The Orange County Register ISO: Duke was just following orders ?The power
producer says the ????
???????agency's disclosure that it ordered units ramped up and down
discredits whistleblowers. July
???????2, 2001 By KATE BERRY

San Diego Union Tribune Duke Energy lashes back at charge of price rigging By
Bill Ainsworth
???STAFF WRITER ?July 2, 2001

Los Angeles Times, July 2, 2001 Monday, Home Edition, Page 1, 1338 words,
????THE NATION; ; Rule May Spur Firms to Waste Energy, JOSEPH MENN, TIMES
STAFF
????WRITER, PALO ALTO

Los Angeles Times, July 2, 2001 Monday, Home Edition, Page 1, 1708 words,
????NEWS ANALYSIS; For Unit of Edison, a Rough Road Ahead; Power: Mission
????Energy's ability to grow is being hampered by its parent's efforts to stay
????out of Bankruptcy Court., JERRY HIRSCH, TIMES STAFF WRITER

Los Angeles Times, July 2, 2001 Monday, Home Edition, Page 7, 297 words,
????The State; ; Californians Cut Energy Use 12.3% From Last Year, TWILA
DECKER,
????TIMES STAFF WRITER

Los Angeles Times, July 2, 2001 Monday, Home Edition, Page 7, 746 words,
????The State; ; Beating Up a Powerful Friend and Creating a Good Impression,
????GEORGE SKELTON, SACRAMENTO

The San Francisco Chronicle, JULY 2, 2001, MONDAY,, FINAL EDITION, NEWS;,
????Pg. A1, 1080 words, Usage down -- Davis' team gloats; ???Energy advisers
????call campaign big success, Jim Doyle

The San Francisco Chronicle, JULY 2, 2001, MONDAY,, FINAL EDITION, NEWS;,
????Pg. A1, 1394 words, Why suppliers get away with huge profits;
????Manipulation of power market appears to be legal, experts say, Carolyn
Said

AP Online, July 1, 2001; Sunday, Domestic, non-Washington, general news
????item, 411 words, Power Grid Operator Details Swings, LOS ANGELES

The Associated Press State & Local Wire, July 1, 2001, Sunday, BC cycle,
????Business News, 637 words, Reports say Calif. power grid operator behind
Duke
????plant's output swings, LOS ANGELES

The Associated Press State & Local Wire, July 1, 2001, Sunday, BC cycle,
????State and Regional, 614 words, Report: State grid operator behind plant's
????output swings, LOS ANGELES

The Associated Press State & Local Wire, July 1, 2001, Sunday, BC cycle,
????State and Regional, 506 words, State: Californians cut power use 12
percent
????last month, By LESLIE GORNSTEIN, AP Business Writer, LOS ANGELES

ISO: Duke was just following orders

The power producer says the agency's disclosure that it ordered units ramped
up and down discredits whistleblowers.

July 2, 2001

By KATE BERRY
The Orange County Register

The California Independent System Operator, the agency that runs California's
electric grid, said Sunday that Duke Energy was following its orders to ramp
generating units up and down during a three-day period in January when the
company was accused by three whistleblowers of price- manipulation.

Duke Energy said the disclosure Friday that the ISO was responsible for
"ramping up" and "ramping down" its generating units would discredit the
accusations of the three former plant employees.

The whistleblowers were lauded last month by Gov. Gray Davis as "heroes."
They testified June 22 before a Senate committee that Duke controlled its
power supplies to drive up prices.

Duke is the subject of several federal and state investigations, including a
grand jury inquiry, into whether generators operated to drive up prices in
California's unregulated wholesale electricity market.

Steve Maviglio, a spokesman for Davis, could not explain why the governor or
the Senate committee were unaware that the ISO was responsible for having the
generating units ramp up and down.

On Friday, the ISO released a memo to the state's Electricity Oversight Board
stating that Duke's "peaking" unit in Chula Vista was "in accordance" with
ISO regulations. The memo said Duke followed the agency's orders to increase
and decrease production 38 times during a three-day period in mid-January.

Duke spokesman Tom Williams said the ISO memo refutes the testimony of the
whistleblowers.

"These former employees had an incomplete picture of what was going on," he
said. "They made assumptions."

Stephanie McCorkle, an ISO spokeswoman, said her agency did not rebut the
testimony of the former employees because the ISO was not asked to testify,
nor was it involved in the Senate committee hearings.

She said the ISO routinely tells generating units - especially peaker plants
-- to ramp up and ramp down at a moment's notice to control the ebb and flow
of electricity through the grid.

The plant's production was an automated dispatch system that allowed the ISO,
not Duke, to control the output. The ramping up and down of units can be done
for several reasons, including price, fluctuating demand, operating reserves
and congestion, she said.

The ISO is still investigating Duke's bidding pattern during the period from
Jan. 17 to Feb. 14, when Duke routinely charged prices as high as $3,880 a
megawatt-hour. Neither the ISO nor Duke has released pricing information from
their plants.

The Federal Energy Regulatory Commission ordered Duke to refund $20 million
for the prices it charged in January and February, even though the company
has not been paid for the power purchases.

"It's not a secret that we had high prices in this period because of credit
reasons," Williams said. "The price issue has been fully fleshed out. People
need to not lose sight of the fact that we haven't been paid."

Peter Navarro, an economics professor at the University of California,
Irvine, said the Duke whistleblowers also testified about the broader issue
of power plants being kept offline for routine maintenance - a central reason
in why California faced threats of rolling blackouts in the winter.

"It would be a shame if Duke came out looking like a wronged white knight
just because of the governor's overexuberance in targeting power suppliers,"
said Navarro, who has been highly critical of Davis' handling of the
electricity crisis.

Duke Energy lashes back at charge of price rigging

By Bill Ainsworth
STAFF WRITER

July 2, 2001

SACRAMENTO -- Duke Energy, which has been stung by allegations of price
gouging at its Chula Vista plant, has begun fighting back by selectively
releasing documents it says exonerate the company of trying to drive up
prices by withholding electricity during a critical power shortage in January.

Duke has released a memo from the state electricity grid manager saying the
company was following state orders when it powered the plant up and down
during three days in January.

But the company has refused to release price information that a spokeswoman
from the Independent System Operator, the grid manager, said was critical to
fully understanding whether the company engaged in price gouging.

The dispute is part of a larger battle between Gov. Gray Davis and the power
generating companies that have made enormous profits from the California
energy crisis.

Last month, in a dramatic public hearing before a state Senate committee,
three former workers at the Chula Vista plant accused Duke of turning
electricity production up and down to manipulate prices, throwing away spare
parts and prolonging plant outages.

Duke, which is based in North Carolina, leases the plant from the San Diego
Unified Port District.

Duke officials called the allegations "baseless," saying plant workers
weren't in a position to know why the plant was powered up and down. Duke
spokesman Tom Williams acknowledged that the company never explained its
actions to employees, saying it was none of their business.

Duke said the plant was following orders from the ISO when it powered down on
Jan. 16 during a Stage 3 alert, when electricity supplies were so low that
rolling blackouts were threatened.

Yesterday, the company released a memo from the grid manager confirming that
from Jan. 16 through Jan. 18, the company followed ISO direction. "The units
did follow the ISO dispatch orders," the memo said.

But Duke refused to disclose how much it charged the state for electricity on
those days, saying the information was confidential.

The ISO, in a March report, accused Duke and other generating companies of
manipulating the market by withholding power and by bidding prices higher
than the state can afford.

Stephanie McCorkle, spokeswoman for the ISO, said the pricing information is
needed to get a complete picture of Duke's actions in January. She said the
grid manager may have ordered the South Bay plant to power down because Duke
was charging prices so high the state could not afford them.

"The ISO frequently orders plants to ramp down because the plant owner is
charging high prices. Output will certainly fluctuate if the price is so
astronomical we can't afford it," she said.

The ISO has the pricing information but is not allowed to release it without
authorization from the power company.

Duke spokesman Williams yesterday said the ISO memo shows that Duke reduced
plant output to keep the electricity grid in balance -- that is, to make sure
that supply was equal to demand.

He said Duke charged high prices during those three days in January,
including the record price of $3,880 per megawatt-hour, because it feared it
would not be paid.

"It's not a secret at this time that we had some high credit prices," he said.

Michael Aguirre, a lawyer who is suing Duke and who helped get the ex-workers
to testify to the Senate committee, chastised the company for not fully
disclosing the prices.

"They should have the courage that these workers had to come forward with all
the information," he said. "They should make a full disclosure."

The memo from the ISO does not address broader charges by the former
employees that the company had been powering its plant up and down for the
entire year to drive up the price of electricity.

Glenn Johnson, a former mechanic at the South Bay plant, has said working
turbines frequently were taken offline for "economic reasons." He and other
plant workers say that meant the company was trying to drive prices higher.

Williams yesterday said "economic reasons" meant the cost of running the
extra turbines was so high the company could not recover the operating costs.

"It's not to drive prices up, it's because you can't produce the power and
make money," he said.

Aguirre said he was skeptical that Duke could not make money operating close
to capacity at a time when wholesale electricity prices were skyrocketing.

Lt. Gov. Cruz Bustamante yesterday accused the company of trying to explain
away its price gouging. "Duke should stop trying to manipulate the media the
way it has California's energy market," he said.

On Friday, Duke asked the ISO to release its memo to just two news
organizations, the Los Angeles Times? and the Charlotte Observer? in North
Carolina. But McCorkle refused, saying a document should be available to
everybody or to nobody.

The newspapers nevertheless obtained the document. Williams said the company
selected those two news organizations because it had been working with them
for weeks on the story. He said Duke plans to release the memo to the public
at a news conference today.

Davis wants nearly $9 billion in refunds from Duke and other companies that,
under the state's flawed deregulated electricity system, acquired power
plants from public utilities and raised wholesale rates dramatically.

Duke Energy, which has been accused by state and federal regulators of
overcharging California customers for its power, set a California record when
it sought $3,880 per megawatt-hour in January.

By comparison, during the first half of 2000, power sold for about $30 a
megawatt-hour.

Los Angeles Times
July 2, 2001 Monday ?Home Edition

SECTION: Part A; Part 1; Page 1; National Desk

LENGTH: 1338 words

HEADLINE: THE NATION;

Rule May Spur Firms to Waste Energy

BYLINE: JOSEPH MENN, TIMES STAFF WRITER

DATELINE: PALO ALTO

BODY:

??The fluorescent lights are burning bright on the top floor of a
Hewlett-Packard Co. office building here, even as sunlight streams in from
skylights and windows, and it pains HP electricity conservation czar Erik
Andres.

