Maureen --

Thanks for the information on the switching of the "held" customers.  We will process through a standard EDI transaction.

I am trying to find out who would work up the credit amount.  When I find out, I'll e-mail you.

Thanks,

Jim

 -----Original Message-----
From: 	"Hall, Gatti Maureen E." <MAUREEN.HALL-GATTI@us.ngrid.com>@ENRON
Sent:	Tuesday, December 11, 2001 10:09 AM
To:	Steffes, James D.
Subject:	Follow-up

Jim:

Sorry we have played phone-tag.

The couple issues I wanted to talk with you about are 1) the reference in
your Dec 4 letter regarding re-enrolling customers for switching to Enron,
and 2) the listing of Massachusetts Electric as a creditor in Enron's
bankruptcy filing.

The pending switches of the 1013 customer accounts were canceled based upon
our conversation last week.  This does not put them on 'hold' for a later
switch, since that is not feasible or appropriate.  The customers simply
remain on their former rate (Default Service or Standard Offer) until they
choose otherwise.  When/If Enron wishes to re-initiate a switch for the
customers, you would need to send through the appropriate EDI switch
transaction as usual.  If the customer has not yet chosen another supplier,
the switch would be processed.  We assume you'd take care of any contract
updating that needed to be addressed with the customers, as that is a matter
between you and them.  Hope that clarifies.  Please let me know if
questions.

Have you been able to identify someone in the financial area that could
answer some questions on the calculations of the amounts listed under the
creditor section of the bankruptcy filing?  We'd like to speak with someone
ASAP.  Thanks.

- Maureen
(508) 389-3036

This e-mail and any files transmitted with it, are confidential to National Grid and are intended solely for the use of the individual or entity to whom they are addressed.  If you have received this e-mail in error, please contact the National Grid USA Help desk on 508-389-3375.


Start Date: 4/23/01; HourAhead hour: 15;  No ancillary schedules awarded.  No
variances detected.

    LOG MESSAGES:

PARSING FILE -->> O:\Portland\WestDesk\California Scheduling\ISO Final
Schedules\2001042315.txt


Attached hereto are clean and marked copies of the current draft of the template Interim Master Terms Agreement (Financial). This is the form of adoption agreement that may be used where a counterparty prefers to "adopt " the terms of its prior Master with ENA  until such time as a definitive master agreement is entered into with UBS.  The marks indicate the changes made from the draft Mark Taylor sent around last Friday and reflects comments made by Bryan last week.  Please review and call with any comments.

Jeff and Leslie, please adapt this form as needed to create templates for the gas and power masters.

Thanks, Anne


Please consider the following retired judges from Chicago.  I don't know any
of them personally and there is a good chance that neither does Paul Weiss:
Abner Mikva, Seymour Simon, Frank McGarr.  They come highly recommended by
my friend Marv Aspen, the Ch. Judge of the ND Ill.

Steve Susman
713/653-7801
Pager 888/562-1184
Fax  713/654-6670

-----Original Message-----
From: Williams, Robert C. [mailto:Robert.C.Williams@ENRON.com]
Sent: Wednesday, June 06, 2001 9:44 AM
To: Haedicke, Mark; Mordaunt, Kristina; Sanders, Richard; Derrick Jr.,
James; Walls Jr., Rob
Cc: Johnny W. Carter; Steve Susman; Kenneth S. Marks
Subject: Arbitrators for Blockbuster Arbitration

We have been given a new list of potential arbitrators.  Please take a
minute and let me know if any of these represent us, and the general
level of representation.  Thank you again for your help.  If you want to
leave me a voicemail, my telephone number is (713) 646-6412.

     1.  William Frank Carroll--Donohoe, Jameson & Carroll
     2.  James E. Coleman Jr.--Carrington, Coleman, Sloman & Blumenthal
     3.  Randall Duke--Johnson & McElroy
     4.  Edward Fiorito--Consultant
     5.  Eric F. Hale, Jr.--formerly with Carrington, Coleman; now
self-employed
     6.  Herbert J. Hammond--Thompson & Knight
     7.  Orrin Harrison--V&E
     8.  Brian J. Hurst--Baker & McKenzie
     9.  C. Michael Moore--Locke Liddell
    10.  Robert C. Prather, Sr.--Jordan, Dunlap, Prather & Harris,
L.L.P.

