-----Original Message-----
From: 	David Givens <dgivens@intellibridge.com>@ENRON
Sent:	Wednesday, October 10, 2001 2:40 PM
To:	Steffes, James D.
Subject:	Intellibridge has compiled the following report in response to yo	ur request

 10  October, 2001
To: James D. Steffes,  Enron
From: Enron  Forum
Content: Intellibridge has compiled the following report  in response to your request.
Request:
What  would be the amount of installed capacity of each of the FERC RTOs (assuming  Californiais ultimately in the  Western RTO) and what is the total peak demand in each  area?

Response:

Intellibridge estimates the following peak demand and installed capacity  figures for each of the four proposed FERC RTO regions based on the most recent  complete data available.  Peak load  data sets that were deemed complete and reliable are for 1999. Installed  capacity information is from forecasts made by NERC for 2001.

[IMAGE]

 In response to FERC  Order 2000 of 6 January  2000, utilities throughout  the United  Statessubmitted proposals to  form Regional Transmission Organizations (RTOs) for coordinating and controlling  electric power grid systems in their area.   FERC responded to these proposals on 12 July 2001, in a series of orders  that made clear the Commission's vision of four large, regional RTOs making up  U.S. bulk power markets.  FERC said  in these orders, "We favor the development of one RTO for the Northeast, one RTO  for the Midwest, one RTO for the Southeast, and one RTO for the  West."

Though the eventual shape and scope of the regional RTOs remains in  question, estimates of capacity and peak demand can be made based on groupings  of North American Electricity Reliability Council (NERC) regional councils or  regional ISOs and bulk power markets.   For the purposes of estimating installed capacity and peak load in these  regions, the following groupings of NERC regional councils and ISOs were assumed  to correspond to the four RTOs proposed by  FERC:

Northeast:
?         PJM
?         ISO-New England
?         New York ISO

Southeast:
?         Southeastern Electric Reliability Council  (SERC)
?         Florida Reliability Coordinating Council  (FRCC)

Midwest:
?         Mid-Continent Area Power Pool (MAPP)
?         Mid-American Interconnected Network, Inc.  (MAIN)
?         Southwest Power Pool (SPP)
?         Eastern Central Area Reliability Coordination Agreement  (ECAR)

West
?         Western Systems Coordinating Council  (WSCC)

Peak Load  Data:
FERC  Form 714 hourly load data were used to calculate coincidental peak load for the  Midwest and Southeast RTOs.  FERC's  most recent, complete set of Form 714 data are for year 1999; FERC is still  collecting data for year 2000.  Year  1999 data were consequently used throughout for the sake of consistency.  Peak demand for the Western RTO was  taken as the 1999 annual peak reported by NERC for the WSCC in its year 2000  "Summer Assessment".  Coincidental  peak demand for the Northeastern RTO was calculated from 1999 hourly load data  available on the PJM, ISO-New England, and New York ISO web sites.

Installed  Capacity Data:
NERC  Electricity Supply & Demand for 2001. While some sets of this data for 2001  are estimates, it can be assumed that the Summer 2001 installed capacity data is  reasonably current. Other estimates can be made available.

Sources:
 FERC NERC ISO-New England PJM New York  ISO

For  more information, you may contact David Givens, senior managing analyst, at  202-298-6300, ext. 243, or dgivens@intellibridge.com
 - clip_image002.gif
 - Forum Expert Link Capacity and Peaks.doc


Please see the following articles:

Sac Bee, Fri, 7/13: Lawmakers vow a vote on Edison
Sac Bee, Fri, 7/13: No outcry to ease clean-air process
Sac Bee, Fri, 7/13: State lawmakers lobby for refund on energy purchases
Sac Bee, Fri, 7/13: Energy conflicts revealed
SD Union, Thurs, 7/12: Judge says California owed 'hundreds of millions of
dollars' ) not billions
SD Union, Thurs, 7/12: Southern California gas fights FERC over routine
decision that may cost millions
LA Times, Fri, 7/13: Options Debated in Edison Rescue
LA Times, Fri, 7/13: Developer Pulls Plug on Power Plant in Chula Vista
LA Times, Fri, 7/13: Some State Energy Consultants Own Generators' Stock
LA Times, Fri, 7/13: Plan Uses Public in Refund Demand
SF Chron, Fri, 7/13: 2 sides face off at EPA hearing on regulating energy
plant emissions
SF Chron, Fri, 7/13: 7 California advisers own energy stocks
Secretary of state calls for investigation
SF Chron, Fri, 7/13: PG&E customers get a payback for conservation
Nearly one-third earn rebates for cutting electricity use 20%
SF Chron, Fri, 7/13: Judge spells out opposition to power refund claim
Opinion says $8.9 billion in alleged overcharges for electricity 'cannot be
substantiated'
SF Chron, Fri, 7/13: News briefs on the California power crisis
SF Chron, Fri, 7/13: Wholesale prices drop by largest amount in 28 months
Mercury News, Fri, 7/13: Power rebate generates shockingly high interest
Mercury News, Fri, 7/13: Settlement talks unsuccessful
OC Register, Fri, 7/13: Rate hike may hit businesses
Wash. Post, Fri, 7/13: Judge Rejects Power Refunds For California
WSJ, Fri, 7/13: Mediator Questions California 's Claims To Power Refunds
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 Lawmakers vow a vote on Edison
By Kevin Yamamura and Emily Bazar
Bee Capitol Bureau
(Published July 13, 2001)
Facing a looming deadline and pressure from the governor, legislative leaders
said Thursday they will push for a vote next week on a revised plan to save
Southern California Edison from bankruptcy court.
Under competing proposals from each house of the state Legislature, large
businesses would pay for the majority of Edison's $3.5 billion debt and power
generators would be pressed to accept less than they are owed for past energy
purchases.
A vote next week would come three months after Gov. Gray Davis first struck
an agreement with Edison. His original arrangement would have the state
purchase the company's transmission lines for $2.76 billion and use a portion
of consumer rates to help pay off Edison's debt.
But lawmakers roundly criticized the Democratic governor's agreement in
subsequent weeks and floated alternatives soon afterward. Lawmakers
acknowledged that the latest alternatives are still under negotiation.
The governor's agreement with Edison has an Aug. 15 deadline, which falls
toward the end of the Legislature's summer recess. Because the monthlong
break is scheduled to begin next Friday, lawmakers plan to vote before then.
The Assembly could vote on a proposal as early as Saturday.
Davis on Tuesday threatened to call a special session to keep legislators in
Sacramento if they do not approve the Edison plan before the break. But
Senate President Pro Tem John Burton, D-San Francisco, challenged that
threat, saying, "Only the Legislature can keep the Legislature here."
Senate Democrats are studying a plan by Sen. Byron Sher, D-Palo Alto, that
would have large businesses pay off most of Edison's debt and force
generators to reduce by 30 percent the amount they are owed by the utility.
That would leave about $1.2 billion in debt, for which Edison itself would be
responsible without relying on ratepayers, Sher said.
His plan also gives the state the option to purchase Edison's transmission
lines for book value -- less than half the price Davis offered to pay.
Burton said his house will vote on a version of Sher's proposal next week.
Burton said he prefers Sher's version because large businesses and industrial
users, not consumers or small businesses, would be responsible for paying the
majority of Edison's debt. He reiterated that businesses were among the most
ardent advocates for electricity deregulation.
"We're trying to do something legislatively that protects the people and
isn't a bailout for the utility," Burton said. "I don't think it's fair that
small users pay for any of (the debt)."
While the Senate toils over Sher's proposals, members of the Assembly are
drafting their own version of a plan. Their version, too, would separate
users into large and small categories, according to Paul Hefner, a spokesman
for Assembly Speaker Robert Hertzberg, D-Sherman Oaks.
Under the plan, electricity for small users -- some residential and
small-business customers -- would come from the cheapest sources -- Edison's
own power plants and renewable energy sources known as "qualifying
facilities." Larger users would pay more because they would obtain power from
the long-term contracts that have been signed by the state Department of
Water Resources.
Ultimately, as the amount of electricity supplied by the long-term contracts
declines over the course of several years and the overall supply increases,
costs to large businesses are expected to decline as they buy more power on
the open market, presumably at lower prices.
The plan envisions a portion of business and residential rates dedicated to
reducing Edison's debt for at least the first year, with businesses picking
up more of the burden in future years. Like the Senate plan, the state would
have an option to buy transmission lines.

The Bee's Kevin Yamamura can be reached at (916) 326-5542 or
kyamamura@sacbee.com <mailto:kyamamura@sacbee.com>.

No outcry to ease clean-air process
By Chris Bowman
Bee Staff Writer
(Published July 13, 2001)
The Bush administration did not receive much sympathy from California at a
hearing Thursday about its concerns that some environmental rules make it
hard for industry to meet demands for electricity and gasoline.
No owners of California power plants testified in Sacramento at the second of
four public hearings examining whether clean air rules unnecessarily impeded
energy production.
President Bush ordered the 90-day review by the U.S. Environmental Protection
Agency in May as part of his national energy policy.
As for California's gasoline producers, a few representatives called for
streamlining and clarifying the EPA rules, but not relaxing them.
At issue are federal Clean Air Act regulations collectively called "new
source review" that apply to businesses looking to build or expand
refineries, power plants and other sites that generate air pollution. The
rules call for installation of the best-available pollution-control hardware,
plus smog-cutting measures that more than offset the added air emissions.
California's smog officials saw the lack of industry protest Thursday as
evidence that rules do not need major fixing.
"The system is working," Peter Venturini, a state Air Resources Board
official, said at the hearing, which was attended mostly by industry
representatives and environmentalists.
Venturini said smog-forming emissions from businesses in the state have
declined 50 percent the past 20 years despite a 40 percent increase in
population and commensurate industry growth.
"That tells us we can have a healthy economy and protect our environment," he
said.
That balance has been put to the test during the state's energy crisis.
Venturini testified to EPA officials Thursday that California's fast-tracked
system of permitting new power plants within 30 days shows that new-source
rules can be flexed to meet a sudden thirst for more energy.
Several industry representatives said the Clinton administration had
interpreted the rules in confusing ways that inhibited even routine plant
maintenance and upgrades, some of which improved efficiency and cut emissions
of pollutants.
Worse, they said, state and local regulators of the rules would impose their
own, often conflicting, interpretations of the rules.
"A system in which different agencies reach different conclusions from the
same set of facts is no system at all," said Shannon Broome, spokeswoman for
the Air Permitting Forum, a national coalition of manufacturers seeking to
streamline the rules.
Environmentalists argued the Bush administration was exploiting the
California energy crisis to roll back environmental regulations at the
expense of public health. They said any relaxation would result in thousands
of premature deaths of heart and respiratory patients.
Priscilla High of the Care for God's Creation Committee of the Roman Catholic
Diocese of Sacramento reminded EPA officials that emissions from power plants
and automobiles trap the Earth's heat, contributing to climate change that
alters "the natural world as we know it."