??Although the Silicon Valley computer firm has spent more than $1 million on
the latest conservation software and gadgetry and has cut electricity
consumption by 12% from a year ago, Andres won't switch off any more lights.

??If he did, it would make it harder for the company to comply when Pacific
Gas
& Electric orders Hewlett-Packard to cut its power use by as much as 15% in 15
minutes. That's the curtailment promise HP and more than 50 other large
companies around the state recently made to their utilities to win exemptions
from rolling blackouts.

??"We could cut our power 10% right now and not feel it," Andres said,
gesturing upward. "The only reason the lights are on in here is for the
curtailment."

??Andres' dilemma illustrates an unfortunate paradox: California's main
program
for protecting businesses from blackouts is perversely rewarding firms that,
on
most days, conserve the least. Power wasted in the resulting game-playing is
driving up demand and may increase the likelihood of blackouts for
Californians
who aren't exempt, according to utility customers and analysts.

??Since few companies will confess to using more power than they need, it's
impossible to know how much energy is squandered. But few believe
Hewlett-Packard, considered to be among Silicon Valley's better corporate
citizens, is alone.

??"HP isn't the only one who's got smart people," said Richard McCann, a
partner at energy consulting firm M.Cubed in Davis, Calif. "Every program you
have, you're going to have people that figure out how to work the system."

??A lot is at stake in the curtailment program, which was approved in its
current form in May by the California Public Utilities Commission. PG&E, which
has signed up the most customers for the plan, says a 10% power savings from
those companies would amount to 77 megawatts--enough to keep the lights on in
50,000 homes. That kind of savings could have mitigated the effect of the last
rotating blackouts PG&E had to impose. Southern California Edison and smaller
utilities are also participating in the program.

??But if companies can win blackout exemptions later by burning a few more
bulbs now, they will.

??"Anything a business can do to avoid rolling blackouts has a tremendous
appeal," said Joe Desmond, a software executive who works on energy issues for
the Silicon Valley Manufacturing Group.

??Firms Agree to Energy Cuts Under Program

??The prospect of dozens, even hundreds, of hours of outages this summer has
large companies fretting about millions of dollars in lost productivity,
ruined
equipment and other damages. Given that, industry experts say companies in the
curtailment program are only responding logically to the details in the PUC
plan, which carries a title so bureaucratic they find it hard to say with a
straight face: the Optional Binding Mandatory Curtailment Program.

??The program works like this:

??If a company pledges to cut power use from a utility's circuit, the utility
will leave that circuit on when it blacks out other areas. (Smaller businesses
and other users that share a circuit have a much harder time meeting the
requirements, so fewer have applied.)

??Failure to meet the utility's reduction target--whether 5%, 10% or 15%--is
severely punished. The excess use is billed at $6,000 a megawatt-hour,
compared
with recent market prices of about $100 an hour. And repeated misses get
companies barred from the program for five years.

??The trick lies in what usage level the reductions are measured from.

??Under PUC rules, that baseline level is an average of the power consumed
during the 10 most recent days without calls for power curtailment. Weekends
are
excluded, if the call comes during the workweek.

??That means the more power a company uses now, the easier it is to meet the
target when the call comes.

??"It has taken away the incentive for people to do voluntary conservation,"
said Oracle Corp. Energy Director Mukesh Khattar. "There is a dark side that
comes to your mind" and suggests letting the air conditioning rip. Oracle and
most other companies interviewed say they haven't stopped saving electricity.

??But anecdotal evidence shows that "some people are reluctant to conserve, so
that they can keep their average high," said Jennifer Tachera, a staff
attorney
at the California Energy Commission.

??Hewlett-Packard, Oracle and others complain that the curtailment program
gives them little credit for the conservation measures they have already
taken,
such as installing more efficient air conditioners and lights. HP has cut its
electricity use by 12.5% in the six months through April from a year earlier.

??The companies also point out that the 10 most recent days without a
curtailment call are likely to have lower temperatures, and lower
air-conditioning demand, than the first day with a call. That makes the
baseline
artificially low--and makes it even more tempting to conserve less in advance.

??"They're measuring on the 10 days when it's cool, as opposed to the one day
when it's 103 in San Francisco," said consultant Carolyn Kehrein of Energy
Management Services.

??Solutions to Problem Aren't Readily Found

??The big energy users and trade groups have suggested alternatives for
setting
the baseline.

??One scenario would set the baseline at the level used on the same day a year
earlier. But many companies have added or closed facilities since then.

??Another solution, said William Booth of the California Large Energy
Consumers' Assn., would be to allow each customer to negotiate a reasonable
baseline with its electricity supplier.

??"Any blanket approach is going to affect different companies in different
ways," Booth said. But the utilities say they don't have the staff for that.

??A third proposal would set the baseline at the level of consumption when the
call comes in. But opponents are worried that as daily demand projections get
more sophisticated, companies could manipulate that baseline as well.

??"We understand that the reluctance to go there is mainly based on the fear
of
'gaming,' where a customer will jack up their usage just before they believe
they will be called," said Dorothy Rothrock, vice president of the California
Manufacturers and Technology Assn. She said monitoring could catch that type
of
maneuver.

??And a fourth idea, supported by Hewlett-Packard and other industrial users,
would adjust the baseline for temperature changes.

??"It would be a lot better than what we have now," said Bill Smith of the
Electric Power Research Institute, a utility think tank, who for a year has
been
advocating the use of such a formula.

??Jonathan Lakritz, an energy expert at the PUC, said all baselines are
subject
to manipulation and the agency had to pick one quickly before temperatures
started rising.

??"We were doing this under extreme time pressure," Lakritz said. "Certainly
some people are going to find it in their best interest to raise their
baseline."

??In the program as it stands, the PUC and the utilities say they hadn't heard
about companies manipulating the system.

??Then again, Lakritz said, "there weren't very many people that were coming
to
the commission and explaining how they were going to game the system."

??Lakritz said that the PUC is making minor adjustments to the program but
that
more serious changes probably won't be made until the summer is over.

??Lynda Ziegler, Southern California Edison's director of business and
regulatory planning, said she was disappointed to hear of possible abuses.

??"I think that is very unfortunate," Ziegler said. "It's against what
everyone
in California is trying to do, which is make it through this summer."

??*

??MORE INSIDE

??Saving energy: Consumers are doing their part. B7

??Power costs: Edison unit's ability to grow is at risk. C1

LOAD-DATE: July 2, 2001

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

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

??????????????????????July 2, 2001 Monday ?Home Edition

SECTION: Business; Part 3; Page 1; Financial Desk

LENGTH: 1708 words

HEADLINE: NEWS ANALYSIS;
For Unit of Edison, a Rough Road Ahead;
Power: Mission Energy's ability to grow is being hampered by its parent's
efforts to stay out of Bankruptcy Court.

BYLINE: JERRY HIRSCH, TIMES STAFF WRITER

BODY:

??For the first time in months, Edison International can see a path through
the
financial and political labyrinth that previously looked to dead-end in
bankruptcy proceedings.

??Yet the survival of the Rosemead-based power company is by no means assured,
as its moves to dodge a date with a federal bankruptcy judge have taken a
tremendous toll.

??In particular, a desperate effort to save itself last week may have dealt a
debilitating blow to Edison's best remaining business, a subsidiary that
builds
and operates power plants around the world.

??That company, Edison Mission Energy, was once considered the crown jewel of
independent power producers.

??But today, the Irvine-based subsidiary is burdened with more than a billion
dollars of debt, used to help its parent company repay loans and avoid
insolvency last week; key managers have fled; and industry analysts and former
company executives say it has little hope for growth and will be at a
financial
disadvantage to its competitors for years to come.

??In the end, Edison's strategy to save itself and its Southern California
Edison utility may prove to be a successful but Pyrrhic victory, producing
enough cash flow to stave off bankruptcy but not nearly the capital needed
for a
healthy future.

??"The path we are on is difficult and fraught with peril," John Bryson,
Edison
International's chief executive, said in an interview Friday. "But it is clear
to us that trying to work this out is vastly preferable to trying to do it
with
lawyers and judges and creditors committees in a bankruptcy court."

??The latter course is the one chosen by PG&E Corp., the San Francisco holding
company that voluntarily plunged its Pacific Gas & Electric utility into
Chapter
11 proceedings in April. PG&E was willing to trade the chance that a federal
bankruptcy judge would strip the utility of important assets to pay creditors
but otherwise leave untouched its other main business, independent power
producer National Energy Group.

??Both utilities became mired in debt, losing billions of dollars buying
electricity when wholesale prices spiked during the last year.

??While Edison executives cope with a legislative stalemate in
Sacramento--where attempts to craft a rescue plan for SCE have stalled--they
can
take heart in several recent developments.

??Major new power plants are coming online, including a Kern County joint
venture of Mission Energy and a division of Texaco Inc. Wholesale energy
prices
have declined, at least for now. SCE has reached repayment agreements with a
group of small generators, the most skittish of its creditors.

??"A number of elements have come together," Bryson said.

??Having survived a near-death experience last week, when Wall Street nearly
balked at Edison's efforts to refinance $1.2 billion in loans and bonds that
started to come due Saturday, Bryson sees an Aug. 15 deadline for a rescue
plan
worked out with Gov. Gray Davis as the next critical milestone for the
company.

??The question now, said Theodore Craver Jr., Edison's chief financial officer
and point man on Wall Street, is how long creditors will wait if they don't
see
a plan coalescing at the state level.

??"This is just not a matter of keeping lightbulbs on," Craver said. "There
are
still billions of dollars of unpaid debt and bills that need to be taken care
of. And the people who are owed that money are anything but relaxed."

??The utility rescue plan worked out between Edison and Davis still lies
stagnant in the California Legislature--its key provision being the state's
purchase of the company's electricity transmission grid for nearly $2.8
billion--and alternative proposals have thus far failed to gather momentum.

??Although the state Senate recently began hearings on the deal at the
governor's request, no votes have been cast, and there is widespread
acknowledgment among lawmakers that the proposal, as written, is functionally
dead.

??Moreover, with the $100-billion state budget and other major matters
demanding the attention of Democrats and Republicans alike, there is little
effort being made in the Capitol to craft a solution before the mid-August
deadline the utility had given state leaders.