No need to respond as to V&E or Locke Liddell, except as to information
about the individuals.  Steve et al.,  Baker & McKenzie does represent
Enron on several matters of which I am aware, but to my knowledge it is
not one of our top 10 firms in billings.


Congratulations to everyone who worked this weekend.  Beyond making a
substantial amount of money, the variance in the calculated profit and loss
and what we show in our incremental sheets was +$342.00.  Such a small
variance comes from carefully tying out the SAR and the CARP, checking that
both volumes and dollars match up exactly.  I appreciate the careful work of
those on shift this weekend and Monday, and am impressed with this relatively
small variance.  Keep up the good work!!!

Bill


Sorry, but the invitation asked for reply by April 20.  I have emailed the
Feinbergs of my acceptance.

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

	SSher5DUN@aol.com
	04/15/2001 01:23 PM

		 To: sara.shackleton@enron.com, labdsc@womans.com
		 cc:
		 Subject: Friday Night Dinner

We have not heard whether you will be joining us for dinner on Friday night.
Please let us or the Feinberg's know.

Anita and Steve


Tom Hoatson, et al -

What would PJM say in response?  What is their current thinking?  Also, given
that the FTR process may leave some FTRs "unfunded", this would seem to move
people away from cash flow devices?  How would PJM need to change so this
doesn't happen?

Jim

	Steve Walton@ECT
	02/09/2001 09:30 AM

		 To: James D Steffes/NA/Enron@ENRON
		 cc: Tom Hoatson/NA/Enron@Enron;, Dan Staines/HOU/ECT@ECT
		 Subject: Re: PJM doesn't pay EPMI on FTRs

Jim,
 The PJM rules give monthly overcollection of congestion charges to those who
pay the access fees (mostly the incumbent utilities) but simply short the FTR
holder if there is an undercollection of congestion charges.  In addition all
the auction revenues go to reduce access fees.  As a result, an FTR holder is
at risk in any month when they congestion charge collections are smaller than
payments due FTRs.  The accounting is done on an hourly basis with any excess
credited at the end of the month.  I have attached the PJM FTR manual.  The
details of the settlement procedure are covered in Section 5.

 This procedure benefits the incumbents, since their transmission cost is
reduced by both auction revenues and monthly excess collections but never at
risk for undercollection.  You have a gate that lets in benefits but keeps
out risk.  In New York, for all its other flaws, the under/over collection
reconciliation works in both directions.  This is fairer, but there could
still be an annual shortfall.  Contrary to advertisement, the simultaneous
feasibility test used in the FTR auction does not guarantee the ability to
fund the FTRs issued.

 To address this potential annual shortfall, we proposed for the e-trans
tariff, that the auction revenues be held in escrow between auctions.  If
over the year, there was a net shortfall, it should be taken from the auction
revenues before the credit is made to reduce the access fees.  This means
that the buyers get what they paid for.  The payers of the access fees still
get credit for the net gain (auction revenues + monthly collections - FTR
payments), without shorting buyers of FTRs.

Steve

	James D Steffes@ENRON
	02/09/2001 08:04 AM

		 To: Tom Hoatson/NA/Enron@Enron, Steve Walton/HOU/ECT@ECT
		 cc:
		 Subject: PJM doesn't pay EPMI on FTRs

Isn't the problem that PJM is only obligated to pay for these "negative" FTRs
as much as there is congestion revenues?  What section of the PJM Manuals is
involved.

Jim

----- Forwarded by James D Steffes/NA/Enron on 02/09/2001 08:07 AM -----

	Christi L Nicolay@ECT
	02/08/2001 04:07 PM

		 To: Tom Hoatson/NA/Enron@Enron
		 cc: James D Steffes/NA/Enron@Enron
		 Subject: PJM doesn't pay EPMI on FTRs

EPMI bought some FTRs in PJM.  PJM did not pay EPMI appr. $105,000 in Sept
and $194,000 in Oct.  PJM told Rebecca Grace at Enron that PJM is revenue
deficient and, therefore, not required to pay.

