this is an old one but a great one.
If you dont like this email, then you just don't understand.

A chronology of events for Saturday,  December 4, 1999,
and the early morning hours of Sunday,
December 5, 1999:
6:00 Arise, play the Eyes of Texas and
Texas Fight at
full-freaking blast
6:20 Get in car, drive to New Braunfels

7:30 Tee off (me and a buddy were the
FIRST tee-time
of the morning)
8:50 Turn 9 (crack open first beer)
8:53 Crack open second beer
8:58 Crack open...(you get the idea)
10:30 Finish 18 (holes, as well as
beers), sign
scorecard for smoooooth 95
10:35 Headed for San Antonio
10:50 Buy three 18-packs for pre- and
post-game
festivities
11:10 We decide we don't have enough
booze, so we
double-back to a liquor store and buy
the good ol' 750
ml plastic bottle "Traveler" Jim Beam
11:50 Arrive at the tailgate spot.
Awesome day. Not
a single cloud in the sky. About 70
degrees.
11:55 I decide that we're going to kick
the shit out
of Nebraska.
11:56 I tell my first Nebraska fan to
go fuck
himself.
12:15 The UT band walks by on the way
to the
Alamodome. We're on the second floor of
a two-story
parking garage on the corner (a couple
hundred of us).
We're hooting and hollering like
wildmen. The band
doubles back to the street right below
us and
serenades us with Texas Fight and The
Eyes of Texas.
AWESOME MOMENT.
12:25 In the post-serenade serendipity,
50-100 grown
men are bumping chests with one
another, each and
every one of them now secure and
certain of the fact
that we are going to kick the
shit out of Nebraska.
1:00 The Nebraska band walks by on the
way to the
Alamodome. Again, we hoot and holler
like wildmen.
Again, the band doubles back and stops
right below us
to serenade us, this time, however,
with the Nebraska
fight songs. Although somewhat
impressed by their
spirit and verve, we remain convinced
that we are
going to kick the shit out of
Nebraska.
1:30 I begin the walk to the Alamodome,
somehow
managing to stuff the "Traveler" and 11
cans of beer
into my pants.
1:47 I am in line surrounded by
Nebraska fans. They
are taunting me. I am taunting back,
still certain
that we are going to kick the
shit out of Nebraska. I
decide to challenge a particularly
vocal Nebraska fan
to play what I now call and will
forever be remembered
as "Cell-Phone Flop Out." Remember flop
out for a
dollar? The rules are similar. I tell
this Nebraska
jackass that if he's so confident in
his team, he
should "flop out" his cell phone RIGHT
NOW and make
plane reservations to Phoenix for the
Fiesta Bowl.
And then I spoke these memorable words:
"And not
those
damn refundable tickets, either! You
request those
non-refundable, non-transferrable
sons-of-bitches!"
He backs down. He is unworthy. I call
Southwest
Airlines and buy two tickets to
Phoenix,
non-refundable
and non-transferrable. Price: $712. He
is humbled.
He lowers his head in shame. I raise my
cell phone in
triumph to the cheers of hundreds of
Texas fans. I am
KING and these are my subjects. I
distribute the 11
beers in my pants to the cheering
masses. I RULE the
pre-game kingdom.
2:34 Kickoff. Brimming with confidence,
I open the
Traveler and pour my first stiffy.
2:45 I notice something troubling:
Nebraska is big.
Nebraska is fast. Nebraska is very
pissed off at
Texas.
3:01 The first quarter mercifully ends.
9 yards
total offense for Texas. Zero first
downs for Texas.
I'm still talking shit. I pour
another stiffy from
the Traveler.
3:36 Four minutes to go in the first
half: the
Traveler is a dead soldier. I buy my
first $5 beer
from the Alamodome merchants. While I
am standing in
line, a center snap nearly decapitates
Major
Applewhite
and rolls out of the end zone. Safety.
3:56 Halftime score: Nebraska 15, Texas
0. I wish I
had another Traveler.
4:11 While urinating next to a Nebraska
fan in the
bathroom at halftime, I attempt to
revive the classic
Brice-ism from the South Bend bathroom:
"Hey, buddy,
niiiiiiiiice cock." He is
unamused.
4:21 I buy my 2nd and 3rd $5 beer from
the Alamodome
merchants. I share my beer with two
high school girls
sitting behind me. Surprisingly, they
are equipped
with a flask full of vodka. I send them
off to
purchase $5 Sprites, so that we may
consume their
vodka. I have not lost faith. Nebraska
is a bunch of
pussies.
4:51 No more vodka. The girls sitting
behind me have
fled for their lives. I purchase two
more $5 beers
from the Alamodome merchants.
5:18 Score is Nebraska 22, Texas 0. I
am beginning
to lose faith. This normally would
trouble me, but I
am too drunk to see the football field.

5:27 I call Southwest Airlines: "I'm
sorry, sir.
Those tickets have been confirmed and
are
non-refundable and non-transferrable."
5:37 I try to start a fight with every
person behind
the concession counter. As it turns
out, the
Alamodome has a policy that no beer can
be sold when
there is less than 10 minutes on the
game clock. I am
enraged by this policy. I ask loudly:
"Why the fuck
didn't you announce last call over the
fucking PA
system??!!"
5:49 Back in my seats, I am slumped in
my chair in
defeat. All of a sudden, the Texas
crowd goes
absolutely nuts. "Whazzis?," I mutter,
awaking from
my coma, "Iz we winnig? Did wez scort?"
Alas, the
answer is no, we were not winning and
we did not
score.
The largest (by far) cheer of the day
from the Texas
faithful occurred when the handlers
were walking back
to the tunnel and Bevo stopped to take
a gargantuan
shit all over the letters "S",
"K", and "A" in the
"Nebraska" spelled out in their end
zone. I cheer
wildly. I pick up the empty Traveler
bottle and stick
my tongue in it. I am thirsty.
6:16 Nebraska fans are going berserk as
I walk back
to the truck. I would taunt them with
some off-color
remarks about their parentage, but I am
too drunk to
form complete sentences. With my last
cognitive
thought of the evening, I take solace
in the fact that
if we had not beaten them in October,
they would be
playing Florida State for the national
championship.
6:30 Back in the car. On the way back
to Austin for
the 8:00 Texas-Arizona tip off. We can
still salvage
the day! I crack open a beer. It is
warm. I don't
care.
7:12 We have stopped for gas. I am
hungry. I go
inside the store. I walk past the beer
frig. I
notice a Zima. I've never had a Zima. I
wonder if
it's any good. I pull a Zima from the
frig. I twist
the top off and drink the Zima in three
swallows.
Zima
sucks. I replace the empty bottle in
the frig.
7:17 There is a Blimpie Subs in the
store. I walk to
where the ingredients are, where the
person usually
makes the sub. There is no one there. I
lean over
the counter and scoop out half a bucket
of black
olives. I eat them. I am still hungry.
I lean
further over the counter and grab
approximately two
pounds of Pastrami. I walk out of the
store
grunting and eating Pastrami. The
patrons in the
store fear me. I don't care.
8:01 We are in South Austin. I have
been drinking
warm beer and singing Brooks and Dunn
tunes for over
an hour. My truck-mate is tired of my
singing. He
suggests that perhaps Brooks and Dunn
have written
other good songs besides "You're Going
to Miss Me When
I'm Gone" and "Neon Moon" and that
maybe listening to
only those two songs, ten times each
was a bit
excessive. Perhaps, he suggests, I
could just let the
CD play on its own. I tell him to
fuck off and
restart "Neon Moon."
8:30 We arrive at the Erwin Center. My
truckmate,
against my loud and profane
protestations, parks on
the top floor of a nearby parking
garage. I tell him
he's an idiot. I tell him we will never
get out. I
tell him we may as well pitch a
fucking tent here. He
ignores me. I think he's still pissed
about the
Brooks and Dunn tunes. I whistle "Neon
Moon" loudly.
8:47 I am rallying. I have 4 warm beers
stuffed in
my pants. We're going to kick the
shit out of
Arizona.
9:11 Halftime score: Texas 31, Arizona
29. I am
pleased. I go to the bathroom to pee
for the 67th
time today. I giggle to myself because
of the
new opportunity to do "the bathroom
Brice." There are
no Arizona fans in the bathroom. I am
disappointed.
I tell myself (out loud) that I have a
"Niiiiiice
cock." No one is amused but me.
9:41 I walk to the bathroom while
drinking Bud Light
out of a can. Needless to say, they do
not sell beer
at the Erwin Center, much less Bud
Light out of a can.
I am stopped by an usher: "Where did
you get
that, sir?" I tell him (no shit):
"Oh, the
cheerleaders were throwing them up with
those little
plastic footballs. Would you mind
throwing this away
for me?" I take the last swig and hand
it to him. He
is confused. I pretend I'm going to the
bathroom, but
I run away giggling instead. I duck
into some
entrance to avoid the usher, who is now
pursuing me.
I sneak into a large group of people
and sit down.
The
usher walks by harmlessly. I am
giggling like a little
girl. I crack open another can of Bud
Light.
9:52 I am lost. In my haste to avoid
the usher, I
have lost my bearings. I have no ticket
stub. I
cannot find my seats. Texas is losing.
10:09 Texas is being screwed by the
refs. I am
enraged. I have cleared out the seats
around me
because I keep removing my hat and
beating the
surrounding chairs with it. A concerned
fan asks if
I'm OK and perhaps I shouldn't take it
so seriously.
I tell him to fuck off.
10:15 After the fourth consecutive
"worst fucking
call I have EVER seen," I attempt to
remove my hat
again to begin beating inanimate
objects. However, on
this occasion I miscalculate and I
thumbnail myself in
my left eyelid, leaving a one-quarter
inch gash over
my eye. I am now bleeding into my left
eye and all
over my shirt. "Perhaps," I think to
myself, "I'm
taking this a bit seriously."
10:22 I am standing in the bathroom
peeing. I'm so
drunk I am swaying and grunting. I have
a bloody
napkin pressed on my left eye. My pants
are bloody.
I have my (formerly) white shirt
wrapped around my
waist. I look like I should be in an
episode of Cops.
10:43 Texas has lost. I put my bloody
white shirt
back on my body and make my way for the
exits. I am
stopped every 20 seconds by a good
samaritan/cop/security guard to ask me
why I am
covered in blood, but I merely grunt
incoherently and
keep moving.
10:59 With my one good eye, I have
located the
parking garage. I walk up six flights
of stairs,
promise that when I see my friend I
will punch him
in the face for making me walk up six
flights of
stairs, find the truck, and collapse in
a heap in the
bed of the truck. I look around and
notice that
traffic is lined up all the way around
the garage, six
whole flights, and no one is moving. I
take a nap.
11:17 I awake from my nap. I see my
friend in the
driver's seat. I lift my head to look
out the bed of
the truck and notice that traffic is
lined up all the
way around the garage, six whole
flights, and no one
is
moving. I am too tired to punch my
friend. I call my
friend a "Stupid fuck."
11:31 I lift my head to look out the
bed of the truck
and notice that traffic is lined up all
the way around
the garage, six whole flights, and no
one is moving.
I call my friend a "Stupid fuck."