??In fact, with lawmakers set to take their annual summer break next month
after the end of partisan budget theatrics, it is almost certain that no SCE
rescue would be approved before fall, if at all.

??Senate President Pro Tem John Burton (D-San Francisco) bluntly stated at a
recent news conference that he feels no pressure to approve a deal with so
many
consequences for the people of California in so little time.

??Assembly Speaker Bob Hertzberg (D-Sherman Oaks), meanwhile, continues to
lead
efforts to craft an alternative plan that would place much of the burden of
financing an SCE rescue on big business. In exchange, companies would be
allowed
to bypass the traditional utilities and contract directly with energy
marketers
for power.

??Although the plan has gathered the most support yet among lawmakers, it also
has met with opposition from business leaders, who contend that they alone
should not shoulder the costs of the energy crisis.

??Bryson is concerned but not panicked over the inaction at the legislative
level.

??"It is a long process trying to understand what has to be done and who needs
to do it," he said.

??Yet he concedes that persuading creditors to remain patient is a difficult
and at times "testy experience"--not to mention something that worries
analysts.

??"You still have the risk that if any creditors get spooked, it is very easy
for just a few of them to get together and file an involuntary-bankruptcy
petition," said Jon Cartwright, a bond analyst at Raymond James & Associates
in
St. Petersburg, Fla.

??Whether or not Edison winds up in U.S. Bankruptcy Court, analysts say the
company's extraordinary efforts to prevent a bankruptcy filing will have a
long-term effect on Mission Energy.

??Independent power producers depend on strong cash flow and borrowing power
to
grow. That's because power plants generally have a limited output. They don't
work like a retail chain, which will see profit soar when sales per store
increase. Independent power producers grow by building new plants and adding
generating capacity.

??"There's no question that if credit costs at Edison Mission Energy are
extremely high, we will be encumbered in our efforts to grow the company,"
Bryson said. Last week's bond sale to refinance Edison International's debt
was
secured by Mission Energy and had a yield of 14%, about double what a healthy
company would pay.

??Analysts are more pessimistic.

??"It's going to be difficult to even get a project," analyst Cartwright said.
"You need a customer before you can do anything, and who is going to sign up
with Mission Energy right now?"

??Specifically, he said, Mission's ability to generate the cash flow required
to start construction of new projects has been placed in doubt.

??The company has grown rapidly in recent years, nearly quadrupling generation
capacity since 1998. As of July 2000, Mission Energy trailed only AES Corp. of
Arlington, Va., internationally, according to Platts, an information company
that tracks the independent power industry.

??Mission Energy's revenue soared 260% to $3.2 billion from 1998 to 2000. But
profit growth has not kept pace. Net income of $125.3 million in 2000 was
nearly
$7 million less than what the company earned in 1998 on a fraction of the
revenue.

??Just as worrisome to the company's ability to grow is the recent flight of
executives.

??As the energy crisis in California grew, nearly a dozen key executives
bolted, including Chief Financial Officer James Iaco, Corporate Secretary
Martha
Spikes and Thomas Legro, a vice president.

??These latest defections add to what has become a nearly complete turnover in
Mission Energy's management since early 2000, including the departures of
Chief
Executive Ed Muller, Senior Vice President S. Linn Williams and Michael
Childers, a vice president of business development who was one of the
company's
chief architects for growth.

??Bryson said it should surprise no one that people are leaving.

??"The skill base remains very good," he said, "but people want to be sure
they
have a future to exercise their skills at building a company."

??Bryson believes that such opportunities remain at Mission Energy. He noted
that the company is working on four or five projects. And there is room, he
said, to boost cash flow and profit through smart management and improving
operating efficiencies at the company's formidable stable of existing power
plants.

??*

??Times staff writer Miguel Bustillo in Sacramento contributed to this report.

??RELATED STORIES

??Power paradox: Businesses pad use to gain in blackouts. A1

??Energy savers: State residents are consuming less power. B7

??Moving Up

??Edison Mission Energy has been producing more power in recent years and
moving up in the ranks of the world's top independent power producers:

??2000

??Rank/company Megawatts of generating capacity 1. AES 33,044 2. Edison
Mission
Energy 22,935 3. International Power 14,933

??1999

??Rank/company Megawatts of generating capacity 1. AES 20,459 2. International
Power 16,362 3. Mirant 12,660 4. Edison Mission Energy 9,383

??1998

??Rank/company Megawatts of generating capacity 1. AES 16,241 2. International
Power 10,562 3. TXU 6,973 4. Edison Mission Energy 6,223 Sources: Platts,
McGraw-Hill

??Rising Revenue, Falling Profit

??Edison Mission Energy's revenue has risen rapidly in recent years, but
profit
growth hasn't kept pace.

??*

??Operating revenue (In billions)

??1998: $0.89 billion

??1999: $1.64 billion

??2000: $3.24 billion

??*

??Net income (In millions)

??1998: $132.1 million

??1999: $130.3 million

??2000: $125.3 million

??Source: Company reports

GRAPHIC: GRAPHIC: Rising Revenue, Falling Profit, Los Angeles Times GRAPHIC:
Moving Up, Los Angeles Times

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

??????????????????????July 2, 2001 Monday ?Home Edition

SECTION: California; Part 2; Page 7; Metro Desk

LENGTH: 297 words

HEADLINE: The State;
;
Californians Cut Energy Use 12.3% From Last Year

BYLINE: TWILA DECKER, TIMES STAFF WRITER

BODY:

??Blackout-weary Californians are apparently doing what has been asked of
them:
consuming less energy.

??State residents used 12.3% less power in June 2001 compared with June last
year, according to findings released Sunday by the California Energy
Commission.

??The figures also show that during peak times of the day, energy consumption
was cut even further to 14.1%.

??"It's all the little things Californians are doing," said Roger Salazar, a
spokesman for Gov. Gray Davis. "Whether it's changing to fluorescent
lightbulbs,
setting the thermostat at 78 degrees . . . or turning in old appliances. All
of
these things are adding up."

??The conservation efforts coupled with the addition of three new power
plants,
two of which are expected to be online this week, lessens the likelihood of a
summer of rolling blackouts, Salazar said.

??On Wednesday, a 320-megawatt power plant opened near Bakersfield. Today, a
550-megawatt plant is scheduled to open in Sutter County. A third is set to
open
in Contra Costa County on July 9.

??But Salazar cautioned that no one can control Mother Nature.

??"We're not in the prediction business," he said. "If we have a week of hot
days, that could increase demand. All we can do is do the things that are in
our
control."

??In compiling its figures, the commission factored in changes in economic
growth, population increases and temperature variations between June 2000 and
June 2001.

??Without factoring in those differences, there was an actual meter reduction
of 3,834 megawatts.

??Though the figures are a good sign, Davis warned residents not to become
complacent.

??"Every kilowatt saved is money we keep in California and out of the pockets
of out-of-state generators," he said. "For those of you who can, I urge you to
do more."

LOAD-DATE: July 2, 2001

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

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

??????????????????????July 2, 2001 Monday ?Home Edition

SECTION: California; Part 2; Page 7; Metro Desk

LENGTH: 746 words

HEADLINE: The State;
;
Beating Up a Powerful Friend and Creating a Good Impression

BYLINE: GEORGE SKELTON

DATELINE: SACRAMENTO

BODY:

??Politicians are too predictable, you say. Well, here's a twist: Republican
conservative beats up on big business.

??Secretary of State Bill Jones, running uphill for governor, lectured the
power industry "to change business practices or face consequences."

??Consequences like being shut out of California's huge electricity
market--12%
of the nation's population, the world's fifth-largest economy.

??Jones scolded:

??"Either you get with the program, or Californians may take matters into
their
own hands. I tell you, if you do not get up and do something to help this
state--and by doing so, help yourselves--then you as energy providers face a
dim
future here . . .

??"Let me remind you of a little process we have out here in California called
the ballot initiative. When people get angry enough, voters can and do take
action directly through the polls."

??You probably have not read or heard about this dressing down by a
pro-business Republican of profiteering power suppliers, some of whom he
asserted "simply got greedy."

??That's because Jones normally does not attract a lot of attention. Too dull
and predictable, we newsies say. And he gave this dinner speech late on a
weeknight, June 21, in out-of-the-way Ojai. The audience was relatively
small--62 people attending a conference of the Western Power Trading Forum.

??"I probably was not as welcome leaving as I was coming in," Jones says. "But
it's the kind of speech those folks needed to hear."

??"He got a mixed reaction," recalls the power group's executive director,
Gary
Ackerman. "We'd like to see stronger support from gubernatorial candidates
because we feel we've done nothing wrong and have played by the rules.

??"But there's some sympathy and understanding that any politician worth his
salt is not going to stand up and go 'rah-rah' for the generators. . . .

??"He's in a lot of good company with people who feel the same way."

??That's verified by a new Times poll. When registered voters were asked
whether they agree or disagree that "independent power companies have
manipulated the electricity market in California in order to make a higher
profit," 89% agreed--77% "strongly."

??Moreover, 90% of voters called energy a serious problem, but only 35%
believed "there is an actual shortage" of electricity.

??The problem, voters think, is gaming and gouging.

??So even if Jones was in strange territory for a Republican politician, he
was
on safe ground with voters.

??Jones' strategy, however, is not merely to pander to voters. His aim is to
be
seen as a straight shooter--an experienced politician who's knowledgeable and
doesn't pull punches.

??That contrasts with his only announced opponent for the GOP gubernatorial
nomination, megabucks businessman Bill Simon, who never before has run for
office. Simon is still doing crash homework on basic issues and is
super-cautious in answering questions about his views.

??Asked last week at the Sacramento Press Club whether he thinks power
producers have gouged consumers, the onetime prosecutor replied, "That really
rests on the investigations. . . . I wouldn't want to prejudge culpability."

??If he had answered the Times poll, Simon would have been among the very
few--6%--who weren't sure.

??Former Mayor Richard Riordan, who's being egged on by President Bush to run
for governor, probably won't be attacking greedy generators either. That's
because he could be branded one himself. The L.A. DWP was one of the biggest
gougers last winter while selling electricity to the state.

??That's priceless fodder for Jones. But in Ojai, he pounded primarily on Gov.
Gray Davis--"he took a problem and made it into a crisis"--and the private
producers.

??Jones admonished the power companies to embrace the Federal Energy
Regulatory
Commission's new wholesale electricity price caps.

??"You are in many ways waging war on yourselves," he said. "The reports of
never-before-heard-of profits of several generators have fueled resentment .
. .
and soured the long-term prospects for true market reforms."