In Dec., EPMI was negative $177,000 and they charged us $191,000.
Apparently, PJM charged us all the negatives, but did not pay us some of our
positives because of the revenue deficiency issue.

Tom--Do you know what the rules are about this?  It seems unfair that we can
be charges all the negatives, but not get our money on the upside.  Let me
know and you or I can call Andy Ott about this.  (Tom Dutta is the commercial
trader on this for EPMI.)


Here's the correspondence between Evelyn in the Houston Confirms group and
Paul Callahan at Bloomberg outlining the broker's new $15-per-trade fee.
Please let me know if you have questions or would like me to talk to someone
at Bloomberg about this. I'll also check with Tim to find out if the fee
change was ever negotiated with Enron.

Thanks,
Kate
---------------------- Forwarded by Kate Symes/PDX/ECT on 04/17/2001 02:18 PM
---------------------------

Evelyn Metoyer@ENRON
04/17/2001 02:14 PM
To: Kate Symes/PDX/ECT@ECT
cc:

Subject: Re: Commission

Kate for our deal 582589 and 582423 these deals according to Bloomberg the
fee should be $15.00.  Please pass on to Mark and Tom.

Thanks!

---------------------- Forwarded by Evelyn Metoyer/Corp/Enron on 04/17/2001
04:15 PM ---------------------------

"PAUL CALLAHAN, BLOOMBERG/ NEW YORK" <PCALLAHAN2@bloomberg.net> on 04/17/2001
03:46:36 PM
To: Evelyn.Metoyer@enron.com
cc:

Subject: Re: Commission

That is the commission for those trades. The rate that Bloomberg Powermatch
now charges for cash trades is $15 per trade.

----- Original Message -----
From: Evelyn Metoyer  <Evelyn.Metoyer@enron.com>
At:  4/17 16:43

>
>
> For the two deals traded on yesterday with Tom and Mark the fee is showing
> as $15.00 flat on both confirmations.  Can you send revisions.
> The numbers are 20010416410003 and 20010416410002
>
> Thanks
>
>
>
>
> "PAUL CALLAHAN, BLOOMBERG/ NEW YORK" <PCALLAHAN2@bloomberg.net> on
> 04/17/2001 03:25:00 PM
>
> To:   Evelyn.Metoyer@enron.com
> cc:
>
> Subject:  Re: Commission
>
>
> That is not the case. I know what Mark and Tom trade, I apologize if I
> misspoke. All daily trades, as well as hourly trades will now be a flat fee
> charge of $15 per trade. This covers any size transaction.
> ----- Original Message -----
> From: Evelyn Metoyer  <Evelyn.Metoyer@enron.com>
> At:  4/17 16:20
>
> >
> > Tom and Mark are not spot traders, they're cash traders. The Real Time
> guys
> > are now being charged $15 for trades - but cash and term traders should
> > still be charged the traditional $.005.
> >
> >
> >
> >
> >
> >
> > "PAUL CALLAHAN, BLOOMBERG/ NEW YORK" <PCALLAHAN2@bloomberg.net> on
> > 04/17/2001 02:28:57 PM
> >
> > To:   Evelyn.Metoyer@enron.com
> > cc:
> >
> > Subject:  Commission
> >
> >
> > Evelyn, as of April 16, 2001 our charge for Spot trades is a flat fee of
> > $15/trade.


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

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

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

Please see the following articles:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

By NANCY VOGEL and JENIFER WARREN, Times Staff Writers

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

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

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

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Friday, March 2, 2001

By Rick Stouffer
rstouffer@ftenergy.com

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Ex-Regulator Urges Temporary Federal Price Caps on Power

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

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

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

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

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

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

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

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


Ted / Sally

We took as an action from the last meeting the need to re-authorise all
traders within the metals global businesses, sign this list off with the
EnronMetals Managing Directors and accompany this list with a note
highlighting the dangers of non authorised trading activity.