11:38 I lift my head to look out the
bed of the truck
and notice that traffic is lined up all
the way around
the garage, six whole flights, and no
one is moving.
I call my friend a "Stupid fuck."

11:47 I lift my head to look out the
bed of the truck
and notice that traffic is lined up all
the way around
the garage, six whole flights, and no
one is moving.
I call my friend a "Stupid fuck."

11:58 I am jostled. The truck is
moving. I lift my
head to look out the bed of the truck
and notice that
traffic is beginning to move on the
second floor. I
jump out of the truck, walk to the edge
of the parking
facility, and pee off the sixth floor
onto the street
below. My friend looks at me like I
just anally
violated his minor sister. I turn
around and pee
on the front of his truck while singing
the lyrics
to "Neon Moon."
12:11 We are moving. We are out of
beer. I jump
from the truck and go from vehicle to
vehicle until
someone gives me two beers. I am happy.
I return to
my vehicle.
12:26 We have emerged from the parking
facility. We
make our way to my apartment and find
Ed sitting on
the couch with a freshly opened bottle
of Glenlivet on
the coffee table in front of him. We
are all going to
die tonight.
12:59 We have finished three-quarters
of the bottle
of Glenlivet. We decide it would be a
wonderful idea
to go dancing at PollyEsther's. Ed has
to pee. He
walks down the hall to our apartment
and directly into
the full length mirror at the end of
the hall,
smashing it into hundreds of pieces. We
giggle
uncontrollably and leave for
PollyEsther's.
1:17 The PollyEsther's doorman laughs
uncontrollably
at our efforts to enter his club.
"Fellas," he says
in between his fits of spastic
laughter, "I've been
working this door for almost a year.
I've been
working
doors in this town for almost 5 years.
And I can
honestly say that I ain't never seen
three drunker
mother fuckers than you three.
Sorry, can't let you
in." We attempt to reason with him. He
laughs
harder.
1:44 We find a bar that lets us in. We
take two
steps in the door and hear "Last call
for alcohol!" I
turn to the group and mutter: "See, dat
wasn't that
fuckin' hard. Day don't fuckin' do that
at the
Awamo...the awaom...the
alab...fuck it, that stadium
we
was at today..." We order 6 shots of
tequila and
three beers.
2:15 Back on the street. We need food.
We hail a
cab to take us the two and one half
blocks to Katz's.
The cab fare is $1.60. We give him $10
and tell him
to keep it.
2:17 There is a 20 minute wait. We give
the hostess
$50. We are seated immediately.
2:25 We order two orders of fried
pickles, a Cobb
salad, a bowl of soup, two orders of
Blueberry
blintzes, two Reuben sandwiches, a
hamburger, two
cheese stuffed potatoes, an order of
fries, and an
order of onion rings.
2:39 The food arrives. We are all
asleep with our
heads on the table. The waiter wakes us
up. We eat
every fucking bit of our food. Most
of the restaurant
patrons around us are disgusted. We
don't give a
shit.
The tab is $112 with tip.
2:46 I'm sleepy.
9:12 I wake up next to a strange woman.
She is the
bartender at Katz's. She is not pretty.


Here is a simplistic spreadsheet.  I didn't drop in the new generation yet,
but even without the new plants it looks like Q3 is no worse than last year.
Can you take a look and get back to me with the bullish case?

thanks,

Phillip


According to the meter statement, there was overflow from November  on meter
985097 and the following deals need to be extended for 12/1 only.

118532
101473
138017

Thanks and if you need further information, please let me know.

Karen


Firsst article attached refers to the 1946 Nebraska case I mentioned to you
in DC
----- Forwarded by Steven J Kean/NA/Enron on 03/02/2001 10:36 AM -----

	Miyung Buster@ENRON_DEVELOPMENT
	03/02/2001 10:04 AM

		 To: Ann M Schmidt/Corp/Enron@ENRON, Bryan Seyfried/LON/ECT@ECT,
dcasse@whwg.com, dg27@pacbell.net, Elizabeth Linnell/NA/Enron@Enron,
filuntz@aol.com, James D Steffes/NA/Enron@Enron, Janet
Butler/ET&S/Enron@ENRON, Jeannie Mandelker/HOU/ECT@ECT, Jeff
Dasovich/NA/Enron@Enron, Joe Hartsoe/Corp/Enron@ENRON, John
Neslage/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, John Sherriff/LON/ECT@ECT,
Joseph Alamo/NA/Enron@Enron, Karen Denne/Corp/Enron@ENRON, Lysa
Akin/PDX/ECT@ECT, Margaret Carson/Corp/Enron@ENRON, Mark
Palmer/Corp/Enron@ENRON, Mark Schroeder/LON/ECT@ECT, Markus
Fiala/LON/ECT@ECT, Mary Hain/HOU/ECT@ECT, Michael R Brown/LON/ECT@ECT, Mike
Dahlke/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Mona L Petrochko/NA/Enron@Enron,
Nicholas O'Day/AP/Enron@Enron, Paul Kaufman/PDX/ECT@ECT, Peggy
Mahoney/HOU/EES@EES, Peter Styles/LON/ECT@ECT, Richard
Shapiro/NA/Enron@Enron, Rob Bradley/Corp/Enron@ENRON, Roger Yang/SFO/EES@EES,
Sandra McCubbin/NA/Enron@Enron, Shelley Corman/ET&S/Enron@ENRON, Stella
Chan/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Steven J Kean/NA/Enron@Enron, Susan
J Mara/NA/Enron@Enron, Mike Roan/ENRON@enronXgate, Alex
Parsons/EU/Enron@Enron, Andrew Morrison/LON/ECT@ECT, lipsen@cisco.com, Janel
Guerrero/Corp/Enron@Enron, Shirley A Hudler/HOU/ECT@ECT
		 cc:
		 Subject: Energy Issues

Please see the following articles:

Oakland Trib 2/28:
 "Energy buyout foes say dump grid plan"

San Diego Union 2/28: "Energy chief 'open' to plan on transmission line
buyout"

SF Chron, 2/28: "Energy Experts Belie Davis' Rosy Prediction
Summer expected to be crunch time"

Riverside Press 3/1: "PUC to mull baseline level for electricity"

Orange Co. Register 3/1: "Electricity notebook"

Contra Costa Times 3/1: "PUC chief defends actions in crisis"

LA Times 3/2: "Cal-ISO Says Suppliers Overcharged"

Sac Bee 3/2: Power profits targeted: Generators urged to forgive some of
utilities' debts            (Steve Kean quoted)

Energy Insight 3/2: "California Energy Island Won't Work"

SF Chron 3/2: Ex-Regulator Urges Temporary Federal Price Caps on Power

SF Chron 3/2: PG&E to Pay Creditors Only 15% / Smaller suppliers outraged
over plan
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------
Energy buyout foes say dump grid plan
Davis critics point to federal veto disclosure
By Steve Geissinger
SACRAMENTO BUREAU
SACRAMENTO -- Foes of Gov. Gray Davis' plan to buy power lines said Tuesday
the 11th-hour disclosure of federal veto power over the stalled deal shows
the effort should be abandoned altogether.
But Davis, who spent the day lobbying federal officials in Washington, D.C.,
said he's confident the Bush administration will support his plan to purchase
California's high-voltage transmission grid as part of a deal to rescue
teetering utilities.
Critics of the plan to ease the energy crisis, however, aren't so sure that
Bush's Republican administration, which favors market-driven strategies over
government intervention, will support the Democratic governor's proposal.
Moreover, Republican legislators here said, the last-minute revelation that
the plan would need the approval of federal regulators is further evidence
that it is misdirected, overly complex and will take too long to implement.
"It means much more time will be required and time is something that
especially a lot of the creditors of the utilities do not have," said
Assembly Republican leader Bill Campbell of Villa Park.
"I think this means we have to look at an alternative deal," Campbell said.
Dan Nelson, a spokesman for Senate Republican leader James Brulte of Rancho
Cucamonga, said Republicans generally oppose state purchase of power lines
from utility companies as part of a plan to rescue them from financial
difficulty.
They instead support acquisition of some other asset from the utilities, such
as stock warrants, in exchange for state assistance with their financial
woes.
Foes say the grid purchase would saddle the state with an antiquated network
that could prove costly to maintain while supporters contend it could lead to
quick improvements in a bottlenecked system overdue for repairs.
Word that Davis' plan to buy transmission lines would need federal approval
surprised some legislators, their aides said. Open government advocates have
harshly criticized the administration for secrecy surrounding much of the
governor's energy crisis relief efforts.
Federal Energy Regulatory Commission Chairman Curtis Hebert disclosed
recently in Washington that his board has authority over the deal, which he
called "nationalization" that is "against the best interests of the American
public."
Following that disclosure, Democratic legislative leaders backing Davis' plan
said they hope to maneuver around the need for commission approval.
California can perhaps circumvent the potential hitch by relying in part on a
1946 case involving the state of Nebraska that did not require federal
approval, according to Senate President Pro Tem John Burton, D-San Francisco.
Nevertheless, Davis, in Washington for a national governors meeting, said he
presented a nine-page proposal to U.S. Energy Secretary Spencer Abraham and
expects a response by the end of the week.
"He wants this problem solved and he's been very supportive," Davis said.
"He's recommended approval on every request I've made and I believe he will
support our proposal."
Abraham's office did not return calls seeking comment.
The Federal Energy Regulatory Commission that will likely weigh the fate of
the plan, however, is independent of Abraham's office. Even so, Abraham is
part of an energy policy team appointed by Bush, and Davis views Abraham's
support of the proposal as a potential key to a federal nod.
Davis' history with the commission won't help his efforts. He and the
commission have been at odds for months over the governor's campaign to
impose tough wholesale price caps in the West.
The latest complications in the plan to rescue utilities came amid a
continuing deadlock in secret negotiations between the state and the Pacific,
Gas and Electric Co., which is reluctant to sell its high-voltage
transmission lines.
Davis announced Friday that California's other major investor-owned utility,
Southern California Edison, had agreed on the basic framework of a deal that
includes the sale of its transmission grid to the state for $2.8 billion.
The utilities, trapped between high wholesale costs and lower
government-frozen retail rates, have been pushed to the brink of bankruptcy
as they amassed nearly $13 billion in debt.
When the utilities could no longer buy enough power, the state began
brokering billions of dollars in emergency and long-term power deals to
thwart rolling blackouts.
Then Davis and legislators began developing strategies to ease the energy
crisis, including increased conservation, construction of new generation
plants and ways to prevent utility bankruptcies.
Under Davis' plan to rescue utilities, the state would help fiscally restore
the companies with bonds in exchange for acquisition of their 26,000 miles of
transmission grids. The state would upgrade the aging grid and then lease the
lines back to the utilities to operate.
------------------------------------------------------------------------------
--------------------------------------------
Energy chief 'open' to plan on transmission line buy out
By Toby Eckert
COPLEY NEWS SERVICE
February 28, 2001