??Ackerman, the dinner host, said Jones arrived as an unknown, but "left
people
with a positive image. . . .

??"I'll add one thing. This man has integrity. I talked to him about
[campaign]
contributions. He didn't hesitate. He said he wouldn't accept money from
generators during the [energy] crisis."

??This is intriguing strategy. Beat up a usual ally. Leave a good impression.
Earn praise for ethics.

??Refreshing politics.

LOAD-DATE: July 2, 2001

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

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

?????????????????????JULY 2, 2001, MONDAY, FINAL EDITION

SECTION: NEWS; Pg. A1

LENGTH: 1080 words

HEADLINE: Usage down -- Davis' team gloats;

Energy advisers call campaign big success

SOURCE: Chronicle Staff Writer

BYLINE: Jim Doyle

BODY:
Gov. Gray Davis' top energy advisers took credit yesterday for the apparent
success so far of their new conservation campaign, calling it the most
aggressive energy-savings effort in the nation's history.

???California's new conservation programs have sparked the public imagination
to significantly reduce energy use -- 12.3 percent less electricity used last
month alone -- save money and avoid blackouts, state energy officials told
reporters during a conference call.

???"People are choosing by the millions to conserve," said David Freeman, the
governor's senior energy adviser. "It is a demonstration of enormous
implications not only for California but the rest of the country. . . .
Californians are acting in their own self-interest and in a patriotic way."

???He noted that the sales of clotheslines in the state have "gone through the
roof," and that fans are practically sold out.

???Reduced power demand was a key factor in the state's avoidance of rolling
blackouts last month, Freeman said. But, he said, "We're not out of the woods
yet," meaning that the new conservation bandwagon is still unlikely to get the
state through the summer without major rolling blackouts.

???"We'll be keeping our fingers crossed," Freeman said. "We're not making any
predictions. . . . We don't know what the temperature is going to be. We
haven't
had a situation where you have real hot weather throughout the state three or
four days in a row. We don't know how many power plants will break down in
July."

???The biggest indicator that Californians appear to be saving more power than
expected came when the governor's energy advisers released figures for the
state's reduced demand for electricity, indicating that for the second month
in
a row Californians exceeded the governor's request to cut power usage by 10
percent. For June, electricity use was down 12.3 percent from last year; in
May,
the state's power use was down 11 percent.

???The savings last month came even though June was a bit hotter than last
year, and there are 500,000 more residents in California than a year ago.

???"Conservation is really working. It's really phenomenal," Steve Larson,
executive director of the California Energy Commission, said in the call.

???"People have stepped to the plate and knocked the ball out of the park. . .
. The demand is down," he said, praising consumers for, among other things,
setting thermostats at higher temperatures in warm weather to reduce air
conditioning.

???EVERYONE'S SAVING ENERGY

???"In all areas of the state, people are conserving and at a fairly
consistent
rate," he said. "It's all sectors. It's business, residents, everyone who uses
electricity. . . . (But) we don't know if these numbers are going to hold."

???In addition to the overall reduction in use, electricity demand at peak
times during June 2001 declined by 5,570 megawatts -- or 14.1 percent compared
to June 2000. Those savings are equivalent to shutting down half a dozen major
power plants.

???The state experienced 10 days in June 2000 where power demand exceeded
40,000 megawatts -- a threshold level that can result in emergency blackouts.
Last month, however, there were no comparable days of extreme power demand.

???Energy officials also noted that new power plants are going online, adding
that the governor will flip the switch on a new, 500-megawatt unit today near
Yuba City in Sutter County.

???"We have record conservation. We have record (power) generation. And we've
locked in long-term energy at reasonable rates," said Roger Salazar, the
governor's deputy press secretary. "It is having a tremendous impact."

???DOUBTING THOMASES

???Skeptics say the numbers aren't as rosy as they are cracked up to be.

???Some have said California's energy savings are simply the result of
businesses shutting down in the stalled-out economy. Others suggest the state
has twiddled the latest conservation figures -- based on differences in this
year's temperature and population growth -- in search of good ink for the
governor.

???And political polls show that Californians are skeptical about the reasons
for the state's energy crisis.

???But the governor's energy advisers insist that state economic growth has
continued and that businesses and residential customers are making significant
reductions in power use.

???"It's real conservation that is taking place," Freeman said. "The bulk of
the savings are coming from voluntary actions that consumers are taking.
There's
nothing unreal about the money people can save in saving energy. I think there
is a combination of a selfish desire to save money and an unselfish desire to
avoid blackouts for the community as a whole."

???Not surprisingly, state energy officials credit the governor's initiatives
for the latest favorable statistics.

???"None of this is happening accidentally," Freeman said. "(These programs),
in combination, are the most aggressive energy conservation programs ever
enacted in the United States of America."

???10 COMPONENTS

???California's energy conservation programs involve 10 major components,
ranging from special pleas to CEOs and ads directed at residential power users
to consumer rebates and new penalties for the biggest power users:

???-- A paid advertising campaign urges California residents and businesses to
conserve energy to not only help avoid blackouts but also to save money.

???-- Residential users whose power usage is 20 percent lower than last year
are entitled to an additional 20 percent discount off their electricity bills.

???-- $850 million has been set aside for rebates and monetary incentives for
consumers who buy new refrigerators and air conditioners that are the most
energy efficient available.

???-- Industrial users who increase their power usage face stiff penalties in
the form of steep rate hikes.

???"We've reached out to everyone from CEOs to building managers and janitors
to schoolchildren," said Aileen Adams, secretary of the state Department of
Consumer Services. "We feel that all these things taken together have a huge
impact."

???In addition, new energy efficiency standards recently went into effect for
state buildings.

???Wally McGuire, director of the California Conservation Campaign, said 236
organizations have signed declarations of their intent to immediately cut at
least 20 percent of their electrical power use.

???The governor's energy advisers declined to indicate the cost of their
energy
conservation efforts.E-mail Jim Doyle at jdoyle@sfchronicle.com.

GRAPHIC: PHOTO

LOAD-DATE: July 2, 2001

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

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

?????????????????????JULY 2, 2001, MONDAY, FINAL EDITION

SECTION: NEWS; Pg. A1

LENGTH: 1394 words

HEADLINE: Why suppliers get away with huge profits;

Manipulation of power market appears to be legal, experts say

SOURCE: Chronicle Staff Writer

BYLINE: Carolyn Said

BODY:
Most Californians think power generators have "gamed" the electricity market,
illegally gouging the state to make billions of dollars. But if energy
companies
are so blatantly villainous, why hasn't anyone been able to collar them?

???The answer is simple, said Harry Snyder, who follows electricity
deregulation for the West Coast office of Consumers Union.

???"Gaming is legal under market theory," he said. "It's called maximizing
profits. They didn't need to break the law in order to screw consumers."

???For months, dozens of investigators from the attorney general's office, the
Public Utilities Commission, the California Independent System Operator and a
special state Senate committee have pored over reams of documents, conducted
copious interviews and visited power plants up and down the state.

???All they want is to prove what seems self-evident to most consumers: Energy
firms drove up electricity prices by withholding supply, shutting down plants
and exploiting the bidding process.

???It's not that simple, say most experts. California created the
dysfunctional
trading market; the companies figured out ways to play by its rules and still
make out like bandits.

???"The state of California can make all the allegations about gaming and
manipulation that it wants, but, damn, it set up the system," said Arthur
O'Donnell, editor and associate publisher of California Energy Markets. "It's
resulted in high prices because of imbalance between supply and demand. Stop
whining about it and fix the damn system."

???PROFIT PARADISE

???Deregulation created a kind of happy hunting ground for energy traders.
There was no "demand elasticity" -- no matter how high the price got, grid
operators couldn't just say, "No thanks, we'll buy less power and have a
rolling
blackout today instead." That meant power companies could charge an arm and a
leg, and California would pay it.

???"It is not illegal for a company to jack up its prices or to put less out
on
the market in order to keep a higher price in the market," said Severin
Borenstein, director of the University of California Energy Institute. "Those
are both legal as long as a company does it on its own; it can't collude with
other companies to do it."

???Still, the generators' behavior is so suspicious that California may be
able
to prove antitrust violations, said state Sen. Joseph Dunn, D-Santa Ana,
chairman of the Senate committee investigating alleged price manipulation.

???'MARKET POWER'

???Making an antitrust case breaks down into two parts: Prove the companies
had
"market power," then prove that they exercised it in concert.

???Market power itself is not illegal. Simply put, it means the ability to set
a price without competitive consequences -- without losing business, in other
words.

???For example, Dunn said, if an auto dealer suddenly decides to raise car
prices by $5,000, the logical consequence would be for car buyers to visit
other
dealers. But if a dealer raises prices and does not lose business -- because
other dealers also raise their prices -- market power has been exercised.

???You can see market power at work in everything from milk to plane tickets.
Grocers and airlines shop their competitors to see how much they are charging
and adjust their prices accordingly.

???Most economists and other experts agree that market power exists in
California's wholesale electricity market, primarily among the big five
generators -- Duke Energy, Dynegy, Williams Energy, Reliant and Mirant.

???But, again, the mere existence of market power does not prove wrongdoing.
However, if power generators (or grocers or airlines) did, indeed, hold a
secret
meeting to set prices, that would be collusion, an illegal activity.

???SEARCH FOR EVIDENCE

???"It's very hard to prove collusion cases unless you have a smoking gun --
tapes, a document, a witness who will testify or wear a wire," Borenstein
said.

???Absent a smoking gun, investigators can try to prove indirect collusion or
concerted activity by scrutinizing plant records and examining instances of
power being withheld and prices going up.

???"There is behavior in the California market that you can't explain in any
other way than by concerted activity," Dunn said.

???"If all five (big generators) withhold their full capacity when demand
exists, it suggests the companies are not acting in competition with each
other
but in complement. We can't yet identify any legitimate reasons for
across-the-board withholding," Dunn said.

???"The only thing that results from all this withholding on a given day is
that they drive up the price tomorrow."

???There is ample evidence that withholding has occurred, but no definite
proof
so far that it happened in concert. The Chronicle reported in May that several
power firms ramped their generators up and down to create artificial
shortages,
which jacked up prices. Those shortages caused the blackouts early this year,
which were unprecedented because they occurred in the winter, when electricity
demand is low.