Due to the storm here yesterday we had to delay the operational control
meeting with the MDs until today and therefore hope to have this out tomorrow
with effect from COB 31 st.

Apologies for the delay - any issues please call

Regards

Mike


I'm free all day.  Give me a time.


Hey.

Hear that you didn't get to hit with Dan on Monday but instead got a few
games of doubles under your belt.  How did that go?

I was wondering if you wanted to hit on Thursday either during lunch or after
work.  I usually have a meeting during lunch on Thursday but heard it might
be cancelled.  I am going to be up at the Met this evening and will book a
court if you want to hit during either times.  I will just have to get back
with you if you want to hit during lunch to let you know if we have our
meeting or not.

Talk to you soon.

Char


SK - I have printed this out and put in a folder w/ other people's
accomplishments.  mm

Steve, attached are the 2000 environmental and safety accomplishments -  Mike


Working on it !

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


I think we need to get scheduling, volume management, and accounting together
somehow.  I don't think a happy hour would do it because people tend to get
in their groups and talk.

Let me know what you guys think.  I would like to talk to Bob Hall and Bob
Supperty about this,.


FYI

Vince
---------------------- Forwarded by Vince J Kaminski/HOU/ECT on 04/19/2000
03:41 PM ---------------------------

Robert Brooks <rebrooks@earthlink.net> on 04/19/2000 12:39:57 PM
Please respond to "rebrooks@rbac.com" <rebrooks@rbac.com>
To: "'GPCM Distribution'" <rebrooks@rbac.com>
cc:
Subject: Gas Price Analysis from Powermarketers.com

Interesting article.  Analysis sees production and import increases this
year, perhaps not quite keeping up with demand increases.
Take a look.

http://199.97.97.163/IMDS%PMAKRT0%read%/home/content/users/imds/feeds/knightri
dder/2000/04/18/krtbn/0000-0087-HO-GAS-ENERGY

Bob Brooks


Peggy asked that I update you on our earnings forecast for this year.

PGE had an exceptional April with PGE IBIT of $39.8 million compared to $5.2
million budget and Net Income of $20.9 million compared to -$.7 million plan.
Earnings for the month were driven primarily by our wholesale business and
outstanding plant operations.  Actual net variable power cost for April came
in at $.2 million compared to our budget of$43.9 million.  Retail loads were
off for the month which created additional length along with strong wholesale
prices in the preschedule and real time markets.

April results do not include any charges for Enron overheads which we would
expect to start occurring in May.  Kirk Stevens and Mark Lindsey are working
on getting these charges allocated to PGE.

For Q2, our Current Forecast for PGG is to over perform at plan by $1.7
million IBIT and 6.3 net income.  The primary driver will still be power cost
for May and June.   Recent downward movement in the forward curve has reduced
the value of our long position in May and June on a forecast basis.  However,
the preschedule and real time markets continue to be strong.  If this trend
continues then we should over perform in both May and June.  How much is still
highly dependent on wholesale prices, our plant operations, retail loads and
weather conditions in the West.

For the year, we are still on track to make our plan but a similar situation
to the second quarter exists for us in the third and fourth quarter.  We are
holding on to some length in our retail book to hedge our retail load and
plant operations.  The value of that length changes on a forecast basis based
upon movement in the forward curve.  However, we continue to see the
preschedule and real time market trade higher than the forward curve.  In
addition, as we discussed before, we have a regulatory mechanism in place
where by we share our overall net variable power cost with customers.  Our
current power cost forecast has us in the 90 / 10 sharing bandwidth with
collection of about $18 million from customers.  If wholesale prices in the
preschedule and real time market continue to be strong then we will move into
the dead band and could move into the refund zones.   In addition to power
cost,  we put in place a goal this year of reducing O&M by 7% from the budget
and we are on target to meet this goal.

Please call me at 503-464-8982 or e-mail me if you have any questions.