WASHINGTON -- Energy Secretary Spencer Abraham is "open" to California's plan
to take over utility transmission lines in the state, but stopped short of
endorsing the proposal, saying he needed to study it further, Gov. Gray Davis
said yesterday.
"From the tone of his remarks, I think his comments will be positive, and I
hope by the end of the week he will be able to endorse the proposal or at
least endorse a modified proposal that is satisfactory to us," Davis said
after meeting with Abraham privately at the Department of Energy.
A spokesman for Abraham said he "couldn't characterize (Abraham's) reaction
one way or the other." But he said Abraham was "open to taking a look at the
material the governor provided" and would follow up with Davis.
In his effort to drum up federal support for the buyout plan, Davis also
invoked a name that resonates throughout the halls of power in Washington:
Alan Greenspan.
Davis said the Federal Reserve Board chairman "in a general way thinks it
makes sense to acquire transmission lines to make the capacity improvements
that have not been done over the past 15 years."
Greenspan and Davis informally talked about the power crisis this week, aides
to Davis said. Greenspan's comments could not be confirmed independently.
Davis was in Washington for the four-day winter meeting of the National
Governors Association. But he also used the occasion to try to convince the
new Bush administration -- and the media -- that his plans to solve
California's power woes are sound.
The governor spent about an hour briefing Abraham on the tentative agreement
the state struck last week to acquire Southern California Edison's
transmission system for $2.76 billion. The state is trying to negotiate
similar deals with San Diego Gas and Electric and Pacific Gas and Electric as
a condition for helping the utilities pay off about $13 billion in debt they
have accumulated because of soaring wholesale power costs.
The Federal Energy Regulatory Commission probably will have to sign off on
any purchase plans, and FERC Chairman Curtis Hebert has made comments
indicating he is skeptical of the idea. But Davis believes he can overcome
possible opposition at FERC if Abraham backs the plans.
Davis also said he and Abraham had "some creative talks about how we might be
able to find more megawatts for this summer" and assigned staff members to
work on that "on a daily basis." He did not elaborate on the ideas, saying
there may be some details forthcoming "in about two to three weeks."
The governor will continue his East Coast sales pitch for the transmission
line purchase -- and other elements of his plan to solve the power crisis --
in a meeting with Wall Street analysts and bond-raters today.
Davis and legislators also have pursued long-term power contracts with energy
suppliers to wean the state from the open market, which became wildly
expensive last year.
Mirant Corp., which operates power plants in Northern California, said
yesterday that it has agreed to shift contracts from the defunct California
Power Exchange to the Department of Water Resources, which is the state's
electricity buyer.
The contracts amount to about 1,000 megawatts of power over the next 10
months. Last week, Mirant agreed to sell 750 megawatts to the state next
month. On a typical winter day, the maximum demand on the grid managed by the
state Independent System Operator, about 75 percent of the total state
network, is about 30,000 megawatts.
Davis' visit to Washington came against the backdrop of a muted federal
response to California's power crisis. The Bush administration, which favors
open power markets, has said it is largely up to state officials to solve the
problem, rejecting calls by Davis for more aggressive action like caps on
wholesale power costs.
But the Democratic governor praised the Republican president publicly on
several occasions. He cited the administration's temporary extension of
federal orders that kept electricity and gas flowing to the state during
emergency shortages and its agreement to speed up federal review of new power
plants.
"Secretary Abraham and the Bush administration in general have been
wonderfully responsive to my requests. I cannot thank them enough," Davis
said yesterday.
Other California Democrats have been less charitable toward President Bush.
"I think the president is going in the wrong direction on this issue," said
Rep. Bob Filner, D-San Diego, a staunch advocate of wholesale price controls.
"A hands-off approach by the federal government, as the president has
suggested, is not going to solve this problem."
------------------------------------------------------------------------------
--------------------------------------------
Energy Experts Belie Davis' Rosy Prediction
Summer expected to be crunch time
Greg Lucas, Sacramento Bureau Chief
Wednesday,?February 28, 2001
,2001 San Francisco Chronicle
Sacramento -- Gov. Gray Davis' optimistic assessment that California may be
on the "back side" of its energy crisis flies in the face of what many energy
companies and other experts predict.
California's real test will come this summer when electricity usage sharply
increases, and unless everything breaks the way Davis hopes, predictions are
that large chunks of the state will be in the dark.
"We're not on the back side of this crisis. This problem is far, far bigger
than the governor is suggesting," said Gary Ackerman, executive director for
the Western Power Trading Forum in Menlo Park.
"To characterize the problem that way shows a recklessness that feeds on the
popular notion we don't have an energy crisis. We do. We have a very serious
one that's going to hit us as temperatures and loads go up," Ackerman said.
The Democratic governor's comments were made Monday in Washington, D.C.,
during an East Coast visit aimed at getting Washington and Wall Street
support for his energy plan.
He admitted more hard work is needed, but said the state is on the "back side
of the crisis" because lawmakers have passed bills needed to help lower
electricity prices.
"Does that mean we're home free?" Davis asked yesterday. "No."
But he again repeated that the state is on the back side of the crisis.
That is contrary to predictions by the Independent System Operator, which
oversees the state's power market.
On any given day in June, the ISO estimates, the state will fall 6,815
megawatts short of demand. That would put nearly 7 million homes in the dark,
if it happens.
In July, the expected shortage is 4,685 megawatts. In August, it's 5,297
megawatts. That's if California has a normal summer. If it's hotter than
normal, the shortage grows.
The ISO's estimates tend to be conservative and do not include Davis'
conservation goal.
But even if a 10 percent reduction were achieved in June that would save
roughly 5,000 megawatts, the state would still be short 1,800 megawatts.
And there are other variables.
Depending on the snowpack and reservoir levels, hydroelectric plants may not
be able to run at full bore, which would also worsen the situation.
"That is something the governor cannot spin his way out of," said Sen. Tom
McClintock, R-Northridge.
Davis said a combination of new power plants and energy conservation will
help the state get through this summer.
The clock is running. The ISO predicts shortages of 3,030 megawatts in May -
- just two months away.
"The real electricity crisis is going to be this summer, and I don't think
we've made enough progress there," said Severin Borenstein, director of the
University of California Energy Institute.
California won't be able to build its way out of the energy crisis by quickly
approving and building new power plants, Borenstein said.
The ISO's demand estimates already factor in the new power plants set to come
online this summer.
"Unless we have a very mild summer and have lots of rainfall between then and
now," Borenstein said, "we are going to face some serious shortages."
Like Davis, Borenstein says California needs to do more to conserve energy.
Unlike Davis, he favors raising prices on big power consumers to give them an
incentive to cut back.
But the Democratic governor may be sending Californians a mixed message.
By telling them the worst is over, he could undercut his plan by making
people believe more conservation is unnecessary.
Excluding what lies ahead, there are also plenty of energy issues left
unresolved right now.
Although Davis has reached a tentative deal with Southern California Edison
on purchasing its share of the state's transmission system for $2.7 billion
-- no such deal exists with either Pacific Gas & Electric or San Diego Gas &
Electric.
Some alternative energy producers, like co-generation plants, are shutting
down because the cash-poor utilities haven't paid them for several months. No
cash means no fuel to run the turbines that make the juice.
Generators like Duke Energy and Reliant Energy aren't convinced the crisis
has passed.
For starters, both companies are owed in excess of $700 million for
electricity bought by PG&E and Edison but never paid for.
"There are a lot of issues still out there such as how much power your state
will require this summer, whether there is enough generation on the ground or
available commercially to handle the load if there is a significant spike in
demand," said Richard Wheatley, a Reliant spokesman.
Harvey Rosenfield, head of the Foundation for Taxpayer and Consumer Rights,
has a slightly different take on whether the worst is over.
"We've said all along it's a crisis inspired by the greed of the utilities
and the energy companies," Rosenfield said.
"Now that taxpayers are paying $1 billion every three weeks to buy
electricity and the ratepayers are going to pay between $13 billion and $20
billion, the companies are happy and the crisis is over. What more could they
want?"
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PUC to mull baseline level for electricity
It's been a decade since amounts were set. They vary by region, season and
whether a home is heated with gas or electricity.

