I couldn't agree more...Happy Holidays!

Sue

Paul Harvey writes:
We tried so hard to make things better for our kids
that we made them worse.
For my grandchildren, I'd like better. I'd really like
for them to know about hand me down clothes and
homemade ice cream and leftover meatloaf sandwiches. I
really would. I hope you learn humility by being
humiliated, and that you learn honesty by being
cheated. I hope you learn to make your own bed and mow
the lawn and wash the car. And I really hope nobody
gives you a brand new car when you are sixteen. It
will be good if at least one time you can see puppies
born and your old dog put to sleep. I hope you get a
black eye fighting for something you believe in, I
hope you have to share a bedroom with your younger
brother. And it's all right if you have to draw a line
down the middle of the room, but when he wants to
crawl under the covers with you because he's scared, I
hope you let him. When you want to see a movie and
your little brother wants to tag along, I hope you'll
let him. I hope you have to walk uphill to school with
your friends and that you live in a town where you can
do it safely. On rainy days when you have to catch a
ride, I hope you don't ask your driver to drop you two
blocks away so you won't be seen riding with someone
as uncool as your Mom. If you want a slingshot, I hope
your Dad teaches you how to make one instead of buying
one. I hope you learn to dig in the dirt and read
books. When you learn to use computers, I hope you
also learn to add and subtract in your head. I hope
you get teased by your friends when you have your
first crush on a girl, and when you talk back to your
mother that you learn what ivory soap tastes like.
May you skin your knee climbing a mountain, burn you
hand on a stove and stick your tongue on a frozen
flagpole. I don't care if you try a beer once, but I
hope you don't like it. And if a friend offers you
dope or a joint, I hope you realize he is not your
friend. I sure hope you make time to sit on a porch
with your Grandpa and go fishing with your Uncle. May
you feel sorrow at a funeral and joy during the
holidays. I hope your mother punishes you when you
throw a baseball through you neighbor's window and
that she hugs you and kisses you at Christmas time
when you give her a plaster mold of your hand. These
things I wish for you through tough times and
disappointment, hard work and happiness. To me, its
the only way to appreciate life. Send this to all of
your friends who mean the most to you. We secure our
friends not by accepting favors but by doing them.

__________________________________________________
Do You Yahoo!?
Get email at your own domain with Yahoo! Mail.
http://personal.mail.yahoo.com/


We should be watching this...
-----Original Message-----
From: IntercontinentalExchange [mailto:nyadmin@intcx.com]
Sent: Thursday, November 15, 2001 11:14 AM
To: Zipper, Andy
Subject: NEW WEATHER SWAPS ON THE INTERCONTINENTAL EXCHANGE

  <http://www.intcx.com/weather/images/header7.gif>
IntercontinentalExchange is pleased to announce that weather swaps trading will be included in its new version 8 release. These fixed-for-floating financial products will be cash settled on a five-day average temperature, Monday - Friday, for the current week and for the forward week. Temperatures used for the settlement of these products will be those reported by EarthSat, a widely recognized and independent source of weather data. Settlement temperatures provided by EarthSat will be available via the IntercontinentalExchange website. The hub locations for weather trades will be the primary airport weather stations at Chicago-O'Hare, Dallas-Fort Worth, New York-La Guardia, Philadelphia-International and Sacramento-Executive. The standard contract size for all locations will be $10,000 per degree Fahrenheit, with a tic increment of 0.1 degree Fahrenheit or $1,000. There are no payout limits on the contracts.
The design and development of these new weather products was done under the guidance of Aquila Energy Marketing Corp., a recognized leader in weather product concepts. In addition, IntercontinentalExchange has worked with Aquila and other major weather market participants, including Reliant Energy, Mirant Americas, and El Paso Merchant Energy, to build consensus and support for these new products.
To trade weather swaps you must have our new version 8 release installed on your system. An advisory with details about this new release is being sent to you by separate email.
We encourage all or our users to take a serious look at the new weather products being offered by the IntercontinentalExchange. Please contact one of our following representatives to find out about the new weather products, or check back on our website product guide:
Patricia Ricci : (646) 792-2624 : Patricia.Ricci@intcx.com <mailto:patricia.ricci@intcx.com>
Mike O'Neill : (646) 792-2626 : Michael.Oneill@intcx.com <mailto:michael.oneill@intcx.com>
Chris D'Ambrosio : (646) 792-2625 : chris.dambrosio@intcx.com <mailto:chris.dambrosio@intcx.com>


Just so you know we are expecting the coldest weather in 4-5 years to hit
Alberta this weekend and next week. Temps of -40 celcius are not out of the
question.

Chris


-----Original Message-----
From: 	Love, Phillip M.
Sent:	Thursday, January 31, 2002 10:17 AM
To:	Cheung, Cecilia
Cc:	Giron, Darron C.; Gossett, Jeffrey C.; McMichael Jr., Ed
Subject:	Book moves

Attached is the list of counterparties we need moved today.  The list has 140 counterparties on it.  Please let me know if you are not going to be able to move these today by 3:30.  Below is what we need done:
1.  Only financial deals with these counterparties
2.  Change the ENA book name from NG-Price to ENA-FT-WC-SJ
3. commodity code should be NG
4. cutoff date 1/1/02

Please shout if you have any questions.  Thanks.
PL


They need to go back to Div IAA.  There currently children in a man's world.


yes, indeed..

-----Original Message-----
From: Clyatt, Julie
Sent: Sunday, November 25, 2001 4:00 PM
To: Cash, Michelle
Subject: RE: Please update -

Thank you.

Did you have a nice trip?

Best Regards,
Julie Clyatt
(713) 853-3256

-----Original Message-----
From: Cash, Michelle
Sent: Sunday, November 25, 2001 3:52 PM
To: Clyatt, Julie
Subject: RE: Please update -

My info is correct.  Michelle

-----Original Message-----
From: Clyatt, Julie
Sent: Sunday, November 25, 2001 10:02 AM
To: Abshire, Kathy; Allex, Anne Marie; Alvarez, Irma; Anderson, Kristi; Argyriou, Carla; Arya, Sunjay; Avery, Ladonna; Barela, Rocio; Barnard, Marla; Berry, Lara; Blaylock, John; Brasseaux, Ben; Broadfoot, Mark; Broussard, Tharsilla; Brown, Ashley; Brown, Cole; Buck, Gary; Buckley, Karen; Burke, Todd; Cash, Michelle; Cashion, Tammy; Cashion, Tana; Chavira, Carmen; Christner, Shelly; Coats, Carol; Collins, James A.; Conn, Philip; Corteselli, Gina; Cox, Shirley; Cronin, Jennifer; Cruz, Magdelena; Curless, Amanda; Daffin, Margaret; Davies, Neil; Davis, Christopher; De Jesus, Frank; De La Paz, Janet; Delgado, Lydia; Dennison, Margaret; Dillehay, Leonard; Dillingham, Geynille; Divelbiss, Sasha; Duncan, Josh; Edwards, Erika; Engler, Adrianne; Evans, Carrie; Fincher, Wendy; Fitzpatrick, Amy; Foster, David; Funkhouser, Shanna; Fuqua, Linda; Galloway, Sonja; Gambill, Amy; Garcia, Grace; Garcia, Robert; Gomez, Javier; Gonzalez, Cynthia; Graham, Toni; Guerrero, Raquel; Hankamer, Cecilia; Hayes, Tracy; Herman, Ben; Hernandez, Iracema; Hickok, Kim; Hill, Dave (HR); Hill, Jo Ann; Hull, James; Iacobell, Don; Inglis, Elspeth; James, Theresia; Johnson, Debra S.; Joyner, Tamera; Kanouff, Erin; Keprta, Dovie; Kerr, Vanessa; Knudsen, Sheila A.; Kutach, Laura; Labbe, Anne; Lee, Gustavia; Lewis, Simone; Lorenz, Michael; Luong, Anjelica; Magee, Molly; Manning, MaryKay; Mathew, Jason; Mayes, Fran; McLoughlin, Hector; McMullan, David; McSherry, Brad; Melodick, Kim; Migliore, Todd; Napoli, Judey; Nolly, Qiana; Oquinn, Kari; O'rourke, Tim; Palmer, Johnny; Palmer, Lizzette; Parker, Courtnie; Parker, Gilda; Parra, Veronica; Patel, Tania; Peikert, Todd; Peng, Terry; Perez, Lisa; Perkins, Ramona; Phillips, Karen; Phillips, Ryan; Pierce, Shelly; Pina, Rafael; Pineda, Nicole; Presas, Gracie S.; Prihoda, Melissa; Quiller, Amanda; Quintana, Becky; Russi, Estalee; Ryan, Noel; Salas, Vangie; Seleznov, Ryan; Sharma, Pankaj; Simon, Cindy; Skinner, Cindy; Slone, Jeanie; Solis, Felicia; Stevens, Andria; Stone, Sandy; Storey, Eddie; Sweet, Twanda; Tamez, Elisa; Taormina, Jennifer; Taylor, Barbara; Taylor, Charles A - HR; Terrell, Margo; Tessandori, Bobbi; Trevino, Imelda D.; Trieschman, Paul; Vanwey, Debi; Vasut, Tony; Venkataramani, Sandhya; Verity, Jackie; Villarreal, Norma; Wachel, Jamie; Walker, Simone Scott; Walton, Sheila; Warren, Davette; Weatherford, April; Weinberger,Paul; Weltz, Tracy; White, Cheryl; Wilbeck, Tom; Worrell, Perrin; Wright, Tracy; Wysatta, Margaret; Yeverino, Norma; Zall, Howard; Zermeno, Rosalinda
Subject: Please update -

Best Regards,
Julie Clyatt
(713) 853-3256


John, are we suppose to put together a handout for the morning meeting?  Let's discuss.  Thanks. Lynn

 -----Original Message-----
From: 	Buchanan, John
Sent:	Monday, August 20, 2001 9:10 AM
To:	Blair, Lynn
Subject:	Omaha Marketing Meeting Notes

See Attached for the notes I took during Brads meeting on the Marketing meeting in Omaha August 28th. There will be a follow up meeting this Wednesday.

 << File: Marketing Meeting A.doc >>

John Buchanan


Bob, see the quote about $83 /5-yr power

GAC

Article 1   Next Article    Return to Headlines

Moody's:Won't Downgrade Calif Utils To Junk Before Jan 4

12/22/2000
Dow Jones Energy Service

(Copyright (c) 2000, Dow Jones & Company, Inc.)

NEW YORK -(Dow Jones)- Moody's Investors Service doesn't expect to reduce the
debt ratings of California's two largest utilities below investment grade
status before state regulators meet on a rate hike on Jan. 4.
But the ratings agency said in a press release Friday that it might still cut
the ratings of PG&E Corp. (PCG) unit Pacific Gas & Electric and Edison
International (EIX) unit Southern California Edison next week to a level
short of speculative status, and set strict terms for what it would consider
a favorable ruling by regulators on Jan. 4.

"Moody's will continue to review for possible downgrade the ratings of
Southern California Edison Company and its parent, Edison International, and
the ratings of Pacific Gas and Electric Company and its parent, PG&E
Corporation, and may take additional rating action next week prior to the
January 4th meeting," Moody's said. "However, it is not anticipated at this
point that any rating action taken prior to the January 4th meeting would
result in the ratings of the utilities or their respective parents falling
below investment grade."