???Three former Duke Energy employees testified before Dunn's committee last
month that the firm raised and lowered plant production, idled units and
destroyed some equipment -- all to drive up prices.

???Duke, which will testify later this month, took out full-page newspaper ads
across the state to rebut the allegations, saying it was merely following
directives from California grid operators.

???Yesterday, the Los Angeles Times reported that, according to its review of
internal documents, grid operators in fact had instructed Duke to vary its
power
output at the plant in question.

???To make a case, investigators still have to link withholding by individual
firms into a mosaic that shows they acted in concert.

???Even if an antitrust case cannot be proved, power companies may still be
liable for civil penalties. The PUC intends to file a case this summer that
would levy such civil charges as violation of contract, unfair business
practices and fraud.

???Gary Cohen, general counsel of the PUC, said: "We have evidence and will be
able to prove that there have been times when the grid was in an alert, an
emergency, and the ISO put out a dispatch order for a particular unit to come
to
full power and they didn't (although) there was no maintenance or other
mechanical reason that would have prevented them.

???"At a minimum, that would be a violation of the ISO tariff, which is like a
contract. That's breach of contract."

???Fraud charges could come if generators gave misleading information about
why
plants were shut down, he said. "They may have thought it looked bad to say
'We're taking a break' and (instead) said they were down for mechanical
reason.
If they said something that's not true, what follows from that is a fraud
case,"
Cohen said.

???Unfair business practices could be charged if power firms intentionally
withheld supply during power emergencies to drive up the price, he said.

???Cohen said he hopes the PUC investigation will also lead to changing the
law, so these practices would be illegal. "If we don't have the right rules,
maybe we need to make some new rules."

??-------------------------------------------------------

??Examining energy pricesThese are among the federal and state investigations
of California's energy crisis: -- Federal Energy Regulatory Commission: has
been
examing the high natural gas prices in California that contributed to the
state's spiraling electricity costs. The agency has also reviewed allegations
that companies overcharged for power in the energy market.

???-- California Senate Committee to Investigate Price Manipulation of the
Wholesale Energy Market: has been looking into charges of price manipulation.

???-- California Attorney General Bill Lockyer: has been pressing ahead with a
review of the practices of wholesale power companies.

???-- California Public Utilities Commission: has undertaken a broad
investigation into the origins of the state's energy problems and whether the
market for power was manipulated.Chronicle Research

??-------------------------------------------------------

??Tell us what you think-- What are your suggestions for saving energy? Send
your best tips to Energy Desk, San Francisco Chronicle, 901 Mission St., San
Francisco, CA 94103; or put your ideas in an energy-efficient e-mail to
energysaver@sfchronicle.com.

??E-mail Carolyn Said at csaid@sfchronicle.com.

LOAD-DATE: July 2, 2001

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

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

?????????????????????????????July 1, 2001; Sunday

SECTION: Domestic, non-Washington, general news item

LENGTH: 411 words

HEADLINE: ?Power Grid Operator Details Swings

DATELINE: LOS ANGELES

BODY:

???The operator of the state's power grid has acknowledged that it was
responsible for swings in production at a power plant that Gov. Gray Davis
said
were evidence of price gouging by out-of-state energy companies, two
newspapers
reported Sunday.

??The California Independent System Operator told its oversight board that
records showed Duke Energy was following its orders to adjust output in order
to
help balance the grid and not to drive up prices, the Los Angeles Times and
The
Charlotte (N.C.) Observer reported.

??Three former workers at a Duke Energy power plant near San Diego told state
investigators on June 22 that production units were shut down in what they
called a scheme to drive up electricity prices.

??Duke responded last week with full-page ads in newspapers from California to
its home state of North Carolina, saying production was increased and
decreased
at the order of the ISO.

??The company said the three workers ''did not know and were not in an
operational capacity to know that the ISO directs output.''

??The ISO gave its analysis to selected lawmakers late Friday after Duke,
based
in Charlotte, N.C., gave the agency's confidential orders to the Times and the
Observer.

??The ISO analysis found that Duke's South Bay plant had accurate logs showing
that the units followed the ISO's orders.

??''It's regrettable that some people have inferred things that just weren't
the case,'' said Duke spokesman Tom Williams.

??However, the ISO findings may not clear Duke entirely of charges that it
manipulated power supplies during three days in January when prices
skyrocketed,
said Gregg Fishman, an ISO spokesman.

??State officials cautioned that further investigation is still needed to
determine if Duke used other tactics to manipulate the power market.

??Duke is one of several out-of-state generators that entered the California
market after the state deregulated its power industry in 1998. It operates
four
plants and accounts for about 5 percent of the state's generating capacity.

??The Federal Regulatory Commission last month found the company overcharged
California by millions earlier this year when it was charging $3,880 a
megawatt-hour for electricity. The commission found that Duke was entitled to
only $273 per megawatt-hour. In one month, the average home in North and South
Carolina uses one megawatt hour at a cost of $73.

?????(PROFILE

?????(CO:Duke Energy Corp; TS:DUK; IG:ELC;)

?????)

LOAD-DATE: July 1, 2001

?????????????????????????????18 of 149 DOCUMENTS

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

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

????????????????????????July 1, 2001, Sunday, BC cycle

SECTION: Business News

LENGTH: 637 words

HEADLINE: Reports say Calif. power grid operator behind Duke plant's output
swings

DATELINE: LOS ANGELES

BODY:

??The operator of California's power grid has acknowledged that it was
responsible for swings in production at a Duke Energy power plant that Gov.
Gray
Davis held as an example of price gouging by out-of-state energy companies.

??The Los Angeles Times and Charlotte Observer reported Sunday that the
California Independent System Operator told its oversight board that records
showed Charlotte, N.C.-based Duke Energy was following orders to help balance
the grid and not driving up prices.

??Three former workers at Duke Energy's San Diego-area plant told state
investigators June 22 that production units were shut down in what they
called a
scheme to drive up electricity prices.

??Duke responded last week by taking out full-page newspaper ads defending
itself against the accusations by the former workers.

??Duke officials said in the ads - which appeared in newspapers in California,
Texas, South Carolina and North Carolina - that plant production was increased
and decreased at the order of Cal-ISO, the agency that controls the state's
power grid and monitors supply and demand.

??The California version of Duke's advertisement specifically denied the
workers' allegations, and claimed they "did not know - and were not in an
operational capacity to know - that the ISO directs output. ..."

??Davis had praised the three workers as heroes and Lt. Gov. Cruz Bustamante
said they had delivered the "smoking gun" needed to prove price gouging.

??Cal-ISO has not yet publicly acknowledged its role in the ramping up and
down
of electricity production, but gave its analysis late Friday to selected
lawmakers. The move came after Duke gave the agency's confidential orders to
the
Times and the Observer.

??The agency's analysis found that Duke's South Bay units had accurate logs
showing that the units followed Cal-ISO's dispatch orders.

??Duke's documents also show the company offered all available power from the
plant to the ISO. Sometimes, the agency bought the right to generating
capacity
but did not - even under threat of imminent blackouts - exercise that right by
asking Duke to produce the power.

??ISO's memo does not address Duke's assertions of how much power it made
available to the ISO or how much power the agency bought and didn't buy.

??"It's regrettable that some people have inferred things that just weren't
the
case," said Duke spokesman Tom Williams.

??Duke, like other generators, has refused to supply prices for power it sold
and offered to sell, citing competitive pressures. Without that information,
accurate conclusions can't be drawn about Duke's business practices, ISO
spokeswoman Stephanie McCorkle said. She said the agency is not ready to
provide
additional information.

??Duke has been challenged for its production tactics and pricing at the state
and national level. The Federal Regulatory Commission last month found the
company had overcharged California by millions earlier this year when it was
charging $3,880 a megawatt-hour for electricity. The commission found that
Duke
was entitled to only $273 per megawatt-hour.

??In one month, the average home in North and South Carolina uses one megawatt
hour at a cost of $73.

??Duke is one of several out-of-state generators that entered the California
market after the state deregulated its power industry in 1998. With three
plants
it owns and the leased South Bay plant, Duke accounts for about 5 percent of
the
state's generating capacity.

??On Thursday, the state Senate committee investigating Duke and others held
two generators in contempt for failing to provide records of their operations
in
California. Duke was not held in contempt because it agreed to turn over
documents by the July 10 deadline, said Ronda Paschal, a spokeswoman for state
Sen. Joe Dunn, D-Santa Ana, a committee leader.

LOAD-DATE: July 2, 2001

?????????????????????????????19 of 149 DOCUMENTS

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

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

????????????????????????July 1, 2001, Sunday, BC cycle

SECTION: State and Regional

LENGTH: 614 words

HEADLINE: Report: State grid operator behind plant's output swings

DATELINE: LOS ANGELES

BODY:

??The operator of the state's power grid has acknowledged that it was
responsible for swings in production at a power plant that Gov. Gray Davis
held
as an example of price gouging by out-of-state energy companies.

??The Los Angeles Times and Charlotte Observer reported Sunday that the
California Independent System Operator told its oversight board that records
showed Duke Energy was following orders to help balance the grid and not
driving
up prices.

??Three former workers at Duke Energy's San Diego-area plant told state
investigators June 22 that production units were shut down in what they
called a
scheme to drive up electricity prices.

??Duke responded last week by taking out full-page newspaper ads defending
itself against the accusations by the former workers.

??Duke officials said in the ads - which appeared in newspapers in California,
Texas, South Carolina and North Carolina - that plant production was increased
and decreased at the order of Cal-ISO, the agency that controls the state's
power grid and monitors supply and demand.

??The California version of Duke's advertisement specifically denied the
workers' allegations, and claimed they "did not know - and were not in an
operational capacity to know - that the ISO directs output. ..."

??Governor Davis had praised the three workers as heroes and Lt. Gov. Cruz
Bustamante said they had delivered the "smoking gun" needed to prove price
gouging.

??Cal-ISO has not yet publicly acknowledged its role in the ramping up and
down
of electricity production, but gave its analysis late Friday to selected
lawmakers. The move came after Charlotte, N.C.-based Duke gave the agency's
confidential orders to the Times and the Charlotte Observer newspaper.

??The agency's analysis found that Duke's South Bay units had accurate logs
showing that the units followed Cal-ISO's dispatch orders.

??"It's regrettable that some people have inferred things that just weren't
the
case," said Duke spokesman Tom Williams.

??The agency's findings may not clear Duke entirely of charges that it
manipulated power supplies during three days in January when prices
skyrocketed,
said Gregg Fishman, an ISO spokesman.