By Robert T. Garrett
The Press-Enterprise
SACRAMENTO
Inland-area residents who want a higher "baseline quantity" of lower-priced
electricity each month will get a chance to plead their case in the next few
weeks.
The state Public Utilities Commission will examine by early April whether the
monthly usage limits that trigger higher rates for residential customers are
set too low, PUC President Loretta Lynch said Wednesday.
Baseline amounts are set by the PUC and vary by geographic region, season and
whether a home is heated with gas or electricity.
"It's been over a decade since the baselines were set," Lynch told the
Sacramento Press Club. ". . . I think it's about time for us to look at what
these baselines are in the 21st century."
Lynch, an appointee of Gov. Davis, declined to say whether the commission
will make permanent a 9-percent rate hike imposed in early January on
residential customers of Southern California Edison, which serves much of the
Inland Empire.
With Edison and Pacific Gas Electric collapsing financially, the PUC imposed
the rate hike -- and increases of up to 17 percent for Edison's large
business customers -- for 90 days.
The "temporary surcharge" will be lifted in early April unless the PUC votes
to keep it in effect.
Davis has said he hopes his plan to rescue the state's ailing utilities and
avoid rolling blackouts can be carried out without further rate hikes.
Davis was in New York City on Wednesday, where the plan drew a tepid response
from Wall Street.
Meanwhile, the unexpected shutdown of four Western power plants for repairs,
combined with scheduled maintenance at several in-state plants, forced
California grid officials to declare a Stage 2 alert.
Wall Street analysts who met privately with Davis in New York called his
moves a good step toward solving the energy crisis, but said more must be
done.
"He talked about a lot of short-term measures to alleviate problems for this
summer, but he hasn't communicated a long-term fix," said Lawrence J.
Makovich, senior director of Cambridge Energy Research Associates.
Lynch said Wednesday that she and others on the PUC should have recognized
sooner that utility deregulation wasn't working.
As part of its review of the January rate hikes, the PUC will invite public
comments on baselines, Lynch said.
She said she plans to examine the baselines for each climate zone. In
Edison's service area, for instance, there are six.
Lynch also said the PUC would look at whether baselines are fair and
effective, and whether similar incentives to conserve energy should be built
into the rates of businesses.
If the commission adopts "incentives for businesses," she said, it has to
make sure it doesn't set the baseline quantities too low for industrial
sectors such as agriculture and biotechnology. State Sen. Jim Battin, R-La
Quinta, said Lynch's proposed review of the fairness of baselines in the
different climate zones "could be encouraging."
But he said he thinks businesses will oppose having baselines applied to
them.
Battin has waged a battle against baselines, which he calls "social
engineering" and which were mandated by a state law passed in the 1980s.
In the Inland area, the baseline system works like this:
In Temecula and Corona an "all-electric" home -- meaning one that is heated
by electricity -- this summer will pay 12 cents a kilowatt for the first 304
kilowatts used each month; for each additional kilowatt consumed, Edison will
charge 14 cents.
In Moreno Valley, Hemet, Rialto and most of Redlands, owners of
"all-electric" homes will pay Edison the lower rate for 514 kilowatts per
month this summer.
In the Coachella Valley, in both summer and winter, Edison charges the
higher, 14-cent rate only for monthly consumption above 1,299 kilowatts.
Those with gas heating in their homes get different baseline allowances than
do those with electric heating.
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Electricity notebook
State, Calpine sign $8.3 billion in pacts.
March 1, 2001
Calpine Corp., a San Jose-based power plant owner, signed two contracts
valued at up to $8.3 billion to sell electricity to the California Department
of Water Resources for 10 to 20 years.
The contracts with the DWR, which buys electricity for the state's
two-biggest utilities, will provide 1,500 megawatts, or enough to light 1.5
million homes, the company said.
Calpine signed one $5.2 billion, 10-year contract to sell 1,000 megawatts
from new power plants. Deliveries are expected to begin July 1, with 200
megawatts. The full amount of power won't be available until July 2002.
A $3.1 billion contract calls for Calpine to provide power for 20 years.
Deliveries are expected to begin in August with 90 megawatts and to increase
to 495 megawatts in August 2002.
The contract also allows the state to buy up to 2,000 hours during peak
periods from 11 new generating units, once they are built.
In February, Calpine signed a 10-year contract valued at $4.6 billion with
the DWR to supply 1,000 megawatts. A megawatt is enough to light 1,000 homes.
Separately, Duke Energy Corp. said it is in discussions with the DWR on
long-term power supply contracts.
The Gas Co. agrees
to buy gas for PG&E
The Gas Co. said Wednesday that it reached an agreement with Pacific Gas &
Electric Co. to buy natural gas for the troubled utility for the next month.
PG&E, which is near bankruptcy, has said it is running out of gas supplies
and is unable to buy more because creditors are hesitant to sell to it.
PG&E had asked the state Public Utilities Commission to force The Gas Co.,
which serves all of Orange County, to step in and buy gas for PG&E on an
emergency basis.
The Gas Co. said the agreement with PG&E includes a guarantee that The Gas
Co. will be paid out of the money received from PG&E customer bills. Unpaid
balances cannot exceed $16.5 million, said Gas Co. spokeswoman Denise King.
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PUC chief defends actions in crisis
Loretta Lynch blames the energy crunch on the failure of deregulation;
credit-rating firm says state will continue to feel its effects
By Andrew LaMar and Mike Taugher
TIMES STAFF WRITERS
SACRAMENTO -- Loretta Lynch, who has faced close scrutiny as president of the
state Public Utilities Commission, defended her handling of the electricity
crisis Wednesday and said she wishes the agency had recognized sooner that
deregulation was not working.
Appearing before reporters at a luncheon, the 38-year-old attorney offered a
harsh assessment of deregulation and said California has not faced the same
degree of uncertainty since the 1920s.
"From my perspective, the system that we created was built on a theory and a
hope and a promise, and that promise is unrealized and the theory was faulty
and so therefore the hope remains unfulfilled," Lynch said. "I'm from
Independence, Mo.; you have got to show me how we're going to get to the
nirvana of the plan for deregulation."
Lynch said the PUC is working feverishly on three things:
To advise the Legislature on scores of energy bills.
To legally defend its decision to keep rates frozen on two utility companies.
To prepare to decide whether to extend or increase a 9 percent electricity
rate hike approved in January.
Meanwhile, the Wall Street credit-rating firm Standard & Poor's issued a
report on the dangers of the energy crisis that said California will feel its
effects "throughout 2001 and beyond."
Damage has been contained to the state's utilities, which are nearly broke,
and the state treasury, which S&P said is insulated from credit problems
because of its ample reserves and ability to borrow.
But S&P analysts said the combination of the energy crisis and a nationwide
economic slowdown could restrict the state's ability to deal with budgetary
issues that could come up if the economy continues to slow. Also, it could
strap the budgets of cities, counties and other local governments if the
state decides to cut payments to them.
"In addition to the overall economic slowing that is clearly evident
nationally, the utility crisis has hit California at a time when the
technology sector, the growth of which has played a significant role in the
state's economy over the past several years, is undergoing a significant
retraction," S&P warned.
As for Lynch, she challenged several popular assumptions as myths. First, she
said, deregulation failed on its own, not because politicians cut it short.
Second, she said, the PUC did not stop utilities from arranging long-term
contracts to buy electricity, as they have claimed.
And, the defense of the PUC's rate freeze in court is not a losing
proposition, she said.
"It is true that the utilities came to the commission and to me personally in
October and said 'End the rate freeze. We are hurting.'" Lynch said. "When we
looked at the request, it really did put us between a rock and a hard place,
and that's a rock and a hard place we remain in today.'"
But Lynch said if the PUC had lifted the rate freeze, "we would have, by
administrative fiat, plunged the rest of California into the price volatility
that San Diego experienced this summer."
As it is, the commission is studying the market value of the assets Southern
California Edison and PG&E were supposed to sell under the terms of
deregulation. Once the commission sets the market value, it can determine
whether the utilities are eligible to raise rates.
In other developments Wednesday:
Power generator Calpine Corp. announced two long-term electricity contracts
that will require energy-starved California to pay up to $8.3 billion to keep
the lights on in as many as 1.5 million homes.
With the latest agreements, San Jose-based Calpine has three separate
long-term electricity contracts with the state Department of Water Resources,
which is shopping for deals that will spread the soaring cost of power over
several years
Environmentalists urged Gov. Gray Davis to upgrade his proposal to obtain
development rights for scenic acreage owned by the state's beleaguered
utilities, saying the state should obtain the properties outright.
As part of a utility bailout package, the governor has recommended Edison and
PG&E turn over development rights to more than 88,000 acres, including scenic
parcels in the Sierra, and 26,000 miles of high voltage transmission lines,
among other considerations.
A Republican assemblyman attacked Davis for comments he made in Washington,
D.C., on Tuesday. The governor said the deals he is negotiating with utility
companies to buy their transmission lines would complete the legislative
fixes needed and "it means we are basically on the downside of the problem."
But Assemblyman Tony Strickland, R-Thousand Oaks, questioned whether there
would be enough power this summer or if federal regulators would approve the
state purchase of transmission lines.
"It's irresponsible to call this crisis nearly over," Strickland said. "There
are still way too many unknowns."
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Cal-ISO Says Suppliers Overcharged

Power: State report calls for a refund of $562 million above 'reasonable'
prices. Generators deny gouging.

By NANCY VOGEL and JENIFER WARREN, Times Staff Writers

?????SACRAMENTO--Wholesale electricity suppliers overcharged California's
utilities more than $500 million during December and January, an amount that
the federal government should demand be refunded, according to a
no-holds-barred state report released Thursday.
?????The report by the California Independent System Operator, which oversees
the flow of electricity in the state, said power suppliers charged $11
billion during those two months alone--more than they did for all of 1999.
?????Studying various market dynamics, the agency concluded that there was a
"prima facie case" that the unnamed generators and marketers had charged $562
million above "just and reasonable" prices, warranting further investigation
and federal hearings into the appropriateness of refunds.
?????The state report is the most accusatory of a number of studies
undertaken to determine why wholesale electricity prices have soared in
California since last summer, throwing the state's biggest utilities into
financial crisis and dashing hopes for lower consumer rates under
deregulation.
?????The study also provides new ammunition to members of California's
congressional delegation, who have unsuccessfully been pressing the Federal
Energy Regulatory Commission to impose price ceilings on wholesale
electricity costs.
?????Generators defended their operating practices and rejected the
allegation that they had raked in unfairly large profits in December and
January.
?????"We have played by the rules, acted ethically and legally in all our
operations," said Richard Wheatley, a spokesman for Houston-based Reliant
Energy, which owns power plants capable of supplying more than 3 million
homes. "We have nothing to hide."
?????Gary Ackerman, executive direcor of the Western Power Trading Forum,
said the Cal-ISO report does not account for less tangible factors that tend
to drive up prices, such as political and financial uncertainties.
?????"Those are the things my people take into account when deciding whether
to sell into California," said Ackerman. He noted that, in the second week of
December, a period analyzed in the Cal-ISO report, electricity prices were
higher in the Pacific Northwest than in California.
?????The report, he said, "provides some reasonable questions which will be
responded to by my members, under FERC authority."
?????Cal-ISO officials stressed Thursday that they are not accusing any
seller of inflating prices but are simply asking for federal action to
restrain costs.
?????"We have not seen prices come down to what we feel are justifiable
levels," said Anjali Sheffrin, director of market analysis for Cal-ISO.
?????Although federal energy commission officials on Thursday refused to
comment on the study, many experts predicted that refunds would not be
forthcoming.
?????Since July, when Gov. Gray Davis first asked the federal commission to
give San Diego Gas & Electric customers refunds for electricity costs that
doubled and in some cases tripled, the agency has refused to order power
sellers to give back some of their profits to California utilities and
consumers.
?????The commission, charged by Congress with assuring "just and reasonable"
wholesale electricity rates, has also resisted imposing firm price caps on
California's electricity market. In November, the commission called that
market "dysfunctional" and vulnerable to manipulation by power sellers, but
the agency has so far failed to document or punish specific cases of such
anti-competitive behavior.
?????"The real question is what is FERC going to do with all of this?" said
Gary Stern, chief of market analysis for Southern California Edison, once one
of the two biggest buyers of electricity in California. "Based on past
history, we think they're probably going to say they don't see wrongdoing
that provides a reason for refund."
?????Determining rebates could prove a logistical nightmare for federal
regulators and Cal-ISO, Stern said, but the data exist to show how much it
cost power plant owners to generate electricity and what price they charged.
?????Given that Edison and PG&E have defaulted on payments of hundreds of
millions to power sellers, Stern said, a rebate order wouldn't lead to
reimbursement for individual utility customers. Instead, it could help the
utilities eliminate some of their debt to generators and marketers.
?????Edison and PG&E have been pushed nearly to bankruptcy by high wholesale
costs, which they could not pass on to their customers because of a
state-imposed rate freeze.
?????Last week, Davis announced that Edison had agreed in principle to state
financial help in exchange for its transmission lines. Negotiations with PG&E
continue.
?????The Folsom-based Cal-ISO drew its conclusions after reviewing
electricity purchases made between Dec. 8, 2000, and Jan. 31, 2001.
?????To calculate the cost of producing electricity in those months, Cal-ISO
analysts assumed power plant owners were buying natural gas from the spot
market, where prices soared this winter, and were running old, inefficient
plants. They also assumed relatively high prices for air emission credits in
Southern California and added a 10% buffer to the operating costs.
?????Cal-ISO officials then compared these costs with the prices sellers were
paid. Their report did not name the individual sellers, which range from the
province of British Columbia to the publicly owned Los Angeles Department of
Water and Power to private companies.
?????Several lawmakers praised the report as long overdue.
?????"It's about time," said state Sen. Debra Bowen (D-Marina del Rey),
chairwoman of the Senate Energy Committee. She said that the desire among
some legislators to seize power plants and take other drastic actions stems
from the sense that "there's no one willing to enforce the provisions of the
federal power act regarding just and reasonable rates.
?????"The utilities are doing a great job looking out for their shareholders,
but who is looking out for ratepayers?" she asked.
?????Consumer advocacy groups applauded Cal-ISO's action and said the
agency's evidence of overcharges underscored the need for hard price caps or
a tax on generator profits.
?????"It's certainly not news to us that the generators are charging
excessive wholesale prices," said Mindy Spatt, spokeswoman for the Utility
Reform Network of San Francisco. "If there had been a real price cap, this
investigation would not be necessary."
?????California's congressional delegation has pushed hard in recent months
for legislation that would impose temporary price controls on wholesale power
supplies in the West. On Wednesday, a bipartisan team met with Curtis Hebert,
chairman of the Federal Energy Regulatory Commission, and came away
discouraged by Hebert's opposition to price caps.
?????The federal commission has imposed a so-called "soft cap" of $150 per
megawatt-hour in California's electricity market. When sellers ask a higher
price they must explain why it is necessary.
?????Within 60 days, the commission can launch a review of those bids that
could lead to refunds. So far, the federal panel has ordered none. On
Thursday, Cal-ISO asked the commission to extend the two-month deadline in
its examination of the purchases made during December and January.