Southern California Edison and Pacific Gas & Electric have lost a combined $8
billion since May buying wholesale power at prices that far exceed the fixed
rates they're allowed to charge their customers.

Between one-third and one-half of that figure is offset by profits from power
plants the utilities still own, but the net losses are substantial and
mounting. Both utilities have said they soon will become unable to continue
buying power for their customers if the situation persists.

Ratings agency Standard & Poor's warned Wednesday that both utilities face
imminent default and a downgrading of their debt ratings to junk-bond status
unless California officials acted immediately to raise rates and restore the
utilities to liquidity.

On Thursday, the California Public Utilities Commission agreed rate hikes
were needed.

"We believe that retail rates in California must rise," the commission said
in a written statement. "It is our intent to maintain the utilities' access
to capital on reasonable terms."

But the commission deferred a final ruling on rates until Jan. 4, pending
hearings on the matter scheduled for next week.

Standard & Poor's wasn't immediately available to comment on the decision.

Moody's said Friday that the PUC's decision was a "necessary first step" in
restoring the utilities to financial viability. Comments by the PUC and other
officials indicated their desire to maintain the utilities' investment-grade
status, Moody's said.

But Moody's set strict terms for what must come out of the PUC's Jan. 4
meeting if the utilities are to avoid being downgraded to speculative status.

"Specifically, at that meeting, the utilities need to obtain the right to
immediately raise rates by a sizeable amount and must obtain the unquestioned
and unambiguous ability to recover past and future wholesale procurement
costs," Moody's said. "The failure by the CPUC to act in a prompt and
constructive way around these two issues could result in the utilities'
ratings being downgraded to below investment grade."

Such a downgrade would hurt the utilities' ability to fund power purchases
and day-to-day operations, Moody's said.

-By Andrew Dowell, Dow Jones Newswires; 201-938-4430;
andrew.dowell@dowjones.com

Article 2   Next Article  Previous Article   Return to Headlines

POWER POINTS: Calif Utils Won't Fail; Competition Will
By Mark Golden

12/22/2000
Dow Jones Energy Service

(Copyright (c) 2000, Dow Jones & Company, Inc.)

A Dow Jones Newswires Column <~>
NEW YORK -(Dow Jones)- Fans of the movie "Erin Brockovich" have been tempted
to fantasize about executives from California's two main investor-owned
utilities, PG&E Corp. (PCG) and Edison International (EIX), heading to
bankruptcy court.

Dream on.

True, this week the utilities didn't get either of the two things they need
to escape the astronomically expensive spot market for electricity in
California: a rate increase and long-term contracts with independent
generators at prices they can afford under new rates. With lending sources
virtually dry, both utilities have said they are about to run out of the cash
needed to continue buying electricity in the spot market.

But hearings on a rate increase are scheduled to resume next week followed by
the California Public Utilities Commission vote on Jan. 4, and long-term
contract negotiations are to resume Jan. 3.

Both negotiations are likely to succeed in keeping the companies afloat
because almost all parties would lose with the utilities under Chapter 11
protection and because the price to save the utilities isn't that high. The
rate increase decision was postponed Thursday because California Governor
Gray Davis and his CPUC are trying to give the corporations only what they
need to survive and not a penny more. If Davis succeeds - he is insisting on
an independent audit of the holding companies and all subsidiaries -
shareholders can expect to see their dividends cut.

Sorting out the finances of the $21 billion PG&E, which is the 73rd largest
U.S. company, and $10 billion Edison International must be daunting.

But here are the basics: First, the utilities have to get out of the spot
market. SCE charges residential and small commercial customers 12 cents a
kilowatt-hour, of which 6.6 cents - or $66 a megawatt-hour - goes for
electricity. The rest covers transmission and distribution, some other costs
and the utility's profit.

In the day-ahead and spot market, where SCE has been buying almost half the
power it needs, the utility has been paying about $350/MWh. Rates, obviously,
won't be tripled so that SCE can continue to buy power in the spot market.

But the company can purchase five-year supply contracts at about $78/MWh
currently, which it could do with a mere half-cent increase in rates. Since
the company is already making plenty of money on the coal-fired and nuclear
generators that it owns, a half-cent increase on all the electricity it sells
could be applied to all of its outside purchasing, which comes to an extra
$10 a megawatt-hour.

Edison International is in a more dire immediate cash situation because the
utility is two-thirds of the parent company, but Pacific Gas & Electric faces
a more difficult situation operationally. PG&E gets only 5.4 cents/KWh, or
$54/MWh, from customers for electricity, while wholesale prices in northern
California are more expensive than in southern California. Finally, PG&E has
to buy about two-thirds of the power it needs in the wholesale market,
compared to SCE's 50%, because it sold off more of its power plants, as
dictated by deregulation legislation, more quickly than SCE.

Still, PG&E could pick up five-year supply contracts at about $83/MWh. A
two-cent increase to its basic rate of 10 cents would give PG&E $30 more per
megawatt-hour - or $85/MWh - to spend on power purchases.

But a 20% increase may not be necessary. The governor's staff needs to find
out the details on the substantial long-term deals PG&E had the foresight to
sign back in October. Those deals were done at less than $55/MWh, and they
kick in Jan. 1.

The governor's staff may also look at the unexpectedly high profits from
SCE's and PG&E's nuclear power plants. The utilities have cut costs at the
plants, so instead of making just 6% return on capital, the utilities have
been getting a net gain of 30% on nuclear revenues, according to Bob
Finkelstein of The Utilities Reform Network. If the utilities say
deregulation decisions such as the rate freeze must be reexamined because
they are bankrupting the utilities, then, TURN says, the deregulation
decisions that have resulted in unexpected gains for the utilities should be
looked at, too.

Nevertheless, retail competition in California is dead for another five
years. The utilities get their modest rate increases with the insistence that
they lock up their needed supplies under long-term contracts. The contracts
will be approved by the CPUC, which means the utilities are guaranteed to be
paid for the costs even if wholesale power prices fall below $80/MWh in three
to four years, as expected.

The only way to ensure that the utilities get paid is to add a new
"non-bypassable" transition cost to customer bills for five years, which
means that even if a customer chooses an alternate power supplier, they will
still be sending money back to PG&E and Edison to pay for this year's
debacle.

The current non-bypassable charges, which are scheduled to end in March 2002,
are what has killed retail competition since 1997. Competitors can't offer
much in the way of savings, so almost nobody bothers to switch.

Electricity traders and regulators wonder why the utilities keep buying so
much power at the last minute through the Independent System Operator, which
will pay almost anything to keep the lights on. Right now, the ISO is paying
$700/MWh for power that readily could have been bought Thursday for $400/MWh.

This practice over the past six months has run up Edison's debt to a
projected $2.3 billion at the end of December and PG&E's to $4 billion.
(Edison overstates its real losses by 50%; PG&E, by 33%.)

So, for about $6 billion dollars, the utilities will get a rate increase and
four more years of protection from competition in their $20 billion business.

These guys are good.

Was all this intentional? Go ask Erin Brockovich.

-By Mark Golden, Dow Jones Newswires; 201-938-4604; mark.golden@dowjones.com

Article 3   Next Article  Previous Article   Return to Headlines

Industry Watchers Confident About Rate Increase for California Utilities

12/22/2000
Dow Jones Business News

(Copyright (c) 2000, Dow Jones & Company, Inc.)

NEW YORK -- Some observers now believe that troubled California utilities
Edison International and PG&E Corp. will get some relief at the start of the
new year after state regulators at least opened the door to electricity-rate
increases the two utilities said they need to stay in business.
Many expect the California Public Utility Commission to authorize a rate
increase at a scheduled Jan. 4 meeting. ABN Amro Inc. analyst Daniel Ford was
so optimistic he upgraded Edison shares to "buy" from "hold."

Shares of the two companies, which own the state's largest utilties, hit
52-week lows Thursday. In midday trading Friday on the New York Stock
Exchange, PG&E (PCG), which owns Pacific Gas & Electric, was up $1.06, or 6%,
to $19.31 while Edison International (EIX), parent of Southern California
Edison, was flat at $14.94.

On Thursday, the California PUC tried to reassure jittery credit markets that
they won't let the state's big utilities go broke. Still they stopped short
of ordering the kind of immediate relief utilities and their lenders want:
rate increases big enough to cover exploding wholesale power costs in the
state's deregulated energy market.

Instead, the California PUC ordered audits of utility records and scheduled
hearings for next week, needed to provide a legal basis for eliminating a
rate freeze that has protected most consumers from spiraling wholesale power
costs.

Soaring power costs in supply-short California have produced a political
crisis in the state, which four years ago led the nation in deregulating its
power industry. Wholesale electricity for delivery Sunday and Monday in the
West sold for $200 to $400 a megawatt-hour Thursday, about 10 times its
year-ago level.

Edison Internaitonal's Southern California Edison unit and PG&E's Pacific Gas
and Electric Co. have said they are more than $8 billion in debt due to the
price they must pay for electricity and the inability to pass on the higher
costs to consumers due to a state-mandated freeze. Between one-third and
one-half of that figure is offset by profits from power plants the utilities
still own in the state, but the net losses are substantial and mounting.

Both utilities have said they soon will become unable to continue buying
power for their customers if the situation persists. Earlier this week
ratings agency Standard & Poor's warned that both utilities face imminent
default and a downgrading of their debt ratings to junk-bond status unless
California officials acted immediately to raise rates and restore the
utilities to liquidity.

The utilities' deteriorating credit situation has left some generators
reluctant to supply power to California without guarantees they'll be paid.
The Department of Energy has issued an emergency order requiring power
suppliers in the West to sell uncommitted electricity to California on demand
until Dec. 28.

Consumer groups, which say the utilities are overstating their financial
woes, decried the PUC decision.

According to Mr. Ford, the utility's fate now rests in the hands of the
Standard & Poor's. He expects S&P to downgrade Edison's utility debt by "a
notch or two to keep politicians honest," but stop short of giving the
companies junk bond ratings.

Another ratings concern, Moody's Investors Service, said it doesn't expect to
reduce the debt ratings of the two utilities below investment grade status
before regulators meet on Jan. 4. Moody's said it might cut the ratings next
week to a level short of speculative status, and set strict terms for what it
would consider a favorable ruling by regulators.

Copyright (c) 2000 Dow Jones & Company, Inc.

All Rights Reserved.

Article 5   Next Article  Previous Article   Return to Headlines

Consumer Grps Oppose Calif PUC Hint Will Raise Util Rates

12/22/2000
Dow Jones Energy Service

(Copyright (c) 2000, Dow Jones & Company, Inc.)

<~> (This article was originally published Thursday) <~>
LOS ANGELES -(Dow Jones)- Two consumer advocate groups Thursday objected to a
California Public Utilities Commission order suggesting it will decide Jan. 4
to increase retail electricity rates for customers of the state's two largest
investor-owned utilities.

"We believe that retail rates in California must rise. It is our intent to
maintain the utilities' access to capital on reasonable terms," the order
says.

Spokesman Bob Finkelstein of San Francisco-based The Utility Reform Network
said such statements indicate the PUC is "kowtowing to Wall Street" rather
than protecting ratepayers.

Michael Shames, spokesman for San Diego-bas notion that rate increases are
inevitable, which isn't a position anyone in the consumer movement takes,"
Shames said.