??"Those facts are all correct, but they may not add up to a complete picture
of what happened during those three days," Fishman told the Charlotte Observer
on Saturday.

??State officials cautioned that further investigation is still needed to
determine if Duke used other tactics to manipulate the power market.

??"ISO's comments on the ramping still do not resolve the full question," said
state Sen. Joe Dunn, D-Santa Ana.

??Duke has been challenged for its production tactics and pricing at the state
and national level. The Federal Energy Regulatory Commission last month found
the company had overcharged California by millions earlier this year when it
was
charging $3,880 a megawatt-hour for electricity. The commission found that
Duke
was entitled to only $273 per megawatt-hour.

??In one month, the average home in North and South Carolina uses one megawatt
hour at a cost of $73.

??Duke is one of several out-of-state generators that entered the California
market after the state deregulated its power industry in 1998. With three
plants
it owns and the leased South Bay plant, Duke accounts for about 5 percent of
the
state's generating capacity.

??On Thursday, the state Senate committee investigating Duke and others held
two generators in contempt for failing to provide records of their operations
in
California. Duke was not held in contempt because it agreed to turn over
documents by the July 10 deadline, said Ronda Paschal, a spokeswoman for
Dunn, a
leader of the committee.

LOAD-DATE: July 2, 2001

?????????????????????????????20 of 149 DOCUMENTS

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

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

????????????????????????July 1, 2001, Sunday, BC cycle

SECTION: State and Regional

LENGTH: 506 words

HEADLINE: State: Californians cut power use 12 percent last month

BYLINE: By LESLIE GORNSTEIN, AP Business Writer

DATELINE: LOS ANGELES

BODY:

??California businesses and residents cut electricity use by 12 percent in
June
compared with the same period last year, state officials said Sunday - proof,
they said, that the governor's plan for coping with a tight power supply is
working.

??"The people of California are speaking very loudly and very effectively," S.
David Freeman, senior energy adviser to Gov. Gray Davis, said Sunday in a
conference call with reporters.

??Peak electricity demand in June declined by 5,570 megawatts, or 14.1
percent,
compared with June of 2000, according to adjusted figures prepared by the
California Energy Commission. Overall, monthly electricity consumption dropped
12.3 percent.

??One megawatt is enough energy to power 1,000 homes.

??The analysis used raw figures from the California Independent System
Operator, which manages most of the state's power grid.

??The figure provided by the ISO was a reduction of only 3,834 megawatts, the
state officials said. The CEC's adjusted number was higher because it
accounted
for population growth and slightly hotter weather so far this year.

??In June 2000, there were 10 days when electricity demand exceeded 40,000
megawatts. There were no such days in June 2001.

??State officials stopped short of saying the conservation marks an end the
state's energy crisis. But they said Californians' energy-saving measures were
an important reason the state avoided blackouts last month, and added that new
generators going online this summer will give the power grid some breathing
room.

??"The combination of new power plants and conservation is closing the gap,"
Freeman said.

??The first new major power plant in California in more than a decade opened
last week in Bakersfield. Davis, who has said the state's power supply will
grow
by 4,000 megawatts this summer, is expected to appear Monday at the unveiling
of
a new, 500-megawatt plant in Yuba City.

??The CEC report lacked specifics on whether businesses or consumers are
conserving more, or on exactly how most Californians are conserving. But
officials did offer plenty of anecdotal evidence.

??"For whole-house fans, the kinds that replace air conditioners, in one store
in the Sacramento area, last year they sold 18, and this year there were 1,000
sales," said Wally McGuire, the state's conservation campaign manager. "I am
assuming that people are buying them as replacements to air conditioners."

??"Incidentally, the sales of clotheslines in the state are going through the
roof," Freeman said.

??State officials said they did not know how much conservation efforts are
costing the state, but Davis has said that the state has pledged $800 million
to
conservation efforts.

??Freeman said the efforts are saving money that would otherwise be spent
buying power on the spot market.

??Sunday's report roughly matches a similar analysis put out last month about
May electricity demands. That report showed that demand was down 11 percent.
In
April this year, monthly electricity use was down 7 percent over the previous
year.

LOAD-DATE: July 2, 2001


Here's your hook em.com fix for the day.....

Backup quarterback
leaving Texas

Associated Press

Posted: April 26, 2000

AUSTIN -- Adam Hall, the Texas Longhorns
backup quarterback during spring drills,
said
he will transfer from the University of
Texas
this fall, coach Mack Brown announced
Wednesday.

"The biggest factor was that I want to
have a
chance to be a starter in the near
future," said
Adam Hall, a redshirt freshman from
Westlake
High School.

The university has released Hall from his

scholarship. Hall plans to complete the
spring
semester then enroll in another
institution in
the fall. The new institution was not
named in
a news release.

"I love all of my teammates and
appreciate
everything the coaches and staff have
done for
me at Texas, but I think I will have a
better
opportunity to play sooner at another
school,"
he said.

Hall completed four of five passes for 85
yards
and a touchdown in Texas' spring game on
April 1. He completed 143 of 263 passes
for
2,188 yards and 21 touchdowns at Westlake

in 1998.

Brown said Hall was a hardworking young
man
on the field and in the classroom. He
wished
the 6-foot-2, 205-pound quarterback luck
at his
next destination.

"Obviously we are very disappointed
because
we felt that Adam had a good spring and
we
have been very pleased with his
progress,"
Brown said.

I'll call you when I get home tonight (around 6).

Love you,
Jenn


The report named: Power Off-Peak Prices <http://erv.corp.enron.com/linkFromExcel.asp?report_cd=19&report_name=Power+Off-Peak+Prices&category_cd=5&category_name=EAST&toc_hide=1&sTV1=5&TV1Exp=Y&current_efct_date=10/26/2001>, published as of 10/26/2001 is now available for viewing on the website.


Reagan thought you may like to see the Bracewell draft of an Asset Management
Agreement for AIG.

Read it, file it, or throw it away.  Completely your call.

Heather
 -----Original Message-----
From:  "Jay Sonnenberg" <jsonnenberg@bracepatt.com>@ENRON
[mailto:IMCEANOTES-+22Jay+20Sonnenberg+22+20+3Cjsonnenberg+40bracepatt+2Ecom+3
E+40ENRON@ENRON.com]
Sent: Tuesday, April 10, 2001 11:57 PM
To: Kroll, Heather; Pagan, Ozzie; steve.van.hooser@enron.com
Cc: Aaron Roffwarg; W. Cleland Dade; Clark Thompson; Scott Miller
Subject: AIG Asset Management Agreement/Brokerage Agreement

Attached please find the initial drafts of the proposed Asset Management
Agreement and Brokerage Agreement for your review.  We'll be prepared to turn
around these documents to AIG tomorrow.

Jay

Jay Sonnenberg
Bracewell & Patterson, L.L.P.
711 Louisiana St., Suite 2900
Houston, TX  77002-2781
(713) 221-1417 (Ph)
(713) 221-2158 (Fax)

 - #1142119 v3 - ASSET MANAGEMENT AGREEMENT.doc
 - #1276593 v2 - BROKERAGE AGREEMENT.doc


If you have not already done so this week, please remember to update your work reports for me this afternoon.

Mark Taylor
Vice President and General Counsel
Enron Wholesale Services
(713)853-7459


Hi Chris,

Happy New Year.  Hope all is going well with you.  We miss you!

I heard a rumor that the UI deal had an asset management aspect to it.  The
guys around here are kicking around some different asset management ideas, so
I'm trying to get my hands on any docs which might give some insight into
some  different approaches.  Do you have anything you can email me?

Thanks,

Kay


Joe, couple of points - a) please check spelling and typos closely and b) in
the first paragraph of the second page starting "The Commercial
Origination...." should end with ".... knowledge necessary to reach our
goals."

Regards
Delainey
---------------------- Forwarded by David W Delainey/HOU/ECT on 12/06/2000
07:47 PM ---------------------------

Joe Kishkill@ENRON
12/06/2000 08:12 PM
To: David W Delainey/HOU/ECT@ECT
cc:
Subject: Latest

Dave,

Our final.

Kish
---------------------- Forwarded by Joe Kishkill/SA/Enron on 12/06/2000 08:13
PM ---------------------------

Miguel Padron
12/06/2000 06:56 PM
To: Joe Kishkill/SA/Enron@Enron
cc:

Subject: Latest

Joe, Keith disappeared so I made the changes...here is the latest...MP


Hey Steve and Melissa....
?
Attached are two files - one of which you should be  able to access.? It
includes a map with a colored line highlighting the  route to our house.?
?
Look forward to seeing you this weekend...?
?
Rob and Diane
 - How to get to the NM Keans.ppt
 - Map to Rob & Diane.pdf


Attached you will find the outstanding PMA's, as of March 2001 accounting.
You will see adjustments requested by financial settlements. They have
finally provided us with reconciliation's for the contract periods of Dec00
through Feb01. Financial settlements thought that reconciling current months
and working backwards would be best. So, you should continue to see PMA's,
from financial settlements, for previous months as they become available to
us. Please let me know if you have any questions.
;
Thanks!
Shannon McPearson
Enron North America
713-853-5944
Shannon.McPearson@enron.com


Hi,
	Previously I forwarded an email to you which contain a list of options products we are considering making markets in.
	Many of you have asked for more details on these (exotic) options products.
	In response to this request, I will be periodically forwarding modules to your attention which give further details on these options products.
	Please do not hesitate to contact me if you have any questions, comments, etc.

Regards,
Iris Mack, MBA/PhD
Power Options Trading Desk
x3-6711


Hi, Russell:

Attached for review is the draft of the proposed fee letter in connection with the Torch deals.  Let me know if you have any questions or comments.

Thanks!

Marie


---------------------- Forwarded by Matthew Lenhart/HOU/ECT on 11/15/2000
12:01 PM ---------------------------
To: Matthew Lenhart/HOU/ECT@ECT
cc:

Subject: Fwd: Election concession & retraction parody. Has good audio also.

---------------------- Forwarded by Ross Prevatt/HOU/ECT on 11/13/2000 01:08
PM ---------------------------

Charles H Otto
11/13/2000 01:03 PM
To: Ross Prevatt/HOU/ECT@ECT
cc:
Subject: Fwd: Election concession & retraction parody. Has good audio also.