* * *
?????Times staff writer Nancy Rivera Brooks in Los Angeles contributed to
this story.
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Power profits targeted: Generators urged to forgive some of utilities' debts
By Stuart Leavenworth and Dale Kasler
Bee Staff Writers
(Published March 2, 2001)
They are cocky and defiant, and unabashedly rich. Over the past year, the
companies that generate and trade much of California's electricity have made
multimillion-dollar profits off the state's power crunch.
Yet pressure is mounting for these power producers to return some of their
profits, or at least forgive some debts they are owed by the state's troubled
utilities:
A spokesman for Gov. Gray Davis said Thursday that at least two energy
companies have volunteered to forgive some debt, a development that could
give Davis leverage over other suppliers.
Also Thursday, the state's Independent System Operator declared that some
power merchants may have overcharged the state and utilities by as much as
$562 million in December and January. ISO officials asked federal regulators
to confirm their findings and seek refunds from the generators.
Several key lawmakers say any deal to rescue Pacific Gas and Electric Co. and
Southern California Edison must include debt forgiveness by generators and
other creditors.
"They have to get a haircut like anyone else," said state Sen. Debra Bowen,
the powerful chair of the Senate Energy Committee. "I'm not saying they have
to walk around like Jesse Ventura, but they can't continue to walk around
like Don King, either."
So far, most generators adamantly refuse to discuss debt forgiveness, saying
their electricity prices are reasonable.
Steven Kean, executive vice president of Enron Corp., said he didn't see "any
reason" to forgive any debts. A spokeswoman for Mirant Corp. said company
officials expect full payment.
Richard Wheatley, a spokesman for Reliant Energy Inc., said lawmakers urging
debt relief are engaged in wishful thinking.
"The more they discuss it, the more they hope it might turn into reality,"
said Wheatley, whose company is owed $300 million. "From our perspective,
it's not open to negotiation."
But Bowen and others say generators, bondholders and other utility creditors
have some good reasons to budge.
If Edison and PG&E go bankrupt, Bowen says, the generators might have to wait
years to get even partial payment. That's because they are unsecured
creditors -- meaning they don't hold any collateral to secure payment of
their debts.
"It is not very hard to figure out from a dollars and cents standpoint," said
Bowen, D-Marina Del Rey, who has been talking to some of the generators about
debt forgiveness. "If you are owed 100 bucks, would you rather get $90
several months from now, or would you rather take your chances with
bankruptcy attorneys and get $50 three years from now?"
Steve Maviglio, a spokesman for Davis, said the governor "has received a
couple of unsolicited offers" from generators willing to forgive debts as
part of a deal. Maviglio declined to name the companies, but said, "It is all
part of the ongoing negotiations."
The game of cat and mouse comes as Davis and lawmakers try to gain leverage
over five companies -- AES Corp., Duke Energy Corp., Dynegy Inc., Mirant and
Reliant -- that bought power plants from the California-based utilities in
the early days of the state's foray into deregulation.
Because of that divesture, much of California's power is controlled by
out-of-state generators and their trading subsidiaries, or by independent
brokers such as Enron, the country's biggest electricity marketer.
In recent months, at least five class-action lawsuits have accused these
companies of manipulating and inflating electricity prices, either by
intentionally shutting down plants or by buying natural gas cheaply and using
it to generate electricity sold at a several-hundred-percent markup.
On Thursday, the nonprofit corporation that manages most of the state's
electric grid revealed data that could support claims of price gouging.
In a filing with federal regulators, the Independent System Operator said the
wholesalers overcharged the ISO by $562 million for spot-market purchases in
December and January.
The ISO's findings are based on federal price caps that say any bids above a
certain level be justified in writing. The ISO calculated the suppliers'
costs, threw in a 10 percent profit margin -- and concluded that the
generators had sold scads of power at unreasonable prices.
The state's grid managers want the Federal Energy Regulatory Commission to
seek refunds from the generators if regulators confirm that overcharging took
place. But some doubt the FERC will act, given its past reluctance to set
price controls or interfere in California's energy markets.
"I don't think they have a whole lot of chance with FERC," said Severin
Borenstein, director of the University of California Energy Institute.
Federal officials, he said, "are likely to bend over backward to excuse the
prices."
Wholesalers also doubted the ISO report would lead anywhere, saying it left
out significant, legitimate costs of selling electricity to California.
Suppliers had the right to charge a "credit premium" as the risks of
nonpayment began rising, said Gary Ackerman of the Western Power Trading
Forum. Not only did the ISO become an uncreditworthy buyer -- because it got
its money from Edison and PG&E -- but the whole political climate in
California added to the wholesalers' risks, Ackerman said.
Whether or not the ISO filing prompts action from federal regulators, it
could help lawmakers pressure the generators.
State Sen. Joe Dunn, D-Santa Ana, said he wants to sort out how much of the
debts piled up by PG&E and Edison since last summer were the result of
electricity prices that could be deemed "unjust and unreasonable" under
federal and state laws.
"Since every regulatory body has concluded those costs were unjust and
unreasonable, a portion, if not a very significant part of that past debt
ought to be forgiven," Dunn said.
Some analysts say state leaders can't push the generators too far, since they
depend on energy companies to build new power plants -- a supply boost that
theoretically would lower energy prices.
Dunn acknowledges that is a concern, but says the Legislature also can't
afford to ignore charges that generators have gouged utilities and
ratepayers.
"That is the game of chicken we are in now," Dunn said. "And up to this
point, it is only the state that has blinked."
The issue of debt forgiveness could become moot if Davis can't strike a deal
with PG&E and San Diego Gas & Electric to buy their transmission systems.
Last week, Davis announced a tentative agreement to acquire Edison's power
lines for $2.7 billion and is reportedly close to coming to terms with SDG&E.
But PG&E has so far rejected the governor's overtures, and on Thursday it
added to a litany of financial woes. The San Francisco-based company
defaulted on another $1.21 billion worth of payments to electricity
suppliers. It did, however, make partial payments totaling $228 million to
the ISO, which bought power from the wholesalers on the utility's behalf, and
to a group of cogenerators and alternative energy providers.
If talks with the state break down, one of PG&E's alternatives would be
bankruptcy court, where a judge would determine how its assets would be
divided among creditors. An alternative scenario has one or all of the
generators going to court to force PG&E into bankruptcy, but Bowen, for one,
is doubtful that will happen anytime soon.
"If they (the generators) thought they would come out better in a bankruptcy,
we would be there already," said Bowen, whose committee would have to approve
any rescue plan for the utilities.
"So that means they have to give. Everyone has to give."
Emily Bazar of The Bee Capitol Bureau contributed to this report.

Thursday's developments
A Davis spokesman says the governor has received "unsolicited offers" from
some generators willing to forgive debts but declines to name them.
In a filing with federal regulators, the Independent System Operator says
some wholesalers overcharged the ISO by $562 million for spot-market
purchases in December and January.
Pacific Gas and Electric Co. pays 16 percent of a $1.44 billion bill to
wholesale power suppliers, defaulting on $1.21 billion of the debt but paying
$228 million.
State declares Stage 2 alert but downgrades it to a "warning" at mid-morning.
Calpine Corp. becomes the latest wholesaler to sign long-term supply
contracts with the Department of Water Resources, agreeing to two deals
totaling $8.3 billion -- a 10-year contract for $5.2 billion and a 20-year
contract for $3.1 billion. Last month, Calpine signed a deal worth $4.6
billion.

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Friday, March 2, 2001

By Rick Stouffer
rstouffer@ftenergy.com

"(No state is an island, entire of itself; every state is a piece of the
continent, a part of the main(" -John Donne

California Gov. Gray Davis has seemingly hit on a plan that he thinks will
solve his state's energy problems:
Acquire some 32,000 miles of transmission lines for between $8 billion and
$10 billion to keep the bankruptcy wolf away from the state's three
investor-owned utilities.

Create a public power authority to buy, build and operate power plants,
financed with up to $5 billion in state bonds.

Not raise customer rates to pay for at least $10 billion in bonds used to pay
for power.
Sounds great, doesn't it? Something for everyone*no more pain*sounds
suspiciously like California's original deregulation plan*itself a misnomer;
California wasn't deregulated, it was restructured.

Energy 'island' won't work
But Davis's efforts to, in effect, create the electrical island of California
will not work, many say. The governor's control of transmission doesn't solve
the immediate demand-supply conundrum.

And creation of the fancy-sounding California Consumer Power and Conservation
Financing Authority to buy, build and operate power plants could drive
private developers out of the Golden State*who wants to compete against the
ultimate government-subsidized entity?

"Davis is, in effect, nationalizing the power industry in California," said
Jonathan Gottlieb, a partner in Washington, D.C., law firm Baker & McKenzie's
North American Utility and Energy Products Group. "Command and control
economies have been collapsing around the world*except in California."

The problems with the California power industry are numerous and beaten to
death by the media. It appears everything went wrong that could go wrong*all
at once*Murphy's Law in the absurd.

Just as numerous as the problems, are the number of entities which can be
fingered as having a hand in the debacle.