The Bee's Chris Bowman can be reached at (916) 321-1069 or cbowman@sacbee.com
<mailto:cbowman@sacbee.com>.

State lawmakers lobby for refund on energy purchases
By Dale Kasler
Bee Staff Writer
(Published July 13, 2001)
Thwarted in their quest for an $8.9 billion refund from wholesale power
suppliers, state officials began applying political pressure Thursday on
federal regulators who will set refund levels.
A month after pressure from Congress prompted the Federal Energy Regulatory
Commission to accept price controls on electricity, House Democrats from
California urged FERC to support Gov. Gray Davis' refund demands.
"The congressional delegation is doing all it can," Rep. Sam Farr, head of
the state's Democratic delegation, told reporters during a conference call
with Davis. Farr called $8.9 billion a reasonable refund.
Recommending a more lenient standard for calculating refunds, the Democrats
said in a letter that FERC should order refunds for power sales dating back
to May 1, 2000. FERC, however, has ruled previously that it cut off the
refund period at Oct. 2.
The state says about one-third of the alleged overcharges, or nearly $3
billion, took place between May and October.
Meanwhile, a FERC administrative law judge reiterated his belief that the
refunds would total "hundreds of millions of dollars, probably more than a
billion dollars," but less than the $8.9 billion California says it was
overcharged.
Judge Curtis Wagner, who oversaw two weeks of negotiations between California
and the suppliers, said "the amount claimed by the State of California has
not and cannot be substantiated." In a report to FERC commissioners, he
repeated his earlier comment that the state owes more to the suppliers for
unpaid power bills than the suppliers owe the state for overcharges.
On Thursday, Wagner formally recommended that FERC hold a public hearing to
calculate the overcharges.
In setting the guidelines for figuring out refunds, Wagner said the
calculations should be tied to production costs, a guideline urged by
California's negotiators. But the judge included a guideline likely to favor
the sellers: For sales taking place after Jan. 5, 2001, the sellers can add
10 percent to their cost calculations as a risk premium.
That was the date Pacific Gas and Electric Co. and Southern California Edison
were placed on junk bond status by Wall Street credit-rating agencies, making
sellers reluctant to deliver power to the two utilities. The state stepped in
two weeks later to buy power for PG&E and Edison.
Davis, speaking to reporters before Wagner's recommendation, said the judge's
cost formulas would help California prove his case. "The number comes up
close to $8.9 billion," he said.
But the governor, who has threatened to sue FERC if he didn't get $8.9
billion, suggested he'll need political help from Congress to get his way
with FERC.
It is widely believed that political pressure made FERC abandon its
free-market orientation last month and place price controls on wholesale
electricity prices throughout the West. Davis credited "a concerted effort by
Democrats in Congress, accompanied by a few good Republicans," with getting
FERC to change its mind.

The Bee's Dale Kasler can be reached at (916) 321-1066 or dkasler@sacbee.com
<mailto:dkasler@sacbee.com>.

Energy conflicts revealed
By Amy Chance
Bee Political Editor
(Published July 13, 2001)
Several state energy traders now working to buy electricity on ratepayers'
behalf own stock in at least one energy generator, conflict-of-interest forms
released Thursday show.
Despite Davis administration claims to the contrary, many energy consultants
who went to work for the state earlier this year didn't file the statements
until Thursday afternoon.
Secretary of State Bill Jones, a potential Republican candidate for governor,
had charged at a Wednesday news conference that the Davis administration had
neglected its responsibility to report any potential conflicts.
"We're very concerned that these documents were not available for public
review throughout the time that energy decisions were being made in the early
stages of this crisis," said Alfie Charles, assistant secretary of state for
communications. "It's disturbing that the governor's office lied about the
existence of these documents earlier this week."
Charles said the content of the reports is of even greater concern because
they show that a number of the employees hold stock in companies selling
power to the state.
Gov. Gray Davis' press secretary, Steven Maviglio, said Wednesday that all
consultants required to file the statement had done so or would do so within
the required time period. But he acknowledged a day later that most of the
reports had not been filed until Thursday.
He said administration lawyers were investigating any possible conflicts.
"If there's anything inappropriate, individuals will be dealt with," he said.
One energy trader reported holding stock in Enron Corp. Several "energy
schedulers" reported owning stock in Calpine, another power generator,
including one who reported holdings valued between $100,001 and $1 million.
Jones said the Democratic governor should have known such financial interests
were unacceptable.
"Clearly, if you have any type of asset involvement ... you have a potential
conflict," he said. "We've spent $43 billion (on electricity) and now we're
sitting here with the people who did the purchasing having a conflict."

The Bee's Amy Chance can be reached at (916) 326-5535 or achance@sacbee.com
<mailto:achance@sacbee.com>.

Judge says California owed 'hundreds of millions of dollars' ) not billions

\
objattph
By Jennifer Coleman ASSOCIATED PRESS  July 12, 2001  SACRAMENTO ) An
administrative law judge mediating talks between the state of California and
energy companies says the state is likely owed "hundreds of millions of
dollars" in refunds, much less than the $8.9 billion the state wants.  Judge
Curtis L. Wagner Jr., in a recommendation released Thursday, said that while
there are "vast sums" due for overcharges, California utilities, grid
managers and the state agency purchasing power owe generators even more.
Gov. Gray Davis and California officials who attended the 15-day talks held
out for $8.9 billion in refunds, but Wagner said that amount "has not and
cannot be substantiated.  "That very large refunds are due is clear," Wagner
wrote, likely amounting to "hundreds of million of dollars, probably more
than a billion dollars in an aggregate sum."  Davis said he hoped the Federal
Energy Regulatory Commission would reject the recommendation.  "Californians
have, by and large, gotten a raw deal from FERC during the past year," he
said in a statement. "Now the day of reckoning for the new FERC has come. I
would like to believe the commission, with two new commissioners, will be
more sensitive to California consumers and order all the refunds that are
due."  U.S. Sen. Barbara Boxer, D-Calif., said the recommendation "undermines
the consumer protections that FERC is supposed to safeguard by law."  The
differences between what the state wants and what the sellers believe they
owe should be decided in a "trial-type, evidentiary hearing" that should be
held in 60 days, Wagner said.  The judge recommended a method for calculating
refunds back to October. California's estimate is based on figures from May
1, 2000.  Peter Navarro, a University of California, Irvine economist who
works on energy issues, called the recommendation "insulting" to California.
The refund order should reach back until at least July, he said, when energy
prices had spiraled to record levels and utilities were accruing billions of
dollars in debts.  "Setting it arbitrarily from October keeps billions and
billions of dollars more in refunds from the state of California," he said.
In calculating costs, the judge recommends using the "heat rate" for the
least efficient plant that sold power into the California market on each day.
That plant's costs to produce power will be the basis for setting a benchmark
prices that day.  Navarro said that's unfair to California and basing refunds
on each individual plant's costs would be the best way to calculate what was
overcharged.  "By choosing that methodology, the judge limits the ability of
California to recover what's really owed to it," Navarro said. "It reduces
the total judgment by as much as 80 percent."  Officials with Reliant Energy,
which participated in the negotiations, were still reviewing the order, but
Melissa Kinch, a company spokeswoman, said they were "hopeful that with the
formula, all the correct data will come out."  Wagner said California hasn't
provided information he requested about the state's long-term contracts.
Further compounding the calculations, he said he has yet to receive
information from the California Department of Water Resources, the utilities
and the Independent System Operator listing amounts they believe they owe to
generators.

