Utilities Biweekly Report
 A news service for energy professionals   	 November 20,  2001

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Electricity Restructuring Gets Push  From Republicans
Republican members of the Energy and Air  Quality Subcommittee of the House Energy and Commerce Committee have agreed with  Subcommittee Chairman Joe Barton, R-Texas, that restructuring legislation should  move forward now that Congress has a few more weeks in session. In an 8-2 vote  last week, Republican Committee members decided to continue drafting electricity  restructuring legislation. Electricity restructuring provisions were excluded  from the energy bill approved by the House earlier this year. The issue was to  be readdressed in the fall but was delayed due to the events on September 11th.  No action has been taken to date in the Senate.
Green Mountain Energy Expands Into  Ohio's Restructured Market
Green Mountain Energy Company has  entered into an agreement with the Northeast Ohio Public Energy Council (NOPEC)  to service northeastern Ohio with solar and wind-generated electricity. NOPEC  was formed last year under Ohio's utility deregulation statute Senate Bill 3,  which allows local governments to serve as aggregators for electricity  customers. NOPEC consists of 100 local communities with approximately 500,000  energy customers. Under the agreement, Green Mountain Energy will construct a  25-kilowatt solar array at Lake Farmpark in Kirtland, Ohio, and will conduct a  study to determine the feasibility of siting a wind generating facility in Ohio.  The Green Mountain Energy solar array will be the largest in the state and the  first commercial solar array in Ohio built for the competitive market. The  proposed wind study will be the first commercial wind analysis executed solely  for the competitive market.
Debate Over Deregulation Impacts in  Oklahoma
Oak Ridge National Laboratory (ORNL) has reported, in a  first-of-its kind study, that restructuring Oklahoma's electric industry can  benefit consumers, but problems and potential pitfalls do exist. The report has  been met with some opposition however. Pete Churchwell, president of Oklahoma's  second largest electric utility AEP/PSO, stated on November 16th that he does  not support the study's findings, one of which indicates that Oklahoma's energy  costs could rise between 5 and 25 percent if the retail electricity market is  opened to competition. The study results indicate that lower electric prices may  be available in the short term, but restructuring will ultimately bring higher  prices. Under the state's restructuring plan, existing generating plants will  have a competitive advantage over new plants. This advantage will result in  higher prices in the long term because newer, higher-cost plants may be forced  out of the marketplace. Churchwell contests that it is too early to know for  certain how consumer rates will react in a deregulated market. While admitting  that the nation's grid was not designed for retail competition, Churchwell said  that improvements in state transmission systems would allow a successful retail  competitive market.
Utility still looks to be freed of  generators
Clark Public Utilities has been trying in vain for  two months to unload some of the 50 portable generators that have become a  multimillion-dollar white elephant.  The units, wired in rows near the  River Road Generating Plant, were leased for a year for $19.5 million. The deal  was signed with General Electric early this year, at a time when there were dire  predictions about this summer's power supply.  In addition to the equipment  lease, there is a $15 million natural gas contract to power the generators and a  roughly $12 million expense to transport the gas. While Clark has been able to  resell some of the gas at a loss, the transportation costs can't be  recouped.  For weeks, electricity on the open market has been much cheaper  than that produced by the generators.  In place since July, the generators,  each producing 1 megawatt of power, have run for just 39 days.  Electricity  prices have plunged, from a high of $325 per megawatt-hour this summer to less  than $30 today. The price has to be about $95 to make operating the generators  feasible. So utility officials have had no choice but to let them sit  idle.  In September, the net expense for the generator farm gas, generator  lease and so on was $3.5 million. For no electricity.  Utility officials  have tried to get GE to find customers for at least some of the  generators.  Tuesday morning, Andy Huck, Clark's operations director, said  he had heard from GE about a "pretty serious inquiry" for two generators for two  months. And that, he said, "is the best inquiry they've had so far."  Now,  utility officials are trying to decide whether to keep spending $62,000 a month  for three GE employees and other expenses associated with maintaining the  generators.  The theory is that the equipment should be tested, a few at a  time, to ensure they will be ready if needed.  "They told me the generators  need to be 'exercised,'" said Huck. "I told them they spent two months on a ship  without being started." The units were built in Austria.  GE, with a signed  one-year lease in hand, has little incentive to find customers for the  equipment, particularly when the company could presumably lease other generators  from its inventory.  "They say it's because we're such good client" that an  effort has been made to find other users for the generators, said Huck. Clark's  $120 million River Road generating plant features a giant GE turbine.   Clark officials don't hold out much hope of getting out from under the generator  lease expense, which runs about $1.3 million per month. "Where would they go?"  asked Jim Sanders, Clark's director of energy resources.  Meanwhile, the  natural gas supply for the equipment is being resold at about half what it cost  the utility. Gas prices also have fallen since the supply deal was inked.   At their regular Tuesday meeting, utility commissioners decided to proceed with  a $100 million bond sale that includes money to pay for the generator  lease.  In March, Rick Dyer, Clark's finance director, recommended that the  utility cut a deal for a one-year, $100 million "bond anticipation note." The  arrangement was made on the assumption that interest rates would fall in a few  months, which they have to 1961 levels.  The move Tuesday gave Dyer and  utility General Manager Wayne Nelson the OK to approve a bond sale of up to 15  years at 6 percent interest although 5 percent or less is more likely, and the  goal is a 10-year term, officials said.  The bond sale likely will occur in  the first week of December. The bulk of the $100 million borrowing is to cover a  $63 million power purchase from Kaiser Aluminum. The deal, like the generator  lease, was for power to cover an August-September gap in Clark's power supply,  before the start of a Bonneville Power Administration contract.  That  Kaiser purchase was at $325 a megawatt-hour. The utility lost a bid to have a  federal judge declare the price exorbitant and order a partial refund.
AEP, Reliant Named as Last Resort  Providers in Texas
The Texas Public Utility Commission (PUC) has  named American Electric Power (AEP) and Reliant Resources affiliates "providers  of last resort" (POLR) for residential and small-commercial customers in all or  part of 96 counties within TXU Electric's service area. The POLR becomes the  electricity provider for customers who have been dropped by their past provider  due to payment problems or if their provider has discontinued service in their s  area. AEP and Reliant will offer a retail price that is expected to be 30-34  percent higher than base rates in the area taking effect January 1, 2002. By  becoming the POLR, AEP and Reliant will acquire an additional 2 million  Dallas-area customers and an expected 1-20 percent load increase. Due to the  higher costs associated with such an increased load the PUC was agreeable to the  higher rate. Consumer groups are opposing the higher rates, saying that  low-income consumers will be unfairly hurt. Although many low-income consumers  will qualify for a 10 percent discount advocates are arguing that POLR rates  should equal the regular rates.
Studies Show Changing Consumer Views  Towards Deregulation
A recent study by Deloitte and Touche  Energy Resources Group finds that consumers are less aware of deregulation in  the electric industry and more wary of its potential benefits. The survey  considered the opinions of 657 consumers nationwide and found that the number of  consumers who are aware of changes in retail electric markets has dropped to  39.7 percent, compared with 50.5 percent in 2000. This is a reversal in a  five-year trend of increasing consumer awareness on deregulation. Analysts cited  the terrorist attacks and the lack of federal legislation or debate on  deregulation as reasons for the change. The survey also found that more  consumers expect electric rates to increase with deregulation. Deloitte and  Touche's Brank Terzi reports that a third of consumers expect no benefit from  competition, while 26 percent expect prices to go down, 9 percent expect  improved service, and 15 percent simply "don't know." Another study completed by  RKS Research and Consulting similarly found that many consumers feel that  "deregulation has been a colossal failure." Their study found that many  consumers who have switched to new service providers have been disappointed  because their service expectations were not met. RKS Senior Vice President  Carmine Grastataro said, "customers of public power are more satisfied with the  job their utility is doing than are customers of the IOUs. Although this finding  has historically remained true, the difference in performance scores between  public power and IOUs is exacerbated in states where competition is under way."  The study also found that consumers are more interested in purchasing power  through buying groups, voluntary energy curtailment programs, and on-site  generation.
FERC Postpones December 15 RTO  Deadline
The Federal Energy Regulatory Commission (FERC) has  officially decided to postpone the December 15, 2001, deadline for utilities to  create four regional transmission organizations (RTO). FERC Chairman Pat Wood  said of the decision, "RTO development is in very different stages in various  parts of the country, and it is not possible for all RTOs to be in operation by  the December 15, 2001, deadline established in Order 2000." The commission has  approved a rulemaking order, RM01-12, that addresses the development of RTOs in  several steps. First, the Commission will develop a broader definition of the  expected functions of an RTO and how they can be achieved. Second, FERC will  seek improved input and communication from both state and federal agencies on  RTO development. Third, FERC will conduct a formal cost benefit analysis of RTO  systems. This comes in response to two conflicting studies: NY ISO reports that  a large Northeast RTO could cause power rates to increase by $90 million, while  Mirant contends that a Northeast RTO could save consumers $440 million. The  rulemaking also calls for FERC to determine areas in which standardization can  be improved. Lastly, a new "progressive" timeline will be developed that  addresses RTO development in a region-by-region approach. While Chairman Wood  said that the commission is holding to its original concept of four RTOs, he  also noted that the new order suggests that three smaller RTOs may be developed  within the Western region. These transmission groups would include RTO West,  Desert Star RTO, and one based on the California ISO. The rulemaking also makes  a call for comments in what Commissioner Nora Brownell noted as possibly the  last opportunity for market participants and state regulators to make  suggestions and raise concerns before final orders are issued.
Ontario deregulation in  doubt
The planned  deregulation of the $35-billion Ontario electricity sector has been thrown in  doubt by a radical proposal that would shackle the province's electricity  transmission company, preventing it from becoming a significant player in an  open North American power market. The plan, known only to Ontario Premier Mike  Harris and a few government and Bay Street insiders, would turn Hydro One into a  not-for-profit entity instead of a fully commercial, privatized company. If this  happens, Hydro One would lack the flexibility to raise equity capital, make  acquisitions and form partnerships in an effort to become one of continent's  premier transmission companies -- a goal plainly set out by chief executive  officer Eleanor Clitheroe. David Lindsay, the president and chief executive  officer of Ontario SuperBuild Corp., the government's privatization adviser,  confirmed that turning Hydro One into a not-for-profit organization, similar to  Nav Canada, the civil air navigation service, is under serious consideration.  "We've been asked to evaluate all options for Hydro One's future, including this  one," he said yesterday. He would not provide details, though it is thought that  the government wants to make a decision on Hydro One's future ownership  structure by the conclusion of the year. A senior official in the Ontario  government, who did not want to be identified, said the proposal "is a step  backward to the old days of Ontario Hydro." He was referring to the debt-laden  utility that was split into Ontario Power Generation, the electricity generating  arm, and Hydro One, whose network of high-voltage transmission lines spans  30,000 kilometres. The Premier's office would not comment. A spokeswoman for  Energy Minister Jim Wilson would say only that "there are a number of options on  the table." Sources on Bay Street and at Queen's Park said the idea of turning  Hydro One into a not-for-profit entity is being propelled by Anthony Fell, the  chairman of Royal Bank-owned RBC Dominion Securities, Bay Street's largest  dealer. If the new Hydro One took this shape, it would raise about $10-billion  through the sale of bonds to investors. The dealers' commission on the sale of  the bonds, which would rank among the biggest debt issues in history, would  range from $25-million to $40-million, one Bay Street executive said. Mr. Harris  is said to be keen on the concept partly because all the money would go back to  the government to help pay down the $21-billion in "stranded debt" racked up by  the old Ontario Hydro. The generating and transmission giant's decades-long  spending spree on nuclear plants and other assets tore a huge hole in the  province's balance sheet. Hydro One's cash flow, derived from sales to  electricity users, would be used to pay the interest on the $10-billion of  bonds. Presumably, consumers would face higher electricity charges if Hydro One  lacked sufficient cash to pay the interest. If Hydro One were a private company  instead, its financial risk would be borne by shareholders, not ratepayers. The  United States has embraced deregulation partly because it shifts the financial  risk of the electricity market from taxpayers to shareholders. Executives at RBC  Dominion declined to comment on the plan, citing client confidentiality  concerns. Mr. Fell first proposed it to the government in the spring. The  government wants to open up the Ontario electricity market, in which buyers and  sellers can negotiate prices, by next spring. The market overhaul contemplated  turning Ontario Power Generation and Hydro One, both of which are 100 per cent  owned by the government, into commercial companies. In Hydro One's case, the  leading options were thought to be an outright sale, in which the utility would  be bought by another company (presumably a rival utility), or an initial public  offering, where the shares would be owned by private investors and traded on the  stock exchange. The third option -- converting Hydro One into a not-for-profit  organization -- has come as a surprise. There has been no debate on this option,  though rumours of its existence have jolted Bay Street and Hydro One, both of  which were working on the assumption that the transmission business would  eventually become a commercial enterprise. Sources said that Hydro One  management opposes the not-for-profit structure because it would deny Hydro One  the flexibility and discipline of a typical commercial business. The  not-for-profit structure would mean it would not have to pay taxes, which raises  potential trade issues with the United States. American transmission companies  might argue that Hydro One's non-taxable status gives it an unfair competitive  advantage. It would also deny Hydro One management the benefit of potentially  lucrative share options.  