The PUC will hold evidentiary hearings Dec. 27 and Dec. 28 on a rate
stabilization plan by Edison International (EIX) unit Southern California
Edison and PG&E Corp. (PCG) unit Pacific Gas & Electric Co.

The utilities have said they are more than $8 billion in debt due to an
inability to pass higes the PUC has something in mind to do, but they need to
claim they had a public process before doing it," Finkelstein said.

The PUC also will look into claims by the two consumer groups that the
utilities aren't as financially strapped as they say. The utilities' debt due
to "undercollections" is counterbalanced by a separate account of proceeds
from the sale of stranded assets, the consumer groups say.

-By Jessica Berthold, Dow Jones Newswires; 323-658-3872;
jessica.berthold@dowjones.RES1771

Calif Ruling On Pwr Rates Leaves Util Credit In Question

12/22/2000
Dow Jones Energy Service

(Copyright (c) 2000, Dow Jones & Company, Inc.)

(This article was originally published Thursday) <~> By Andrew Dowell <~> Of
DOW JONES NEWSWIRES <~>
NEW YORK -(Dow Jones)- California regulators opened the door Thursday to the
retail rate hikes the state's two largest utilities say they need to stay in
business.

But they failed to take decisive action needed to settle the question of
whether PG&E Corp. (PCG) unit Pacific Gas & Electric and Edison International
(EIX) unit Southern California Edison will be able to sustain the mounting
costs of buying wholesale power for their customers.

Ratings agency Standard & Poor's warned Wednesday that both utilities face
imminent default and a downgrading of their debt ratings to junk-bond status
unless California officials acted immediately to raise rates and restore the
utilities to liquidity.

On Thursday, the California Public Utilities Commission agreed rate hikes
were needed.

"We believe that retail rates in California must rise," the commission said
in a written statement. "It is our intent to maintain the utilities' access
to capital on reasonable terms."

But the commission deferred a final ruling on rates until Jan. 4, pending
hearings on the matter scheduled for next week.

The utilities welcomed the possibility of a rate hike, but expressed concerns
that the commission hadn't acted decisively enough.

"This is a significant change in the commission's approach," said PG&E Corp.
spokesman Shawn Cooper. "The real question is whether the action they are
taking today will inspire confidence in the financial community to allow us
to continue to provide power to our customers. Hopefully, the financial
community will take the commission action seriously enough to wait until Dec.
27 and 28 to make a decision on our credit rating."

Southern California Edison said in a statement that it "wished the commission
had acted more decisively."

Standard & Poor's wasn't available to comment on how the PUC's action might
affect its outlook for the utilities.

Shares in PG&E Corp. and Edison International plunged to 52-week lows
Thursday ahead of the commission's ruling, which was expected.

     Utilities' Power-Market Losses Continue To Mount

Soaring power costs in supply-short California have produced a political
crisis in the state, which four years ago led the nation in deregulating its
electric utility industry. Wholesale electricity for delivery Sunday and
Monday in the West sold for $200-$400 a megawatt-hour Thursday, about 10
times its year-ago level.

The utilities have lost a combined $8 billion since May buying wholesale
power at such prices, which far exceed the fixed rates they're allowed to
charge their customers.

Between one-third and one-half of that figure is offset by profits from power
plants the utilities still own in the state, but the net losses are
substantial and mounting. Both utilities have said they soon will become
unable to continue buying power for their customers if the situation
persists.

Southern California Edison, which said this week it won't be able to pay a
power bill that comes due Jan. 4, said in a statement Thursday that it will
soon adopt a "cash preservation" plan that could involve layoffs and cuts in
operations. Company executives were in talks with bankruptcy attorneys
Thursday to plan their next move, a Southern California Edison executive
said.

The utilities' deteriorating creditworthiness has left some generators
reluctant to supply power to California without guarantees they'll be paid.
The U.S. Department of Energy has issued an emergency order requiring power
suppliers in the West to sell uncommitted electricity to California on demand
until Dec. 28.

Consumer groups, which say the utilities are overstating their financial
woes, decried the PUC decision.

"The most disturbing part is this notion that rate increases are inevitable,"
said Michael Shames, spokesman for San Diego-based Utility Consumers Action
Network.

The utilities were seeking rate increases of up to 30%. State officials were
reluctant to accept anything beyond 10%, an amount analysts said is
insufficient.

The commission said it deferred its decision on the matter to create time for
evidentiary hearings and an independent audit to determine how much of an
increase is needed.

Consumer groups, however, were skeptical.

"It is clearly a sham procedural course that indicates the PUC has something
in mind to do, but they need to claim they had a public process before doing
it," said Bob Finkelstein, spokesman for The Utility Reform Network.

The Cambridge Energy Research Associates said Thursday that California faces
another three years of high electricity prices and possible blackouts,
because the state's piecemeal response to the power crisis has discouraged
the development of new generating capacity.

-By Andrew Dowell, Dow Jones Newswires; 201-938-4430;
andrew.dowell@dowjones.com

(Jason Leopold, Mark Golden and Jessica Berthold contributed to this article.)

Article 7   Next Article  Previous Article   Return to Headlines

SoCal Gas Inventories Low, But Interruptions Doubtful
By Pat Maio

12/22/2000
Dow Jones News Service

(Copyright (c) 2000, Dow Jones & Company, Inc.)

Of DOW JONES NEWSWIRES <~> (This story was originally published late
Thursday.) <~>
LOS ANGELES -(Dow Jones)- Unlike the almost daily threats of rolling
blackouts from the electricity industry in California, the possibility of
natural gas interruptions is unlikely even though reserves are historically
low, said a company executive of Southern California Gas Co.

SoCal Gas is the gas distribution unit of San Diego-based Sempra Energy
(SRE), and serves 5 million customers.

Reserves of natural gas stored in four underground rock formations scattered
throughout Southern California are at lower levels than what SoCal Gas
normally maintains, said Anne Smith, vice president of customer service and
marketing at SoCal Gas, in a phone interview with Dow Jones Newswires.

SoCal Gas entered its winter season on Nov. 1 with 63 billion cubic feet of
gas in storage, about 30 Bcf less than its previous heating seasons, Smith
said.

The lower reserve levels are due to power plants in California siphoning out
the gas at unprecedented levels, she said.

The plants burn strictly gas, and are trying to meet the intense electrical
demand this winter after the state's certain source of power from hydro
generators in the Pacific Northwest had evaporated.

Lack of rain in the region this year is to blame for the hydro cutbacks,
Smith said.

As well, a cold snap in November, coupled with SoCal Gas's decision to buy
less gas this past summer for reserves, didn't help matters.

Smith isn't worried about the lower levels of gas in the company's storage
areas, which can hold up to 105 Bcf.

The cold weather in November forced SoCal Gas to pull out of storage about 13
Bcf in November, leaving a total of 50 Bcf, Smith said.

The stored gas is purchased as a hedge to protect the company from
fluctuations in natural gas prices -- which this month have soared to as high
as $60 per million British thermal units on the spot market.

For the most part, SoCal Gas imports its gas from out-of-state regions in
Texas and New Mexico via pipelines owned by El Paso Natural Gas Co. (EPG) and
Enron Corp.'s (ENE) Transwestern pipeline.

El Paso and Transwestern are keeping up with demand, and report that their
pipelines are filled to the near the brim.

Over the past few weeks, Smith said it is pushing out through its system of
pipes about 3.45 Bcf to 3.5 Bcf of gas daily, to its customers.

"The way we see demand breakdown the last couple of weeks is generators using
about 1 Bcf a day, our core customers (4.8 million) about 1.5 Bcf and our
non-core" about 1 Bcf, she said. The non-core customers -- which number about
1,500 in total -- are industrial manufacturers who consume more than 250,000
therms of gas annually, Smith said.

In comparison, a home averages about 600 therms.

Smith's eyebrows have been raised by the rapid consumption of natural gas by
power plants, which use the commodity to run turbines for electrical
generation.

Historically electric power plants have consumed about 300 million to 400
million cubic feet a day of gas in SoCal Gas' service territory, she said.

"This is why we are seeing pipelines fuller than usual. There is continuing
demand by the electric generators," she said. "This is basically an increase
in demand for gas that has contributed to the national picture of why prices
(for gas) have gone up this year. Demand has outpaced production capacity,"
Smith explained.

A growing economy starved for electricity to run its Internet systems or
manufacturing businesses, have contributed to the reasons why gas prices have
soared this month, she said.

Power plant owners have passed along these higher gas costs to the utilities
where they sell their electricity.

This is partially why PG&E Corp.'s Pacific Gas & Electric Co. and Edison
International's (EIX) Southern California Edison face financial insolvency
today.

They are having to borrow billions of dollars to pay for this higher-priced
electricity as part of the state's complex deregulation plan.

The power plants are owned by out-of-state companies like AES Corp. (AES),
Calpine Corp. (CPN) and Duke Energy Corp. (DUK).

The threat of rolling blackouts has several causes.

Some power plants run around the clock -- gobbling up the natural gas at a
rapid pace. But others have temporarily been shut down because environmental
laws prohibit them from emitting certain levels of pollutants annually.

SoCal Gas has managed to keep its gas costs relatively low by buying gas for
its core customers on long-term contracts at fixed prices.

This helps to insulate the company from price spikes on gas delivered to its
system at the California and Arizona and Nevada borders.

By buying gas this way, SoCal Gas was able to set a fixed charge of $6.53 per
MMBTU for its 4.8 million core customers in the month of December. A new
price is set to be established next week for January.

"We hope it holds steady in January," said Smith. "We are doing everything we
can."

-By Pat Maio, Dow Jones Newswires; 323-658-3776;

patrick.maio@dowjones.com

Article 8   Next Article  Previous Article   Return to Headlines

S&P:Diverse Holdings Insulate Generators From Calif Risk

12/22/2000
Dow Jones Energy Service

(Copyright (c) 2000, Dow Jones & Company, Inc.)

(This article was originally published Thursday) <~>
NEW YORK -(Dow Jones)- Independent generators selling power into California
face "extremely serious counterparty credit concerns," but the threat to
their financial positions from a default by one of the state's utilities is
mitigated by their positions in other power markets, Standard & Poor's said
Thursday.

The ratings agency affirmed its double-B-plus corporate credit and senior
unsecured debt ratings for one of those generators, Calpine Corp. (CPN), and
indicated that the positions of a number of other generators were similarly
stable.

Standard & Poor's, without commenting on ratings, said those generators
include Dynegy Inc. (DYN), The Williams Cos. (WMB), Reliant Energy Inc.
(REI), Southern Energy Inc. (SOE) and NRG Energy Inc. (NRG).

"Each company has a diverse asset portfolio that mitigates exposure to any
single market, such as California," S&P said. "Standard & Poor's has
concluded that the developers with merchant exposure to the California market
have sufficient financial liquidity to sustain long-term disruptions to their
markets."

S&P also said the generators have generally incorporated conservative pricing
assumptions well below California's current market prices.

The generators' main counterparties in California - PG&E Corp. (PCG) unit
Pacific Gas & Electric and Edison International (EIX) unit Southern
California Edison - have lost a combined $8 billion buying wholesale power at
prices far higher than they are allowed to charge their customers.

Between one-third and one-half of those losses are offset by the utilities'
own profits from generating power in the state, but they are still
substantial and mounting. Both utilities have said they face a serious
liquidity crisis.