Southern California gas fights FERC over routine decision that may cost
millions

\
objattph
By Joe Cantlupe COPLEY NEWS SERVICE  July 12, 2001  WASHINGTON ) A
little-noticed decision by federal energy regulators last year is forcing a
San Diego gas company to spend up to $100 million more for its deliveries,
with some of that cost expected to be passed on to consumers.  The decision
by the Federal Energy Regulatory Commission (FERC) was already controversial
because critics contend it favored a Texas natural gas pipeline company now
accused of manipulating California's power markets.  As a result, Southern
California Gas ) a division of Sempra Energy ) is preparing to fight the
Federal Energy Regulatory Commission in court over control over deliveries on
a key natural gas pipeline.  The pipeline in question is an interconnection
known as a "delivery point" at the Colorado River near Topock, Ariz.  Despite
objections from California officials and SoCal Gas, federal regulators last
year cut by nearly two-thirds SoCal Gas's natural gas deliveries from Topock,
according to FERC records.  Instead, the federal agency allowed other
shippers to make most of the remaining deliveries at the Topock connection, a
key pipeline for access into Southern California. The decision forced SoCal
Gas to tap into more expensive natural gas basins in the Southwest, and take
other more costly and indirect pipeline routes into San Diego.  FERC "has
severely limited the ability of SoCal Gas to use its reserved pipeline
capacity to access cheaper gas," said Marcel Hawiger of The Utility Reform
Network, the consumer watchdog group based in San Francisco.  SoCal Gas
serves 18 million households and small businesses in more than 23,000 square
miles of southern and central California. But two-thirds of its service area
include 1,500 large industrial and electrical generators, such as San Diego
Gas & Electric Co.  Natural gas powers most of the electrical generators in
California.  SoCal Gas estimated a $50 million to $100 million price tag ) at
minimum ) to comply with the regulators' decision.  "It's complicated and
expensive," said Lad Lorenz, director of capacity and operational planning
for Southern California Gas. Lorenz said SoCalGas is evaluating the financial
fallout and possible impact on consumers.  SoCal Gas is preparing to
challenge the FERC ruling with the U.S. Court of Appeals in Washington.  FERC
said it was prompted to parcel out deliveries among gas shippers on SoCal
Gas's Topock pipeline connection after receiving complaints about one of the
nation's largest pipeline companies, El Paso Corp. of Houston.  El Paso owns
two of the five major interstate pipelines that export natural gas to
California, and it has four major delivery points in the vicinity of Topock,
where it transfers gas to other systems, including SoCal Gas. Nearly half of
California's natural gas imports come from the San Juan and Permian basins in
the Southwest.  SoCalGas and a number of energy companies said they had been
complaining for years that El Paso was "overselling" deliveries to gas
shippers on its pipelines, records show.  Industry experts compared the El
Paso tactic to an airline overbooking passengers on flights. The result was
chaotic scheduling and skyrocketing expenses for energy companies that
reported losing millions of dollars, according to several industry officials
and documents filed with FERC.  Trying for solutions, FERC initially
attempted to let the gas shipping companies sort out the problems themselves.
That effort failed, records show.  In October, 2000, FERC determined that El
Paso's actions were "unjust and unreasonable." FERC officials, speaking on
the condition of anonymity, said the agency sought an equitable solution to
the problem by divvying up the delivery capacity to dozens of gas shippers
that had been controlled by SoCal Gas at the Topock delivery point.  The
regulators also defended their legal position, saying that SoCal Gas did not
have the authority to control the flow of natural gas at the Topock delivery
point, despite long-term contracts. FERC commissioners have not commented on
the case.  SoCal Gas officials insist that FERC's solution punished the San
Diego utility, not El Paso Corp. Some industry observers contend that FERC
botched its oversight of El Paso, which is facing unrelated allegations of
market manipulation.  "FERC allowed El Paso to divvy up the space at the
California border in such a way so as to benefit marketers and shippers, the
gas middlemen, to the detriment of the utility (SoCal Gas), which has to ship
gas to residential customers in Southern California," said Hawiger of the
watchdog group TURN.  California public utilities officials had other
concerns, saying in documents filed with FERC that the decision made state
consumers "unwitting victims of El Paso's overselling practice."  Moreover,
state officials wrote, El Paso has reaped a "significant transfer of wealth"
by its actions. Officials did not provide details.  Earlier this year,
California officials filed separate, unrelated allegations against El Paso,
charging that the Texas company improperly withheld natural gas from the
state to drive up prices.  California officials contend El Paso overcharged
consumers by $3.8 billion. El Paso denies the allegations, which are being
reviewed by an administrative law judge.  Ultimately, FERC will decide
whether El Paso should be disciplined once again.

THE ENERGY CRISIS
Options Debated in Edison Rescue
Energy: Legislature is still sharply split over Davis' plan. Some want to let
the utility fall into bankruptcy.
MIGUEL BUSTILLO and NANCY VOGELS
TIMES STAFF WRITER

July 13 2001

SACRAMENTO -- A week before its annual summer recess, the California
Legislature remains deeply divided over Gov. Gray Davis' plan to rescue
Southern California Edison from financial ruin--and a growing number of
lawmakers are proposing to let the state's second largest utility fall into
bankruptcy.

Convinced that Davis' plan is political suicide, leading Democrats in the
Assembly and Senate on Thursday advanced slimmed-down alternatives to save
Edison.

"The fact of the matter is that we just have to act," said Assembly Speaker
Bob Hertzberg (D-Sherman Oaks), who introduced an alternative plan to rescue
Edison Thursday afternoon and scheduled hearings on it throughout the
weekend. At issue are competing priorities with important ramifications.
Advocates of the rescue say it is needed to keep the utility solvent and
prevent California from descending further into its long-running energy
crisis. Critics say it is politically impossible to sell a bailout for the
utility and argue that bankruptcy may be a better solution.

In recent days, those critics have appeared to be gaining ground. Lawmakers
conceded Thursday that none of the counterproposals to Davis' bailout plan
appears to have sufficient support to clear both houses--and none has the
blessing of the utility, which contends that only the original Davis version
would make it credit-worthy.

In fact, some lawmakers and lobbyists working on the Edison deal contend the
sudden legislative push is a political exercise designed to deflect criticism
and provide cover in case the company goes under.

California is spending billions to buy about a third of the electricity
needed to serve the state because its two largest utilities, Edison and
Pacific Gas & Electric, are too burdened with debt to do so. That dilemma can
end only when the utilities are able to resume their role as procurers of
power.

PG&E opted to take itself into Bankruptcy Court in April rather than wait for
a political solution to its financial problem, but Edison reached a sweeping
deal with Davis later that month. That plan has languished in the Legislature
ever since.

The agreement calls for California to purchase Edison's power transmission
grid for $2.76 billion. In turn, the company would use the money to retire
some of the $3.5 billion in debt it racked up between May 2000 and January
2001, when it bought billions of dollars' worth of electricity in the
wholesale power market but could not recover those costs from customers
protected by a state utility rate freeze.

As a result of the state assistance, Edison would resume buying electricity
for the 11 million people it serves in January 2003. If the Legislature does
not approve the deal, Davis argues, the state will be left in the business of
buying that power for far longer.

But angry consumer groups are threatening to derail any rescue deal with an
initiative campaign, calling such proposals massive government bailouts. And
some leery lawmakers are convinced that Bankruptcy Court would provide a
better forum for resolving Edison's unwieldy problem.

"Tell me why bankruptcy is any worse than any other proposal," said state
Sen. Mike Machado (D-Linden), echoing a view he said was shared by many of
his colleagues.

"PG&E," he added, "seems to be doing quite well."

In recent weeks, said state Sen. Ross Johnson (R-Irvine), he has received a
series of letters from constituents with a penny attached--the amount they
said they were willing to contribute to a rescue of Edison.

"PG&E declared bankruptcy months ago," Johnson said, "and contrary to
prevailing notions, the world did not come to an end."

The tentative rescue deal Davis reached with Edison allows the utility to
back out of the agreement if the Legislature does not approve it by Aug.
15--a deadline lawmakers will almost certainly miss unless they strike a deal
before they recess.

Edison Officials Voice Optimism

Edison officials remain optimistic, however, that lawmakers will soon fashion
an agreement. Davis threatened this week to haul legislators into a special
session on Edison's woes later this month if they fail to forge a compromise,
a tactic that encouraged representatives of the utility.

"We're feeling better about the likelihood of having this be resolved in
time," said Edison spokesman Brian Bennett.

The Edison deal is among many interrelated facets of Davis' efforts to end
the energy crisis and escape with a working electricity market in California.
As such, it is a complicated proposal.

Indeed, even some of the basics are hard to discern. For one thing, the
continuing debate in Washington over whether California is owed billions in
refunds for overcharges by power generators makes it difficult for lawmakers
even to be sure how big Edison's debt truly is.

California leaders had hoped a mediator would find common ground between the
state and energy companies, but those talks broke down earlier this month.
The refund dispute now moves to the Federal Energy Regulatory Commission--and
possibly to the courts, where it could take years to resolve.

"Now we have to act, not knowing what the outcome of that process will be,"
said Assemblyman Fred Keeley (D-Boulder Creek), one of the legislators
working to craft an Edison deal.

Then there is the $43 billion in long-term power contracts that Davis signed
with energy companies this year in hopes of stabilizing supplies for years to
come.

Many lawmakers are convinced that those contracts, which are to be paid off
over the next 15 years by utility consumers, will leave less money for the
utilities to regain their financial footing. That would probably force the
state to raise electric rates again in coming months.

That, in turn, would make it more politically difficult for lawmakers to
approve the Edison deal, which calls for utility ratepayers to retire the
company's $3.5-billion under-collection through a special surcharge on their
bills.

"One of the major problems is those long-term contracts," said Assemblyman
Keith Richman (R-Northridge), who is leading the GOP's efforts to cut an
Edison deal in the Assembly. "These contracts are going to burden the
ratepayers for generations, and appear to be a major impediment to a solution
with Edison."

Moreover, many lawmakers want to ensure as part of the Edison deal that at
least the largest business consumers maintain the right to shop around for
the cheapest power providers--one of the main selling points of California's
1996 experiment in electricity deregulation.

While businesses have been demanding the so-called direct access, lawmakers
and some consumer groups have voiced concern. They say droves of businesses
will flee the utilities for better deals than the governor's long-term
contracts provide--leaving residential customers in the lurch.

Amid all these obstacles, a team of Senate Democrats has been huddling with
representatives of the Davis administration for the last two days, working on
a new version of the Edison agreement.

A draft being discussed Thursday evening would abandon the controversial plan
to purchase the utility's transmission grid, whose value has been questioned.
Also, it would not give Edison any help in erasing the roughly $1 billion it
owes power plant owners, leaving the utility to try to get that debt
eliminated in the federal fight with the generators.

Instead, the new agreement would only help Edison shrink the $2.5 billion in
debt it owes to banks and smaller, alternative energy producers. Large power
customers would bear the burden of the costs.

"These guys are going to come up with something," said Senate President Pro
Tempore John Burton (D-San Francisco) of his Senate team. "If Edison doesn't
like it, they'll have to take a chance" and send the Davis-backed deal up for
a vote.

Rival Proposal Is Unveiled

In the Assembly, meanwhile, a team of lawmakers Thursday unveiled a rival
Edison proposal that would also attempt to shield homeowners and smaller
businesses from high rates.

To do so, it would force industrial consumers to pay the utility's
debts--including a portion of the amount owed generators--in exchange for
allowing big consumers the chance to negotiate their own power deals on the
open market.

The proposal represents an effort to coax generators into accepting less than
they are owed by Edison, because it would allow them to quickly receive
prompt payment from large power consumers if they agreed to accept only a
fraction of their bills.
Copyright 2001, Los Angeles Times <http://www.latimes.com>

THE ENERGY CRISIS
Developer Pulls Plug on Power Plant in Chula Vista
Electricity: A San Diego company cancels plans to build a controversial
facility. City officials, community opponents are 'thrilled.'
MITCHELL LANDSBERG
TIMES STAFF WRITER

July 13 2001

A San Diego company has canceled plans to build a controversial power plant
in Chula Vista, angrily blaming state officials for failing to guarantee that
the plant would turn a profit.