---------------------- Forwarded by Charles H Otto/HOU/ECT on 11/13/2000
02:01 PM ---------------------------

Chris Gaskill@ENRON
11/13/2000 12:35 PM
To: Charles H Otto/HOU/ECT@ECT, Tara Piazze/NA/Enron@ENRON
cc:
Subject: Fwd: Election concession & retraction parody. Has good audio also.

---------------------- Forwarded by Chris Gaskill/Corp/Enron on 11/13/2000
12:35 PM ---------------------------

Marc Bir <marc@delphihome.com> on 11/13/2000 12:29:45 PM
To: Chris.Gaskill@enron.com
cc:

Subject: Fwd: Election concession & retraction parody. Has good audio also.

><http://www.mediatrip.com/shows/phone_flash.html
>http://www.mediatrip.com/shows/phone_flash.html


<meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1">
<TITLE>Get AlumniAccess FREE!!!</TITLE>

Introducing the HighSchoolAlumni Deal of the Week. To thank you for being a valuable member of our community, we will occassionally present you with special offers and exciting products.

If you would like to stop receiving our Deal of the Week, please change your email settings on HighSchoolAlumni.com.


Cordially,
Mary Cook
Enron North America Corp.
1400 Smith, 38th Floor, Legal
Houston, Texas 77002-7361
(713) 345-7732
(713) 646-3393 (fax)
mary.cook@enron.com


That's what I told AP, but after I looked like a major doofus on the front
page of the Chronicle... The last few weeks have not been pretty for PR...
How was your vacation?

From: Jeff Dasovich on 05/29/2001 11:13 AM
Sent by: Jeff Dasovich
To: Karen Denne/Corp/Enron@ENRON
cc:

Subject: Re: SF Gate: Enron's secret bid to save deregulation/PRIVATE
MEETING: Chairman pitches his plan to prominent Californians

Seems to have Riordan written all over it.  I say "no big deal."  We're
talking to everyone.  No secrecy involved.  We'll keep talking, being
constructive and trying to help develop solutions that work for CA.   Your
thoughts?


Management and employees both have roles in meeting Enron's commitment to Equal Employment Opportunity, and Harassment Prevention.  To achieve Enron's vision, we need to recruit, select, retain, and manage the most talented people effectively.  We expect all employees to demonstrate Enron's values of respect, integrity, communication and excellence in the workplace.  Our efforts to achieve equal employment, and prevent harassment for all employees will guide us towards ensuring that each employee and organization is as productive, inventive, and competitive as possible in a world of changes.

Enron is an equal employment opportunity (EEO) employer.  In choosing to do business with federal, state, and city government agencies, Enron implements affirmative action plans (AAP) to recruit, retain, and promote women, minorities, individuals with disabilities, and covered veterans.  Our efforts are inclusive and based on sound business practices, individual qualifications and merit.  Employee and management conduct is expected to be inclusive and equitable in all aspects of the workplace, including recruitment, applicant screening, hiring, training, assignments, compensation, benefits, job performance evaluation, disciplinary action, separation, and the like.  There is no place at Enron for management practices that include bias, favoritism, discrimination, harassment, or conduct that otherwise violates the law or Company policy.

Enron's Harassment Prevention Policy was developed to prevent harassment and help all employees to maintain a productive and mutually rewarding work relationship.  Harassment of any type, including sexual harassment, is contrary to our policy and preventable with education and respectful personal behavior.  We want all employees to know what harassment is, how to prevent it and how to report it.  Our policy outlines these unacceptable behaviors and helps employees better understand work-related expectations and steps.  Every employee at Enron is expected to prevent harassment and report it if it happens.

Enron's Fair Treatment Policy was developed to provide and maintain a work environment in which all employees are treated equitably.  Our goal is to resolve employment disputes promptly, informally and (where possible) at the lowest level.  Employees who believe they are treated unfairly are encouraged to discuss the matter with their immediate supervisor.  When a concern of unfair, unlawful or unsafe treatment is raised, it will be investigated thoroughly and promptly.  An effective resolution will be reached based on all the information.  The Company will take reasonable steps to ensure confidentiality, but must act on assertions indicating that a violation of policy or law has occurred.

Each of these policies is available for review at http://home.enron.com/resources.  Please familiarize yourself with these policies.  Enron expects and encourages every worker to report workplace issues of concern.  If you need to speak with anyone someone regarding these policies or if an incident occurs that concerns you, please talk with your supervisor, contact your Human Resources representative, or call Enron's Office of Labor and Employment Relations Department at 713-853-7573.  Management is expected to ensure retaliation does not occur.  In addition, Cindy Olson, as  is Enron's EEO officer.  As and  Executive Vice President of Human Resources and Community Relations, Cindy has the responsibility, authority, and full support of Enron to ensure that all employees can avail themselves of our policies.

Your support of respectful workplace relationships adds to a productive and rewarding work environment.  In turn, such personal and organizational success adds to Enron's business success.

Thank you.


Please send to sarah dennison- leonard the letter jeff sent me this morning.


Hi Kam,

This is punit ...i'm working tonite...as i hv been for the past 2 nites. The thing with checking new deals is that i finish at like 530 am and the prices get populated only by 700am or later. Also, to track them from home i spoke with an EOL rep. the other day who informed me that i could track it from my home as long as i cud get onto the internet. When i tried to do it from home i was unsuccessful and was informed that i could not unless i had the VPN software and logged in through enron and that an e-request would take at least a day to come through as long as i had my supervisor's approval.

By which time it would have been already too late. Also i have had trades, as you know, which were not mine.. on my account and am hence wary of giving anyone access to my EOL a/c to monitor my positions. The last thing i wanna do once i finish 12 hrs of working is to come back to enron to track my positions on simEOL even on off-days

I hence request you to undo the penalty for this time as i am setting up all that is needed to be done to trade from home. I guess i would have to do what needs to be done to track my positions and track the VaR positions from home, during my off-days.

Thanking you.

Regards,

Punit.

 -----Original Message-----
From: 	Keiser, Kam
Sent:	Sunday, November 11, 2001 11:37 AM
To:	Rawal, Punit
Subject:	RE: VaR violation

These were trades done by EOL, they have been testing the bridge to Enpower and they were killed.  If there are any other trades you don't agree with let Kimat know.  It is very important that you check your new deals daily.

Kam

 -----Original Message-----
From: 	Rawal, Punit
Sent:	Friday, November 09, 2001 6:37 PM
To:	Keiser, Kam
Subject:	RE: VaR violation

hi Kam,

This is Punit. I have received this email from you but have no other earlier than this one. so when u say 'again' i dont understand. i didnt know i was in such a position and tho i tried to work this from home...i was told i wud not be able to do it unless i put in an 'e-request' which i am in the process of doing. Also i think someone else is trading off my account cos i was on leave and not scheduled to come in till 1730 today and to my surprise i find that there were trades on my account!!!

Please look into this closely including the VaR violation thing.

Thank you.

Punit.

P.S : these are the trades that popped up in my account today from nowhere. << File: notmytrades.xls.csv >>

 -----Original Message-----
From: 	Keiser, Kam
Sent:	Thursday, November 08, 2001 7:07 AM
To:	Rawal, Punit
Subject:	VaR violation

Punit,

You have exceeded your VaR limit again today.  I will be taking $100,000 from your P&L tonight.  You must decrease your position today.

Kam
x3-5781


Vince-

I know you're very busy, so you might not have heard this ...

Apparently, the Board will meet this week to approve the sale of *all* of
Enron International's assets to a member of hte Saudi royal family, the same
Prince who once invested heavily in Citicorp to bail it out.

The source of this is someone I trust.

Clayton


Let's try and keep this quiet.
 -----Original Message-----
From: 	Thode, Eric
Sent:	Monday, October 01, 2001 9:40 AM
To:	Kitchen, Louise
Subject:	Fortune

Here's the Fortune link...

http://www.fortune.com/indexw.jhtml?channel=list.jhtml&list_frag=list_5columns_powerwomen.jhtml&list=22&_requestid=3612


How did it go with Lil' Steve.  Were you able to get his fever reduced?  Poor
thing, I hope he's feeling better.  How Siera?  Well, anyway, just was
thinking about the kids and thought I'd drop you a line.

Are you rehearsing tonight?


----- Forwarded by Jeff Dasovich/NA/Enron on 02/08/2001 03:03 PM -----

	Jean Munoz <jmunoz@mcnallytemple.com>
	02/08/2001 02:32 PM

		 To: IEP <jmunoz@mcnallytemple.com>
		 cc:
		 Subject: Hertzberg Press Conference

Attached are press materials from the Hertzberg press conference held
earlier today.

Just FYI, this press conference was originally going to include Republican
members -- and was originally scheduled for last week.

Thanks,
Jean

--
Jean Munoz
McNally Temple Associates, Inc.
916-447-8186
916-447-6326 (fx)

______________________________________________________________________
FOR IMMEDIATE RELEASE                    CONTACT: Paul Hefner
February 8, 2001                                  (916) 319-2408

ASSEMBLY DEMOCRATS PUSH TO IMPROVE ENERGY OUTLOOK
Legislative Package Would Increase Supply and Provide Immediate Energy
Savings

SACRAMENTO dAssembly Speaker Robert M. Hertzberg and a coalition of Assembly
Members announced today a package of bills aimed at increasing the supply of
electricity and cutting down on demand through energy efficiency.

     "While working to protect consumers in the short term, we have also
been looking for long-term solutions to provide reliable power for
California," said Hertzberg (D-Van Nuys). "Today, we are taking the next
step d proposing realistic ways to meet the energy needs of the world?s
sixth largest economy d and offering sound proposals to help Californians
use energy wisely."

    Joined at a news conference by Assemblymembers Christine Kehoe (D-San
Diego) and Carole Migden (D-San Francisco), leaders of the working groups
the Speaker established earlier this year, and other Members of his caucus,
Hertzberg said that the package being introduced will produce more than 750
megawatts and save 1,200 megawatts over the next couple of years.

    "It?s important that we look for ways to end this energy crisis on all
fronts d both using short-term solutions to @keep the lights on? d as well
as long-term solutions to stabilize the energy market," said Kehoe, the lead
author of the energy efficiency package.  "By providing incentives to make
California?s homes, schools and businesses more energy efficient, we can
save in just a couple of short years enough energy to supplant two or three
new and expensive power plants."

    Kehoe said that, by this summer, the energy efficiency package may save
as many as 500 megawatts, equivalent to a new power plant.

    Assemblymember Carole Migden agreed, but added, "We know that reducing
demand will not by itself solve our energy crisis.  We also have to address
the supply side of the energy equation as well."