S&P said Thursday that both companies face imminent default unless California
officials immediately come up with a way to correct the imbalance between
their buying and selling price for power, and said it would likely downgrade
the utilities' debt ratings to junk-bond status even if they avoid
bankruptcy.

The California Public Utilities Commission met Thursday and opened the door
to rate hikes, but deferred a final decision to its Jan. 4 meeting.

S&P wasn't available to comment on its outlook for PG&E and SCE or the
generators following the PUC's decision.

About 1,284 net megawatts of Calpine's total 4,900 net megawatts of
generation is exposed to California counterparty risk, S&P said. Nonetheless,
only about $400 million of Calpine's approximate $2 billion revenues for 2000
have seen exposure to California's energy markets, the ratings agency said.
Calpine's receivables total only about $75 million, S&P said.

"The affirmation comes during a period of extremely serious counterparty
credit concerns for generators selling into the California power markets,"
S&P said of its decision regarding Calpine.

-By Andrew Dowell, Dow Jones Newswires; 201-938-4430;
andrew.dowell@dowjones.com

Article 9   Next Article  Previous Article   Return to Headlines

Chapter 11 Filing May Give Calif Utils Breathing Room

Of DOW JONES NEWSWIRES

12/22/2000
Dow Jones Energy Service

(Copyright (c) 2000, Dow Jones & Company, Inc.)

(This article was originally published Thursday) <~>
By Jason Leopold

LOS ANGELES (Dow Jones)--If two of California's largest utilities file for
Chapter 11 bankruptcy protection, a move they said this week was possible, it
may give the companies some breathing room to allow for a much needed
internal reorganization, according to one California bankruptcy attorney.

"What Chapter 11 ultimately does is it allows a company to reorganize," said
Larry Peitzman, an attorney with the Southern California-based law firm of
Peitzman, Glassman and Whegg. "The whole purpose is to come up with a plan to
allow the company to service and pay back creditors and shareholders as much
as possible."

While in bankruptcy, a judge can order the state to raise the utilities
retail electricity rates if that would help the company generate revenue to
pay its creditors, Peitzman said.

Peitzman, who has worked on many large company bankruptcy cases in
California, said if PG&E Corp. unit (PCG) Pacific Gas & Electric Co. and
Edison International unit (EIX) Southern California Edison file for
bankruptcy, the companies will be given an injunction by a court that will
prevent creditors from seizing the utilities assets, collecting money or
filing a lawsuit against the companies.

"Another reason to file for bankruptcy protection is the companies wouldn't
be forced to pay pre-bankruptcy debts if they have run up enormous bills,"
Peitzman said.

Executives at both PG&E and SoCal Edison said they may be forced to file for
bankruptcy protection because of a combined $8 billion debt in excess
wholesale power costs and the inability under state law to pass those costs
on to rate payers. However, between one-half and one-third of that money has
been paid into accounts held by the utilities to collect profits from the
generators they still own.

The utilities were hoping for an immediate rate hike Thursday by the state's
Public Utilities Commission, but commissioners said it would first hold
evidentiary hearings and conduct an internal audit of the companies. A rate
increase is still at least two weeks off, the commission said at its meeting.

   Utilities Can Conduct Business While In Bankruptcy

Peitzman said that while in bankruptcy, the companies could operate as a
"debtor in possession," which means the companies have the authority to
conduct business as usual without the consent of bankruptcy court. But if the
companies were to try and secure a loan, the loan would have to be approved
by a judge.

Although most Chapter 11 bankruptcy cases "can't survive," Peitzman said, the
state's two largest utilities - with millions of customers - may be an
exception.

"Inevitably they are going to continue to owe money because of the constant
shortfall they pay in (electricity costs) and what they charge their
customers," the attorney said. "But the bigger the company, the more likely
the company will survive. It will be devastating to lose such large
corporations."

If the companies fail to survive a Chapter 11 filing, the utilities' assets
would be liquidated to pay off their creditors, Peitzman said.

In a Chapter 11 filing, PG&E and SoCal Edison would put their creditors in
different classes and determine how much under the dollar each one would get
paid, Peitzman said.

"It can be as much as possible or less than 100 cents on the dollar," he
said.

In addition, any contracts that either companies held before a potential
bankruptcy filing would have to be honored regardless if the company can
fulfill its financial obligations to its counterpart, Peitzman said.

"That's one of the other benefits," he said. "It's called executory
contracts, which generally means both parties have material operations that
have yet to be performed. It may be long-term contracts and the company would
be able to enforce the other part to continue doing business. The other party
can't refuse to do business because of a stay."

Bankruptcy can last as long as a judge allows it, Peitzman said, pointing to
the Eastern Airlines bankruptcy case in the early 1980s which lasted for
years.

Neither company has indicated whether it will actually file for bankruptcy,
but SoCal Edison said in a filing with the Federal Energy Regulatory
Commission Tuesday that it may not be able to pay its January power bill if
its retail rates are not immediately raised.

-By Jason Leopold, Dow Jones Newswires; 323-658-3874;
jason.leopold@dowjones.com

Article 10   Next Article  Previous Article   Return to Headlines

National Desk; Section A
Trying to Shore Up Utilities, California Plans Rate Increase
By LAURA M. HOLSON

12/22/2000
The New York Times

Page Page 16, Column 1
c. 2000 New York Times Company

LOS ANGELES, Dec. 21 -- The California Public Utilities Commission said today
that a rate increase for consumers was likely and that over the next weeks it
would inspect the books of the two major utilities to decide how much was
reasonable.
The move is an effort in part to show Wall Street that California is
committed to ensuring the health of the state's utilities.

On Wednesday, the agency that rates the credit-worthiness of both the Pacific
Gas and Electric Company and Southern California Edison said that if
meaningful action was not taken by Friday, the two utilities were headed for
bankruptcy. The agency is expected to comment on the commission's action
soon.

Gov. Gray Davis has been meeting this week with utility executives and
consumer advocates to come to an agreement on the size of a rate increase.
Mr. Davis, a Democrat, is also seeking the advice of financial experts,
including Alan Greenspan, chairman of the Federal Reserve Board, whom he is
expected to meet with next week.

Some people close to those discussions suggested that 10 percent would be a
palatable rate increase, but the utilities are asking for more. The
commission will hold hearings next week, and just how much consumers will
have to pay should be decided by Jan. 4.

Four years ago, California agreed to deregulate its utilities with the hope
that competition would lower rates for households and businesses. But this
year, prices for wholesale electricity and natural gas have skyrocketed,
forcing utilities to incur costs of more than $8 billion that they cannot
pass to consumers because rates are frozen until 2002.

In recent weeks, the utilities have tried to make a case that, without rate
increases, service to consumers is threatened. John Bryson, chief executive
of Edison International, the parent company of Southern California Edison,
has taken the unusual step of warning consumers in television and newspaper
advertisements in Southern California and in Sacramento that blackouts are
inevitable unless order is imposed.

In response to the announcement by the commission today, Southern California
Edison said it expected additional cost cutting and measures to preserve cash
soon.

But not all the commissioners believed that today's announcement would be
enough to placate financial analysts and investors, many of whom buy utility
stocks because they are perceived to be less risky than, for example,
Internet stocks. Analysts have recently downgraded the stocks of both Pacific
Gas and Electric and California Edison, which are trading near 52-week lows,
over fears about California's energy woes.

''When I look at the newspapers and peruse the Internet I get the decided
impression that Wall Street has spoken,'' said Richard Bilas, a commissioner.
''I don't know if this decision goes far enough.''

Article 11   Next Article  Previous Article   Return to Headlines

Fitch Comments On California Electric Utilities

12/22/2000
Business Wire

(Copyright (c) 2000, Business Wire)

CHICAGO--(BUSINESS WIRE)--Dec. 22, 2000--Fitch views the California Public
Utilities Commission's (CPUC) interim decision to initiate proceedings to
consider raising retail rates as just one of the steps necessary to salvage
credit quality for the state's two largest utilities, Southern California
Edison (SCE) and Pacific Gas and Electric Company (Pac Gas). The CPUC is
expected to reach a decision on rate increases and recovery mechanisms during
the first week of January, at which time Fitch will assess the appropriate
ratings for these companies. The outstanding issue is whether rate increases
will sufficiently offset high wholesale power prices being paid by the
companies.
The companies' securities ratings are likely to weaken, unless 1) full
recovery is provided for the large monies paid by the utilities above
existing retail rates and 2) price stability is ensured for the regional
market. The utilities are unable to tap new credit until the rate decision is
executed. They do have, however, sufficient cash and existing credit to
support them through the decision period of the first week in January. If a
suitable rate structure is passed by the CPUC at that time, the utilities'
banks would be more likely to consider additional funding.

Liquidity will remain strained, however, to the extent that regional power
prices remain high. While Energy Secretary Richardson has ordered certain
power producers to sell into the California market, wholesale prices remain
high and are above retail rates. No additional federal action has been taken.

The CPUC's decision in early January is not expected to completely resolve
the utilities' future. Given the large costs incurred and numerous
constituent groups affected, Fitch envisions a longer-term scenario of
consecutive rate increases associated with a fundamental overhaul of
California's power market. In conjunction with the governor's active
involvement, the California legislature is evaluating potential actions to
restructure the state's power situation. Legislative action remains possible
over the next three months, and could impact debt ratings.

The Rating Watch Negative designation remains in place for Pac Gas, SCE and
its parent, Edison International. The current ratings are:

Southern California Edison:

-- First Mortgage Bonds,`A';

-- Senior Unsecured Debt,`A-`;

-- Preferred Stock,`BBB+';

-- Commercial Paper,`F2'.

Edison International:

-- Senior Unsecured Debt,`A-`;

-- Preferred Stock,`BBB+';

-- Commercial Paper,`F2'.

Pacific Gas and Electric Company:

-- First Mortgage Bonds,`A-`;

-- Preferred Stock,`BBB+'.

EIX's ratings are also on Rating Watch Negative as approximately half of its
consolidated cash flow is provided by SCE. Fitch does not rate the securities
of Pac Gas' parent holding company, PG&E.

The ratings of San Diego Gas & Electric Company (SDG&E) are not pressured to
the extent of the utilities described above. Unlike the other utilities,
SDG&E is operating under a legislatively-imposed rate ceiling for residential
and small commercial loads. Its legislation also permits a balancing account
to accumulate uncollected power procurement costs. Less liquidity pressure
also exists at SDG&E due to its strong financial fundamentals (senior
unsecured debt rated 'AA-'). Fitch has a Rating Outlook Negative designation
on SDG&E's ratings due to potential increases in leverage while power
procurement costs are high. Sempra's ratings (senior unsecured debt rated
'A') have a stable outlook due to the strong and consistent cash flow derived
from its regulated natural gas distribution subsidiary, Southern California
Gas.

Based in Rosemead, California, SCE is a wholly owned subsidiary of Edison
International. Pacific Gas and Electric Company is headquartered in San
Francisco, California. SDG&E and its parent, Sempra Energy (SRE), are based
in San Diego, California.