The announcement from Ramco Inc., made public Thursday, is the latest setback
to Gov. Gray Davis' campaign to get more electricity on line this summer. But
one state official characterized the decision as evidence that California is
now dealing with power companies from a position of strength, and can afford
to turn down projects if the price isn't right.

"That's the exact position California wants to be in, frankly, where we can
negotiate and, if we need to, walk away from the table," said Oscar Hidalgo,
a spokesman for the state Department of Water Resources. "So we'll move on to
other, more willing participants." Ramco apparently gave up after failing to
strike a deal with the department for energy from the proposed plant, which
would have been near a community recreation center and elementary school in
Chula Vista, a city of 173,000 in southwestern San Diego County.

The plant would have provided 62 megawatts of "peaking" power, which is
primarily intended for use during periods of heaviest electricity use.
Sixty-two megawatts is enough to serve about 50,000 homes.

The developer's announcement follows the decision of another San Diego
company to withdraw plans for a plant in the Baldwin Hills area of Los
Angeles, also in the face of community opposition. State officials conceded
earlier this week that several other power plant projects appear to be behind
schedule.

Chula Vista Opposed Ramco Power Plant

The Chula Vista City Council had opposed the Ramco project, which would have
been built next to another new power plant in a highly urbanized area that is
a jumble of industry, residences and other uses. The first plant began
operating around July 1.

City officials had complained that the proposed plant would run initially
without advanced pollution control devices, and, together with other new and
proposed plants in the area, would have a disproportionate impact on a poor,
predominantly Latino population. Some community activists opposed the plant
on similar grounds.

Despite the opposition, the Energy Commission approved the plant's license on
June 13.

The company did not mention community opposition in its letter to the
commission, and Ramco officials did not return telephone calls seeking
comment Thursday. Opponents reacted with relief that the plans were being
scrapped.

"We're thrilled," said Michael Meacham, special operations manager for the
city of Chula Vista. "Regardless of the reason for withdrawal, we're happy
about it."

Josie Lopez-Calderon, president of San Diego's Mexican American Business and
Professional Assn. and a leading opponent of the plant, was similarly
pleased, and said the community opposition had led to the company's
withdrawal.

"I think if it was solely for the reasons they've given, all the other peaker
plants would be pulling out, and I don't see that happening," she said. "So I
think our concerns might have had some effect."

Robert Laurie, the state energy commissioner to whom the company's letter was
addressed, said that he was not sure he understood the company's rationale,
but that it seemed clear that Ramco was unhappy with the Department of Water
Resources. Since last winter, when the state's large investor-owned utilities
became unable to pay for their own energy purchases, the agency has been
buying most of the state's electricity.

"To me, it called into question what the policies of DWR were," Laurie said.
"Are they seeking to add power or are they not seeking to add power?"

In his letter, Ramco President Richard McCormack wrote that the company had
been optimistic that the department would "provide the credit support" for
the company to supply power to the Independent System Operator, which runs
the statewide electrical transmission grid. "Unfortunately," he said, the
department had "specifically rejected such support."

Officials at Cal-ISO and the department said they didn't understand
McCormack's comments.

Ramco Couldn't Foresee 'a Reasonable Return'

The letter also said that Ramco needed to expect "a reasonable return on its
investment while dealing with a credit-worthy entity in an environment where
the sanctity of contract exists. There is simply no evidence that we can see,
even on the horizon, that would suggest conditions will improve to the point
where Ramco could once again consider investing in new power plants in
California."

Hidalgo, the department spokesman, said the agency still intends to sign
contracts with energy providers, and is willing to continue talks with Ramco,
but can now afford to be pickier than it was earlier this year, when it was
criticized for signing more than $40 billion in long-term contracts at rates
that some considered exorbitant.

Gary Ackerman, a spokesman for the Western Power Trading Forum, an
organization of power traders and generators, said he didn't understand why
Ramco's failure to sign a contract with the department would doom the
project. After all, he said, the agency is not the only buyer of electricity.

"You could take market risk and build that plant," he said. Abandoning it
"doesn't make any sense." He said he knew of no other energy generator
contemplating a similar pullout.

Rob Schlichting, a spokesman for the Energy Commission, noted that Ramco
could still build the plant. Under the terms of its license, the plant would
have to be completed by Sept. 30.
Copyright 2001, Los Angeles Times <http://www.latimes.com>

THE ENERGY CRISIS
Some State Energy Consultants Own Generators' Stock
Ethics: They negotiate deals and buy electricity from power firms. GOP
officials claim credit for forcing the disclosure of potential conflict.
ERIC BAILEY
TIMES STAFF WRITER

July 13 2001

SACRAMENTO -- More than half a dozen consultants hired by the state to
purchase electricity and to negotiate long-term power deals own stock in
generating companies such as Calpine and Enron that have profited handsomely
during California's energy crisis.

The potential conflict of interest emerged Thursday with the release of
financial disclosure statements by consultants who have been hired by the
state since the start of the power crunch.

Among those disclosing stock ownership were two key negotiators of long-term
energy contracts and two workers hired to purchase electricity from
generators, including some of the firms in which they hold an interest.
Several other consultants who played key roles in the state's energy efforts
decided not to file financial disclosure statements, citing legal exemptions
under state law.

Among those who did not file the financial disclosure statements were a pair
of executives at two Wall Street firms that stand to make $14 million if the
state buys California's power grid. Of about 50 consultants hired by the
state in the past six months, 27 filed the disclosures.

The disclosures follow a firestorm in Sacramento last month over the hiring
by Gov. Gray Davis of two media consultants also employed by Southern
California Edison, the troubled utility that is negotiating with the state
over a bailout package.

Steve Maviglio, a Davis spokesman, said the governor's legal staff was
reviewing the financial disclosure forms for any potential conflicts of
interest.

"If there's anything inappropriate," Maviglio said, "then we'll deal with it."

Republicans, however, said the hired workers had revealed overt conflicts
that clearly violated state law.

Secretary of State Bill Jones, a Republican running for governor against
Davis next year, said the revelations call into question the work performed
by the consultants on high-priced energy contracts that are "going to
mortgage our children's future for decades to come."

"If you show a conflict, the potential is there for collusion," Jones said.
"I'm not accusing anyone, but that's why you have disclosure."

Rob Stutzman, a state GOP spokesman, said he was particularly troubled
because the consultants had delayed filing the disclosure forms for months.
Under state law, the forms are supposed to be submitted within 30 days after
the consultants go to work for the state.

Most of the energy consultants, who could not be reached for comment,
reported owning relatively small amounts of stock in energy firms, generally
less than $10,000.

But one of the new workers, William Mead, disclosed that he owned between
$100,000 and$1 million in Calpine, a San Jose-based energy firm. Mead did not
report when the stock had been purchased.

Only one of the contractors reported selling off stock after coming to work
for the state.

Vikram Budhraja, president of Pasadena-based Electric Power Group LLC, on
Jan. 11 purchased between $10,000 and $100,000 in stock of Dynegy, a
electricity and natural gas producer. He sold it off on Jan. 29, 10 days
after he came to work for the state. Budhraja has been a top negotiator of
the state's long-term energy contracts, which have included a deal concluded
March 2 with Dynegy.

Richard Ferreira, a retired Sacramento Utility District executive hired by
the state to negotiate long-term power contracts, reported the purchase of
between $2,000 and $10,000 of stock in Calpine, a San Jose-based energy firm,
in August 2000. He also purchased a similar amount of stock in General
Electric Co., which produces power plant equipment, in April 2000.

Bernard Barretto, an energy trader, reported that he owned an undisclosed
amount of stock in Enron Corp., a big Texas-based energy firm. Elaine Griffin
purchased between $10,000 and $100,000 in Calpine stock on Feb. 1, less than
three weeks before she came to work for the state as an energy trader.
Constantine Louie, an energy scheduler, reported owning between $10,000 and
$100,000 in Calpine stock.

Republicans took credit for forcing the Davis administration to file the
reports, a charge the governor's office brushed aside.

Jones, the secretary of state, held a news conference Tuesday to complain
about the failure of nearly all the state's energy consultants to file any
sort of financial disclosure forms. The statements were only made available
late in the afternoon Thursday, months after many consultants went to work
for the state.

Maviglio, the governor's spokesman, said the delays were explained in part by
negotiations that began in March with the Fair Political Practices
Commission, the state's ethics watchdog, to determine if the consultants were
required to file the forms.

He also suggested that Jones' accusations were fueled more by campaign
politics than any devotion to constitutional duty.

"One needs to question why the secretary of state is using taxpayer money to
investigate something beyond his jurisdiction," Maviglio said. "That's why we
have an FPPC, to look at these kinds of things."
Copyright 2001, Los Angeles Times <http://www.latimes.com>

THE ENERGY CRISIS
Plan Uses Public in Refund Demand
Legislature: Democrats' proposal to pressure 'greedy' firms is attacked by
GOP as political ploy.
CARL INGRAM
TIMES STAFF WRITER

July 13 2001

SACRAMENTO -- The Democratic-led state Senate intends to fill constituent
mailboxes with a taxpayer-financed appeal urging Californians to demand
nearly $9 billion in energy price refunds from "greedy out-of-state power
generators."

Senate leader John Burton (D-San Francisco) said the mailers will ask
Californians to join the Senate and Gov. Gray Davis in insisting that the
Federal Energy Regulatory Commission order the refunds of alleged overcharges.

Senate Democrats set the high target despite a federal mediator's ruling
against Davis earlier this week. The mediator said California would be
entitled to only about $1 billion in generator overcharges, not the $8.9
billion that Davis has fought for. Senate officers said the cost of the mail
campaign will be paid from the budgets of senators, at taxpayer expense, as
part of the Legislature's constituent service mail program.

But Republicans attacked the mailer as political propaganda that may violate
state law and Senate policy barring issuance of "partisan" documents at
public expense.

Sketchy details of the quietly developed project surfaced on the Senate floor
Thursday. Staffers who worked on it said it was virtually impossible to
calculate the program's cost.