Rod Taylor, Hydro One's executive vice-president,  would not comment on the not-for-profitoption being contemplated by the  government. He said, however, that the company's strategy hinges on its ability  to become a major player in the deregulated North American electricity market.  "Our vision of the company is to become a fully commercial entity, and become in  the transmission sector what Canadian National is to the rail sector," he said  in a phone interview. Stanley Hartt, the chairman of the Canadian office of Wall  Street's Salomon Smith Barney, is among the Bay Street executives who opposes a  not-for-profit structure for Hydro One (Salomon has a small role as an adviser  to Hydro One's strategic business plan). In a three-page letter sent this week  to the top executives of several large power-using Ontario companies, he said  that "this idea is short-sighted and bad for Ontario." He argued that "the  absence of an equity component in the capital structure of the not-for-profit  corporation essentially transfers the equity risk to the ratepayers." He also  said that, without financial flexibility, Hydro One would lack the resources to  invest in "new bottleneck-eliminating connections" that would allow the company  to become a significant electricity exporter. "Ontario would lose the prospect  of becoming a true hub for North American Energy transmission," he said. In a  recent report on the power industry, TD Newcrest analyst David McCracken wrote,  "With its operating expertise and strong balance sheet, Hydro One is well  positioned to act as a consolidator of transmission grids in the northern United  States, where ownership tends to be fragmented." He noted that Hydro One is  expected to be privatized in the next few years, and he said the utility has  "the opportunity to lever strengths from traditional wires businesses into  competitive high-growth initiatives." According to sources familiar with the  not-for-profit proposal, Hydro One would be governed in the best interests of  all electricity users by stocking the board of directors with appointees from  corporations that are heavy power users, such as auto and steel makers and paper  companies. Such a structure exists at Nav Canada, with airline executives on the  board, and the company has been able to cut the fees it charges customers.  Restructuring Hydro One with debt, rather than equity, is also presented as the  most efficient way to capitalize the company. "The problem with a Canadian  National Rail-style IPO is that equity is much more expensive than debt," said  one financier familiar with the proposal. "With a debt-based structure, every  dollar earned is available to pay interest, while an equity-based structure  means you pay federal taxes, provide a return to shareholders and make debt  payments." Dofasco Inc., the big Ontario steel producer that consumes about  $100-million of electricity a year, supports the not-for-profit proposal. Gord  Forstner, head of communications, said a bond sale would reduce Ontario Hydro's  stranded debt by $10-billion immediately, paving the way for lower electricity  charges. Currently, a special levy on all electricity bills is being used to  whittle down the debt. The charge costs Dofasco alone about $15-million a year.  "We want to see the stranded debt paid down first," Mr. Forstner said. "Until  that happens, we don't favour Hydro One going to the expense of expanding  outside of Ontario's boundaries."
Retail Access Requested in  California
The Alliance for Retail Energy Markets (AReM) has  asked the California Supreme Court to overturn the state Public Utilities  Commission's September 20th decision that suspended direct retail access across  the state. The consumer group, comprised of American Utility Network, the  Alliance for Retail Energy Markets, California League of Food Processors,  Western Power Trading Forum, Strategic Energy, AB&I Foundry, Tricon Global  Restaurants and School Project for Utility Rate Reduction, has argued that the  ruling was made without due process and that the Court had no right to abrogate  contracts retroactively. "It is our hope that the Supreme Court recognizes the  PUC has acted in complete disregard of our constitutional rights and has rushed  to judgment on this issue, without hearings and without creating a proper  evidentiary record," said AReM Attorney Dan Douglass. PUC Commissioner Carl Wood  has maintained that the PUC issued the order because it believed that consumers  have hastily signed contracts with competitive suppliers, leaving fewer  customers to pay for the state's wholesale power costs. AReM is disputing the  claim, saying that only a limited number of customers switched suppliers during  the summer of 2001.
Plant Construction Influences  Florida's Wholesale Market
California based Calpine Corporation  announced that it has begun construction of a 530 megawatt power plant in  Auburndale, Florida. The construction brings Florida closer to deregulation, as  Calpine is one of the few out-of-state generating companies to successfully  penetrate Florida's wholesale electricity market. Other companies, such as  Enron, have attempted to construct new power plants in the state, but have been  unsuccessful due to community and regulatory resistance. Florida's stringent  Power Plant Siting Act makes it very difficult for out-of-state companies to  enter the market. Calpine has succeeded by agreeing to sell the output from the  Auburndale plant under a long-term contract to one of Florida's existing  utilities, Seminole Electric Cooperative. In addition, Calpine has been working  with the Florida Partnership for Affordable Competitive Electricity to persuade  lawmakers and Governor Bush to deregulate Florida's wholesale market. Florida's  Energy 2020 Study Commission, which is responsible for the state's competition  plan, has endorsed a proposal to allow out-of-state companies to enter Florida's  wholesale market by building new plants and selling power to the state's  incumbent utilities. The Commission has also suggested eliminating the power of  state government to approve power plant development and limiting the ability of  local governments to block projects. The Commission is expected to issue a final  report on December 1, 2001.
Florida PSC Approves Independent  Power Line Operations
The Florida Public Service Commission  (PSC) has approved the transfer of the state's power lines from utility  jurisdiction to an independent company. The PSC has asked Florida's three main  utilities, Florida Power and Light (FPL), Florida and Power Corporation, and  Tampa Electric, to devise a proposal within 90 days that will turn over  operation of the power lines to an independent system operator. Commissioner  Michael A. Palecki said that the decision was made in the best interest for  ratepayers, utility companies and independent power companies seeking a  competitive market. Under an earlier proposal submitted to the PSC, the  utilities proposed a statewide regional transmission organization, GridFlorida,  that would have owned and managed the power lines. The PSC did not approve the  plan, as it would have moved jurisdiction of retail rates to the Federal Energy  Regulatory Commission.
New England Congressmen Seek Equal  Representation on RTO Board
Twenty-three U.S. congressmen from  New England requested that their states be given adequate representation on the  governance of the Northeast Regional Transmission Organization (RTO.) In an  effort organized by Representative Edward Markey (D-Mass), the bipartisan  delegation of congressmen wrote a letter to the Federal Energy Regulatory  Commission (FERC) asking the regulators to create a governing board comprised of  equal numbers of representatives from New England, New York, and the  Mid-Atlantic. "We view an equally balanced governance structure as the only way  in which a single market design can be implemented which would truly benefit the  consumers of all the regions," Markey said. FERC has been considering several  options for structuring the board that will oversee the unified Northeast  wholesale power market. One proposal gives five seats for representatives from  the Mid-Atlantic, three seats to New York, and two to New England. ISO New  England and New York Independent System Operator joined the congressman in  opposing that plan and requesting equal representation.
California Wants Consumers to See  Real Power Costs
In a move that may prevent a repeat meltdown of  the wholesale electricity market in California, the California Consumer Power  and Financing Authority wants to install electricity meters that charge  consumers the real cost of power. Currently consumers pay the same price for  electricity throughout the day even though the wholesale price varies every  hour. Therefore, consumers have no incentive to conserve during peak times. The  meters will charge residential consumers more for power used during peak hours,  when demand is highest and less during off peak times. The authority issued  requests for proposals, due by November 15, for a minimum of 10,000 real-time  meters, the cost of which varies between $200 and $1,000. The power authority  plans to finance the purchase of the meters and will market them to customers of  Pacific Gas & Electric, Southern California Edison, San Diego Gas &  Electric and dozens of municipal utilities. As consumers have shown to be  responsive to price signals in a pilot program in Washington, Californians too  can expect to reduce their energy consumption. Project manger, Kevin Wood of  Southern California Edison hopes his company will install meters for 11,000  customers by next summer. He said that if these customers, who represent 20 to  30 percent of the load, respond to price signals during peak hours, this may in  turn drive down wholesale prices for all users. While consumers may benefit, the  decrease in consumption may cost power generators millions of dollars in  revenue.
Environmentalists and Union Coalition  Oppose Deregulation in Indiana
A coalition of union members from  several groups showed their opposition to electric utility deregulation in  Indiana during a peaceful demonstration on November 7. The coalition, know as  People's Energy Campaign, includes members from UNITE Local 399, formerly the  Ladies Garment Workers Union, the Central Labor Council, Valley Watch  environmental group, and the Citizens Action Coalition. Denny Owen, an executive  board member of UNITE Local 399, expressed the general concern of the coalition  that deregulation should be discouraged. "We don't think it'll make prices  lower, it'll make them go higher," Owen said. Indiana is considered to have low  utility rates compared to other states. Indiana lawmakers are considering  deregulation as newly introduced legislation proposes to create an Energy Policy  Commission that would craft a comprehensive energy plan for the state. Senator  Gard and other General Assembly members created the bill to address the state's  need for a true energy policy and as a means to address future electric load  growth. "Merchant power plants have been a divisive issue in the past year and a  half," Gard said. "There are many people who feel if the state has a  comprehensive energy policy, it might be better able to deal with this issue.  And we also have to pay attention to what's happened in California." The bill  would set up a temporary commission with appointed members representing various  stakeholder groups including state government, industry, labor, and  environmental groups. The commission is scheduled to present a final report to  the governor in December 2002. While electric deregulation would not be a prime  focus of the commission, the "specter of deregulation" would have to be examined  in some fashion, Senator Gard said. SB 233 has been sent to the Senate Rules and  Legislative Procedures Committee. Senator Gard predicts it will pass the Senate,  although chances in the House of Representatives are less favorable.
Debate Over Oklahoma Transmission  System's Readiness to Serve Future Load
The Electric  Restructuring Advisory Committee met with industry officials on November 7 to  discuss the future capabilities of Oklahoma's transmission system. The committee  is responsible for researching the capabilities of the system, determining  whether upgrades are necessary, and delegating the responsibility for paying for  such upgrades. With new power plants being developed and proposals to open the  state to a competitive electric market in progress, concern has risen as to  whether the transmission system can handle the increased load. Stanton Hadley of  Oak Ridge National Laboratory reported that electricity demand in Oklahoma is  expected to grow 26 percent, to 14,350 megawatts by 2010. The transmission  system currently is able to handle only 13,300 megawatts. Nevertheless, power  companies are planning 13,500 megawatts of new power generation. Calpine  Corporation is spending about $20 million on transmission improvements between  its power plant near Coweta, Oklahoma, and the outlying region. Also, Public  Service Company of Oklahoma plans to spend $40 million on transmission upgrades  over the next few years. With the new power plants and a supply surplus  expected, Hadley also said that consumers could expect lower costs. John Wright,  one of the committee members questioning this assumption, said that in a  deregulated market, the utilities are likely to sell their power out of state.  If this were to occur, lower power prices would be unlikely. The Electric  Restructuring Advisory Committee will deliver a report to the Legislature at the  end of the year.
Thirty New Power Plants Proposed for  Virginia
The latest news out of the deregulation of Virginia's  electric power industry centers around thirty proposals for new power plants in  the state. While the surge in supply is expected to prevent a California-like  energy crisis, health and environmentalists argue that the air pollution and  smog from the plants could damage the state's parks and forests. Since 1998,  when the state announced its plans to open its energy markets to competition, 30  companies and utilities have asked for state approval to build new plants.  Activists complain that the new power would not even benefit Virginia's  customers, as the energy is intended for delivery in northeastern states. By  building plants in Virginia, utilities avoid the Northeast's stringent  environmental regulations. An advisory group composed of utility and industry  representatives argues that new plants pose no significant risk. They stated  that 28 of the new plants would run on cleaner-burning natural gas and that  other federal regulations would require older plants to reduce harmful emissions  by 65 percent by 2004. The representatives also expect that only a few of the  plants will actually be built due to market conditions and cooling-water  shortages.