Teco Tap       105.000 / HPL IFERC ; 10.000 / Enron

LS HPL LSK IC       30.000 / Enron


Yes

	Stephanie Truss/ENRON@enronXgate
	05/08/2001 10:03 AM

		 To: Richard B Sanders/HOU/ECT@ECT
		 cc:
		 Subject: FW: Computer Hardware

Michelle Blaine has requested a flat screen for her computer.  Please let me
know if I can move forward with fulfilling this request.  Thanks!

 -----Original Message-----
From:  Elbertson, Janette
Sent: Tuesday, May 08, 2001 9:54 AM
To: Truss, Stephanie
Subject: Re: Computer Hardware

Stephanie:

Go ahead and order the computer battery for Gail Brownfeld.

You  need to get approval from Richard Sanders by e-mail so you will have a
record he approved it (because he is the cost center owner) before you order
the flat panel for Michelle Blaine.  Please note, the standard flat panel for
our department is a 15" panel, definitely not an 18".    When Richard
approves it you can go ahead and order the flat panel through iBuyit.

The usual procedure for our department is the cost center owner needs to
approve any requests for computer equipment before they are purchased.

Thanks.  I hope you are doing well.

Janette Elbertson
Enron Wholesale Services
Legal Department - EB3326
Telephone:  (713) 853-7906
Fax:  (713) 646-2600
janette.elbertson@enron.com

	Stephanie Truss/ENRON@enronXgate 05/08/2001 09:34 AM 	   To: Janette
Elbertson/HOU/ECT@ECT  cc:   Subject: Computer Hardware

I need to order a new computer battery for Gail Brownfeld, as her current one
has a broken connector.  Also, Michelle Blaine has requested a flat screen
for her computer.  Can I order these from IBuyIt, or do I need to get
approval from someone first?  Thanks!

____________________________________________
Stephanie M. Truss
Senior Administrative Assistant
Enron Wholesale Services
1400 Smith Street
Houston, Texas 77002
(713) 345-3861 - Telephone
(713) 646-3490 - Facsimile


---------------------- Forwarded by Mark - ECT Legal Taylor/HOU/ECT on
08/06/99 08:55 AM ---------------------------

Carol St Clair
08/06/99 08:44 AM
To: Mark - ECT Legal Taylor/HOU/ECT@ECT
cc:
Subject: Re: Restriced Master Agreements

Mark:
The only one that I have done recently is the one for Petrous LLC which does
not contain the trade option exemption rep from them.
Carol


----- Forwarded by Jeff Dasovich/NA/Enron on 03/13/2001 10:55 AM -----

	Jennifer Rudolph@EES
	03/13/2001 10:52 AM

		 To: CA Team
		 cc:
		 Subject: LA Times Press on uc/csu lawsuit

LA Times
Today

Tuesday, March 13, 2001
UC, Cal State Systems Sue Power Seller to Retain Pact's Low Prices

Electricity: Officials want to prevent Enron from switching their accounts to
Edison and PG&E. They fear losing discounted rates.
By MASSIE RITSCH, Times Staff Writer