CONTACT: Fitch Lori R. Woodland, 312/606-2309 (Chicago) Robert Hornick,
212/908-0523 (New York)
14:31 EST DECEMBER 22, 2000

Article 12   Next Article  Previous Article   Return to Headlines

SCE Reacts to CPUC Interim Decision

12/21/2000
PR Newswire

(Copyright (c) 2000, PR Newswire)

ROSEMEAD, Calif., Dec. 21 /PRNewswire/ -- Southern California Edison reacted
to today's California Public Utilities Commission's (CPUC) interim decision
by stating that it wished the commission had acted more decisively but would
work with the commission to take definitive action to address the current
crisis by Jan. 4, 2001.
The company said it was encouraged by the language in the CPUC's interim
decision that committed the commission to: <~> " ... take expedited actions
to fulfill our statutory obligations to <~> ensure that the utilities can
provide service at just and reasonable <~> rates. In our view, that mandate
means that we must avoid continuing <~> conditions that may jeopardize the
utilities' creditworthiness and their <~> ability to continue to procure
energy on behalf of customers. Therefore, <~> we believe that retail rates in
California must begin to rise. It is our <~> intent to maintain the
utilities' access to capital on reasonable terms. <~> We recognize that this
will require that we act expeditiously to address <~> the new FERC-imposed
reality of unlimited wholesale prices."

Nevertheless, SCE underscored that any solution to the current crisis
requires prompt, meaningful and final action by the commission ending the
rate freeze, providing for the recovery of procurement costs, and increasing
rates to a level that will restore the creditworthiness of California's
investor- owned utilities.

SCE added that it anticipated announcing additional cost-reduction and
cash-preservation measures in the near term that would be necessary to
protect the company's financial integrity while maintaining customer service.

An Edison International company, Southern California Edison is one of the
nation's largest electric utilities, serving a population of more than 11
million via 4.3 million customer accounts in a 50,000-square-mile service
area within central, coastal and Southern California.

/CONTACT: Southern California Edison, Corporate Communications, 626-302-2255/
19:24 EST

Article 13   Next Article  Previous Article   Return to Headlines

Ambac Financial Group has Insured Exposure to Southern California Edison and
Pacific Gas & Electric

12/21/2000
Business Wire

(Copyright (c) 2000, Business Wire)

NEW YORK--(BUSINESS WIRE)--Dec. 21, 2000--Ambac Financial Group, Inc. (Ambac)
announced today that it has $75.1 million in insured net par exposure
outstanding to Southern California Edison.
The bonds are secured by a first mortgage or lien on substantially all of the
property and franchises now owned by Southern California Edison. Ambac has
$72.6 million in insured net par exposure outstanding to Pacific Gas &
Electric. These bonds are also secured by a first mortgage lien. Both
Southern California Edison and Pacific Gas & Electric have been warned by
Standard & Poor's that their ratings might drop below investment grade.

"The secured nature of our exposure, coupled with the essentiality of the
services the companies provide, cause us to be confident that the likelihood
of any permanent material loss is remote," said Robert J. Genader, Vice
Chairman. "On the other side of the coin, this difficult situation serves as
a strong reminder as to the value of bond insurance," he continued.

Ambac Financial Group, Inc., headquartered in New York City, is a holding
company whose affiliates provide financial guarantees and financial services
to clients in both the public and private sectors around the world. Ambac
Assurance Corporation is the principal operating subsidiary of Ambac
Financial Group, Inc. Ambac Assurance, a leading guarantor of municipal and
structured finance obligations, has earned triple-A ratings, the highest
ratings available from Moody's Investors Service, Inc., Standard & Poor's
Ratings Group, Fitch and Rating and Investment Information, Inc. Ambac
Financial Group, Inc. common stock is listed on the New York Stock Exchange
(ticker symbol ABK).

CONTACT: Ambac Financial Group, Inc., New York Brian S. Moore, 212/208-3333
bmoore@ambac.com Website:www.ambac.com
16:37 EST DECEMBER 21, 2000

Article 14   Next Article  Previous Article   Return to Headlines

Ambac Financial Group, Inc. Corrects and Replaces Previous Announcement,
BW2354, NY-AMBAC-FINANCIAL

12/21/2000
Business Wire

(Copyright (c) 2000, Business Wire)

Business Editors
NOTE: The following news release replaces and corrects the

previous Ambac Financial Group, Inc. news release, which

ran earlier Thursday on Business Wire, BW2354

(NY-AMBAC-FINANCIAL)

NEW YORK--(BUSINESS WIRE)--Dec. 21, 2000--

Ambac Financial Group has Insured Exposure to Southern

California Edison and Pacific Gas & Electric

Ambac Financial Group, Inc. (Ambac) announced today that it has $75.1 million
in insured net par exposure outstanding to Southern California Edison.

The bonds are secured by a first mortgage or lien on substantially all of the
property and franchises now owned by Southern California Edison. Ambac has
$72.6 million in insured net par exposure outstanding to Pacific Gas &
Electric. These bonds are also secured by a first mortgage lien. Both
Southern California Edison and Pacific Gas & Electric have been warned by
Standard & Poor's that their ratings might drop below investment grade.

"The secured nature of our exposure, coupled with the essentiality of the
services the companies provide, cause us to be confident that the likelihood
of any permanent material loss is remote," said Robert J. Genader, Vice
Chairman. "On the other side of the coin, this difficult situation serves as
a strong reminder as to the value of bond insurance," he continued.

Ambac Financial Group, Inc., headquartered in New York City, is a holding
company whose affiliates provide financial guarantees and financial services
to clients in both the public and private sectors around the world. Ambac
Assurance Corporation is the principal operating subsidiary of Ambac
Financial Group, Inc. Ambac Assurance, a leading guarantor of municipal and
structured finance obligations, has earned triple-A ratings, the highest
ratings available from Moody's Investors Service, Inc., Standard & Poor's
Ratings Group, Fitch and Rating and Investment Information, Inc. Ambac
Financial Group, Inc. common stock is listed on the New York Stock Exchange
(ticker symbol ABK).

CONTACT: Ambac Financial Group, Inc., New York Brian S. Moore, 212/208-3333
bmoore@ambac.com Website:www.ambac.com
16:36 EST DECEMBER 21, 2000

Article 18   Previous Article   Return to Headlines

Calif. puts IOUs' request for rate hikes on hold

12/11/2000
Megawatt Daily

(c) Copyright 2000 Pasha Publications, Inc. All Rights Reserved.

Pacific Gas and Electric (PG&E) and Southern California Edison (SoCalEd) were
disappointed Thursday in their bid to gain permission for a rate increase to
go into effect Jan. 1.
State regulators denied the utilities' request that they take immediate
action to approve the rate increases, saying that the requests are
"premature."

While regulators did not outright reject the utilities petitions, they
declined to implement the remedies requested until the cases can be reviewed
further at a later date.

The president of the Public Utilities Commission (PUC), Loretta Lynch, issued
two rulings at the commission's meeting Thursday "suspend[ing] the schedule
in the Rate Stabilization Plan applications recently filed by [PG&E and
SoCalEd]."

Both utilities filed papers separately with the PUC stating that they had
fulfilled the criteria set for ending a rate freeze imposed on them under
California's electric industry restructuring statute. The law allowed for a
transition period, during which the utilities were to pay off any "stranded
costs" related to investments in generation assets.

By keeping prices frozen at 1993 levels, legislators and utility
representatives who expected wholesale power prices would fall, thought the
measure would give the companies a chance to pay off those costs by a March
31, 2002, deadline. Instead, prices shot up and the utilities were left with
the responsibility to supply power to their customers while paying the
difference between high wholesale prices and lower retail rates.

Claiming "undercollections" totaling over $5 billion between them, the
utilities say they want the price freeze lifted and retail rates increased.
Last month, SoCalEd asked for permission for a 10% increase and PG&E for a
22% increase in its rates. ADP

 Display as:  Full Article Keywords in Context Full Article Plus Indexing
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Copyright , 1999 Dow Jones & Company, Inc. All rights reserved.


Start Date: 12/22/01; HourAhead hour: 14;  No ancillary schedules awarded.  No variances detected.

    LOG MESSAGES:

PARSING FILE -->> O:\Portland\WestDesk\California Scheduling\ISO Final Schedules\2001122214.txt


Effective December 1, 2001 PLE will be updated to reflect a name change for Axia Energy, LP (LE # 13327 for all three companies SAP # 4000002904) to

Entergy-Koch Trading, LP

All other information will remain the same.

Please let me know if you have any questions or need additional information.

Dennis P. Lee
ETS
Gas Logistics
(713) 853-1715
dennis.lee@enron.com


Per my voice mail.
---------------------- Forwarded by Sara Shackleton/HOU/ECT on 05/05/2000
06:59 PM ---------------------------

Sami Arap@ENRON_DEVELOPMENT
05/05/2000 09:18 AM
To: Sara Shackleton/HOU/ECT@ECT
cc:
Subject: Re: Financial Trading in Brazil

Sara;

Are you also involved in EnronOnLine ?  I only got a copy of an EOL summary
but would like to receive a more detailed memo about such business.  Can you
provide me with any additional materials ?!

Thanks,

Sami

Sara Shackleton@ECT
05/04/2000 04:29 PM
To: Sami Arap/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc: Andrea Calo/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT

Subject: Re: Financial Trading in Brazil

Hi, Sami!  Sorry we missed the call yesterday.  I just wanted to update you
on some of the financial trading issues in Brazil (and I have added you to
the working group list).  I am going to finalize our "swap matrix" for
Brazil.  On the physical trading side, I had asked a physical trading lawyer
to call you and am wondering if Elizabeth Sager ever called or emailed.
Please let me know.  Thanks.  Sara
---------------------- Forwarded by Sara Shackleton/HOU/ECT on 05/04/2000
02:55 PM ---------------------------

"MBTOS - Marcelo Rodrigues" <Mbtos@tozzini.com.br> on 05/04/2000 01:21:59 PM
To: Sara.Shackleton@enron.com
cc: Andrea.Bertone@enron.com, Brent.Hendry@enron.com, Lynn.Aven@enron.com,
Rick.Hopkinson@enron.com, afac@tozzini.com.br, Krishna@tozzini.com.br
Subject: Re: Financial Trading in Brazil

Dear Sara:

Thank you for your message below. Please find attached hereto free
translation into English of new foreign investor's regulations in Brazil. We
are preparing a memo to you in connection with such new regulations and are
finalizing the matrix prepared last year. We will send them to you shortly.

Kind regards,

Marcelo Rodrigues

>>> "Sara Shackleton" <Sara.Shackleton@enron.com> 05/04 12:08 pm >>>

AFAC and Marcelo:  I hope this message finds you both well.  I would like to
finalize the matrix which was prepared last year so that we can create a
"baseline" for future updates.  Please feel free to date the matrix as of
December, 1999, if you wish.  Please forward any recent changes to me for
comment  and I will respond immediately.  Then we can move on to other things!
Thanks for your help and attention to this mattter.  Regards.  Sara
---------------------- Forwarded by Sara Shackleton/HOU/ECT on 05/04/2000
10:34
AM ---------------------------

"MBTOS - Marcelo Rodrigues" <Mbtos@tozzini.com.br> on 03/13/2000 06:27:26 PM

To:   Sara.Shackleton@enron.com
cc:   Brent.Hendry@enron.com, Lynn.Aven@enron.com, afac@tozzini.com.br
Subject:  Re: Financial Trading in Brazil

Dear Sara:

Thank you for your E-mail below. We will be reflecting the new changes in the
regulations in the chart and will be sending it to your review as soon as
possible.