Copyright ? 2001 Egnatia Research &  Management. All rights  reserved


We have figured out why the credit group is getting so many "New
Counterparty" names in gas.  The spreadsheets that they are getting that
information from are for position purposes only on pipe-optons.  The value is
captured in TAGG and therefore if both had the correct counterparty it would
be doublecounting credit risk.  The spreadsheet download has a specific
download that it has to follow which includes counterparty name  (which in
this case had to be put in as new counterparty.)  I am working with Debbie to
figure out how we can download those positions without showing a counterparty
at all from the spreadsheet.  It will be done as quickly as possible.

Thanks


-----Original Message-----
From: 	Terrie Sechrist <mudlaw@swbell.net>@ENRON
Sent:	Tuesday, November 13, 2001 4:12 PM
To:	'12007'; '12152'; '12255'; '12300'; '12351'; Pereira, Susan W.; '12361'; '12364'; '12442'; '12476'; '12633'; '12639'; '12640'
Subject:	Cookie Sales 2002

My name is Terrie Sechrist and I am the Service Unit Cookie Manager for
Bending Bayous this year.  I know that you were the cookie managers for your
troop(s) last year.  I do not have confirmation as to who the cookie
managers are for your troops this year.  Will you please respond to this
email and let me know if you are a cookie manager for a troop this year?  If
you are not your troop's cookie manager, would you please (if you know) tell
me who is this year's manager (please include the troop number(s) in your
return email.  I have sent out three emails to the troop managers today and
would like to get the information to your troop's manager as soon as
possible.  Thanks for your help!


Cinergy has agreed to settle the imbalance of 11,035 mmbtu owed them at
$1.77/mmbtu.  Please prepare the paperwork showing us paying them $19,531.95
to clear this imbalance.

Thanks,

Susan Pereira

p.s.- you can just address the letter to Daniel Kieran


these are 50 mw - they've been changed.

Kerri Thompson@ENRON
02/15/2001 11:58 AM
To: Kate Symes/PDX/ECT@ECT
cc:

Subject: Re: apb

do you know that status?

Kerri Thompson
02/14/2001 03:29 PM
To: Kate Symes/PDX/ECT@ECT
cc:

Subject: apb

523212
523213

broker has 50 mws on both


Another one to brighten your day!  SRS
 - President's Sail.JPG


If you are looking to feed and challenge your faith, visit
Crosswalk.com's Spiritual Life Channel at:
http://spiritual.crosswalk.com
-----------
N E I L   A N D E R S O N   D A I L Y   D E V O T I O N A L
             from Freedom in Christ Ministries

November 22

PROPHETIC MESSAGES

"Is not My word like fire?" declares the LORD, and like a hammer
which shatters a rock?" (Jeremiah 23:29).

If you attend a Christian fellowship where prophecies are part of
public worship, I wonder if we should expect from God generic
messages like, "I love you, My children" or "I'm coming soon."
These statements are certainly true, but why would they need to
be prophesied, since the Bible already clearly asserts God's love
and Christ's imminent return? I have heard "prophecies" like
these given in churches where many people were living in sin,
lulling them into an unrighteous complacency.

The voice of a prophet is a consuming fire and a shattering
hammer. A prophetic message should motivate people to
righteousness, not placate them in their sin (1 Peter 4:17). God
is more concerned about church purity than about church growth.
Comfort only comes to those who are persecuted for righteousness'
sake by allowing God's Word to purge their sin and shatter their
self-centeredness.

Jeremiah relates two other evidences of false prophets: "'Behold,
I am against the prophets,' declares the LORD, 'who steal My
words from each other'" (23:30). That's plagiarism: taking what
God gave someone else and using it as if it were your own. "'I am
against the prophets,' declares the LORD, 'who use their tongues
and declare, "the Lord declares"'" (verse 31).