But they indicated that if all 26 Democrats agreed to send up to 30,000
mailers each to constituents, the postage alone would cost $140,400.

If each mass mailing exceeded 30,000 pieces, a higher postage rate would
apply, raising the cost, officials said.

In the mailer, constituents are asked to return an attached card to their
state senator, urging "full refunds of the outrageous prices charged by the
greedy out-of-state power generators."

Cynthia Lavagetto, manager of the Senate mail program, said each member will
decide what do do with the returned cards, including simply filing them or
sending them on to FERC.

Lavagetto said a prototype mailer was prepared with the help of the Select
Committee on Citizen Participation, a panel that has no chairman or members,
since it has not been activated this year. But it does maintain an office and
has three staffers on the Senate payroll.

Burton dismissed the Republican charges of partisanship as baseless. "We do
this all the time on a variety of issues," he said. "We're saying, 'Stop
stealing California's money.' "

But Sen. Ross Johnson of Irvine, the Senate's senior Republican, denounced
the mailing as clearly partisan. He said it appeared to reflect a developing
2002 election strategy of Davis and Democrats to blame the FERC and
out-of-state generators for California's energy mess.

"I seriously question the appropriateness of using taxpayer money to get
people to lobby [for the refunds]," Johnson said.

Johnson and Sen. Ray Haynes (R-Riverside) suggested that Democrats turn their
criticism to municipal utilities, including the Los Angeles Department of
Water and Power. Some utilities charged the state even higher prices last
winter than did private generators.

"Why are they not attacking the DWP?" Johnson asked.

He noted that S. David Freeman was running the DWP at the time some of its
highest prices were charged to the state, which is buying power for
California's financially crippled utilities. Later, Davis hired Freeman as
his top energy price negotiator.

"Doesn't David Freeman more properly belong in that same jail cell as the guy
called Spike than he does in the governor's office?" Johnson asked.

"Spike" has become a character in the California energy debate, thanks to
Atty. Gen. Bill Lockyer, who is investigating whether power sellers engaged
in price-gouging and antitrust behavior.

In an interview with the Wall Street Journal in May, Lockyer said he would
"love to personally escort [Enron Corp. Chairman Kenneth] Lay to an 8-by-10
cell that he could share with a tattooed dude who says, 'Hi. My name is
Spike, honey.' "
Copyright 2001, Los Angeles Times <http://www.latimes.com>

2 sides face off at EPA hearing on regulating energy plant emissions
Jane Kay, Chronicle Environment Writer <mailto:jkay@sfchronicle.com>
Friday, July 13, 2001
,2001 San Francisco Chronicle </chronicle/info/copyright>
URL:
<http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/07/13/
MN233685.DTL>
Sacramento -- Power plants, refineries and factories need relief from federal
clean air laws if they are expected to respond to energy needs during a
crisis, industry officials told the U.S. Environmental Protection Agency
yesterday.
California regulators and environmentalists, on the other hand, said the
federal policy that requires the best available pollution control equipment
to be installed when a new pollution source comes online is absolutely
necessary to protect air quality and health.
The Bush administration's National Energy Plan, released in May, recommended
that the EPA perform a 90-day review of the policy to determine its effects
on investment in new utility and refinery capacity, energy efficiency and
environmental protection.
Industry and environmental representatives lined up yesterday at one of four
hearings held by the U.S. Environmental Protection Agency across the country
to argue over the importance of requiring tough reviews and emission
controls.
The EPA's existing policy creates a disincentive for energy efficiency and is
overly complex, said Shannon Broome, a lawyer for the Air Permitting Forum.
The trade group includes General Electric, General Motors, Ford Motor Co.,
Exxon Mobil, International Paper and Merck.
When a manufacturer wants to add new equipment that would improve the
efficiency of the operation but may emit some pollution, Broome said, the EPA
has been requiring a wider plant review that might include installing
thousands of dollars of new pollution-control technology.
Instead, said Nelson Meeks, a Clorox executive who spoke on behalf of the
National Association of Manufacturers, the EPA should allow companies to make
routine changes in the physical plant without triggering a wider examination
of the plants and their pollution controls.
Roland Hwang, senior analyst at Natural Resources Defense Council, disagreed
with any attempt by the Bush administration to solve energy problems by
backing off pollution control.
"Weakening protections would have a devastating impact on air quality and
public health in California," he said. "Allowing a new power plant to operate
without the controls -- even running on natural gas -- would create
significant emissions of oxides of nitrogen, a precursor of smog that has
been found to cause lung damage."
Terry Davis, of Sacramento, described himself as the father of a daughter who
has asthma and depends on two inhalators every day. So far this summer,
Sacramento has had 26 days of air considered unhealthful to her.
Referring to an evaluation paper that the EPA released this week on its own
policy, Davis said, "I'm really worried that the evaluation . . . seems to
put production over health."
Speaking for the California Air Resources Board, Peter Venturini, chief of
the stationary source division, said the federal EPA's policy might need some
tidying up, but it's generally acceptable. California would not like to see
it weakened, he said.
"We believe very strongly that the best time to apply controls is when a new
facility is constructed or undergoes major modification," Venturini said. He
said it saves money to incorporate the original technological controls into
the design.
California's stricter review process has allowed for approval of 12,000
megawatts of new power from 46 plants, including some peaker plants, since
1999, Venturini said. Some have been reviewed within 21 days, a streamlined
period initiated by Gov. Gray Davis last year.
E-mail Jane Kay at jkay@sfchronicle.com <mailto:jkay@sfchronicle.com>.
,2001 San Francisco Chronicle </chronicle/info/copyright> Page A - 13

7 California advisers own energy stocks
Secretary of state calls for investigation
Mark Martin, Chronicle Staff Writer <mailto:mmartin@sfchronicle.com>
Friday, July 13, 2001
,2001 San Francisco Chronicle </chronicle/info/copyright>
URL:
<http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/07/13/
MN98940.DTL>
At least seven consultants hired by Gov. Gray Davis to help California buy
and deliver power own stock in power companies doing business with the state,
according to financial statements released yesterday.
The personal financial statements prompted Secretary of State Bill Jones, an
announced GOP candidate for governor, to call for an investigation into a
conflict of interest that Jones said could compromise California's position
as an electricity buyer.
"It's unbelievable. How does the public know these people are staying at
arm's length from their investments?" Jones said.
A Davis spokesman said administration lawyers are reviewing the documents and
will determine if any of the new employees have a conflict.
According to statements filed with the state's Fair Political Practice
Commission, six of 45 new consultants hired by Davis own stock in San Jose-
based Calpine Corp., while one has investments in Enron Corp. of Houston.
Both companies are power generators that sell electricity to the state.
In January, the state began buying power as the biggest California utilities
teetered on financial disaster. Since then, state officials say they've spent
more than $8 billion on electricity.
Of the seven, two describe their new jobs as energy traders. Traders buy
power for the state. Four others list their jobs as schedulers, who receive
invoices from traders and coordinate energy deliveries across the state. The
seventh lists his job as consultant.
Three of the stockholders said they own between $2,000 and $10,000 in stocks;
two own between $10,000 and $100,000, and one consultant said he owns between
$100,000 and $1 million in Calpine.
"We just received the documents today, and our lawyers are going over them, "
said Steve Maviglio, the governor's press secretary.
Jones held a press conference Wednesday blasting the Davis administration
because the new hires had not filed statements of economic interest. He said
state law requires public officials to fill out the statements within 30 days
of beginning a job, and said many of the consultants had worked for the state
for months.
Davis officials insist the employees have until Monday, but 27 filed their
statements Wednesday or yesterday. The others are not required to fill out
the forms because of their job duties, Maviglio said.
The news comes amid charges by Jones and state Controller Kathleen Connell
that two former Clinton-Gore campaign operatives hired by Davis to work on
the power crisis had ties to Southern California Edison. Davis is negotiating
with Edison on a bailout for the utility.
Connell has refused to pay Mark Fabiani and Chris Lehane for their work as
communications consultants.
E-mail Mark Martin at markmartin@sfchronicle.com
<mailto:markmartin@sfchronicle.com>.
,2001 San Francisco Chronicle </chronicle/info/copyright> Page A - 12

PG&E customers get a payback for conservation
Nearly one-third earn rebates for cutting electricity use 20%
Joe Garofoli, Chronicle Staff Writer <mailto:jgarofoli@sfchronicle.com>
Friday, July 13, 2001
,2001 San Francisco Chronicle </chronicle/info/copyright>
URL:
<http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/07/13/
MN186973.DTL>
Nearly a third of Pacific Gas & Electric customers who have received this
month's bill got rebates totaling $7.6 million as a reward for slashing
electricity use in June, the utility said yesterday.
The program that cuts 20 percent off ratepayers' bills if they reduce usage
by 20 percent was a high-profile initiative by Gov. Gray Davis to promote
conservation and decrease dependence on out-of-state generators.
So far, PG&E has given credits to 394,000 ratepayers, or 29 percent of those
who have received their bills, said utility spokeswoman Staci Homrig.
Thousands of additional ratepayers stand to get rebates because the utility
has processed only a third of its billing cycle.
The news was giddily received by the Davis administration, which has made
conservation a cornerstone its plan to dig out of California's energy mess.
Administration officials had projected that 10 to 20 percent of customers
would conserve enough to get a rebate.
If only 10 percent of customers qualified, Davis estimated that the savings
to the state, which has been buying power on behalf of financially troubled
utilities, would be between $400 million and $1.3 billion. The less power
used means the less power the state has to purchase for the utilities on the
expensive spot market.
'HEROIC EFFORT'
"Wow, this is fantastic," said Davis spokesman Roger Salazar. "What this says
is that Californians are taking their conservation seriously. The governor
could not be prouder of their heroic effort so far."
About half the rebate amount, $3.7 million, went to 355,000 residential
customers, with $3.9 million going to 39,000 agricultural, industrial and
commercial customers. The utility will not have the amount of the average
rebate until later this month, when it completes the billing cycle.
To qualify, customers have to reduce their electricity use by 20 percent for
any of the four monthly billing periods that end in July, August, September
and October over a comparable period in 2000. Customers can get the rebate
for more than one month.
The rebate is labeled "California 20/20 Rebate," and appears on monthly bills
right above the line marked, "Total amount due."
Whether it be out of fear of dodging 260 hours of rolling blackouts predicted
for the state this summer or the desire to save cash, the number of rebates
is another signal that Californians are conserving energy -- even if there is
some disagreement on how much.
Last month, Davis announced that power usage was down 11 percent in May after
being adjusted for growth and weather. In terms of raw, unadjusted data,
California's overall electricity consumption in May was down only about 2
percent from the previous year.
SWEET REWARD
That was little matter to those who received a rebate. For them, it was a
sweet reward for months of bumbling through darkened rooms, watching less TV
and enduring skyrocketing power bills.
Those who didn't get the rebate were disappointed. Especially if they have
endured small personal sacrifices in the hope of saving power and cash. For
example, Pierre Chomat, a retired engineering firm manager in Pacific Grove,
takes only two baths a week as part of his conservation plan. Despite his
bathing cutback -- and replacing incandescent bulbs with fluorescent ones and
turning off pilot lights -- Chomat's utility usage went up last month.
He blamed his three houseguests for robbing him of the chance at a rebate.
"They were taking baths and doing all sorts of things like that," Chomat
said. "And they were here for three weeks."
Chomat hopes to get a rebate next month. It may be his last chance for a
while; more houseguests are scheduled to arrive in August.