All that said, Gov. Davis feels he has the magic bullet which will make
everything right: take over much of the system, force those
out-of-state-based generators to act "responsibly," bail out the incumbent
utilities and not raise customer rates.

But has anyone looked longer term than the next few months concerning the
consequences of Davis' moves? Anyone stop to think what happens if and when
the state does take control?

Who runs the state-owned system?
"With the transmission-lines buy, you have a mechanism which gives the
utilities cash to pay off the debt incurred in buying wholesale power," said
Craig Pirrong, a commodity markets expert and professor in the Olin School of
Business at Washington University in St. Louis.

"But now there are operational questions," Pirrong continued. "Is the state
the most efficient entity to operate and maintain the wires system?"

Good question. "You have to find someone to run the system once you take it
over," said William Hogan, a professor in Harvard University's John F.
Kennedy School of Government. "So you either contract or hire utility
employees."

There is precedent, obviously, for government-owned and operated utilities.
In the United States, more than 2,000 municipals operate today, while
internationally a number of state-run utilities are in operation, for example
Electricit, de France. But government ownership of utilities appears to be on
the way out across the world, the experts say.

"Look what's happening worldwide," said Adrian Moore, executive director of
the Los Angeles-based free market think tank Reason Public Policy Institute.
"Over the last seven or eight years, billions of dollars worth of utility
privatizations have taken place. Germany and Italy, for example, are selling
off huge tranches of their national utilities."

Municipal utilities tout their lower costs per customer, but those figures
are deceptive, some industry watchers believe.

"There are a lot of tax advantages and hidden subsidies in municipal
utilities that mask the real cost," said economist Murray Weidenbaum, scholar
in residence at the Jones Graduate School of Management at Rice University in
Houston, Texas, and the former first chairman of President Reagan's Council
of Economic Advisers. "If you move to a state-run utility, you can almost
guarantee costs will go up over time," Moore said.

Politics taking precedence
With state control of California's transmission lines, many experts see
politics taking precedence over economics*or need*when decisions are made
concerning where to build new lines.

"You can see gamesmanship and lobbying taking precedence, moving away from
economic drivers toward political drivers," Washington University's Pirrong
said.

On the generation side, many of the same problems associated with assuming
command of the wires could occur.

Generators including Mirant Corp. and Duke Energy already publicly expressed
concerns with the wires acquisition; specifically, will they be shut out of
access to get their power to market?

"I can see politically that they've got to get something out of this to sell
the plan to consumers, but we need to make sure we aren't discriminated
against," Mirant President Marce Fuller said during the recent Cambridge
Energy Research Associates energy conference in Houston.

Discrimination against incumbents could occur, but what about bias against
potential generators? With the establishment of the Consumer Power and
Conservation Financing Board, what private company would want to bid against
the sixth largest economy in the world?

"With the government involved, companies would be reluctant to build new
plants without a government contract, because the government is subsidizing
construction," said Harvard's Hogan.

"Where's the state's comparative advantage in building new plants?"
Washington University's Pirrong asked.

FERC must weigh-in
There is another major player in California's ascension to wires
owner-operator: the Federal Energy Regulatory Commission (FERC). The Federal
Power Act puts FERC right in the middle of the California takeover, said
Baker & McKenzie's Gottlieb.

"FERC Chairman Curtis Hebert has used the word 'nationalization' publicly to
describe what California is proposing, and has said he has definite concerns
about the proposal," Gottlieb said. "I don't think FERC can say no to the
California takeover, but they could weigh it down with conditions."

One of those conditions may be a trade-off: FERC will approve California's
takeover of transmission wires, in exchange for the state giving control of
the lines to multi-state regional transmission organizations.

A 'quick' fix could take months
No one, including Davis, sees this plan happening quickly. In a presentation
Wednesday to analysts in New York, the governor admitted it would take up to
four more weeks to reach agreement with PG&E Corp./Pacific Gas & Electric Co.
for its wires. He also admitted he cannot win enough Republicans to pass the
bill with the two-thirds majority needed for immediate implementation. Bills
in California passed with a simple majority must wait 90 days before going
into effect.

Thus, the entire process may not be over for at least another six weeks, and
even then the Davis plan could face a ballot initiative. But for the sake of
argument, assume Gov. Davis gets his way and takes control of the
investor-owned utilities' wires and begins building and buying plants. Where
does such a massive undertaking leave the Golden State in three to five
years?

"All things add up to a pretty grim situation," said the Reason Public Policy
Institute's Moore. "Five years from now just because the state is purchasing
power, we will have prices higher than the U.S. average. That will be
exacerbated by the state owning the wires and building the plants."

"I'm very dubious; the government-run utility in the long-run will be very
expensive," Harvard's Hogan concurred.

Baker & McKenzie's Gottlieb sees the California screen test as providing the
impetus for a huge infrastructure build-out nationwide. One recent survey
found that some $20 billion in plant financings within the United States are
projected for just the first three months of 2001*compared to $24 billion for
all of 1999.

A textbook case
According to economist Weidenbaum, the California energy debacle answers the
question "does the government deregulate as badly as it regulates," with a
huge exclamation point.

"California is a textbook dramatization of the shortcomings of government
involvement with business," Weidenbaum said. "You now have Chapter Two in
that book; we already have Chapter One."

The English poet Donne said: "And therefore never send to know for whom the
bell tolls; it tolls for thee."

In California, that "bell" is clanging.
------------------------------------------------------------------------------
--------------------------------------

Ex-Regulator Urges Temporary Federal Price Caps on Power

Carolyn Lochhead, Chronicle Washington Bureau
?
Friday,?March 2, 2001

Washington -- Federal energy regulators should intervene more forcefully in
California's energy crisis, a former Reagan-appointed regulator said
yesterday,
while other experts feared the financial effects could balloon into another
savings-and-loan bailout disaster.
Independent regulatory experts speaking at a high-profile panel on the energy
crunch also said Gov. Gray Davis may be whistling in the dark in his
assurances that the power crisis will be largely resolved by summer.
"I think there is a fairly compelling argument that something needs to be
done," said Elizabeth Moler, appointed to the Federal Energy Regulatory
Commission by President Ronald Reagan and named chairwoman by President Bill
Clinton.
Moler, speaking to the Brookings Institution and the American Enterprise
Institute Joint Center for Regulatory Studies, said some form of temporary
federal intervention on wholesale prices is needed, so long as it does not
discourage investment in new generation capacity.
Davis and Sen. Dianne Feinstein, D-Calif., have urged federal regulators to
impose temporary price controls to give the state breathing room.
The chairman of the Federal Energy Regulatory Commission, Curt Hebert, is
strongly opposed to price caps, saying they would discourage investment and
delay resolution of the crisis. California needs to lift the electricity rate
freeze on consumers to encourage conservation and restore the finances of the
bankrupt investor-owned utilities, Hebert has argued.
But Moler faulted federal regulators and the California Public Utilities
Commission, both of which oversaw the state's deregulation plan, for allowing
the problem to fester.
"The signs were there in June that something needed to happen," Moler said,
noting that electricity deregulation is complex and always needs adjustments.
"I'd like to think I would have been reading the market monitoring reports, "
Moler said. "I'd like to think I would have been on the airplane to San
Francisco every other week, and on the other weeks, the CPUC would have been
on a plane to Washington."
Moler also faulted state PUC members for blaming the crisis on their
predecessors. "I'm pretty amazed the CPUC is still blaming Dan Fessler," the
former chairman, Moler said. "He's been gone for three years."
Moler noted that the state's plan to take over the utilities' transmission
lines needs federal regulatory approval, which Hebert indicated he opposes,
comparing the move to "nationalization."
Davis' assertions this week to Washington policymakers and Wall Street
analysts that he has the crisis under control were also viewed dubiously.
Noting that peak California power demand will rise to 45,000 megawatts in the
summer from 30,000 in the winter, Robert Litan, director of the Joint Center
for Regulatory Studies, said, "You do your own math. If you think the problem
is bad now, you ain't seen nothing yet."
Litan said the state's partial electricity deregulation was a giant gamble
that freed wholesale prices would stay below fixed retail prices, but the bet
went bad and now state taxpayers are paying the cost.
"I used to study S&Ls, and what California is doing sounds a lot like what
the federal government did for 10 years, which was pray and hope that the
problem goes away," he said.
California is paying roughly $1.5 billion a month for electricity while state
officials try to craft a long-term solution.
Paul Joskow, director of the Center for Energy and Environmental Policy
Research at the Massachusetts Institute of Technology, said state and federal
policymakers must devise a long-term blueprint that encourages investment in
new generation and offers price stability to consumers.
"I haven't seen any long-term plan yet for where they are going in
California," Joskow said. ". . . I think the governor owes that to the
citizens of California, because now we're going from week to week, and you
know as well as I do what it's going to be six months from now."
E-mail Carolyn Lochhead at clochhead@sfchronicle.com.

?
? Printer-friendly version
? Email this article to a friend

02/16/2001 - California governor proposes state power line purchase .
02/09/2001 - Removal of Rate Caps Urged.
02/08/2001 - Developments in California's power crisis .
02/04/2001 - Davis Neglected Key Strategy In Power Crisis.
>>more related articles...

------------------------------------------------------------------------------
------------------------------------------

NEWS
PG&E to Pay Creditors Only 15% / Smaller suppliers outraged over plan
David Lazarus