Declaring that what you are saying is directly from the Lord when
it isn't is an incredible offense to God. If God wants me to know
something He will tell me directly. I believe in the priesthood
of believers; however, God can and will encourage us and confirm
His Word to us through others. "There is one God, and one
mediator also between God and men, the man Christ Jesus" (1
Timothy 2:5). If someone says to you "God told me to tell you . .
." that person may be functioning as a medium. The gift of
prophecy should reveal the secrets of the heart so people will
fall on their faces and worship God (1 Corinthians 14:25). Then
God will guide them by His Holy Spirit.

Lord, teach me not to quench Your Spirit nor to despise prophetic
utterances but to examine everything and hold fast to what is
good.

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George,

Is the dress casual at the conference?

Vince

George_Wayne@fpl.com on 04/03/2000 05:03:37 PM
To: "Vince J Kaminski" <Vince.J.Kaminski@enron.com>
cc:
Subject: Re: Presentation

Thanks !

You are probably familar with the format ... 15-20 minutes for the
presentation
followed by 20-30 minutes for Q&A.

See you at 7:30am Thursday in the lobby of the  Sonesta for breakfast!

ghw

"Vince J Kaminski" <Vince.J.Kaminski@enron.com> on 03/31/2000 12:48:58 PM

To:   George Wayne@FPL
cc:   "Vince J Kaminski" <Vince.J.Kaminski@enron.com>, vkaminski@aol.com
Subject:  Presentation

George,

This is the presentation I promised.

Vince
(See attached file: fpl0400.ppt)

 - fpl0400.ppt


??? Yo Sweets, thought you might want to see these.? I also just replied and
gave her your email address but you may want to contact her directly
yourself.? Tu Esposa

-----Original Message-----
From: Stephanie Owens [mailto:ksowens8@iwl.net]
Sent: Sunday, October 15, 2000 9:20 PM
To: zwharton@dawray.com
Subject: Wedding photos

Hey Zo...

So, you got a new job?? I didn't know.? Congratulations!? I guess you are
just getting adjusted.? Well, I'm about to have to get readjusted when I go
back to work in a week or so.? I'm ready though.

Martin said you had a good time on your honeymoon (aside from the big bruise
on your ass).? I did the same thing in New Braunfels several years ago.? It
looked worse than it felt.? Oh, could you give me Martin's email address at
work?? Kevin keeps meaning to get back with him about his father's
employment situation.? I'll make sure he does that tomorrow.

I'm sending some wedding photos.? I'll have to send only a few at a time, so
you will see other messages from me.? Let me know if you want to have any of
them printed up.

Steph

?
 - hereshecomes.jpg
 - zowalking.jpg
 - takingvows.jpg
 - closeupvows1.jpg
 - closeupvows2.jpg
 - almostover.jpg
 - mrandmrs.jpg


Here's the last shot of Hef's present to Cameron when she was born.  I think
you all have seen it at the Dome at some point in your visits there.  It
lasted almost thirty-two years.

.

 - teddybear2.jpg


Yes, we will go to the Sheas, but probably not until around 9pm.  When are
you guys going???

Cameron Sellers
Vice President, Business Development
PERFECT.COM
1860 Embarcadero Road - Suite 210
Palo Alto, CA 94303
cameron@perfect.com
650.798.3366 (direct dial)
650.269.3366 (cell)
650.858.1095 (fax)

-----Original Message-----
From:  Jeff.Dasovich@enron.com [mailto:Jeff.Dasovich@enron.com]
Sent: Friday, October 20, 2000 8:37 AM
To: cameron@perfect.com
Subject:

Thanks so much for the gifts.  Very sweet.  Sorry I was rushed, but I've
got a big bad finance midterm on Tuesday that I ain't ready for and work's
nuts.  But I really want to hear more about the trip.  Sounds like it was a
blast.

You looked lovely in the pictures, all dressed up a la l'Italienne, and you
look lovely in your everyday sweatshirt and jeans, too.  (Don't sweat it.)

Prentice and I were planning on going to the Shea's tonite.  You guys
going?

Also, I'd love to talk to you this weekend if possible about Prentice's
bday festivities.


*******************************************************

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This one is tiny.  I'm da man.


Hi Everyone,

Don't  forget to RSVP for the End-of-Year Party at Palio D'Asti in SF on
May 18 from 6:30 - 8:30 pm.

Last day to RSVP is Friday, May 11.  Please send Seung Lee
(slee@haas.berkeley.edu) your response.

This a great event, and we hope you can make it!

Cheers,

Diane


----- Forwarded by Tana Jones/HOU/ECT on 12/08/2000 11:15 AM -----

	Mary Cook
	12/08/2000 10:00 AM

		 To: Tana Jones/HOU/ECT@ECT, Susan Bailey/HOU/ECT@ECT
		 cc:
		 Subject: PG&E

This is the list of financial trades with PG&E power sub--going out on our
omnibus.  This looks like a good candidate for a master.  Mary

Cordially,
Mary Cook
Enron North America Corp.
1400 Smith, 38th Floor, Legal
Houston, Texas   77002-7361
(713) 345-7732 (phone)
(713) 646-3490 (fax)
mary.cook@enron.com
----- Forwarded by Mary Cook/HOU/ECT on 12/08/2000 09:57 AM -----

	Rhonda L Denton
	12/08/2000 09:52 AM

		 To: Mary Cook/HOU/ECT@ECT
		 cc:
		 Subject:

This report does not have volume or prices.  If you need this info, let me
know.


Mr. Lay responded that he is unable to attend.  I know that you already have
that message as someone has called, but I wanted to let you know also.

Rosalee Fleming

"Slade, Priscilla D" <Slade_PD@tsu.edu> on 08/22/2000 11:42:28 AM
To: "'klay@enron.com'" <klay@enron.com>
cc:
Subject: Kennybunkport and other

Hello Mr. Lay,

It's been a long time since we've talked.  I'm Priscilla Slade, President of
Texas Southern University.  The primary purpose of this e-mail is to invite
you to attend a weekend at the home of President and Mrs. Bush September
16-18.  So many people have expressed a desire to become know more about the
University (it's new initiatives and successes) that  President Bush
volunteered to host a gathering of 25 CEOs and spouses (or a second person
in the corporate hierarchy).  In addition to having fun golfing, sailing,
boating, etc., we are presenting ALL YOU WANT TO KNOW ABOUT TEXAS SOUTHERN
UNIVERSITY.

I know this is your favorite topic and that we can look forward to you
joining us.  An invitation is in the mail.  I look forward to you joining
us.

Sincerely,

Priscilla


----- Original Message -----
From: Jack Belcher <mailto:jbelcher@chemweek.com>
To: David Holt <mailto:dholt@chemweek.com> ; steve blalock <mailto:sblalock@calpine.com> ; Joe Parks <mailto:jparks1@houston.rr.com> ; Michael Nix <mailto:menc@earthlink.net> ; Chris Pendergraft <mailto:cpendergraft@calpine.com> ; Jimmy Glotfelty <mailto:Jimmy.Glotfelty@hq.doe.gov> ; David Lynch <mailto:dlynch1@txu.com> ; Chris Giblin <mailto:cgiblin@reliant.com> ; Michelene Graham <mailto:mgraha1@txu.com> ; Matt McManus <mailto:mcmanusmt@state.gov> ; Matt Manley <mailto:matt.manley@neg.pge.com> ; marty allday <mailto:martin.allday@elpaso.com> ; Ben Dillon <mailto:bdillon@ipaa.org>
Sent: Thursday, April 04, 2002 1:12 PM
Subject: Fw: Shares of Independent Power Producers and Traders Fall

----- Original Message -----
From: IssueAlert@SCIENTECH.COM <mailto:IssueAlert@SCIENTECH.COM>
To: ISSUEALERTHTML@LISTSERV.SCIENTECH.COM <mailto:ISSUEALERTHTML@LISTSERV.SCIENTECH.COM>
Sent: Thursday, April 04, 2002 1:29 PM
Subject: Shares of Independent Power Producers and Traders Fall

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April 4, 2002

Shares of Independent Power
Producers and Traders Fall

By Robert C. Bellemare
Vice President

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[News item from Reuters] Renewed concerns over accounting irregularities and heavy debt burdens took their toll on the power sector on Wednesday, sending shares of independent producers and traders falling. The downturn was triggered by disclosures in The Wall Street Journal (WSJ) of a financing arrangement used by Dynegy Inc. (NYSE: DYN) which prompted unwelcome comparisons to Enron as well as an inquiry by the Securities and Exchange Commission (SEC) into energy trader and pipeline operator Williams Cos. (NYSE: WMB).

Analysis: Just when the market conditions appeared to be stabilizing for the recently hard-hit independent power producers (IPPs), more unwanted bad news has once again plagued this sector. In addition to Dynegy and Williams, companies such as Calpine, Mirant and AES have had significant news in the past week as the companies make moves to weather the storm of business losses, lowered credit ratings, softening energy commodity prices, and questions of accounting practices. Let's take a look at the latest developments for these companies.