For more information about the rebate program, go to www.pge.com/2020
<http://www.pge.com/2020>/
,2001 San Francisco Chronicle </chronicle/info/copyright> Page A - 1

Judge spells out opposition to power refund claim
Opinion says $8.9 billion in alleged overcharges for electricity 'cannot be
substantiated'
Christian Berthelsen, Chronicle Staff Writer
<mailto:cberthelsen@sfchronicle.com>
Friday, July 13, 2001
,2001 San Francisco Chronicle </chronicle/info/copyright>
URL:
<http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/07/13/
MN162115.DTL>
In a final written ruling that portrayed California negotiators as obstinate
and unwilling to compromise, the judge who led talks over electricity price
refunds said yesterday the state's claim of $8.9 billion in overcharges "has
not and cannot be substantiated."
Three days after negotiations to reach an agreement ended in failure, Curtis
Wagner Jr., the chief administrative law judge of the Federal Energy
Regulatory Commission, said any refund to California would have to be much
less than what state representatives sought -- and would not come in cash.
"That very large refunds are due is clear," Wagner wrote in a 12-page opinion
to members of the commission, expanding on remarks he made publicly Monday.
"While the amount of such refunds is not $8.9 billion as claimed by the state
of California, they do amount to hundreds of millions of dollars, probably
more than a billion dollars.
"However," he went on, "the amount claimed by the state of California has not
and cannot be substantiated."
Wagner's opinion appeared to paint the California delegates to the 15 days of
talks as unreasonable, unwilling to negotiate and perhaps more motivated to
score political points than resolve the state's yearlong dispute over energy
prices.
"There is an old saying down South that you can take a horse to water but you
can't make him drink," Wagner wrote. "The problem was that there were those
who simply did not want to negotiate, but rather, stood firm on their
litigation position with no movement."
Wagner wrote that California's negotiators had "summarily" rejected his
settlement proposal, but did not say what that was.
Collectively, the state's power providers made a counteroffer of slightly
more than $700 million. It was not clear if they ever offered to come up.
Michael Kahn, president of the state's Independent System Operator board and
Davis' chief negotiator during the sessions, said the state refused to budge
because generators had demanded exemptions from various inquiries. He said
the California delegation did not summarily reject the judge's proposal to
bring the parties to the table, saying Wagner never came up with a specific
plan or dollar figure.
Some energy analysts have argued that the $8.9 billion figure produced by the
ISO was flawed from the start. The ISO made inaccurate assumptions about gas
prices and the rate at which some plants burn it to generate electricity,
critics said, and it didn't look at whether the state's two main utilities
also charged prices above the competitive benchmark.
The ISO also looked at a period stretching back to May 2000, even though the
date from which refunds would be considered in the negotiations began in
October.
Wagner said California and its utilities' debts to the energy providers --
estimated at $4.5 billion by some participants -- is larger than any refund
the power companies owe. As a result, he said, any refunds awarded to the
state should come in the form of either forgiveness of debt or lower prices
on long-term power contracts the state has signed.
Wagner suggested the federal commissioners hold 60 days of evidentiary
hearings, rather than relying on economic analysis, to figure out how much
the state might be owed.
E-mail Christian Berthelsen at cberthelsen@sfchronicle.com
<mailto:cberthelsen@sfchronicle.com>.
,2001 San Francisco Chronicle </chronicle/info/copyright> Page A - 13

News briefs on the California power crisis
The Associated Press
Friday, July 13, 2001
,2001 Associated Press
URL:
<http://www.sfgate.com/cgi-bin/article.cgi?file=/news/archive/2001/07/13/state
0900EDT0147.DTL>
(07-13) 06:00 PDT CHULA VISTA, Calif. (AP) --
An energy company has scrapped plans to build a new power plant in Chula
Vista, blaming state officials for failing to guarantee that the facility
would turn a profit.
Officials from Ramco Inc., made the announcement Thursday after they couldn't
reach an agreement with the state Department of Water Resources on the amount
of energy to be generated at the proposed plant.
The natural gas-fired generator would have produced up to 62 megawatts during
peak usage and was scheduled to be operational by Sept. 30.
The state's Energy Commission approved the company's plans last month,
despite opposition from the Chula Vista City Council and residents. City
officials said the plant would have contributed to air pollution and noise.
"We're thrilled," said Michael Meacham, special operations manager for the
city of Chula Vista, a city in southwestern San Diego County. "Regardless of
the reason for withdrawal, we're happy about it."
An Energy Commission spokesman said that energy company could still build the
plant because its license doesn't expire until the end of September.
SACRAMENTO (AP) -- State legislators are taking their campaign against the
Federal Energy Regulatory Commission public.
The Democratic-led Senate wants to send mailers to Californians asking them
to join Gov. Gray Davis in demanding that FERC commissioners order the
refunds of alleged overcharges by power companies. State officials claim
California is owed $8.9 billion but a federal mediator said this week that
"hundreds of millions of dollars" should likely be refunded.
People who receive the mailers would be asked to return an attached card to
their state senator, urging full refunds. Senators then would decide whether
to file the cards or send them to FERC.
Talk about the mailers surfaced on the Senate floor Thursday. Senate officers
said the cost of the mailer campaign would come at taxpayers' expense. The
cost hasn't been determined but if Democrats agreed to send up to 30,000
mailers, the postage would cost more than $140,000.
Republicans said they were opposed to the idea, claiming it violated state
law and Senate policy prohibiting the issuance of partisan documents that are
paid by taxpayers.
"I seriously question the appropriateness of using taxpayer money to get
people to lobby for the refunds," said Sen. Ross Johnson, R-Irvine.
Senate leader John Burton, D-San Francisco, dismissed the GOP charge and said
legislators and the public need to send a strong message to FERC
commissioners.
"We're saying, 'Stop stealing California's money,"' Burton said.
,2001 Associated Press

Wholesale prices drop by largest amount in 28 months
MARTIN CRUTSINGER, AP Economics Writer
Friday, July 13, 2001
,2001 Associated Press
URL:
<http://www.sfgate.com/cgi-bin/article.cgi?file=/news/archive/2001/07/13/finan
cial0836EDT0021.DTL>
(07-13) 06:39 PDT WASHINGTON (AP) --
Prices at the wholesale level plunged 0.4 percent in June as record declines
in residential electricity and natural gas prices and a big drop in gasoline
costs gave the country the best performance on wholesale inflation in more
than two years.
The Labor Department reported that the drop in its produce price index, which
measures price pressures before they reach the consumer, was the first
decline since last August and the biggest drop since a 0.5 percent fall in
February 1999.
Analysts had been expecting that inflation would moderate after steep
increases earlier this year driven by a big jump in energy prices. They also
said the sharp slowdown in economic activity was helping to ease inflationary
pressures as wage demands soften with the rising jobless rate.
Meanwhile, a second report Friday showed that retail sales rose 0.2 percent
in June, pushed up by a strong 1.5 percent surge in sales of new cars. While
the overall number was slightly weaker than analysts had been expecting, the
government revised its estimate for May sales sharply higher to 0.4 percent,
rather than the original estimate of a much smaller 0.1 percent gain.
Beginning last summer, U.S. economic growth has slowed dramatically, with
many analysts believing that growth in the just completed April-June quarter
will come in at a weak annual rate of 0.5 percent, even worse than the 1.2
percent growth recorded in the first three months of the year.
Still, economists believe consumers will keep the economy out of a full-blown
recession with their spending expected to increase in coming months,
reflecting the boost provided by lower interest rates and the big tax cut
passed by Congress.
The Federal Reserve has cut interest rates six times so far this year, its
most aggressive credit easing in the next two decades, in an effort to make
sure that the U.S. economy does not tip into recession.
Analysts said the good news on inflation will give the Fed room to cut
interest rates further if needed to provide fuel for an economic rebound. The
Fed's next meeting is Aug. 20.
Ken Mayland, chief economist at ClearView Economics in Cleveland, said that
both the benign report on wholesale prices and the moderate gain in retail
sales pointed to an economy that would rebound in the second half of this
year.
"There is reason to be optimistic about the economy's prospects. We are going
to be transitioning to considerably better growth in the third quarter," said
Mayland, whose own forecast puts overall economic growth at a 3 percent rate
in the third quarter, three times the 1 percent growth figure he expects for
the second quarter.
President Bush, who next week will attend his first economic summit of the
world's seven richest countries in Genoa, Italy, is counting on the Fed's
rate cuts and the stimulative effect of his $1.35 trillion tax cut, to lift
the economy to a stronger growth rate later this year.
The 0.4 percent drop in wholesale prices in June left inflation at this level
rising at an annual rate of 2.4 percent through the first six months of this
year, far better than last year's 3.6 percent.
The news was just as good excluding volatile energy and food prices. The
so-called core rate of inflation edged up just 0.1 percent in June, even
better than the small 0.2 percent increases in April and May. So far this
year, the core rate of inflation at the wholesale level is rising at an
annual rate of just 1.6 percent.
For June, the big drop in overall prices was led by a 2.5 percent plunge in
energy costs, the biggest one-month decline since a 3.5 percent drop in April
2000.
The good news on energy reflected record drops of 1.5 percent in residential
energy costs and 5.8 percent in natural gas prices. Gasoline prices fell by
3.7 percent, the biggest decline since a 3.9 percent fall last August.
Economists had been predicting that energy prices would retreat following a
sharp run-up last winter that was caused by a shortage of supplies. Still,
residents of California face difficult problems and potential power shortages
this summer because of the shortage of electrical generating capacity.
Motorists this summer have been getting a break at the gas pump after world
crude oil prices eased and refiners rushed to fill shortages that developed
during the spring.
Food prices in June edged up 0.1 percent after having fallen by 0.4 percent
in May. The increase reflected gains of 0.9 percent for beef and 1.6 percent
for dairy products.
Outside of food and energy, prices remained well contained.
Prescription drug prices fell by 0.7 percent, their biggest drop since
January 1999.
Tobacco prices, which had risen a sharp 4.9 percent in May, were up just 0.1
percent in June.
New car prices rose 0.1 percent in June after having falling 0.1 percent in
May.
,2001 Associated Press