Kind regards,

Marcelo Rodrigues

>>> "Sara Shackleton" <Sara.Shackleton@enron.com> 03/13 2:29 pm >>>

Greetings to you both!  It has been awhile since we last spoke.  I would like
to
finalize the matrix which we have been discussing since the latter part of
1999.
Although we were awaiting new Central Bank regulations, I am beginning to
think
that the Central Bank revisions will not impact the matrix except with respect
to transactions which may be entered into by entities that are the subject of
the Central Bank regulations.  Please let me know whether or not you agree or
can offer any suggestions.  Thanks and regards.  Sara

 - Res2689a.doc
 - Ins325a.doc


I tried to fax all 4 deal sheets at once - and the pages stuck together.  So
I faxed each page seperately.

Nice outfit.  Judy says "Hey".


TO:	American Heart Walk Walkers

Per the request below, please advise whether you want a LARGE or EXTRA LARGE T-shirt (the shirt only comes in two sizes).

Leesa

 -----Original Message-----
From: 	Wadsworth, Sue
Sent:	Wednesday, October 17, 2001 9:20 AM
To:	Adams, Felecia; Ayers, Lesley; Chapa, Barbara; Crooks, William; Cruver, Brian; Darrah, Jacqui; Denton, Rhonda L.; Dhruv, Tushar; Fraylon, Damon; Fuller, Phyllis; Hall, Lyla; Hamlin, Mason; Herron, Steve; Ibrahim, Amr; King, Terri; Lewis, Susan; Lodi, Fahd; Macpherson, Sigrid; Mendez, Angela; Napier, Dale; Nash, Tim; Patel, Sheetal; Poranski, Peter; Priddy, Janice; Reynolds, Deborah; Roman, Deborah; Rose, Mary Sue; Sloan, Mary; Sugarek, Velvet; Trevino, Linda S.; Weeks, Charm; White, Leesa; Wilbeck, Tom; Willard, Kathy; Wood, Ron; Yao, Anne S.
Subject:	HEART WALK

In two weeks it will already be time to turn in the donations for the American Heart Association.  Please encourage your teams to get as many donations as possible.  Please send me the name and sizes (Large or Extra Large ONLY) for your walkers today.  Don't forget to keep track of the Enron Employees donations so they can be matched.

I will have the shirts available to pick up on bank day (Oct. 30) when you turn your money in.

Thanks again for volunteering to be captains.
Sue


Yeah, it's a long story but basically, he doesn't have a solid offer for me.
But he has connections with some REO directors of some good companies like
Advanta and he said he would give me great recommendations.  He has already
given my name and his recommendations to the REO director of Advanta and I
guess that guy wants to talk to me.

-----Original Message-----
From: Mark.Guzman@enron.com [mailto:Mark.Guzman@enron.com]
Sent: Tuesday, November 07, 2000 12:21 PM
To: Katie.Trullinger@wfsg.com
Subject: RE: FW: What's up?

The fact that you are moving down there has nothing to do with whether or
not I do.  I was just joking.  Stop be so over analytical.  :)   Did you
talk to Danny about the offer?


Fundies:

Due to rotations we need six analysts in Aug/Sept.  Chris has been assigned three new analysts from the pool.  I believe these people are outside of the 26 assigned to you.  We need a minimum of three.  If you want to give us up to six, we will send our allocation of three back to the pool.  We would also like a summer analyst.

 -----Original Message-----
From: 	Lavorato, John
Sent:	Wednesday, May 02, 2001 4:10 PM
To:	Allen, Phillip; Arnold, John; Arora, Harry; Aucoin, Berney; Baughman, Edward D.; Belden, Tim; Calger, Christopher; Davies, Derek; Davis, Mark Dana; Deffner, Joseph; Devries, Paul; Duran, W David; Foster, Chris H.; Gaskill, Chris; Gilbert-Smith, Doug; Herndon, Rogers; Jacoby, Ben; Josey, Scott; Kitagawa, Kyle; Lagrasta, Fred; Lavorato, John; LeDain, Eric; Luce, Laura; Martin, Thomas A.; McKay, Jonathan; McMichael, Ed; Miller, Don; Miller, Michael L.; Milnthorp, Rob; Mrha, Jean; Neal, Scott; Parquet, David; Presto, Kevin; Redmond, Brian; Shively, Hunter S.; Sturm, Fletcher; Swerzbin, Mike; Thompson, C. John; Tricoli, Carl; Tycholiz, Barry; Vickers, Frank; Will, Lloyd; Wolfe, Greg; Yzaguirre, Max; Zufferli, John
Cc:	Kitchen, Louise; Buckley, Karen; Davies, Neil
Subject:

We have been assigned 24 new Associates, 26 new Anaysts, 8 summer Associates and 8 summer Analysts from the incoming class.

Please let me know your needs with respect to numbers.   Louise and I will then decide if we agree and then we will create a process to pick from the ones we have assigned to us.  I'm assuming that Calgary, Toronto and Portland have done their own thing and don't need any of these people (let me know if this is incorrect).

If you received this and you report to someone else on this list (ie. you don't report to the office of the chair) please cooridinate your needs with your supervisor.

Please respond prompty,

John


Once every few years I hedge my corn crop in Iowa (10,000 Bu give or take).
Is this the sort of thing you are asking about? Needless to say, I don't have
a special account to do this.

	From:  Mark Taylor                           06/21/2000 06:39 PM

Sent by: Enron Announcements
To: All Enron Houston, Everyone_in_ECT_Calgary, Everyone_in_ECT_London,
Everyone_in_ECT_Portland, Everyone_in_ECT_New York, Everyone_in_ECT_Denver,
Everyone_in_ECT_Oslo, Everyone_in_ECT_Singapore, EI-Australia, Buenos Aires
Argentina - Office Staff, Buenos Aires Argentina - TGS Office Staff, Enron
Everyone_EOG_Denver, Enron Everyone_EOG_Calgary
cc:

Subject: Enron North America Corp. NYMEX Hedge Exemption Applications

We are in the process of preparing applications for position limit exemptions
for ENA,s NYMEX energy commodities futures trading.  These applications
require that ENA represent whether its officers, employees, owners, or agents
have a power of attorney, control or have a financial interest in any other
related commodity future(s) account either individually or acting with
another person pursuant to express or implied agreement.

Please direct any responses to my paralegal, Tana Jones, via intercompany
email or call her at (713) 853-3399 by the end of business Friday, June 30,
2000 if you have any power of attorney, control or have a financial interest
in any commodity futures account (other than an ENA or other trading
affiliate account).

IF YOU DO NOT HAVE A COMMODITY FUTURES ACCOUNT, YOU DO NOT NEED TO RESPOND TO
THIS REQUEST.


Jane:
Jane:

I wanted to give you the benefit of some of my thoughts before I considered your Annex A which I would like to compare to the ENA current version.  We are currently considering more revisions so your Annex A will help me to think a bit.

I have attached a redline of the actual confirm (without Annex A).  A couple of thoughts:
(1)	for purposes of creating a "template", I gave a choice for Termination Date
(2)	I collapsed Payment Date/Invoice because I'm concerned that EJC may forget to send a timely invoice so we need to ensure that there is no issue about whether or not a payment is owed
(3)	We need to "fix" the Floating Price language.  I don't know where the reference to "North Sea, West Africa, Mediterranean" comes from.  I didn't see it in Marketwire and London doesn't use it.  Also, the conversion language is vague (i.e., TTM, TTB and TTS are not defined but I suspect they refer to bid/mid/sell?  Are they references on the Bank of Tokyo-Mitsubishi, Ltd. screen?).  Also, it may be better to create a conversion reference to your Central Bank and not a particular banking institution (you could get caught later dealing with that bank, using the conversion language and then giving the bank an unfair advantage).
(4)	I didn't see your Schedule 1 guarantee but I assume that it is the normal ENE format.

Regarding Annex A, I quickly noticed an issue with the "TIBOR" definition (which uses quite a bit of ISDA language) which can be easily fixed with an appropriate ISDA reference.  Give me another day or so to comment.

Let me know if you'd like to talk.  My home number is 713-664-3207 if you'd like to call.

Regards.  Sara

Sara Shackleton
Enron Wholesale Services
1400 Smith Street, EB3801a
Houston, TX  77002
Ph:  (713) 853-5620
Fax: (713) 646-3490

 -----Original Message-----
From: 	McBride, Jane
Sent:	Friday, October 12, 2001 1:20 AM
To:	Shackleton, Sara
Cc:	Aronowitz, Alan; Bekeng, Jan-Erland; Hirl, Joseph; Glover, Sheila; Musch, Susan
Subject:

 << File: Final.doc >> Dear Sara,

I am attaching the long form confirm re a deal which we did yesterday  - small, but our office's first yen based crude transaction!

The yen-USD forex however was done through ENA and needs to be documented.  ENA will also be providing these services to EJ (through our metals desk) moving forward so we need a master agreement in place.

Alan suggested you may be able to assist with a form of document that would work in this situation.  The only requirement from EJ's perspective is that it be effective from yesterday, Oct 11, 2001.

If you need more information about the forex arrangements we have with ENA, Sheila / Jan Erland may be able to assist.

Otherwise, if you were able to get a draft together, I will run it by Susan Musch and Jan-Erland, and get it signed up.

Thanks Sara.

Jane McBride

Ps. I didn't make it to the GM Legal Conference this time but hope it went well and to see you in May.


Dadburnit!  You're not going to believe this.  I'm going to be in---you
guessed it---Houston.  Shewt.

	Nancy Sellers <Nancy.Sellers@RobertMondavi.com>
	10/19/2000 09:50 AM

		 To: "'Jeff Dasovich'" <Jeff_Dasovich@enron.com>, "Prentice @ Berkeley"
<PSellers@haas.berkeley.edu>, Prentice Sellers <PSellers@pacbell.net>
		 cc:
		 Subject: Alaska Flight #'s

To Mazatlan - 3/6 #264
To SF - 4/2 - #267

Nancy
(707) 251-4870 (phone)
(707) 265-5446 (fax)
"Plus je bois, mieux je chante"


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Please note that this message  was sent to the following e-mail address: brogers2@ect.enron.com


Justin please see my comments in red below.  You probably need to have a
conversation with Mark Taylor to flush out details of the broker customer
relationship.

Justin Boyd
11/01/2000 02:50 AM
To: Bob Shults/HOU/ECT@ECT
cc: Andy Zipper/Corp/Enron@Enron, Mark Taylor/HOU/ECT@ECT, Amita
Gosalia/LON/ECT@ECT
Subject: Re: Broker Client Process flow

Bob,

Thanks for these.  My comments/questions were:

What is the rationale for requiring margin from the broker, given its role as
agent for the client?  What if the client refuses to accept/acknowledge the
trade - I assume the agent is nonetheless liable?  The margin will secure the
risk between treansaction and confirmation with the counterparty.  the broker
will pay liquidated damages if counterparty does not accept the trade.  (risk
is essentially 1-3 days)

I assume we will negotiate a fully-fledged agreement with each broker,
covering all the usual protections for Enron (indemnities/right of agent to
bind its principal/reps and warranties/duties & obligations of
agent/liability of agent/margin arrangements)  Yes.  Mark Taylor is drafting
the agreement.  the agreement will lay out the margin requirements,
liquidated damages, etc.  I am not sure that the broker is acting as a agent
for the customer as the customer may not even know that the broker is
transacting on EnronOnline.