Dynegy shares closed at $28.79 per share, down by about 4 percent, as the market reacted to a WSJ article concerning Dynegy's use of off-balance-sheet transactions designed to cut tax bills and address a growing gap between cash flow and net income. Project Alpha, as it was called, was blessed by Dynegy's former auditor, Andersen, and current auditor PricewaterhouseCoopers. Dynegy was quick to try and distinguish this transaction from the type of business practices that Enron engaged in. Dynegy spokesman John Sousa emphasized, "The primary drivers of this transaction were that it provided us with a long-term source of physical gas supply and a significant tax benefit." Sousa also pointed out that no related parties were involved, Dynegy stock was not used to back the loans, and the transaction was disclosed in Dynegy's financial reports last year. In 2000 the company reported "unrealized gains" of $354 million generated by valuing derivative contracts, increasing the gap between its profit and cash flow. Trading companies include the estimated value for "derivative" contracts they use for future buying and selling of commodities in net income as "unrealized gains." A special purpose entity (SPE) was formed in April of last year with a $300-million loan from Citigroup Inc. The SPE entered into gas trades with a partnership called DMT Supply LP, in which Dynegy held a stake. According to Dynegy, during the first nine months of operation, DMT bought gas from the entity at below-market prices and resold the gas at a profit. But during future years of the project scheduled to end in 2006, DMT will buy gas at above-market gas prices, generating unrealized losses. By arranging transactions in this manner, Dynegy was able to lower its 2001 tax bill by $80 million. But according to WSJ, higher values were being assigned to derivative contracts than those assigned to cash transactions which creates a "disconnect" between reported net income and cash flow that investors could notice.

Williams shares also dropped by 4.5 percent on Wednesday to close at $23.08 per share on news from WSJ, which reported that the SEC is looking into the company's third-quarter results. In reaction, Williams clarified that it had received a request in early February from the SEC for additional information concerning the company's 2001 third-quarter results but was told after a review that no financial adjustments were needed. Williams' spokesperson Jim Gipson said, "We received an informal, confidential request for information by the SEC in early February about our third-quarter 10Q. They asked a couple of questions, we responded in writing, they called back in seven days and said no amendment to the third-quarter results was required." Gipson emphasized that, "We are not aware of any unresolved or open issues at the SEC." Williams reported a third-quarter net income of $221.3 million, up from $176.5 million, or 27 cents a share, earned in the same quarter one year ago. The quarter included a one-time charge of $71 million for the company's investment in former subsidiary Williams Communications Group. On March 7, Williams announced it had taken a $2.1-billion charge in the fourth quarter to account for its contingent liability on Williams Communications. Williams reported a loss of $477.7 million for the fourth quarter.

Calpine shares were down 6.26 percent yesterday apparently in reaction to news that Moody's had downgraded Calpine's unsecured debt from Ba1 to B1, along with a negative ratings outlook. Approximately $12.4 billion of long-term debt instruments are affected. This follows a March 29 report, when the company disclosed that it will restate 2001 earnings after the company discovered that emission-reduction credits it had purchased last year were not actually available. In a press release, Calpine said 2001 earnings would be lowered by $11.5 million after tax from the $659.6 million reported on Jan. 31. The restatement will drop 2001 diluted earnings per share after extraordinary items by 3 cents a share, to $1.87.

Moody's sited several reasons for the ratings downgrades including Calpine's high leverage, limited financial flexibility, and substantial ongoing capital expenditure requirements to complete its reduced build-out program. Calpine's debt is expected to grow over the coming year as the company continues its development of committed projects. While Calpine's total electric sales are expected to increase as it completes additional plants, it is expected to be selling into unfavorable market conditions. Moody's anticipated that lower spark spreads (the difference between electric and fuel prices) will lower in the near term. Moody's warned that the negative outlook reflects the possibility of additional downgrades should Calpine's liquidity position further deteriorate or its cash flow fall below expectations. Calpine plans to fund completion of 22 gas-fired power projects and 2 project expansions during 2002 and 2003. Moody's also assigned a Ba3 rating to Calpine's $2 billion of senior secured credit facilities. According to Moody's, the Ba3 rating reflects the benefits and limitations of Calpine's collateral package. A portion of the collateral package consists of Calpine's equity interests in Saltend and nine U.S. power plants. A principal part of the collateral package is Calpine's natural-gas properties, which may be subject to fluctuation in value based on changes in reserves and gas prices. Moody's claims a portion of these gas reserves is not proven.

Mirant also continues to experience hard times. Its shares were down 6.21 percent to close at $13.60 per share. Although yesterday's downturn may have largely been driven by the overall downturn in the sector, Mirant has been involved in several interesting announcements this week as it continues to try to shore up its balance sheet. On April 1 it was reported that Mirant has put its Kogan Creek power station and Wilkie Creel coal mine in Queensland up for sale. Queensland's government-owned CS Energy, currently 40-percent owner of Kogan Creek, is reported to be a potential buyer, as are MIM and Macarthur Coal. In a separate transaction announced on March 27, Cleco agreed to buy Mirant's 50-percent interest in a 725-megawatt power plant the companies are building in northeastern Louisiana. The merchant power plant is owned by a joint venture between the two companies. Cleco said it would assume Mirant's $19.5-million equity commitment and pay $48 million to retire Mirant's project debt. Cleco said it would finance the buyout with a combination of new common stock and debt.

AES has also fallen on tough times. Although the company's stock was up yesterday to close at $8.96 per share, the company continues to struggle. Early this week, AES sent a shockwave through the U.K. market when it announced its decision to put its 363 MW Fifoots Point coal-fired power plant located in Wales into receivership. The recommissioning of Fifoots in late-1999 was funded with a $214.5-million loan arranged and underwritten by Deutsche Bank. Richard Hill, joint administrative receiver at KPMG in London, who is charged with selling the asset, says Fifoots has some GBP80 million of non-recourse bank debt obligations as well as other liabilities that have yet to be fully determined. Similar to the U.S. market, wholesale prices in the U.K. reportedly have collapsed by 30 percent after the launch of last spring's new bilateral trading system. Accordingly, one report claims at least a dozen project loans are either in technical default, have broken their covenants, or are very close to not meeting their coverage ratio.

In other AES-related news this week it was announced that GE would be purchasing AESGener's 40-percent stake in the Servicios Integrales de Generacion de Energia Electrica (Sigen) services company for an undisclosed amount. GE already owned 60 percent of the joint venture. AESGener, controlled by AES, posted losses of Pesos $5,027mil in 2001 compared to a profit of Pesos $2,275mil in 2000. Operating results were down by 12.5 percent to Pesos $70,241mil on sales declining 23.8 percent to Pesos $347,009mil. The performance of AES' Argentinean subsidiaries TermoAndes and InterAndes, and selling off the subsidiaries Central Puerto and Puerto Ventanas imposed losses. Recently appointed AESGener Chairman Roberto Morgan commented that the company will continue to divest in non-electric assets and assets not based in Chile.

The fallout of the Enron debacle, lowered credit ratings, and weak commodity prices are providing a 1-2-3 blow that has many energy companies on the ropes struggling to make the bell. The companies are aggressively working to put up a defense by shoring up their balance sheets through asset sales, postponing or canceling projects and taking necessary write-offs. But as quickly as these companies' fortunes have nosedived, they can rise once again. Such is the fickle nature of the commodity world.

An archive list of previous IssueAlert articles is available at
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Please!

NG Price
NG PR OPT
NG X OPT NG
NG X OPT HO
NG X OPT GAS Daily
NG X OPT Index
NG X OPT HU
NG X OPT WTI
NG X OPT JV

Thanks

Shannon McPearson
Enron North America
713-853-5944
Shannon.McPearson@enron.com


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Yeah, yeah, yeah.  How long have y'all been saying you were going to hit
500?  I'm still holding at 3 with the possibility of getting 6 more signed by
year end.

Marie Heard
Senior Legal Specialist
Enron Broadband Services
Phone:  (713) 853-3907
Fax:  (713) 646-8537
Marie_Heard@Enron.net

	Tana Jones@ECT
	10/17/00 03:21 PM

		 To: Marie Heard/Enron Communications@Enron Communications
		 cc: Susan Bailey/HOU/ECT@ECT, Samantha Boyd/NA/Enron@Enron, Stephanie
Panus/NA/Enron@Enron
		 Subject: The Countdown Continues

Well, just mentioning the landmark levels now, we just hit 460...it's not
impossible that we won't get 40 more in by the end of the year...


Robin,
$4.1 M was to have been reduced from our Q1 trading income to break out the
origination correctly.  It looks like this was never done in your report.  I
thought it had been based on previous Emails.  I don't think the p&l in your
report is correct as it is $4.1M too high.  This is what our trading income
at Dec 31 should be.  Note:  the DPR was never adjusted because the LTD and
YTD numbers do not exclude orgination income.  It also looks like the break
out by trader is not quite right

Kathy

Robin Rodrigue
12/08/2000 10:58 AM
To: Kathy Reeves/CAL/ECT@ECT
cc:
Subject: Re: Canada p&l

Kathy,

I am attaching a copy of the NGPL that was reported as of this morning.  If
you look at the by Trader P&L, we are off from your spreadsheet by
approximately $3.6 million USD for December and approximately $7.6million
year to date.  The $7.6 consists of the December variance and the $4 million
variance that we discussed earlier (originations).  However, I spoke with the
Chris Able from the Controls group, what we are reporting for originations
and for Canadian p&l ties to the DPR.   This leads me to believe that either
our number already includes the origination adjustment or the origination
adjustment was never made to the DPR.  To help resolve the December variance,
I have added a tab to your file to show what we have reported each day for
December.

Remember the p&l we are reporting by trader excludes originations.  Give me a
call when you have time and we can try to resolve these variances.

Thanks,
Robin

Kathy Reeves
12/07/2000 06:46 PM
To: Robin Rodrigue/HOU/ECT@ECT
cc:
Subject: Canada p&l

Robin
I would like to make sure before year end that the p&l being reporting for
Canada ( trading profits only) equals what I think it is as per attached:

Would you let me know what you are currently reporting for Canada.