03/02/2001
The San Francisco Chronicle
FINAL
Page A1
(Copyright 2001)
Pacific Gas and Electric Co. said yesterday it would pay only about 15 cents
on the dollar for its outstanding power bills, sparking outrage among smaller
creditors, who accused the utility of driving them out of business.
In a filing to securities regulators, PG&E revealed it would pay just $228
million of about $1.4billion due for recent electricity purchases.
"How would you feel if your boss gave you just 15 percent of your paycheck
and said he'll get back to you for the rest?" asked Bob Judd, director of the
California Biomass Energy Alliance, representing operators of 28 wood-fired
plants statewide.
PG&E's filing marks a turning point in California 's energy crisis. It is now
possible that not only will the state's largest utility go under, but it
could take a number of power generators with it.
PG&E, now in talks with the governor on a possible financial bailout, is
telling creditors to be thankful for whatever they get. If the utility
declares bankruptcy, all parties know, many creditors may receive nothing.
Still, time is running out for Ridgewood Power, a New Jersey company with 14
plants in California . It already has had to shut down three facilities in
PG&E's service area because it can no longer afford to keep them running.
'NOWHERE NEAR'
"The amount of money PG&E is giving us is nowhere near what we need to pay
our natural gas suppliers," said Martin Quinn, Ridgewood's chief operating
officer. "We could restart the plants tomorrow if we could be released from
our PG&E contracts and sell to another buyer."
He added that his company would ask federal regulators to nullify its
contracts with PG&E so Ridgewood could bid for alternative power contracts
being offered by California state officials.
PG&E's larger creditors reacted more cautiously to word that the utility
would pay only a fraction of its outstanding bills.
"We have to study the consequences and see," said Richard Wheatley, a
spokesman for Houston's Reliant Energy, which formed a creditors' committee
last month with other leading electricity providers. "We don't know how much
of the money we'll get."
Reliant and other major creditors are grappling with how much leeway to grant
PG&E on its unpaid bills before deciding to cut their losses and push the
cash-strapped utility into bankruptcy.
'VERY CONCERNED'
"We are very concerned about the credit issue," said Steve Stengel, a
spokesman for Houston's Dynegy Inc., another member of the creditors'
committee. "But we are still interested in finding a comprehensive solution
to California 's energy situation."
That may depend on the outcome of current talks Gov. Gray Davis is holding
with PG&E and Southern California Edison to purchase the utilities'
transmission lines as part of a multibillion-dollar bailout package.
PG&E and Edison are saddled with nearly $13 billion in debt as a result of
ill-conceived efforts to deregulate the state's electricity market.
The announcement of partial payments was not a complete surprise to PG&E's
creditors. The utility's chief financial officer, Kent Harvey, told investors
in a conference call last month that PG&E would prefer to "make partial
payments than no payments at all."
PG&E has defaulted on more than $730 million in short-term debt payments
since January amid growing concerns that the utility will file for bankruptcy
protection.
In response, three California counties have formed their own creditors'
committee to recoup investments in PG&E's short-term debt, also known as
commercial paper.
The three -- Santa Cruz, Riverside and Siskiyou counties -- are inviting
other public agencies to join forces in seeking compensation from PG&E for
the defaulted payments.
The prospect of PG&E filing for bankruptcy has diminished somewhat in recent
weeks as Davis and Sacramento lawmakers scrambled to come up with proposals
to rescue California 's utilities from financial ruin.
Although Edison has said it is prepared to sell its power lines to the state
for nearly $3 billion, PG&E so far has refused to follow suit.
However, as The Chronicle reported yesterday, the utility retained outside
counsel this week to offer advice on a possible sale of its power lines,
increasing the likelihood that a deal may be in the works.
SUITS ALLEGE MISMANAGEMENT
Separately, PG&E said yesterday it had been hit with a pair of lawsuits
seeking almost $3 billion in restitution for financial mismanagement.
One suit charges the utility's parent company, PG&E Corp., with violating its
fiduciary duties by forcing the utility to repurchase shares from the
corporation for $2.3 billion.
The other alleges that PG&E Corp. collected nearly $3 billion from the
utility under a tax-sharing arrangement but paid only $2.3 billion to the
government.
The lawsuits were filed in San Francisco Superior Court by Richard D. Wilson.
No other information about the plaintiff was immediately available.
------------------------------------------------------------------
----------- Refund RequestedElectricity generators overcharged the state by
more than a half-billion dollars in two months and should be forced to return
the money, power officials said yesterday.
The California Independent System Operator said in a filing with the Federal
Energy Regulatory Commission that generators appeared to have charged $555
million more than what was reasonable.
It was unclear how any refunds might be passed on to consumers. About
two-thirds of all power purchases in the spot market were over price caps
established by FERC, said Eric Hildebrandt, an ISO manager of market
monitoring. The cap was $250 per megawatt hour in December and $150 per
megawatt hour in January.
The ISO is requesting that FERC order a refund for "excessive" costs.
Source: Chronicle Sacramento Bureau

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved.


This is pretty much an all-out attack against the positions that we and the
generators have taken.
----- Forwarded by Susan J Mara/NA/Enron on 11/21/2000 07:43 AM -----

	"Julee Malinowski-Ball" <jmball@ns.net>
	11/20/2000 01:38 PM
	Please respond to "Julee Malinowski-Ball"

		 To: "William Hall" <wfhall2@duke-energy.com>, "Trond Aschehoug"
<taschehoug@thermoecotek.com>, "Tony Wetzel" <twetzel@thermoecotek.com>,
"Tandy McMannes" <mcmannes@aol.com>, "Sue Mara" <smara@enron.com>, "Steven
Kelley" <steven@iepa.com>, "Steve Ponder" <steve_ponder@fpl.com>, "Roger
Pelote" <roger.pelote@williams.com>, "Robert Lamkin"
<rllamkin@seiworldwide.com>, "Paula Soos" <paula_soos@ogden-energy.com>,
"Marty McFadden" <marty_mcfadden@ogden-energy.com>, "Lynn Lednicky"
<lale@dynegy.com>, "Kent Fickett" <kfickett@usgen.com>, "Ken Hoffman"
<khoffman@caithnessenergy.com>, "Jonathan Weisgall" <jweisgall@aol.com>,
"John Stout" <john_h_stout@reliantenergy.com>, "Joe Ronan"
<joer@calpine.com>, "Joe Greco" <joe.greco@uaecorp.com>, "Jim Willey"
<elliottsa@earthlink.net>, "Jack Pigott" <jackp@calpine.com>, <iep@iepa.com>,
"Hap Boyd" <rboyd@enron.com>, "Greg Blue" <gtbl@dynegy.com>, "Frank DeRosa"
<fderosa@sanfrancisco.usgen.com>, "Ed Tomeo" <ed.tomeo@uaecorp.com>, "Duane
Nelson" <dnelsen@msn.com>, "Dean Gosselin" <dean_gosselin@fpl.com>, "David
Parquet" <dparque@ect.enron.com>, "David Keane" <dnke@dynegy.com>, "Curtis
Kebler" <curtis_l_kebler@reliantenergy.com>, "Carolyn Baker"
<cabaker@duke-energy.com>, "Bob Escalante" <rescalante@riobravo-gm.com>, "Bob
Ellery" <bellery@spi-ind.com>, "Bill Woods" <billw@calpine.com>, "Bill
Carlson" <william_carlson@wastemanagement.com>, "Stephanie Newell"
<stephanie-newell@reliantenergy.com>, "Richard Hyde"
<rwhyde@duke-energy.com>, "Kassandra Gough" <kgough@calpine.com>
		 cc: "Susan McCabe" <sfmccabe@mindspring.com>, "Scott Govenar"
<sgovenar@govadv.com>, "Ron Tom" <thackbarth@govadv.com>, "Robert Ross"
<robbiz@cwo.com>, "Phil Isenberg" <Isenberg@HMOT.com>, "Mike Monagan"
<mrmonagan@aol.com>, "Maureen OHaren" <Oharen@HMOT.com>, "Marie Moretti"
<marie_moretti@msn.com>, "Kassandra Gough" <kgough@calpine.com>, "Hedy
Govenar" <hgovenar@acom2.com>, "Delany Hunter" <dhunter@smithandkempton.com>,
"Bev Hansen" <bhansen@lhom.com>, "Anne Kelly" <kelly@hnks.com>, "Jenn
Paulsen" <paulsen@hmot.com>, "Jamie Parker" <jparker@hmot.com>
		 Subject: Peace Press Conference Notes

Senator Steve Peace held a press conference today to discuss, as chair of
the Senate Budget Committee, the Senate Budget proposal with contain $2
billion for a special reserve for energy initiatives.

He stated that he is not proposing any uses for this money, that it is
designed to &preserve the options for the Governor8 and other policy makers
in dealing with California,s energy woes.  However, he proceeded to outline
some possible options, including the state taking over the transmission
system, condemning power plants and the state running them, condemning just
the output of the states power plants, or having the state build power
plants.  Again, he is not proposing these, they are just options for the
Governor.

Other comments of interest:

- Generators are only willing to build power plants if they can get 14 cents
kw/hr.  If that,s the case, the state can build them for cheaper.

- He noted that today the CEC will release some data that calls into
questions there is a supply problem.  Independent energy producers have
&fabricated the supply problem.8

- Criticized generators for pushing for retail solutions, saying that
&nothing would be more disastrous than opening the retail market before the
wholesale market is controlled.8

- &Generators are extorting the law8 and &running roughshod over California,
s environmental law8 in a &well-orchestrated political agenda.8

- Generators are in a &full-scale attack on the balance sheets8 of the
investor-owned utilities.

- He also said that the IOUs have indicated that they would be willing to
get back into the generation business if the state finances it.

- Generators are asking FERC to keep prices artificially high.

- He still insists that rates are outright market manipulation, and that
generators were holding back thousands of megawatts of power this summer.
Cites today,s higher prices as an example.

Please contact me or our office if you would like a copy of the press
release or the other supporting materials, including his letter to Lynch
that urges the CPUC to deny the IOUs cost pass-through request, and asks the
CPUC to order the IOUs &to exhaust their legal remedies to obtain refunds
from all parties who were the beneficiaries of the proceeds of the unlawful
wholesale charges the IOUs incurred.8

--end--

Julee Malinowski-Ball
Associate
Edson+Modisette
916-552-7070
Fax- 552-7075
jmball@ns.net


test

Regards,
Megan

Aspen Technology, Inc.
Eldridge Green
1293 Eldridge Parkway
Houston, Texas 77077
Tel: (281) 584-5492
Fax: (281) 584-4329
megan.la@aspentech.com
www.aspentech.com


cassie would be fun to hang out with.  i don't know if you want to invite her
pal though.  i am sure bryan doesnt'


How was NY?


This is to confirm  the meeting will take place on Friday, January 21 at
12:00 - 5:00p,  at the DoubleTree Hotel, 400 Dallas Street.
The meeting room is Suite 407.

Those in attendance:

 Rick Buy
 Ted Murphy
 Rick Carson
 Vince Kaminski
 Dave Gorte
 Kevin Kindall
 Grant Masson

Lunch will begin at 12:00 noon and a snack will be served at 2:30p.

Please give me a call with questions at x31881.


Although I did not graduate from U of H, I would be happy to assist you with
any recruiting efforts.
---------------------- Forwarded by Gretchen Jennings/OTS/Enron on 08/09/2000
04:05 AM ---------------------------

Laura Wilkinson
08/08/2000 07:26 AM
To: Gretchen Jennings/OTS/Enron@Enron
cc:

Subject: Re: U of H grads

Gretchen, I am sure Rod will need your help with this college recruiting
effort (even if you did not go to that @!## school, just kidding).

---------------------- Forwarded by Laura Wilkinson/OTS/Enron on 08/08/2000
07:21 AM ---------------------------

Rod Hayslett

08/08/2000 06:40 AM
To: Dave Schafer/OTS/Enron@ENRON
cc: Kristin Passmore/OTS/Enron@Enron, Laura Wilkinson/OTS/Enron@Enron,
Estalee Russi/HR/Corp/Enron@ENRON

Subject: Re: U of H grads

Thanks.     I will be contacting them over the next few weeks while we are
starting to set up next years program.