I assume that the client will be an approved EOL counterparty with trading
access for the particular product Not neccesarily.  the customer must however
have a profile set up in enronOnline and must have a credit headroom in
EnronOnline.  We can potentially paper the transaction under normal OTC
process.

We will need to ensure that the client agrees to be bound by each trade
concluded through the agent, notwithstanding the intermediation of the agent
(it would seem to me that we should create special ETAs/PAs for this purpose
- e.g. each trade is effected by the "click" of the agent, not the client;
the ETA does not contemplate intermediation; the PA relates to the use of
passwords by a principal and not its agent)  Mark is also drafting a BTA
(broker transaction agreement.  Once again the broker is not acting as agent
rather they will release the rights and obligations under the transaction to
the counterparty.

The agent will, in its terms of business with the client, need to ensure that
it is authorised to bind the client with respect all trades, whether effected
online (including EOL) or offline  This is not the case today in OTC
transactions and will not neccessarily be the case with the EnronOnline
broker client.

The agent will need to meet the usual legal/regulatory/financial tests, as if
it were acting as principal - e.g. in the case of derivatives trades, the
agent must be regulated to carry on its business by the UK SFA [no doubt, the
CFTC swaps exemption test will also need to be met]  Lets discuss

The agent must also be a corporate or similar commercial enterprise The
broker must be financially able to meet margin requirements

Look forward to your response.

Thanks

Justin

To: Justin Boyd/LON/ECT@ECT
cc: Mark Taylor/HOU/ECT@ECT, Andy Zipper/Corp/Enron@Enron, Michael
Bridges/NA/Enron@ENRON, Teresa Smith/Corp/Enron@Enron

Subject: Broker Client Process flow

We are currently in discussions with 3-4 brokers (including GFI in London) to
allow them to transact on behalf of their customers via EnronOnline.  Mark
Taylor suggested that I send you some information on the broker client
application and the process flow.  Attached please find the functional
specifications for the broker client and a draft process flow.  All documents
are work in progress.

We have been discussing this with Amita Gosalia (EnronOnline Product
Control), Debbie Nichols and Gail Hill in the London Office.

Please call me with any question at 713 853-0397.  I will continue to
coordinate my legal questions through Mark Taylor.


I have put down 2:00 - 2:30 on Nov. 6/01.  Pls come by 3206b.  If this is not a good fit, just let me know and we can re-schedule.

BT

 -----Original Message-----
From: 	McClain, Jennifer
Sent:	Wednesday, October 24, 2001 2:15 PM
To:	Tycholiz, Barry
Subject:	Meeting with Weather group

Barry,

We would like to set a time when Dave Kistler is back in town to discuss our list of companies that we would like to pursue along with your guidance.  Dave will be in town Nov 6th-7th, therefore, I would greatly appreciate you taking the time to meet with us for 30min-1hour. Please advise on your availability.

Thanks so much for you time last week and we look forward to working with you in the future.

Jenn McClain


Thanks for you help, Simon.  And Margaret, as always, thank you very much.


That's fine....as long as we can pull the info on the desk level.  Also, we will need to move this report to the Report Launcher within Enpower (i.e. get it out of the Port Calc screen) because we will need to grant access to it to individuals in Accounting and we don't want to give them access to Port Calc.  Ideally, we would like to have a screen similar to other reports in the report launcher (i.e. pcs) that would allow us to choose a portfolio, then choose certain or all desks within that portfolio, then choose whether we would like the info on a summary level (i.e. total liabilities and total assets) or a detail level (i.e. liabilities and assets on an individual deal basis within the desk selected).  Make sense?!

I'll be out of the office tomorrow, but I'll call and check messages so if this is unclear, you can just leave me a voice mail.  Otherwise, I'll be back in the office on Thursday.

Thanks!
casey
 -----Original Message-----
From: 	Lee, Norman
Sent:	Tuesday, February  5, 2002 7:20 PM
To:	Evans, Casey
Subject:	MTM Detail Report Changes.

Dear Casey,

	In order to run MTM Detail report by Desk, a Post ID is still needed. Is that acceptable? You will first choose a Post ID, and then select the desks within that Post ID.

	Would you want multiple Post IDs at once, too?

	Thanks,

Norman.


Kay -- No problem.  I'm with you totally on this.  Reagan did send the letter
to Marvin.  David and Marvin are meeting at 4:30 to discuss it.  Marvin has
not heard from Bob Priest yet, but he and Reagan are both trying to follow up
with Bob this afternoon.  We should hear from Marvin first thing in the
morning if not late this afternoon.  Thanks -- David

 -----Original Message-----
From:  Mann, Kay
Sent: Tuesday, May 29, 2001 11:18 AM
To: Rorschach, Reagan; Fairley, David; Kroll, Heather
Subject: Clarification

I'm thinking my last email was unclear.

I assume that someone from the commercial team will send (or has sent) the
extension letter to MDEA, YC, and Clarksdale's commercial reps for their
review.  I assume that the  commercial reps with YC, MDEA, and Clarksdale
will get whatever legal input they want from their own lawyers if they think
it is necessary (may not), but as a courtesy, I sent drafts to the two
lawyers I know about.

Kay


Andy:

I wanted to let you know where we were on incorporating your changes to the co-marketing agreement.  Drew, Ted and I have been through these, and they have all been addressed or incorporated except as set forth below.  Please give Drew or I a call if you have any questions; we will circulate a revised draft of the agreement when I receive it from Ted.

On your item #6, we deleted "subdomains" from the definition of Enron Web Site, but included successor sites if the successor site is Enron's primary electronic marketplace for the Specified Product.  We are making this agreement binding on Kiodex' successor, and Kiodex will certainly require that they have the benefit of this deal if Enron does something like changing it's name.  However, this definition wouldn't pick up any other Enron website unless it became the "EnronOnline" for the commodity that Kiodex was generating the report for.

On your item #7, the point that neither Enron nor Kiodex guarantees the accuracy or completeness of the data or reports will be addressed in a number of provisions, including limitations of liability provisions and agreements with Enron customers that will be entered into when they access the program (but that we have not yet drafted).

On your point #10 (regarding striking Kiodex right to use the Enron Market Data (the end of day mids) to generate indices, etc., we have deleted that, but we expect Kiodex to raise it again in negotiations.

On your point #16, because of the other limits we have on the data we will provide and how Kiodex can use it, it really doesn't work against us to call it a worldwide license, so we left it alone for the time being.  Kiodex only has the right to run the Kiodex reports for Specified Products, which are NA gas and crude and refined products, and products that we subsequently agree to include.  A worldwide license gives Kiodex the right to run those reports from a server located anywhere in the world, but only on data from customers that trade those Specified Products -- it would not give Kiodex the right to data or to run reports for Enron customers worldwide, or for Enron products that are traded worldwide.  As a result, a German customer that trades NA gas could get a Kiodex report for NA gas, but a US customer couldn't get a report on SO2 allowances and a German customer couldn't get a report on a product traded out of London (unless we agreed to add those products).

On your second set of comments re: no ads for competing platforms, as we discussed, we have included a most favored nations clause that if Kiodex promotes Enron competitors on their site, they will give us comparable placement on their site.  This is what we gave to Kiodex if we promoted their competitors on our site -- comparable placement.

Re: non-payment by Kiodex customers, we are defining a Qualified Customer as one that accesses the Kiodex site through the Enron site, or one that finds out about the Kiodex site from Enron (and we have audit rights to determine if customers told Kiodex they heard about Kiodex from us), or Enron customers that send us the release form to allow us to electornically transmit data to Kiodex.  What level of revenue those customers generate for Kiodex or how long their relationship lasts does not affect whether or not they are a qualified customer.

On the term, this will be a big deal point that we should all discuss in some more detail.  We are leaving it as a five year deal for purposes of this draft for the following reasons.  First, it was always pitched to Kiodex as a five year deal, and just changing that in the document without some pretty substantial pre-discussion with Kiodex will really create some fireworks.  Second, since we are making such substantial changes in the deal anyway because of the accounting issue (trying to book all of the income on the equity investment in Q1) that we are probably going to have to go back to the table on a number of things, and might be able to work out a different term as part of the overall
negotiations.

As to our equity if Kiodex terminates the agreement, we are providing that we keep the entire 12.5% and the warrants vest 100% if we terminate the agreement because of what is effectively a Kiodex breach of the co-makreting agreement that would include Kiodex terminating the agreement without a specific right to do so, like an Enron breach).

Here is the revised co-marketing agreement (clean and redlined to reflect your comments as well as Drew's):

Travis McCullough
Enron North America Corp.
1400 Smith Street EB 3817
Houston Texas 77002
Phone:  (713) 853-1575
Fax: (713) 646-3490
----- Forwarded by Travis McCullough/HOU/ECT on 02/21/2001 03:59 PM -----

	Andy Zipper/ENRON@enronXgate 02/16/2001 02:29 PM 	   To: Travis McCullough/HOU/ECT@ECT  cc: Jay Fitzgerald/NY/ECT@ECT, Drew Ries/ENRON@enronXgate  Subject: Kiodex co-marketing agreement

1). In recitals, should read EnronOnline will offer to its customers not Enron to its online customers. We have online customers for other systems i.e. DealBench, Commodity Logic, ClickPaper etc. etc.

2). Data format for Data feed will be XML. do not need to specify TCP.

3)."Enron Customer" replace "customer only" with "access the parts of the Enron Web site requiring a userid and password"

4)."Enron Data Feed"should read "means the technology platform by and through ...." . do not define platform.

5)."Enron Market Data" shall mean the last recorded midpoint price, defined as the arithmetic average of the bid price and the offer price, at the time of transmission of the Enron Market Data. If the midpoint is not calculable due to either the bid price or the offer price not existing at the time of caluclation whatever price is available, either bid or offer, will be used

6)." Enron Web Site" no need for subdomains or sucessors.

7). "Kodex Customer Agreement" There needs to be some agreement or acknowledgement by customer when using Lite tool that neither Kiodex or Enron guarantees the accuracy or comlpletness of the data or reports.

8). "Kiodex Oerational Failure" for any period of 2 days

9). 2.1.(a) We will limit number of requests per unit of time, as deided at the sole discretion of Enron.

10). 2.2 (b) (iv) Strike this. This is the first I've heard of this.

11). We use language around security that Kiodex will use commercially reasonable efforts. Why isn't it that they guarantee security ? Or if that security is breached we can terminate the agreement. My concern revolves around the fact "commerically reasonable for a struggling .com company might be less than what we consider acceptable.

12). 2.2 (c) Delete the second sentence.

13). 3.3 I would like the language to read that at a minimum they provision dual T1's, but that bandwidth but be sufficient to meet a level of service that Enron, in its reasonable judgement, finds acceptable.

14). 3.5 all subject to conforming with 3.1

15). 5.1 Real Time in this case means that as transactions happen on the Enron Platform they will be sent to the Kiodex platform. No guarantees on timeliness. It is our intent that this will happen consistent with transaction reporting on the Enron website.

16)5.1 (b). the license is not worldwide, just for us in North America.

This is as far as I have gotten. I will keep going and hopefully let you have rest of comments by Tuesday morning if not sooner.