    The Democrats presented a four bill package aimed at rapidly increasing
and stabilizing the supply of power available to the demands of residents
and businesses.  The bills would:

 ? Provide $50 million to establish an incentives program to encourage
businesses to install clean and modern on-site generation;
 ?? Provide $150 million to develop clean and efficient renewable energy
supply;
 ? Allow plants up to 100 megawatts to be cited by local government and not
through the more time-consuming Energy Commission review;
 ??Ensure power for Californians by requiring new power plants to enter into
purchasing agreements with the state.

    The Assembly Democrats? proposal also includes an energy efficiency
package of five bills, which would provide funding to, among other things:

 ??Replace energy inefficient appliances like refrigerators and air
conditioners;
 ? Give schools grants and loans to decrease consumption;
 ? Provide 50 percent grants and 50 percent loans to local governments to
retrofit government buildings;
 ? Establish a Mobile Efficiency Brigade with $100 million in grants to
nonprofits to hire a team of people to not only distribute low-energy
lightbulbs to residences, saving 125 megawatts, but also to help the other
conservation programs get started well before the summer by providing people
to do the work while learning new skills.

"We have reshaped this house," Hertzberg said, "using every resource
available to address this problem.  Throughout this effort, our focus has
been on protecting taxpayers, consumers and the future of this great state.

"Today, I am proud to stand with members of my caucus as we take the next
step," the Speaker concluded.

Assembly Democratic Caucus begins today to address the short and mid-term
implications of the ongoing energy needs of the state.  The following bills
are the first in a series of proposals the Caucus will be offering to
address the supply and conservation needs of our residential and commercial
energy consumers.

Supply

1. On-site and Distributed Generation.  Requires the CEC to design an
incentives program to promote the installment of clean and modern on-site
generation technologies as defined in SB 1298 (Bowen, 2000) including
eliminating standby and installment fees charged by electrical corporations.
$50 million shall be allocated to the CEC to subsidize the development of
on-site distributed generation through this program.
Provides: 20 MWs clean power the first year d additive in out years. Also
reduces demand on the grid in peak periods.
(Frommer, Alquist & Wiggins)

2. Renewable Sources of Power.  Provides $150 million to establish a loan
guarantee program for underwriting joint venture agreements to develop clean
and efficient renewable energy supply.
Provides: 1,000 MWs over four years.
(Jackson, Aroner & Pavley)

3. Expedited Power Plant Permitting. Increases from 50 to 100 MW generation
facilities subject to local instead of CEC review and approval. Impacts
seven applicants who have withdrawn their applications because of the CEC
review. Provides: 634 MWs.
(Cardoza, Calderon & Salinas)

4. Ensuring Power for Californians. Requires, as a condition of receiving a
permit for plant construction, that developers enter into power purchasing
agreements with the state to ensure that a significant amount of the energy
output is available to the state.
Provides: 6,000 MWs  (Hertzberg and Caucus)

TOTAL SUPPLY ADDED: 7,654 MWs over the next four years
 Energy Efficiency

1. Residential & Small Business Energy Efficiency Program (AB 29X).
Appropriates $375 million and requires the commission:
 ? To pay the costs of installation of an interval meter to a small business
that voluntarily reduces its electric consumption.
 ? To administer a grant program for the replacement of energy inefficient
appliances.
 ? To administer a grant and loan program for eligible construction or
retrofit projects.
 ? Expand the Emerging Renewables Buy-Down Program for renewable energy
systems such as photovoltaics (PVs).
Savings: About 400 MWs
(Kehoe, Cedillo, Nakano, Shelley & Wesson)

2. Schools 2001.  Appropriates $250 million for grants and loans to make
2001 schools more energy efficient, including 750 older year-round schools
by June 30, 2001.
Savings: 250 MWs
(Kehoe)

3. 50-50 Local Government Program.  Appropriates $350 million as a matching
grant to local governments to make local government buildings energy
efficient.
Savings: 400 MWs
(Steinberg & Oropeza)

4. Mobile Efficiency Brigade.  Provide $100 million (50% grants/50% loans)
to nonprofits to distribute energy efficient light bulbs and to assist in
getting all the other programs announced in this package up and running
quickly to achieve as much energy savings as possible by this summer.
Savings: 125 MWs (in addition to the MWs, the Brigade will help us save in
the other elements of the package).
(Correa & Cedillo)

5. Shopping Center Program. Provide $50 million in low-cost loans to
shopping centers to install energy-saving lighting devices.
Savings: 60 MWs
(Lowenthal, Thomson & Nakano)

TOTAL SUPPLY SAVED: 1,235 MWs
500 MWs BY SUMMER

 - ASSY Dem Supply/Cons  Memo


---------------------- Forwarded by Andrea Ring/HOU/ECT on 02/14/2001 02:57
PM ---------------------------

	From:  Karen D McIlvoy                           02/14/2001 08:40 AM

To: ragan.bond@bhlp.com
cc:  (bcc: Andrea Ring/HOU/ECT)
Subject: Fwd: Fw: Baking Cookies

Subject: Baking Cookies

>
> An elderly man lay dying in his bed. In death's agony, he suddenly
> smelled the aroma of his favorite chocolate chip cookies wafting up
> the stairs. He gathered his remaining strength, and lifted himself
> from the bed. Leaning against the wall, he slowly made his way out
> of the bedroom, and with even greater effort forced himself down the
> stairs, gripping the railing with both hands.
>
> With labored breath, he leaned against the doorframe, gazing into
> the kitchen. Were it not for death's agony, he would have thought
> himself already in heaven: there, spreads out upon newspapers on the
> kitchen table were literally hundreds of his favorite chocolate chip
> cookies.
>
> Was it heaven? Or was it one final act of heroic love from his devoted
> wife, seeing to it that he left this world a happy man? Mustering one
> great final effort, he threw himself toward the table, landing on his
> knees in a rumpled posture. His parched lips parted; the wondrous taste
> of the cookie was already in his mouth; seemingly bringing him back to
> life. The aged and withered hand, shakingly, made its way to a cookie at
> the edge of the table, when it was suddenly smacked with a spatula by his
> wife.
>
> "Stay out of those," she said. "They're for the funeral."
>


Meeting to evaluate ETC Survey Process and Recommend Improvements


---------------------- Forwarded by Peter F Keavey/HOU/ECT on 07/20/2000
08:22 AM ---------------------------

	From:  Kate Fraser                           07/20/2000 08:13 AM

To: Mark Courtney/HOU/ECT@ECT, Peter F Keavey/HOU/ECT@ECT, Laura
Podurgiel/HOU/ECT@ECT, Mirna Mejia/HOU/ECT@ECT, LaCrecia
Davenport/Corp/Enron@Enron
cc:
Subject: Re: For Sale: Home Office Furniture from Storehouse Furniture

Sorry guys, I was on vacation yesterday.  Here are the photos.  Some of you
have asked......the furniture is four years old.  My husband and I both work
outside the home, so it has really just been used to surf the internet and do
family finances.  It is in great condition.  Come over any evening or weekend
and see for yourself.  We still like it, but we have to give up our study to
make room for the twins we are expecting in September!  Mima, I would prefer
to keep all the pieces together, but I may consider selling the bookcase
separately, I'll let you know.

Thanks,
Kate

---------------------- Forwarded by Kate Fraser/HOU/ECT on 07/20/2000 08:00
AM ---------------------------

	From:  Kate Fraser                           07/18/2000 02:01 PM

To: Kendra Dromgoole/NA/Enron@Enron
cc:
Subject: Re: For Sale: Home Office Furniture from Storehouse Furniture

---------------------- Forwarded by Kate Fraser/HOU/ECT on 07/18/2000 02:00
PM ---------------------------
From: Kate Fraser on 07/18/2000 01:48 PM
To: Karen Lambert/HOU/ECT@ECT, Joan Quick/HOU/ECT@ECT
cc:
Subject: Re: For Sale: Home Office Furniture from Storehouse Furniture

Thanks for the interest!

Kate


I have put it on my calendar.

Kaye Ellis
01/20/2000 04:41 PM
To: Mark Taylor/HOU/ECT@ECT, Shari Stack/HOU/ECT@ECT, Carol St
Clair/HOU/ECT@ECT
cc: Sara Shackleton/HOU/ECT@ECT, Taffy Milligan/HOU/ECT@ECT, Suzanne
Adams/HOU/ECT@ECT
Subject: Attorneys' Meeting

Sara would like to meet with you Tuesday, January 25 at 10 am in 38C1
regarding Utility and UCC Issues.  Please let me know if this time will work
for you.

Thanks,
K


Annex B comments fine except we need your website address for purposes of
Paragraph 4.  Please note that:

Par. 3 Credit Support Agreements - Guaranty
this assumes that we have the signed guaranty on the date of the Confirmation

The Enron Corp. guaranty in favor of ConEd was submitted to our Treasury
group this morning for signature.  As of 5:30 p.m., it had not been returned
to me.  I have left a message with Treasury and hope that I will receive in
the morning.  Please advise (1) fax number of person to whom I should fax
guaranty upon my receipt and (2) person/address for FedExp delivery of
executed guaranty.

Please let me know if you have any questions.

Sara Shackleton
Enron North America Corp.
1400 Smith Street, EB 3801a
Houston, Texas  77002
713-853-5620 (phone)
713-646-3490 (fax)
sara.shackleton@enron.com

	"Rozmus, Gary" <RozmusG@coned.com>
	02/01/2001 12:52 PM

		 To: "'Samantha.Boyd@enron.com'" <Samantha.Boyd@enron.com>,
"'Edward.Sacks@enron.com'" <Edward.Sacks@enron.com>,
"'Sara.Shackleton@enron.com'" <Sara.Shackleton@enron.com>
		 cc:
		 Subject: Enron Credit Annex

Attached are our latest comments relating to Annex B and Annex B-1 please
review and let me know if the changes are acceptable.

 <<enron credit annex draft 012901.doc>>

Gary

 <<Rozmus, Gary.vcf>>

 - enron credit annex draft 012901.doc
 - Rozmus, Gary.vcf


Tana:

The following CP's are not authorized to trade US Power Products:

Willowbridge Associates: Declined by Credit
City of Roseville: Need to speak with Elizabeth/Leslie  - will get back to
you on them today.
Coastal Field Services Restricted by Credit
Mississippi Chemical Corporation - Restricted by Credit

Thanks,

Shari