Dave Schafer
08/07/2000 03:31 PM
To: Rod Hayslett/FGT/Enron@ENRON
cc: Kristin Passmore/OTS/Enron@Enron, Laura Wilkinson/OTS/Enron@Enron,
Estalee Russi/HR/Corp/Enron@ENRON

Subject: U of H grads

Rod,
 Per your request this morning, it turns out you can't swing a dead cougar
around here in GPG HR without hitting a U of H grad!
 Kristin Passmore, an HR Assistant whom you may not have met yet, as well as
Estalee and Laura all are University of Houston graduates in good standing.
(Well, Laura barely is in good standing, but I'll let her be the one to tell
you all about that.)  In addition, Miranda Southard, a student learner in our
department, will be a senior this Fall at U of H.
 Each of these good people has expressed an interest in helping you with any
recruiting efforts directed at U of H alumni.

  d.s.


fyi
---------------------- Forwarded by Randall L Gay/HOU/ECT on 02/07/2000 02:58
PM ---------------------------

Jay Reitmeyer
02/07/2000 01:45 PM
To: Isabel Y Resendez/HOU/ECT@ECT
cc: Randall L Gay/HOU/ECT@ECT, William Kelly/HOU/ECT
Subject: APEA Payment

Please pay American Public Energy Agency $228,203.99 for shortages recorded
from May 1999 through November 1999.  This includes:

 July 1999 Force Majeure      $57,000.00
 November 1999 Force Majeure  $86,400.00

 May 1999 Shortage   $ 3,360.00
 June 1999 Shortage   $79,717.91
 July 1999 Shortage   $ 1,726.08

They are requesting payment by Tuesday, February 8, 2000.

Thanks for your help on this matter.

Jay Reitmeyer


Daren:
 Here is a list of potential deals for this November:

 Brigham Oil and Gas,  Lopez Mineral Trust #2, Meter 9865 ,  6000 Mcfd.

 Phoenix Gas Pipeline, Phoenix Taylor #1, Meter Unknown, 3000 Mcfd

 Pressler Petroleum, Pressler Stoval #2, Meter 6821, 300-400 Mcfd

 Superior Natural Gas, Walter Hamilton #1, Meter Unknown, 3500 Mcfd

 These numbers are not included in Vance's nomination.

 Let me know if you need any additional information.

 Thank You,
  Susan Smith
  x 33321


Mary Hain has resigned her position with Enron.  Please remove her from all
your mail lists.

Thank you.

Lysa Akin
Gov't Affairs - Sr. Admin. Ass't.

Charles Yeung
03/23/2001 06:24 AM
To: Cara Semperger/PDX/ECT@ECT
cc: Mary Hain/HOU/ECT@ECT, James D Steffes/NA/Enron@Enron
Subject: Re: Electronic Scheduling

The individual RTOs have the upper hand as far as dictating what the
scheduling practices will be.  This is driven by the fact that the RTO
efforts have focused on the scheduling needs internal to their borders.   The
problem the Electronic Scheduling Collaborative (ESC) faces is trying to
define standard business practices for OASIS II now - after most RTOs have
taken great steps to defining their own internal scheduling practices.   In
the West, there is a coordination effort to address the seams between the 3
RTOs (there are some in theEast as well).

FERC required in Order 2000, under Function 8, for RTOs to address seams
issues.   At the ESC workshop last week, several RTOs admitted that Function
8 is lowest on their list of priorities.  Several, includig a rep from the
West admitted that the real hard seams issues, those that cannot be patched,
will likely need FERC involvement to "force" a compromise or settlement.
The problem is that FERC is taking a light handed approach to the seams
problems with acting Chairman Hebert opting to rely on the RTOs themselves to
address the seams issues.   Our argument, of course, is that these are the
entities that have the least incentive to patch the seams.

So, by August, the ESC intends to file at FERC the disposition of 26
scheduling practices - whether there is a single standard for each practice,
or exactly which ones cannot be agreed upon to be standard (e.g. - losses,
ramp rates).  My supsicion is that there will be very little commonality (
for example - I am leading a group defining Congestion Management practices
that will likely find very little common practice due to the diversity of
congestion management approaches in the East) and that the filing will merely
point out that several scheduling practices need to remain inconsistent at
the borders -for reliability reasons internal to each RTO.   The threat to us
is that in order to schedule between RTOs, it may require some "lowest common
denominator" approach that burdens one market with the ineffeciencies of
another.

If there are any pressing scheduling inconsistencies you see coming that will
impede markets in the West due to the formation of RTOs, please express those
to me as I am a bit removed from the activities of the West.  Enron is party
to a petition for FERC to hold a technical conference on seams issues to
highlight the importance to the marketplace to patch the seams.  I do intend
to continue representing Enron at the ESC and hopefully with some additional
FERC initiatives, put in place as many common scheduling practices as
possible.

Cara Semperger
03/22/2001 02:55 PM
To: Charles Yeung/HOU/ECT@ECT
cc:
Subject: Electronic Scheduling

Hi Charles,

I was going over the NERC meeting minutes and noticed that you were in
attendance at the meeting.  I would appreciate it if you would tell me your
opinion about the process, your views on the Escheduling practice as it is
shaping up, and if you plan to stay involved in the ESC meetings. You are
welcome to call or e-mail me at your convenience.

Thank you,

Cara Semperger
West Power Scheduling Supervisor
503/464-3814


Can you get me his undergrad grades.


couple things.   i was wondering ... did  wildhorse declare unprofitability?

and scott suggested that instead of telling them that we will be considering
laying our own gathering system, [don't tell them now what we may do],
instead of telling them that, to tell them that we will need to quickly
evaluate other alternatives in getting our gas to the plant.  that we will
need to do this quickly, because of the long lead times needed.

joan

---------------------- Forwarded by Joan Quick/HOU/ECT on 07/28/2000 09:47 AM
---------------------------
From: Joan Quick on 07/28/2000 09:39 AM
To: Gerald Nemec/HOU/ECT@ECT
cc:
Subject: Re: Wildhorse Letter

i guess this looks good to me.  you do ask for a response by aug 1st, which
means that they will get this on monday, and have 24 hrs to turn it around.
didn't know if that's what you wanted.

i found something small for you to change up.

To: Dan J Bump/DEN/ECT@Enron, Joan Quick/HOU/ECT@ECT, Scott
Josey/Corp/Enron@ENRON
cc: Brian Redmond/HOU/ECT@ECT, Barbara Gray
Subject: Wildhorse Letter

Attached is the latest version of the Wildhorse Entrada Letter.  Please
review.  I reviewed the letter with Jim Osborne and Ken Krisa yesterday and
should get their comments today.  My plan is to Fedex to Midland for Ken's
signature tomorrow morning and from there it will got to Wildhorse.


Here is a revised version of the Red Rock agreement which includes changes suggested by Jeff.  If you've already sent the previous version to shippers, that is perfectly fine, as Jeff's changes should be noncontroversial.  We've just removed the reference to the service request as service requests will be submitted along with each shipper's bid rather than executed simultaneously with the agreement.  This new version more accurately reflects the contracting process for this expansion.


we do not get deal tickets from the desk for transportation on a regular
basis - very sporadic.
PL


i will try to get tomorrow.  if not, is another day okay?

Errol McLaughlin@ENRON
01/31/2001 07:46 AM
To: John Arnold/HOU/ECT@ECT
cc:
Subject: Sherry

John,

Could you do me a big favor.  Sherry has been really working hard and doing a
good job.  Do you think that you could talk with one of your contacts and get
her a pair of Rockets tickets.  I know they are a playing the Clippers
tommorrow night.   I know that no one else wants to see the Clippers, but
she's never been to a game and would really appreciate it.

Thanks,

Errol, X5-8274


You didn't answer me about driving tomorrow.
--------------------------
Sent from my BlackBerry Wireless Handheld (www.BlackBerry.net)


-----Original Message-----
From: 	William.Krenz@enron.com@ENRON
Sent:	Tuesday, November 20, 2001 3:25 PM
To:	Harris, Stephanie J
Subject:	SK-Enron SPA

Jim:  Im finalizing the SPA that will be going out to our shortlist of
final-round bidders in connection with the auction of our interest in
SK-Enron.  Currently, the definition of "Knowledge" as it relates to our
knowledge-qualified reps only includes the actual knowkedge of Jim Hughes
and Darrell Kinder.  For optical reasons, our bankers and corp. development
have suggested we broaden that group to include at least the actual
knowledge of the Enron-appointed directors of SK-Enron, which, of course,
would include you.  Although I realize you have not been intimately
involved with the goings-on at SK-Enron, Im checking if it would be ok with
you to be added to the list for the desired optics. Im happy to provide you
with the draft agreement (and the schedules once they are prepared) should
you desire.  Pls let me know.  Thanks.

Bill Krenz


The meeting is scheduled at 11:30 AM CDT. Same time as in the past.
EM


Louise,

Don and I spoke about this prior to the execution of the Highstar letter.  While we both feel that it is unlikely that we will be in "material negotiations" with a potential counterparty within the next 11 days (or so), we are prepared to notify AIG in the event that something comes very quickly.  Thanks.

Stuart

	Louise Kitchen 04/30/2001 10:29 AM 	   To: Don Miller/HOU/ECT, Stuart Zisman/HOU/ECT@ECT  cc:   Subject: Highstar Letter

You guys will need a strategy as to notifying AIG of other material negotiations.
---------------------- Forwarded by Louise Kitchen/HOU/ECT on 04/30/2001 10:28 AM ---------------------------
From:	Heather Kroll/ENRON@enronXgate on 04/27/2001 05:05 PM
To:	Steve Van Hooser/HOU/ECT@ECT, "Clark Thompson (E-mail)" <cthompson@bracepatt.com>@SMTP@enronXgate, "Jay Sonnenberg (E-mail)" <jsonnenberg@bracepatt.com>@SMTP@enronXgate, Stuart Zisman/HOU/ECT@ECT
cc:	W David Duran/HOU/ECT@ECT, Louise Kitchen/HOU/ECT@ECT, Don Miller/ENRON@enronXgate

Subject:	Highstar Letter

To all:

Attached below is the letter signed between ENA and Highstar.  In summary, we have acknowledged that we have been unable to finalize the existing transaction but are going to discuss a restructured deal.  ENA is free to begin marketing the plants to third parties, provided that we cannot enter into binding agreements before May 11, 2001.  Either party may terminate after May 11, 2001 for any reason or no reason.

Now on to final docs!

Regards,

Heather


Hey team!  Man have I been waiting for this day.

I have a meeting at 9:00 AM this morning.  It's a meeting with lawyers so it is very possible that it will go through lunch.  Don't wait for me if you can't get ahold of me.  I hope to be there cause I wanna see JEAN, the light of my life.  Scott--- HANDS OFF JACK!

Later


I called Bill Gaines of Puget to try to relax our credit constraints.  We just traded voicemails, but agreed to talk on Monday.  My general message, unless you have something to add or subtract, will be: "lots has gone on at both companies, makes sense to get together to meet your team to talk about gas and power - probably is more we can be doing together, etc. meeting in late Nov/early Dec".

Thoughts?

Chris