Power rebate generates shockingly high interest
Posted at 10:00 p.m. PDT Thursday, July 12, 2001
BY
DANA
HULL
In another sign that energy conservation is paying off, hundreds of thousands
of consumers are opening power bills this month to find that they have earned
a 20 percent rebate from the state for slashing summer electricity use.
What's more, preliminary figures compiled by utility companies indicate that
many more households and businesses are qualifying for the automatic cash
credit than Gov. Gray Davis and his energy team anticipated.
Pacific Gas & Electric has processed about 1.5 million bills this month, and
394,000 customers, or 29 percent, have qualified for the rebate, said
spokeswoman Staci Homrig. Early expectations were that only 10 percent to 20
percent would qualify.
``It warms the cockles of one's heart to hear these numbers,'' S. David
Freeman, the governor's chief energy adviser, said Thursday. ``Nobody dreamed
we would have gotten this kind of response. The people of California are
smart. Money talks.''
Homrig said thrifty consumers -- including residential, commercial,
industrial and agricultural customers -- earned $7.6 million in credits. Of
that, $3.7 million went to 355,000 residential users and nearly $3.9 million
to the others.
Consumer interest in conservation has been high, particularly since a
progressive electricity rate increase kicked in June 1. The full extent of
participation in the rebate program will be known as the month progresses.
Utilities process bills daily, rather than at once.
The numbers elsewhere
Southern California Edison has yet to calculate its figures. But in San
Diego, where consumers have to cut back only 15 percent to get the 20 percent
rebate, the numbers are even higher: 38 percent have earned rebates. San
Diego customers were the first in the state to suffer skyrocketing costs for
electricity and began conserving last summer, so their conservation threshold
was lowered for the program.
The rebates, which compare this summer's use to last summer's, are available
to about 10 million homes and businesses that get electricity from PG&E,
Southern California Edison and San Diego Gas & Electric. Originally the
rebate was to come at the end of the summer but now appears on each monthly
summer bill.
Unplugging a second refrigerator or turning off an air conditioner can result
in large energy savings, and many consumers have swarmed Web sites and phone
lines for other ways to cut usage. Still, utility executives and state
officials alike are astonished at the high early figures.
``This is excellent news, and we applaud our customers for making the
effort,'' said Jennifer Andrews of Sempra Energy, the parent company of San
Diego Gas & Electric. ``In our first five cycles of billing, we have applied
approximately $1.5 million in rebates.''
Nearly $1.1 million went to residential customers, $400,000 to other
accounts.
Brett Kennedy of Morgan Hill first became a conservation fanatic over the
winter, when the cost soared for propane to heat his home. He insulated his
attic and installed double-pane, high-efficiency windows.
He still uses his air conditioner but has changed his light bulbs and has
bought an Energy Star refrigerator. The moves have paid off. His electricity
use is down 33 percent from this time last year.
``I got a $15.25 rebate on my bill,'' Kennedy said. ``Pretty tough way to
earn $15.''
The early rebate numbers are in line with recent statewide conservation
figures. Californians used 12 percent less electricity this June than last.
``I think it's phenomenal,'' said Susanne Garfield of the California Energy
Commission. ``The rebate is icing on the cake.''
Critics have blasted the 20/20 program for rewarding those who have been
wasteful in the past.
``We feel we're being burned yet again by the governor,'' said Kathy
Erpenbeck of Menlo Park. ``We would have to unplug our fridge, our computer,
the water heater, the TV and the one or two lights we use each day to
approach a 20 percent decrease, thanks to our past low volume of use.''
But state officials say those consumers will see lower power bills because
low energy users largely escape the rate increase.
Savings on demand
The figures drive home the fact that California residents, whether motivated
by a fear of high bills or a desire to fight back against power companies,
are making a huge dent in the state's electricity demand.
``We've shrunk the spot market,'' Freeman said. ``People are using
clotheslines, and fans are being bought by the thousands.''
The ambitious campaign was designed in part to get the state through the hot
summer months without rolling blackouts; the last was May 8.
Information on the rebate program is available at www.pge.com
<http://www.pge.com >.

Contact Dana Hull at dhull@sjmercury.com <mailto:dhull@sjmercury.com> or
(510) 790-7311.

Settlement talks unsuccessful
Posted at 10:05 p.m. PDT Thursday, July 12, 2001
BY JOHN WOOLFOLK AND STEVE JOHNSON

Mercury News

The state has failed to prove California was overcharged anywhere near $8.9
billion for electricity, a federal judge said Thursday in a sharply critical
recommendation on calculating potential refunds.
After two weeks of unsuccessful settlement talks, the judge overseeing them
agreed California is due ``very large refunds,'' but repeated his earlier
estimates that the amount is closer to $1 billion.
``The amount claimed by the state of California has not and cannot be
substantiated,'' Judge Curtis Wagner wrote in a 12-page recommendation urging
a hearing within 60 days on the refund.
It is now up to the five-member Federal Energy Regulatory Commission to hold
hearings and order refunds.
Wagner sharply criticized state officials for refusing to budge on the $8.9
billion.
Peter Navarro, an economist at the University of California-Irvine, said the
judge ``sided with the generators on every single key issue.''
``The FERC judge adopted a set of rules that effectively slashed the size of
California's possible refunds by up to 80 percent,'' Navarro said.
The recommendation left neither side cheering. State leaders were irked the
judge didn't back their number. They will press commissioners to order the
full refund immediately instead of the hearing.
``It is clear that Judge Wagner's recommendation undermines the consumer
protections that FERC is supposed to safeguard by law,'' U.S. Sen. Barbara
Boxer, D-Calif., said.
Gov. Gray Davis said he hopes President Bush's two new appointees on the
commission ``will be more sensitive to California consumers and order all the
refunds that are due.''
Energy suppliers, who offered the state $703.6 million to settle the matter,
and industry officials greeted the recommendation with caution.
Gary Ackerman, executive director of the Western Power Trading Forum, a trade
group, said he was ``encouraged'' the judge didn't back the state's figure.
But he added, ``there is no reason for us to be confident or comfortable.''
``We'll have to see how this hearing unfolds,'' he said.
A spokesman for Mirant Corp., one of the five major California power
generators, was circumspect. ``This is just another step in this process,''
Pat Dorinson said.
Wagner offered no specific refund figure of his own, repeating instead
estimates he made before the talks began.
``That very large refunds are due is clear,'' Wagner said. ``While the amount
of such refunds is not $8.9 billion as claimed by the state of California,
they do amount to hundreds of millions of dollars, probably more than a
billion dollars.''
That amount is far more than the $125 million in potential refunds federal
regulators had identified earlier this year. But it's still less than what
the state owes energy suppliers for past sales, meaning any refund would
probably be in the form of canceled debt.
The state's $8.9 billion figure was calculated by analysts who oversee the
power grid and has been hotly challenged by suppliers.
A key dispute is the period subject to refund. The state figure is based upon
sales from May 2000 to May 2001. But Wagner said the number should be
calculated from last October, when the federal commission notified sellers
they could face refunds.
Michael Kahn, the state's chief negotiator, said the figure could be up to $5
billion and said it was ``disappointing'' the judge wouldn't consider earlier
refunds. The state, he said, would continue pressing for them.
The judge recommended that the commission calculate refunds using its latest
price control order issued last month and applying it to sales since October,
with a few modifications.

Contact John Woolfolk at jwoolfolk@sjmercury.com
<mailto:jwoolfolk@sjmercury.com> or (408) 278-3410.

Rate hike may hit businesses
Residential rates would stay level under Democrats' proposal.
July 13, 2001
By JOHN HOWARD, HANH KIM QUACH and KATE BERRY
The Orange County Register
SACRAMENTO -- Businesses would be socked with a big rate increase, while
residential rates could hold steady, under the latest plan to rescue Southern
California Edison and resolve major energy matters the state has been
wrangling over since January.
The proposal by Assembly Democrats likely will draw fire from business
interests. Rates easily could triple for some companies.
Meantime, the Davis administration was wrapping up a plan likely to include
further rate hikes to pay for $13.4 billion in borrowing planned this fall.
The clock is ticking down for lawmakers to rescue the near- bankrupt Edison
and figure out how the state will pay for billions of dollars in energy
costs. The Legislature is slated to adjourn July 20. The Assembly could vote
on a deal as early as Saturday; Gov. Gray Davis' plan could be released any
day.
The Assembly plan would reserve the cheapest electricity - that generated by
Edison itself, or bought from small generators - for residential users and
small businesses that use fewer than 20 kilowatts at peak periods.
Everyone else - more than 123,000 businesses from restaurants to steel
manufacturers - would buy the more expensive electricity secured under
long-term contracts.
Senate Leader John Burton said decisions must come swiftly. "There's a ...
deadline," he said. "You gotta have something up for a vote."