Thanks
Kathy


---------------------- Forwarded by Vince J Kaminski/HOU/ECT on 04/24/2001
05:32 PM ---------------------------

Celeste Roberts
04/24/2001 04:30 PM
To: gappy@stanford.edu
cc: Vince J Kaminski/HOU/ECT@ECT
Subject: Re: From a previous summer intern

Dear Giuseppe:

Unfortunately, I am no longer with the Associate and Analyst recruiting
department and will be unable to assist you directly.  Please contact Tracy
Warner, who is now responsible for recruiting.  She will be able to assist
you directly.  Tracy can be contacted at Tracy.Warner@Enron.com.  I would
also recommend having Vince Kaminski contact her as well to ensure that all
communications are in order.

Best regards,
Celeste Roberts

Giuseppe Andrea Paleologo <gappy@stanford.edu>@Stanford.EDU on 04/20/2001
01:53:39 PM
Please respond to gappy@stanford.edu
Sent by: gappy@Stanford.EDU
To: Celeste Roberts <Celeste.Roberts@enron.com>
cc:
Subject: From a previous summer intern

Celeste, my name is Giuseppe A. Paleologo and you amy remember me: I was
a summer intern last summer in the research group, and attended the
hiring event this year at Stanford. In that occasion I had an informal
offer from Vince Kaminski, and the assurance that I would receive a
written one in the following two weeks, but since then I have not
received any letter from Enron. I would like to know if the offer is
still valid, and if it has been sent. I am asking because I am in the
process of evaluating my offers, and would like to wait for Enron before
I make my final decision.

Thanks in advance,

Giuseppe Paleologo

--
Giuseppe A. Paleologo
email: gappy@stanford.edu
office phone: (650) 725-0541


Please find attached a revised version of the document pertaining to the
political environment in BC and
the resulting communications implications.

 <<Project Stanley-BC-08August2000.doc>>

Sasha Jacob
GPC Canada
sjacob@gpc.ca
Ph:  (416) 598-0055
Fx:  (416) 598-3811
www.gpcinternational.com

 - Project Stanley-BC-08August2000.doc


Yes dear


Richard:

Mike Swartz was the sole questioner of Busse on Friday.? He focused primarily
on the theme that the offering memorandum misreprested the use of proceeds
(which, in hindsight we know, it certainly did--i.e., unscheduled pay offs of
bank debt and lots of previously unscheduled fees.)

Neither Swartz nor any other questioner asked about the off-take agreements
(though those agreements are featured in nearly all of the complaints.)

Swartz asked loosely if there were any Enron people at the roadshows, and
Busse answered yes.? So I asked a few questions--brought out that only Brian
ever attended any road shows and that he did not speak.

Roland will be in Fort Wayne next week for Nolan's depo and will continue on
to New York for Izowar's depo (White & Case) on Friday, 7/21.? I will cover
Goldstein (Oaktree) in LA on Wednesday.? We are going to skip a
NatWest/personal jurisdiction deposition in New York on Tuesday.

Schultes will be deposed in NY during the week of 7/31.

Steve

This e-mail message may contain legally privileged and/or confidential
information. If you are not the intended recipient(s), or the employee
or agent responsible for delivery of this message to the intended
recipient(s), you are hereby notified that any dissemination,
distribution or copying of this e-mail message is strictly prohibited.
If you have received this message in error, please immediately notify
the sender and delete this e-mail message from your computer.


Thanks to everyone for your help and support this past week as we worked through the process of taking the new spreadsheet format (requiring the use of the Counterparty ID instead of the ERMS Short Name) into production.  The credit for a successful implementation goes to each and everyone of you!

Going forward, please bear the following points in mind:
1) There is a minor change to the manner in which the spreadsheets will load into RisktRAC:  If the new validation routine does not find any errors in your spreadsheet, it will immediately load the positions into RisktRAC without prompting you to confirm and insert the spreadsheet into our tables.  When you see the final confirmation message, the position has already been loaded into our deal tables.

2) Please make sure that you have only numeric values, i.e., valid counteparty ID's, in column F (external_cp_ID) and column G (internal_cp_ID).  Any alpha values in these two colums will produce a fatal error and the system will not accept your spreadsheet until you input a valid counterparty ID.

3) Please obtain access to the Global Counterparty system to look up valid Counterparty ID's for any new counterparties that you might add to your spreadsheet in the future.

If you have any questions or concerns, please feel free to call me: 5-7069.

Thank you.

Sue Vasan.


BID ON FABULOUS TRAVEL PACKAGES IN CONTINENTAL AIRLINES 2001 CORPORATE REGATTA ONLINE AUCTION

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The draft looks accurate regarding facts and history.

In paragraph 11 I would suggest that you consider adding the reason given by
El Paso for this requested change: internal accounting flexibility, i.e. that
they may wish to house these swaps in some other El Paso entity in the future
for bookeeping convenience.  When this change was agreed it was with the
understanding that the Guaranty would follow the swaps.  Even if the actual
documentation is ambiguous this was the explicit understanding of those
present at the time the request was made and the change agreed.

From: Andrew Edison on 05/04/2001 04:50 PM
To: Mark E Haedicke/HOU/ECT@ECT, Charles Ward/Corp/Enron@ENRON, Joseph
Deffner/Enron@EnronXGate, Lisa Mellencamp/HOU/ECT@ECT, Brad
Alford/NA/Enron@Enron, Richard B Sanders/HOU/ECT@ECT, W David
Duran/HOU/ECT@ECT
cc:

Subject: El Paso -Petition for Declaratory Relief

Attached is a draft of the declaratory judgment action prepared by Baker
Botts, our outside counsel on this matter.  A conscious effort has been made
for the petition to be short and sweet.  However, we need to make sure the
underlying facts and the history of the transaction are described properly.

Please take a few moments to review this draft and forward me any comments by
e-mail or fax (713-646-3490).

Thanks.

 - Petition for Declaratory Relief.DOC


Jeff, I would like to discuss this with you and your plans in gas.

Regards
Delainey
---------------------- Forwarded by David W Delainey/HOU/ECT on 06/09/2000
06:49 PM ---------------------------

	From:  Edward D Baughman                           06/07/2000 12:13 PM

To: David W Delainey/HOU/ECT@ECT, John J Lavorato/Corp/Enron@Enron
cc: Kevin M Presto/HOU/ECT@ECT
Subject: East Power Mid-Market Org. Chart

Dave & John:

As requested, the attached organization chart lays out the MM commercial
teams including regulatory experts. Please let me know if you have any
questions.

Regards,  Ed


Good morning, Yelba.

It has been a long time!  You may not remember me, but I have been working
with Jeff since the McKinsey days (my name used to be "Baumbach").

After reviewing your e-mail, Jeff suggests that you speak to Lou Pai,
Chairman & CEO of Enron Energy Services; his telephone number is
713.853.5646.  By copy of this e-mail, he is advised that you will contact
him.

Good luck with your venture, Yelba, and welcome back to Houston.  If I can be
of assistance, please don't hesitate to call me.  And please tell Richard
that we said hello.

Regards,
Sherri Sera
Assistant to Jeff Skilling
713.853.5984
713.646.8381 (fax)
e-mail: sherri.sera@enron.com

Yelba Saettone <YSaettone@home-link.com> on 03/28/2000 01:34:07 PM
To: "'jskilli@enron.com'" <jskilli@enron.com>
cc: Jim Golden <jgolden@home-link.com>

Subject: Home-Link Business Model

Hi Jeff,
Don't know if you remember me from your old McKinsey days, but I am Richard
Saettone's wife. The entire family is finally back in Houston after several
years in Peru.  I am working for a company called Home-Link Services, and
wanted to request your aid in finding the correct person to talk to at Enron
regarding our business model.

We currently represent over 200,000 transactions per year (people moving),
and one of the most requested services from our customers is the connection
of utilities.  As an aggregator for the energy sector with that type of
volume, who do you recommend we call?  We are expected to grow to about
500,000 transactions by year-end.

Feel free to call me with any questions.  I would be most happy to send you
or the proper Enron contact an executive summary for review.

Richard sends his regards and we hope your family is doing well.

Yelba R. Saettone
Vice President of National Sales
Home-Link Services, Inc.
43 West Isle Place
The Woodlands, TX 77381
281-296-6498 phone
281-465-9240 fax
email: ysaettone@home-link.com


Do you think it wise to send these out to MDEA for discussion Monday??

Reagan C. Rorschach
Enron North America
1400 Smith Street
Houston, Texas 77002
713.345.3363

 -----Original Message-----
From:  Mann, Kay
Sent: Friday, June 01, 2001 3:19 PM
To: Rorschach, Reagan
Subject: Re: Exhibits

I'll work on them over the weekend.