----- Forwarded by Travis McCullough/HOU/ECT on 02/21/2001 03:59 PM -----

	Andy Zipper/ENRON@enronXgate 02/19/2001 01:59 PM 	   To: Travis McCullough/HOU/ECT@ECT  cc: Drew Ries/ENRON@enronXgate, Jay Fitzgerald/NY/ECT@ECT  Subject: Kiodex co-marketing agreement

On 4.2 (d) and 5.1 (d) I think the wording should go along the following lines:

" Kiodex will guarantee that all Encrypted Enron Transaction Data will not be available to any party, including but not limited to the EnronOnline customer whose data has been encrypted, in any electronic or textual form. The only approved method for viewing of such Data is in its aggregate form as provided by Kiodex risk workbench products. The format of such reports requires the approval of Enron prior to their being made available to a Kiodex customer. The redistribution, retransmission etc etc of such data is expressly prohibited."

The point here is that they can only use the data in Kiodex risk workbench products. while they can show a listing of transactions used for the aggregation of risk, the only way this data could get into someone other than Kiodex's system is by typing.

5.1 (e) Kiodex will guarantee security....

6.1 strike "with familiarity with the Kiodex Lite Tool and the operation of"

6.2 No advertisements for competing platforms. We can furnish them with a list.

7.1 non-payment by a Kiodex customer post signing a Kiodex customer agreement does not alter status as qualified user and our warrant earn in.

8.1 5 years seems way too long. I was thinking more like 18 months ?? Jay, Drew ??

General point here: What are the consequences for our equity if Kiodex terminates ? We have been discussing this a lot but I have not heard where we are at on this. This, as Travis is well aware, effects our view of termination rights by them.

8.3 (b) Shouldn't that be "Kiodex shall have disabled....."

8.3 (i) strike the word "material". In the words of Ted Stockbridge everything in this agreement is material or it wouldn't be in.


Stan Horton will attend in person.

Billy Dorsey@ENRON_DEVELOPMENT
04/18/2001 10:21 AM
To: Cliff Baxter/HOU/ECT, Jeremy Blachman/HOU/EES@EES, Philippe A
Bibi/HOU/ECT, Raymond Bowen/HOU/ECT, Michael R Brown@ECT, Rick Buy/HOU/ECT,
Richard Causey@ENRON, Wade Cline/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, David
Cox@Enron Communications, David W Delainey/HOU/EES@EES, James V
Derrick@ENRON, Steve Elliott@ENRON COMMUNICATIONS, Jim Fallon/Enron
Communications@Enron Communications, Andrew S Fastow/HOU/ECT, Mark
Frevert/NA/Enron, Ben Glisan@ECT, Kevin Hannon@ENRON COMMUNICATIONS, Rod
Hayslett/FGT/Enron, Stanley Horton@ENRON, James A Hughes/ENRON_DEVELOPMENT,
Steven J Kean/NA/Enron@Enron, Louise Kitchen@ECT, Mark Koenig@ENRON, Kenneth
Lay@ENRON, John J Lavorato/Enron@EnronXGate, Dan Leff/HOU/EES@EES, Danny
McCarty@Enron, Mike McConnell/HOU/ECT@ECT, Rebecca
McDonald/ENRON_DEVELOPMENT, Jeffrey McMahon/HOU/ECT, Mark Metts/NA/Enron,
Mark S Muller/HOU/EES@EES, Cindy Olson@ENRON, Karen S Owens@ees@EES, Ken
Rice@ENRON COMMUNICATIONS, Matthew Scrimshaw@ECT, Jeffrey A
Shankman/Enron@EnronXGate, Jeffrey Sherrick/Corp/Enron, John Sherriff@ECT,
Jeff Skilling@ENRON, Marty Sunde/HOU/EES@EES, Greg Whalley@ECT, Thomas E
White/HOU/EES@EES, Greg Piper/Corp/Enron, Janet R Dietrich/HOU/EES@EES
cc: G G Garcia@Enron, Susan Skarness/HOU/ECT, Karen K Heathman/HOU/ECT,
Sharron Westbrook@ENRON, Kay Chapman/HOU/EES@EES, Stephanie
Harris/Corp/Enron, Bridget Maronge/HOU/ECT, Nicki Daw/NA/Enron, Inez C
Dauterive@ECT, Carol Ann Brown@ECT, Cindy Stark@ENRON, Maureen
McVicker/NA/Enron@Enron, Joannie Williamson@ENRON, Rosalee Fleming@ENRON,
Tori L Wells@ECT, Cathy Phillips@ECT, Loretta Brelsford/ENRON_DEVELOPMENT,
Sue Ford/HOU/ECT, Dolores Fisher/NA/Enron, Karen Owens/HOU/EES@EES, Dorothy
Dalton@ENRON COMMUNICATIONS, Mercedes E Estrada@Enron Communications,
Christina Grow@ENRON, Lauren Urquhart@ECT, Sherri Sera/Corp/Enron@ENRON, Liz
M Taylor@ECT, Judy G Smith/HOU/EES@EES, Kathy McMahon/NA/Enron@Enron, Suzanne
Danz@ENRON, Peggy McCurley/HOU/ECT, Marsha Schiller/HOU/ECT, Samantha
Lopez-Dias/EU/Enron@Enron, Jana L Paxton/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT,
Connie Blackwood/ENRON_DEVELOPMENT, Tammie Schoppe@ECT, Kimberly
Hillis/HOU/ECT, Jennifer Burns/HOU/ECT, Sharon Dick/HOU/EES@EES, Kathy
Dodgen/HOU/EES@EES, Kerry Ferrari@ECT, Carol Moffett/HOU/EES@EES, Jennifer
Adams@Enron Communications, Leah Rijo@ECT, Lucy Marshall/Enron
Communications@Enron Communications, Kathy Campos/GPGFIN/Enron, Julie
Armstrong@Enron, Binky Davidson/HOU/EES@EES, Mrudula
Gadade/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Kelly Johnson@Enron, Rebecca
Carter@ENRON, Tina Spiller/Corp/Enron, Vivianna Bolen/Corp/Enron, Linda
Hawkins/Corp/Enron, Vanessa Bob/Corp/Enron

Subject: re: Executive Committee Weekly Meeting

Executive Committee Weekly Meeting
Date:  Monday, April 23rd
Time:  11:00 a.m. (CDT)
Location: 50th Floor Boardroom
Video:  Connections will be established with remote locations upon request.
Conf call: AT&T lines have been reserved.  Please contact Sherri Sera
(713/853-5984)
  or Bill Dorsey (713/646-6505) for the weekly dial-in number and passcode.

Please indicate below whether or not you plan to attend this meeting and
through what medium.

 Yes, I will attend in person _______

 By video conference from _______

 By conference call  _______

 No, I will not attend  _______

*  *  *

Please return this e-mail to me with your response by 12:00 p.m., Friday,
April 20th

Thank you,
Bill Dorsey.


What do you think. Probably ok I guess. Rick
---------------------- Forwarded by Rick Buy/HOU/ECT on 02/12/2001 10:36 AM
---------------------------
From: Michael B Rosen on 02/12/2001 09:11 AM
To: Rick Buy/HOU/ECT@ECT
cc:
Subject: DASH for Harvard

Rick-

Thanks for the DASH for the Harvard case study.

I know that you changed the name and some numbers, but I just wanted to check
that you are comfortable with it being included as an example in a study that
will be published and taught.

Please confirm.

Thanks.

Mike


The attached schedule covers Monday through Wednesday, Jan 21-23.  Schedules sent yesterday for the holiday Monday and for Tuesday now incorporate later weather forecast data and are again shown on sheets  "EES-Schedule day 1" and "day 2".  The schedule for Wednesday, Jan 23 on sheet labeled "day 3" is being sent early to accomodate the long holiday weekend.  If significant changes occur, this schedule will be rerun Tuesday AM.  Associated text files for all dates will be posted to Sparky as usual.

Michael R. Frazier
Manager
Load Forecasting Desk
Enron Energy Services
Office: 713-345-3200
Pager: 877-926-0615
P-mail: 8779260615@skytel.com


Molly,

Yes, March 1 would work.

Vince

	Enron North America Corp.

	From:  Molly Magee                           01/16/2001 03:36 PM

To: Vince J Kaminski/HOU/ECT@ECT
cc:
Subject: Fed Ex from Iris

Just checking to be sure you're okay with a March 1 start date for Iris?

Molly
---------------------- Forwarded by Molly Magee/HOU/ECT on 01/16/2001 03:35
PM ---------------------------

	Enron Capital & Trade Resources Corp.

	From:  "iris mack" <irismmack@hotmail.com>
01/16/2001 03:13 PM

To: molly.magee@enron.com, Vince.J.Kaminski@enron.com
cc:
Subject: Fed Ex from Iris

Hi,

     Thanks for the Fed Ex with the offer letter, and other pertinent
information about Enron.

     I have signed the letter and returned it to you, along with a couple of
other forms.  You should receive these documents via Fed Ex on tomorrow
morning.

     Because I have to tie up a few loose ends here in California, I won't
be able to start until March 1st.  I hope that is okay.

     Thanks so much.

Regards,
Iris
_________________________________________________________________
Get your FREE download of MSN Explorer at http://explorer.msn.com


(See attached file: hpl0913.xls)

 - hpl0913.xls


---------------------- Forwarded by Vince J Kaminski/HOU/ECT on 11/17/2000
05:37 PM ---------------------------

Shirley Crenshaw
11/15/2000 02:48 PM
To: bobb.supertravel@wspan.com, audrau@yahoo.com, Memaw1995@aol.com,
Kathy.Crenshaw@inteq.com @ Enron, Kayla Crenshaw/Enron Communications@Enron
Communications, Anita DuPont/NA/Enron@ENRON, IMYoars@aol.com, Vince J
Kaminski/HOU/ECT@ECT, Kelly Summers/HOU/ECT@ECT
cc:
Subject: Palm Beach County Ballot Revision

This is so funny!  We all need a good laugh after this past week!

 - Ballot.doc


I will be out of the office starting  07/12/2000 and will not return until
11/13/2000.

I will respond to your message when I return.


Mark, I just wanted to send you an e-mail to let you know that I have, over
the last six weeks, received an increasing number of requests for assistance
in drafting language for the long descriptions of new Canadian products our
commercial people want to trade on EOL.  These products have primarily been
financial products and have been with respect to both gas and power.  I
understand that the process is that Dianne Seib of our offices makes the
request to commence the approval process through Melba Lozano and that,
eventually, you are asked to approve the products on-line from a legal
perspective.  I wanted to check with you to make sure that you are okay with
me preparing the long descriptions for these various products and to find out
if you have any preference as to whether I forward the descriptions to you
when I send them to Dianne for her to start the process, just drop you an
e-mail letting you know about the new product and that I have been involved
and have signed off on the description or just leave it for you to look at
when you receive the request for legal approval from Melba and if you have
any concerns you can call me.  Whatever is easiest for you is fine with me,
just let me know how you would like to proceed.

By the way, I'm not sure if you were aware but Mark Powell from the Calgary
office is headed down to the Houston office for his secondment.  He arrives
in your offices on Monday, March 19 and will be there for five weeks.

Cheers
Greg


I wanted to update you on those Phillips deals that the counterparty is
saying are booked wrong.  I have left Gary L. a voice mail, but I have a
feeling I won't be hearing from him.  So, we might not be getting an answer
until next week on these deals.  The deals are; 131054 & 131048.

If I hear from Gary I'll let you know.  I'm hoping that they are ok.

Julie


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