were discussed in this week's ETS and Corporate Change Control Item...
Oct. 11
Beginning today, the Corporate team is pushing out workstation updates.  Users were notified via email when their floors will have the upgrade available.  The major push for ETS floors begins on Oct. 24.
Oct. 12
From 5:00 - 6:00 p.m., the Messaging team will add all EES mail to route through mimesweeper.  No impact to ETS is expected.

Oct. 13
From 7:00 a.m. - 5:00 p.m., Facilities will complete the installation of Alarm and status controls on the new Humidifier Unit in 3450 and the new water detector system in the EB34 Data Center.  No impact is expected.

Oct. 13
From 8:30 - 10:00 a.m., the Corporate Server team will migrate the EES DNS to Corp.  No impact to ETS is expected.

Oct. 13
From 9:00 a.m. - 2:00 p.m., Enron Network Services will migrate the switches for the printer networks on ECN 24 - ECN 38.  This is will effect the printers on each of these floors as the hubs are replaced.  The printers will be reconnected to the new cisco switches and tested to make sure they are back on the network.  No impact to ETS users is expected unless they reside on floors 24-38.

Oct. 13
From 11:00 a.m. - 12:00 p.m., Enron Network Services will migrate EBS users on the 10.x.x.x network to the 172.28.x.x network.  This change will result in intermittent network outages.  No impact to ETS users is expected unless they reside on a 172.28.x.x floor.
Oct. 13
From 6:00 p.m. through 10/14 at 6:00 a.m., the Unix group will perform maintenance on Croaker.  The following applications reside on this server: Custom Logs (CEI), EnPower, Equities, ERP/TRV, Estreme Relocation, Etalk, Government Affairs, Infinity, ITOPS, IZZIE, OMS (Yantra), RMS, SIEBEL, WEBMODAL, and REMEDY.  This maintenance will result in a total disruption of access to these applications.
Oct. 13
From 6:00 p.m. through 10/14 at 6:00 a.m., the Unix group will perform maintenance on Charon.  The following applications reside on this server: OPM, ENLighten, RAM.  This maintenance will result in a total disruption of access to these applications.
Oct. 13
From 10:00 - 10:15 p.m., Enron Network Services will add IGMP to ENA-CX13 and ENA-CX14 which house the 172.28.0.0 networks.  No impact is expected.
Oct. 13
From 10:00 p.m. through 10/14 at 2:00 a.m., Telephony services will perform their monthly maintenance and backups of the CMS and Conversant systems.  No impact to ETS users is expected although the Solution Center will not have access to their call management system during this time.
Oct. 13
From 6:00 p.m. through 10/14 at 6:00 p.m., the Unix group will perform maintenance on Adcupalpha.  The following application resides on this server: SAP / Project Sunrise.  This maintenance will result in a total disruption of access to these applications.
Oct. 16
At 11:00 a.m., Enron Network Services will add routing protocols to the 155.251.16.0 network which currently bridges Gas Control from Houston to Omaha.  This change along with additional maintenance will result in disruption of service between Houston and Omaha for the Gas Control segment only.
Oct. 17
From 8:00 - 10:00 p.m., Enron Network Services will enable multicast or change filters to ENA WAN sites.  The sites affected include: Calgary, Chicago, Costa Mesa, Dublin, Hinsdale, NY Metals, Omaha, Portland, Toronto, and Washington DC.  There will be a slight disruption of service (a few seconds) to these WAN sites while the multicast changes are made.

Oct. 20
From 11:00 p.m. through 10/21 at 3:00 a.m., the EDI team will upgrade the QA-Test server, adding hard drives and memory resulting in a total outage for the EDI test environment.

ETS Solution Center - Houston, at 713-345-4745
ETS Solution Center - Omaha, at 402-398-7454


Phil,

Wednesday would work for me.

Vince

08/21/2000 07:22 PM
Phil Sisneros@ENRON COMMUNICATIONS
Phil Sisneros@ENRON COMMUNICATIONS
Phil Sisneros@ENRON COMMUNICATIONS
08/21/2000 07:22 PM
08/21/2000 07:22 PM
To: Vince J Kaminski/HOU/ECT@ECT
cc:
Subject:

Vince:

i'm in town wed/thurs/fri--let me know if dinner on wed or thurs works for you


---------------------- Forwarded by Tori Kuykendall/HOU/ECT on 04/24/2001
03:30 PM ---------------------------

Tori Kuykendall
04/24/2001 03:31 PM
To: Monique Sanchez/HOU/ECT@ECT, Keith Holst/HOU/ECT@ect, Phillip K
Allen/HOU/ECT@ECT, Frank Ermis/HOU/ECT@ECT, Mike Grigsby/HOU/ECT@ECT, Jane M
Tholt/HOU/ECT@ECT, Matthew Lenhart/HOU/ECT@ECT, Randall L Gay/HOU/ECT@ECT,
Jay Reitmeyer/HOU/ECT@ECT, Susan M Scott/HOU/ECT@ECT
cc:
Subject: Admin Asst's Day

We need to get something for Ina for Admin Asst's Day - it is tomorrow.  I
will take a collection of $10 from each person and get a gift certificate
from Foley's if that is okay with everyone.  I will probably have to go get
the gift certificate tonight - so please dont stick me with more than my
share of the bill. ( Thats what happened last time)  Thanks.


Colleagues:

URM positions as of June 2001 (more precisely as of end of May) are now
available at the following level of details:
The position (long, short, and net) in electric utility "x"
The position (long, short, and net) per customer in the electric utility "x".
The position (long, short, and net) per rate schedule/customer class in
electric utility "x".
Aggregates of the above per State, NERC Region, and Customer.

If you need any position for a specific utility in your service territory,
please contact Miyung Buster (713-853-4329) by email with cc to: Stella Chan,
Pat Keene, Harry Kingerski, and/or Amr Ibrahim and we shall attempt to
provide the data in the shortest possible time (currently aiming at within
the same business day).

Best regards

AI
713-853-3037