From: Reagan Rorschach/ENRON@enronXgate on 06/01/2001 02:49 PM
To: Kay Mann/Corp/Enron@Enron
cc:

Subject: Exhibits

Kay,

Rough form.  Have a look

 << File: Contract Exhibits (Jun 1).doc >>

Reagan C. Rorschach
Enron North America
1400 Smith Street
Houston, Texas 77002
713.345.3363


put on calendar, and rsvp.  thanks.
----- Forwarded by Jeffrey A Shankman/HOU/ECT on 02/06/2001 02:56 PM -----

	Mark Frevert@ENRON
	Sent by: Nicki Daw@ENRON
	02/06/2001 02:54 PM

		 To: Greg Whalley/HOU/ECT@ECT, Mike McConnell/HOU/ECT@ECT, Jeffrey A
Shankman/HOU/ECT@ECT, Jeffrey McMahon/HOU/ECT, Raymond Bowen/HOU/ECT, David W
Delainey/HOU/ECT@ECT, John J Lavorato/Corp/Enron, Rebecca
McDonald/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, James A
Hughes/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Louise Kitchen/HOU/ECT@ECT,
Philippe A Bibi/HOU/ECT@ECT, Richard Causey/Corp/Enron@ENRON, Rick
Buy/HOU/ECT@ECT, Steven J Kean/NA/Enron@Enron, Wes Colwell/HOU/ECT@ECT, Sally
Beck/HOU/ECT@ECT, David Oxley/HOU/ECT@ECT, Mark E Haedicke/HOU/ECT@ECT, Mark
Koenig/Corp/Enron@ENRON
		 cc:
		 Subject: Invitation to the Rodeo - Monday, 19th February

You are cordially invited
to join me at the
2001 Houston Livestock Show & Rodeo
on
Monday, 19th February

with performances by
Lyle Lovett & Robert Earl Keen
performance starts at 7pm

Please RSVP Nicki Daw (x33497)


To the great and powerful Research Group:

As you may know, Moody's has recently upgraded Enron from Baa2 to Baa1.
We had been on watch for an upgrade for a while and after their intitial
credit meeting, they still had questions primarily related to our control of
market and credit risk.  To that end, Jeff McMahon and Tim Despain had Rick
Buy, Bill Bradford and I meet with eight members of the Moody's team.  The
questions centered around policy and procedure in the Wholesale businesses.
We discussed VAR, stress testing and potential credit exposure.  To make a
long story short, subsequent to that meeting, they reconvened their committee
and announced the upgrade.

I want you to know how critical your contribution was to the discussion and
will continue to be as the bar gets raised.  I am sure that next year they
will continue to be concerned with our risk management capabilities as well
as extensions of our current platform - tail risk, intra day risk,
operational risk, and enterprise wide risk.

Thank you for your efforts in supporting RAC - it has tangible benefits.

Ted

p.s. - there is still lots of interesting opportunities to extend the
paradigm


I believe that is correct.  Of course, ENA will pass through to retail
appropriate charges for retail transport.

Chris Germany
01/27/2000 04:15 PM
To: Jeffrey T Hodge/HOU/ECT@ECT, Colleen Sullivan/HOU/ECT@ECT
cc:
Subject: Payment for January

I'm sure I asked this question before - ENA will be paying all transport cost
for January, even if we did not get set up as agent, correct?


Melissa,

Further to our conversation,  attached are ENA's Special Provisions to the
GISB along with revisions to certain sections.    With regards to the payment
guarantee,  in the second paragraph please change "10 days" to  "five
business days"  where it appears.  For   Section 2.4, please change ENA to
confirming party, and in Section 3.2 change to  Spot Price Standard.

Finally,  we  purpose the following language for  Section 10.1.

Upon your review of the attached, please give me a call to disucss same.

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


On 11/1/00, FERC Staff issued reports on its Investigation of Bulk Power
Markets in the Eastern Interconnection.  These reports were the result of a
Commission order earlier this summer.  Enron's Federal regulatory staff
(Christi, Charles Yeung, and Sarah Novosel) provided a great deal of
information for this investigation and Joe Hartsoe and Donna Fulton discussed
many of the problems with the grid with the new head of Staff, Scott Miller
(who recently joined FERC from PG&E Gen).    While the Commission is under no
obligation to take any of Staff's recommendations, the Commission typically
looks to Staff for guidance on transmission and market issues.  Importantly,
Staff concludes that the Commission should consider these options for the
Southeast and Midwest -- all of which Enron has been asking FERC to implement
for several years:

Reduce the advantages of network service over point to point service by
requiring that native load be served under the same tariff as other
transmission services to eliminate the current incentives that VIUs have to
favor their native load through the calculation of ATC and handling of
interconnection requests.

While the Staff Hotline is used productively, the Commission can direct Staff
to conduct formal investigations into entities that have a pattern of
complaints.

The Commission could require TPs to submit tariff provisions containing a pro
forma interconnection process specific to interconnection, rather than simply
relying on the Tennessee Power order that utilizes the OATT timelines and
procedures.

Require TPs to retain real-time transmission data on market functions
pertaining to daily load, internal generation to meet that load, and imports
and exports.

RTOs should submit the basis and methods for calculating ATC and TTC, as well
as standardized criteria for curtailment.  In addition, since even such
standardized criteria might not "get to the root of the problem" -- that
control area still control generation -- the Commission could require that
each RTO set a date certain by which it will create one control area.
Regardless of the implementation of these two options, the Commission could
standardize ATC and TTC methodology.

Staff finds that while electricity is a commodity with market characteristics
similar to many other commodities, it is still viewed as "different," with a
reaction of price caps.  Staff encourages that basic decisions about the
regulatory model be made in order to complete the transition from a
traditional cost-of-service model to a model that uses markets to price the
commodity and services.

DETAILS  (Also, the reports contain good summaries of the generation,
transmission, state retail, federal reg. and other issues for the region):

Midwest:  The Midwest is dominated by vertically integrated Transmission
Providers ("TPs") that control transmission, generation and load.  "As such,
they have weak economic incentives to provide access to transmission service
to third-parties and strong incentives to favor their own services."  Staff
received numerous complaints; however, due to the lack of information
available from TPs, Staff cannot conclude whether these are isolated
incidents or wide-spread.  At the very least, the complaints indicate a lack
of confidence in the bulk power market and the ability of market participants
to rely on transmission access, thus harming the liquidity of the market.

TLRs are the most important transmission issue in the Midwest, with an
"enormous" increase in 2000.  The region showed a decline in peak load from
1999 to 2000 and a growth in new generation since the 1998 price spikes.
Even though there was an increase in generation and mild weather with
virtually no price spikes, TLRs climbed to record numbers.  The TLRs were
highly concentrated:  only 5 flowgates account for 41% of ECAR TLRs and
another 5 flowgates in MAIN account for 42% in that region.  Notably, even
though the NERC procedures for Level 3 TLRs mandate transaction curtailment,
78 of the 191 TLRs in the Midwest do not show any curtailment amount.  The
total amount of relief that these curtailments are intended to produce are
not posted.  Staff notes that TLR rules are established by NERC, whose
procedures are voluntary and not enforced by penalties.  While the Commission
has required certain NERC standards and procedures to be placed in Open
Access Transmission Tariffs ("OATT") where the Commission has the power to
enforce provisions under the Federal Power Act, in practice the Commission
has generally deferred to NERC on transmission reliability questions,
including the propriety of TLRs.

TLRs inhibit optimal functioning of the transmission system and market
because load is not served by the least cost supplier.  TLR procedure is an
inefficient instrument in mitigating constraints -- curtailment by fiat.  In
addition, the NERC IDC can result in inappropriate curtailments or increased
loading on the affected flowgate.  The impact could be mitigated by one
control area per RTO.

Staff notes that the Midwest state commissions did not petition FERC for
price caps following the 1998 price spikes.  Some market participants believe
that the absence of price spikes is the single reason that NUG construction
increased in the Midwest.

Market participants must keep track of, and follow, a plethora of information
in order to make energy deals, submit reservations and provide schedules for
service.  Staff received many complaints about barriers to transmission
access, including TLR curtailments and a lack of standardized information and
protocols, particularly for ATC and interconnection requests, and
discriminatory conduct.  Unbelievably, key data was unavailable to Staff,
such coincident peak load data, system-wide snap shots for days when TLRs
were called, and import/export data.  This lack of data creates a market
inefficiency, because neither market participants nor regulators can fully
analyze market conditions in real time.  As such, the market is risk adverse,
eschewing long-term deals for short-term transactions.  Staff also noted that
because the Security Coordinators often work for the IOU, there is a mixed
incentive to enforce reliability on the grid and maximize profit for the
IOU.  (Staff cites Richard Tabors' paper, "Transmission Markets, Stretching
the Rules for Fun and Profit.")

Staff cites the lack of information on OASIS or on the NERC web site,
particularly about real time TLRs and curtailments.  Examples were provided
to Staff of transmission refusals when there were no TLRs posted and improper
implementation of TLRs causing substantial financial loss.

The currently proposed Midwest RTOs may mitigate some problems; however, all
three retain existing control areas with the favortism for generation and
native load.  These incentives will continue to remain until the RTO
exercises complete autonomy over transmission control and security
coordinator functions.  Staff notes that the Midwest is a balkanized region
of 61 control areas with no uniform method for calculating ATC and CBM.  The
result is that ATCs can be different on 2 different sides of an interface.
Staff notes examples in inaccurate ATCs and states that Staff's own ATC audit
this summer was consistent with market participant complaints.  Staff is
weighing follow-up options.  The result of these problems is a lack of
liquidity.

Staff next noted the problems with unfiled "business practices," especially
on the next hour market.  Staff's audit of OASIS sites revealed several areas
of non-compliance.

Information transparency is necessary for a market to function efficiently,
with equal and timely access to data, including ATC, CBM, TRM, and load flow
input data.  TPs have incentives to resist efforts to make this information
transparent because of native load.  This incentive will still exist under
RTOs if utilities are allowed to calculate their own ATC.  ***  "As a
consequence, the Commission may wish to eliminate the native load exemption
and have all transactions under the same tariff."  ***  The Commission could
benefit by having access to existing transmission data and should require the
TPs to retain data, including current real-time network status.

Interconnection Issues:  IPPs need to be compensated for VAR support.  Also,
Staff cites a number of Hotline complaints about TPs seeking large deposits
or failing to complete System Impact Studies timely.  One solution is to have
the RTO handle this function to eliminate the disincentive the utilities have
against IPPs.  The current practice of requiring IPPs to deal with a wide
variety of procedures inhibits the free flow of transactions within the
region.