A Section
Judge Rejects Power Refunds For California
Peter Behr

07/13/2001
The Washington Post
FINAL
Page A05
Copyright 2001, The Washington Post Co. All Rights Reserved
California 's claim for $8.9 billion in refunds for excessive electricity
charges "cannot be substantiated," the federal government's chief energy
regulatory judge said yesterday, concluding his two-week attempt to mediate
the California energy dispute.
Curtis L. Wagner Jr., chief judge of the Federal Energy Regulatory
Commission, said "very large refunds" are due the state because of
overcharging by generators, saying the figure would probably amount to more
than $1 billion.
But Wagner, in a report to the commission, indicated that the state might not
get even that. Generators serving California are owed even more than $1
billion for power delivered to the state but not yet paid for by utilities
and state power agencies.
"Can a cash refund be required where a much larger amount is due the seller?
The chief judge thinks not," he said. Wagner's report formalizes comments he
made Monday at the close of the failed mediation effort.
Although Wagner said the $8.9 billion demand by Gov. Gray Davis (D) was
unsupportable, he did not attempt to calculate a figure of his own. Wagner
recommended that FERC convene a public hearing to set both the amount of
overcharging that occurred and the amounts that generators are owed by the
state.

http://www.washingtonpost.com
Contact: http://www.washingtonpost.com

Mediator Questions
California 's Claims
To Power Refunds

07/13/2001
The Wall Street Journal
Page A2
(Copyright (c) 2001, Dow Jones & Company, Inc.)
WASHINGTON -- A federal mediator said California 's claim to $8.9 billion in
electricity refunds "cannot be substantiated," and questioned whether the
state should get any money because it owes huge sums to energy sellers for
unpaid bills.
Curtis L. Wagner Jr., the Federal Energy Regulatory Commission's chief
administrative law judge, said the state is owed "probably more than a
billion dollars" of refunds from power companies. But he also said the state
and its utilities owe energy sellers "even larger amounts."
Mr. Wagner, who recently presided over unsuccessful talks aimed at settling
the dispute, urged the commission to convene a "trial-type" hearing to figure
refunds within 60 days. He said the FERC should use a modified version of a
pricing plan it set on June 19 to stabilize markets and ensure competitive
rates.
"The differences between what the state of California believes the buyers in
California markets are owed in refunds and what the sellers in the California
market believe should be refunded raise material issues of fact," Mr. Wagner
said.
In his report, Mr. Wagner said the state had "summarily rejected" a
settlement proposal he personally devised during the talks. The energy
companies offered about $700 million, which also was refused.
California officials have vowed to go to court to recover any amounts the
FERC doesn't order reimbursed. Among other differences, the state claims
refunds should date from May 2000, but the FERC says it is authorized to
order relief only from October.
California Gov. Gray Davis said it would be "unconscionable" for FERC to not
order refunds for the longer period. A spokesman added that the state and its
legislature are working out arrangements on reimbursing the power companies
-- albeit at a substantial haircut.


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Hi Mary,

Sorry about not getting in touch with you earlier. (Just checked my e-mail)
Unfortunately I will be out of Houston this weekend and will be headed back
to India. Hence i will not be able to meet with you. I am looking into the
commercial aspect of the LNG contracts and hence would like to discuss your
plans. Can we still do this over the phone??

Sorry again, about not getting in touch with you.

Regards,

Anshuman

Mary Solmonson@ECT
06/09/2000 11:59 PM
To: Anshuman Srivastav/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc: Sally Beck/HOU/ECT@ECT, Scott Earnest/HOU/ECT@ECT

Subject: Re: LNG Contracts

I would like to visit with you while you are here in Houston.  You may
contact me at x3-6079 and we can arrange a time to meet.

---------------------- Forwarded by Mary Solmonson/HOU/ECT on 06/09/2000
01:27 PM ---------------------------

Heidi Hellmann@ENRON_DEVELOPMENT

06/09/2000 07:34 PM

To: Mary Solmonson/HOU/ECT@ECT
cc: Anshuman Srivastav/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Sandeep
Katwala/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
Subject: Re: LNG Contracts

Mary,

One of our team members, Anshuman Srivastav, is currently in Houston.  It
would probably be useful for the 2 of you to meet, so that we can understand
exactly what your plans are with regards to LNG and what exactly you will
require as far as contracts go.

Failing that,  the person, who is the official keeper of all our contracts,
is Sandeep Katwala.  He should be able to get you whatever you need.

Let me know if you have any difficulties and I can try and hunt stuff down.

Heidi

Mary Solmonson@ECT
06/08/2000 05:21 PM
To: Rick Phillips/Corp/Enron@Enron, Stephen Wallace/Corp/Enron@ENRON, Gautam
Dhar/Corp/Enron@Enron, Stephen Wallace/Corp/Enron@ENRON, Heidi
Hellmann/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Milind
Laad/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Love Sharma/Corp/Enron@Enron
cc:

Subject: LNG Contracts

---------------------- Forwarded by Mary Solmonson/HOU/ECT on 06/08/2000
05:18 PM ---------------------------

Mary Solmonson
06/08/2000 05:19 PM
To:
cc: Sally Beck/HOU/ECT@ECT, Scott Earnest/HOU/ECT@ECT
Subject: LNG Contracts

I am seeking information on where to find copies of LNG Contracts that were
previously in the domain of the old Enron International company.   Enron
North America will be establishing a risk book to manage LNG positions on a
worldwide basis and we need copies of all contracts to set this up.  These
contracts may or may not be related to the Dabhol project.  If you can
provide guidance or information as to where to find these contracts, I would
appreciate it.  You may respond via email or call me at 713-853-6079 in
Houston.

Thank you for your attention.


Suite tickets are available for the game tonight, 6:30 P.M.
Please see me if you are interested.

Mollie


Well, after this weekend, we can scratch off watching the horns as a major
activity for Vegas.  It looks like there is going to be around 6-8 of us
going, myself and a most of the others going Thursday and a few showing up
Friday. Make sure you get your air ticket soon, the prices are good but
availability will be running low with a $200 ticket.  I have called on rooms,
but I haven't gotten the right deal yet.  It will work itself out, it always
does.

 For those of you who I haven't heard from, drop me a line.

BN

Where the hell is Iaia?  What is a Iaia?


Sara Shackleton
Enron North America Corp.
1400 Smith Street, EB 3801a
Houston, Texas  77002
713-853-5620 (phone)
713-646-3490 (fax)
sara.shackleton@enron.com
----- Forwarded by Sara Shackleton/HOU/ECT on 02/07/2001 01:49 PM -----

	Sara Shackleton
	02/07/2001 01:27 PM

		 To: neel.lemon@bakerbot
		 cc: Carol St Clair/HOU/ECT@ECT
		 Subject: Enron/Corrugated Services

Neel:

My apologies for the late response.  Carol St. Clair will be handling
Corrugated and she will call or email you to schedule a call.  Carol can be
reached at 713-853-3989.  Thanks.

Sara Shackleton
Enron North America Corp.
1400 Smith Street, EB 3801a
Houston, Texas  77002
713-853-5620 (phone)
713-646-3490 (fax)
sara.shackleton@enron.com
----- Forwarded by Sara Shackleton/HOU/ECT on 02/07/2001 01:13 PM -----

	Neel.Lemon@bakerbotts.com
	02/06/2001 07:29 PM

		 To: Sara.Shackleton@enron.com
		 cc: Rebecca.Williams@BakerBotts.com, ffelvey@csipaper.com
		 Subject: Enron/Corrugated Services

Sara:

Any chance you are available at 1:30pm on Wednesday for a call regarding the
Enron/Corrugated Services ISDA?  If that time will not work for you, please
suggest another time tomorrow afternoon that would.

Also, you will be receiving on Thursday morning a copy of some of the more
relevant documentation relating to the June 2000 drop down of the Corrugated
Services, Inc. operating assets and liabilities (including the original
Enron/Corrugated Services, Inc. ISDA) into a newly formed limited
partnership known as Corrugated Services, L.P.  In connection with that
transaction, Corrugated Services, Inc. changed its name to CSI Holdings,
Inc.  CSI Holdings, Inc. also formed at that time and now owns 100% of CSI
GP, Inc., which entity serves as the general partner of Corrugated Services,
L.P.  All of this was done to create a more franchise tax efficient
operating and ownership structure.

Based on the foregoing, we believe that it will be necessary to redocument
the original agreement either through an amendment thereto or the
cancellation thereof and the creation of a new LP/Enron agreement.

We plan on discussing the foregoing during our call tomorrow afternoon.

Thanks.
__________________________
Neel Lemon
Baker Botts LLP
2001 Ross Avenue
Suite 700
Dallas, Texas 75201
214.953.6954 - office
214.661.4954 - fax
469.323.6120 - NEW MOBILE
214.361.6717 - home
neel.lemon@bakerbotts.com - email

The information contained in this email is confidential and may be subject
to the attorney-client privilege.  As a result, any unauthorized use or
transmission is prohibited.  If you are not the intended addressee, please
delete this email and notify the sender.


Ike, thanks for the letter on Friday.  The team is preparing an analysis on
where we have flexibility and preparing a response.  We should be able to
respond before the end of the week.

Thanks
Dave Delainey


----- Forwarded by Tana Jones/HOU/ECT on 05/03/2000 02:01 PM -----

	"Bolan, Kathy" <kathy.bolan@et.pge.com>
	05/02/2000 03:23 PM

		 To: "'tana.jones@enron.com'" <tana.jones@enron.com>
		 cc:
		 Subject: Transaction information

here's a copy of the deal information.  I left a message with Bob Bowen as
the deal he added appears to be an Enron Canada deal.  The Enron
confirmation that was executed stated the counterparty as Enron Canada.  Our
lawyer is looking at the Assignment agrement.

 <<transact.doc>>

Kathy Bolan
Contracts Manager
PG&E Energy Trading, Canada Corporation
Phone: (403)261-3379  Fax: (403)262-8867
E-mail:  kathy.bolan@et.pge.com

PG&E Energy Trading and any other company referenced herein which uses the
PG&E name or logo are not the same company as Pacific Gas and Electric
Company, the California utility.  These companies are not regulated by the
California Public Utilities Commission, and customers do not have to buy
products from these companies in order to continue to receive quality
regulated services from the utility.
 - transact.doc