Network service has inherent advantages over point-to-point, citing the
Entergy source and sink order.  The Commission has relied on "passively"
receiving informal and formal complaints to determine if discriminatory
behavior has occurred rather than actively canvassing market participants.
While Staff cannot conclude that discriminatory practices are widespread,
there is evidence of discriminatory instances.

Southeast:  The traditional vertically integrated utility ("VIU") model has
largely persisted in the SE.  This continued control has vastly reduced the
economic incentives to facilitate IPP activities.  In many cases, the VIUs
have dampened IPP involvement without violating any Commission regulation due
to the inherent flexibility of the current rules.

Staff cites examples of delays in performing system impact studies,
transmission hoarding in the name of serving native load growth and
manipulation of ATC.  TPs have shown little inclination to improve the
transmission system and use many TLRs.

There is also a lack of market information that has stymied the development
of markets in the SE.  ATCs change constantly that leads to uncertainty and
there is no clearinghouse for electric power prices.

TVA, despite having taken steps to participate in reformed markets, has acted
as a bulwark against the development of competitive energy markets in the
SE.  This is significant because of TVA's size and location.  IPPs have
reported TVA's discouragement of siting in TVA through excessive time to
perform studies, excessive fees, and rejection of requests to perform
interconnection studies.

In addition, Staff cites the Florida Sup. Ct. decision against merchant
plants as significantly impeding the competitive market in Florida.

Staff discusses the significant flow of power from the Midwest to the SE this
summer.  Much of this resulted from the import of cheaper coal power, than
the use of gas fired peakers due to higher gas prices.  Peak prices were
radically lower this summer because utilities appear to have been better
prepared for peak events through the use of forward contracts, increased
generation capacity on line and reduced number of forced outages.

SE utilities reported that they have not used market-based rates to
extensively increase sales.  (Less used than in the midwest.)

The SE region lacks information, which has retarded the Staff's efforts to
discern the truth about the numerous complaints about transmission in the SE
(including ATC and TLRs).  Market participants seem to have less confidence
in the SE market than in any other market region.  This appears to be
justified based on Staff's investigations.  This lack of confidence
discourages investment and participation in the markets.  Staff concludes
that the Commission may need to be more prescriptive in terms of how
transmission is allocated in the SE RTOs, since there are market concerns
that the incumbents will continue to dominate operations.  The investigation
found numerous problems in bad ATCs and TTCs and poor OASIS postings.  In
addition, several OASIS audit logs actually erased historical data.  Staff
thinks that additional affiliate transaction information should be posted.
Staff could not obtain summer demand data and the Commission's lack of
jurisdiction over TVA made it difficult to obtain transmission access
information.

The Staff investigation revealed unclear interconnection procedures and lack
of adherence to schedules and arbitrary cost estimates and deposits.  In
addition, the TPs have reserved a huge amount of network transmission
capacity, much of it reserved shortly after the IPP approached the TP to
interconnect.  Staff cites the recent Skygen order in which Southern denied
Skygen's request for transmission stating that the only option was the
construction of an 80 mile 500 kv line that would take 8 years to complete.
Staff solutions include allowing network requests by IPPs and limiting
self-build capacity in the incumbent's territory.

ATC variations are a big problem in the SE.  SERC coordination of a
standardized ATC is a long process and may not be resolved soon without
direction from the Commission.  An improved method and improved communication
are needed.

The SE experienced a 354% increase in TLRs this summer.  This increase raises
the issue of whether curtailment has become an impediment to the competitive
operation of the market in the SE.  Staff cites information provided by
Charles Y. that an Ameren TLR was not implemented according to NERC
criteria.  Staff also wonders if transmission is being oversold since TPs do
not generally refund transmission revenues when TLRs are implemented.  RTOs
must have a broad geographic area to internalize much of the constraints.  In
addition, RTOs will adopt pricing mechanisms that obviate recourse to TLRs.
However, if control areas are retained, VIUs will retain mixed incentives.

*** As noted in the Midwest report, the manner in which load is calculated
weighs heavily on the value of this information.  This is an issue that the
formation of RTOs may not resolve.  Eliminating native load exceptions -- ie,
treating all load equally -- and placing all transactions under the same
tariff may be an option that provides the right incentives for the provision
of transparent and standardized information.

Finally, Staff describes specific problems with TVA and FP&L, TVA is a
"problem area" for the Eastern Interconnect grid.  TVA is a transmission
bottleneck due to the many TLRs called this summer.  The current federal law
and lack of Commission jurisdiction are impediments to the development of
deep and robust power markets in this area.  TVA simply has no strong
incentive to provide effective and efficient transmission service.  In
addition, the Commission does not have full information on TVA.  Staff lists
a number of complaints against TVA, including unjustifiably increasing the
tag deadline and allowing TVA Marketing, but not others, to sink and park
power.  Staff concludes that recent proposals by TVA to enhance the
development of markets and its system do not appear to have great potential.

A Staff audit of FP&L revealed violations of standards of conduct, including
confidential information on FP&L's transmission system (including interchange
information for other entities) posted on EMS systems that were available to
FPL's merchant function.  Staff's report found that FP&L does not have an
established procedure for review of EMS to ensure that information is not
displayed in error.  It is "up to individual Managers discretion."  ((FRCC
web site report dated 9/8/00)).  Violations such as these undermine
competition.

The reports are attached below.

 - southeast.pdf
 - midwest.pdf


Richardson is headed back to the Forrestal Building to
sign the order...

DJ US Richardson Declares Emergency Powers In Calif

Dow Jones International News Service -- December 13,
2000  [Return to Headlines]

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

(MORE) Dow Jones Newswires 13-12-00

2107GMT

DJ DOE To Order Power Delivered To Calif At Set Rates
(MORE) Dow Jones Newswires 13-12-00

2108GMT

*DJ DOE Action To Stem Calif Rolling Balckouts
(MORE) Dow Jones Newswires 13-12-00

2109GMT

*DJ Calif Gov Davis,Sen. Feinstein Urge Immediate FERC
Moves
(MORE) Dow Jones Newswires 13-12-00

2110GMT

DJ US DOE/Calif -2: Action Targets `Unfair Profit'
WASHINGTON (Dow Jones)--Looking to avert eminent
blackouts in California, U.S. Energy Secretary Bill
Richardson asserted Wednesday his emergency authority
under the Federal Power Act to order power producers
to make electricity available to the state.

The action came as more than one dozen power producers
informed the California Independent System Operator
they wouldn't make power available unless they receive
payment guarantees.

"I can order a power plant to send power where
needed," Richardson said at a press conference in
Washington. Richardson said he would mandate the price
power producers will receive, promising "a fair
return."

Richardson said, "I won't allow (power producers) to
unfairly profit due to today's market situation."

(MORE) Dow Jones Newswires 13-12-00

2125GMT

DJ US DOE/Calif -3: FERC Pledges `Strong Action Soon'
Richardson's announcement came at a press conference
in the Washington office of Sen. Dianne Feinstein,
D-Calif., following a meeting Feinstein brokered
between Richardson, California Gov. Gray Davis, and
James Hoecker, chairman of the U.S. Federal Energy
Regulatory Commission.

The press conference came as the California grid
operator was on the brink of failing in its nearly
yearlong effort to keep the lights on in the state in
the face of chronic power shortages.

Davis and Feinstein said they asked the FERC chairman
to issue an order establishing a region-wide
electricity price cap to stop the hourly export of
between 4,000 megawatts to 5,000 MW out of the state's
troubled market. They also called for FERC to order
power producers to enter into long-term contracts with
the state's distribution utilities at reasonable
prices.

Hoecker pledged that FERC would take "strong action
soon" in response to the electricity crisis. "We
believe in competitive markets, but they have to
behave responsibly and at reasonable prices," he said.

The commission is scheduled to meet Friday morning to
issue a final order restructuring the state's
problem-plagued electricity market. A key issue in the
pending order will be the establishment of price caps.

Hoecker declined to comment on what actions the
commission will take, and on whether the commission
would act sooner than Friday.

Last Friday, the commission issued an order in
response to an emergency petition from California's
grid operator lifting a $250 a megawatt-hour hard
price cap in California's power markets. Prices soon
hit $600/MWh, and have risen above $1,000/MWh since
then, spiking at one point to $1,400/MWh.

Feinstein and Davis accused power producers of
engaging in price gouging at the expense of California
consumers and utilities in the state, which can't pass
on the high cost due to a state-mandated rate freeze.
The escalating prices in the last week have caused a
liquidity crunch for Southern California Edison Co.
(EIX) and Pacific Gas & Electric Co. (PCG), and have
pushed the companies to the brink of bankruptcy.

Davis called the crisis affecting California's
deregulated power market - the first in the nation -
"an incredibly bizarre situation" illustrating "how
markets can be manipulated." Davis expressed optimism
that Richardson's emergency actions will "stop market
abuses" and bring temporary relief.

-By Bryan Lee, Dow Jones Newswires; 202-862-6647;
bryan.lee@dowjones.com

(END) Dow Jones Newswires 13-12-00

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Corrections:

last name: Policastro
email:  tonyp@elitebrokers.net

-Dan
 -----Original Message-----
From:  Jones, Tana
Sent: Tuesday, May 01, 2001 11:02 AM
To: tonyp@elite.net
Cc: Diamond, Daniel; Greenberg, Mark
Subject: NDA - Elite Brokers Inc.

 << File: elite brokers.doc >>