Faced with losing their protection from sky-high electricity bills, the
University of California and California State University have sued to stop
their power supplier from halting service.
The UC and Cal State systems signed a four-year contract with Enron Energy
Services in 1998, locking into discounted fixed rates for electricity from
the Houston-based energy giant.
Last month, Enron notified its commercial and industrial customers in
California, including the universities, that their power would be supplied by
Pacific Gas & Electric and Southern California Edison.
Because of the complicated rules of the state's deregulated utility market,
the shift saves Enron money, but the universities fear that it could subject
them to the fluctuating--but always expensive--prices that most Californians
have been paying recently for power.
UC and Cal State accuse Enron of breaking its contract so that it can sell
power earmarked for the campuses to other customers for more money.
On Friday, the public universities asked the U.S. District Court in Oakland
to issue a preliminary injunction to stop the switch-over. No hearing has
been scheduled, UC spokesman Charles McFadden said.
"We don't object to Enron making more money," McFadden said. "What we do
object to is Enron seeking to increase their profits at the expense of
California's students, parents and taxpayers."
Enron denied Monday that the company will resell power to boost profits, and
an executive guaranteed that, for this final year of its contract with the
universities, Enron will reimburse them for any increase in their power bills
when they return to the customer rolls of PG&E and Edison.
"All the value that caused the [UC and Cal State systems] to want a contract
with us, we are retaining. . . . The only reason we did [this] is because we
found a better cost alternative to keep us in the game," Enron Vice Chairman
Marty Sunde said.
The universities estimate that their contract with Enron has saved their
campuses $30 million. Being returned to the in-state power suppliers could
cost them an additional $132 million to $297 million over 10 years, they say.
That figure includes the cost of switching meters on the campuses and
changing billing systems. More significant, the higher price the universities
would pay for power would include a projected rate increase that would help
PG&E and Edison reduce the billions in debt they have incurred in
California's deregulated electricity market.
While other colleges in the state pay super high rates for power, UC, Cal
State and Enron have proudly promoted their arrangement. In January, the
university systems put out a news release that extolled the contract and
assured that electricity rates would remain stable until at least March 31,
2002, when the contract was scheduled to expire.
When the agreement was reached in 1998, Enron said it was "honored" to serve
UC and Cal State, and the firm boasts on its Web site that the university
systems are "notable customers."
"We were and are proud of the contract," UC's McFadden said. "That's why
we're fighting so hard to preserve it."
UC and Cal State are among the state's biggest consumers of electricity,
paying more than $125 million annually for power. Both systems meet a portion
of their power needs by generating electricity at on-campus plants.
Not all of the universities' campuses have been served by Enron. UCLA, for
example, buys its power from the Los Angeles Department of Water and Power,
and UC Riverside purchases it from the city of Riverside.


I dont know what any of this stuff is and this is the first time I've seen any $$s.

I dont even see gas trading vision (maybe its the 'global trading vision').
Operational capacity, System Main, Fundamentals, Global Val, and Peoples all have other business sponsers. I cant image what 'IT Commer. Coord' is.

 -----Original Message-----
From: 	Kitchen, Louise
Sent:	Tuesday, October 02, 2001 8:06 AM
To:	Killen, Faith; Storey, Geoff
Cc:	Colwell, Wes; Perlman, Beth
Subject:	RE: 2002 IT Systems Development Allocations

Geoff

This cannot be right - its millions I thought we were about $5mm all in including the secret Zhei project

 -----Original Message-----
From: 	Killen, Faith
Sent:	Monday, October 01, 2001 8:21 PM
To:	Storey, Geoff
Cc:	Kitchen, Louise; Colwell, Wes; Perlman, Beth
Subject:	2002 IT Systems Development Allocations
Importance:	High

Geoff,
Please review the attached listing and advise if you agree to the projects and amounts listed as billings that Enron North America will receive in 2002 for support of these efforts. I'm at x30352 if you have any questions. Thanks!		 << File: Gas Projects.xls >>


Charlie:
Sorry for the delay with the e-mail, I just got back into the office from
traveling.  We are working hard to sell these assets before year-end -
they're a beast.  This Friday does not look good for lunch, but I think
Tuesday or Wednesday of next week works.  I hope this works for you as well.
Talk to you soon.
Regards,
Ben


---------------------- Forwarded by Vince J Kaminski/HOU/ECT on 08/11/2000
07:55 AM ---------------------------

Vince J Kaminski
08/11/2000 07:49 AM
To: "perfmgmt@enron.com"<perfmgmt@enron.com> @ ENRON
cc:
Subject: Re: Mid-Year 2000 Performance Evaluation Due

I haven't received yet the final Performance Evaluation Results.
The usual practice is to defer the reviews till   the final summary rankings
are available.

Please, let me know when I can expect it form the HR.

Thanks.

Vince Kaminski

"perfmgmt@enron.com"<perfmgmt on 08/10/2000 05:16:14 PM
To: vkamins@enron.com
cc:
Subject: Mid-Year 2000 Performance Evaluation Due

Sep 01, 2000

THE ABOVE DATE IS WHEN THE MID-YEAR 2000 PERFORMANCE EVALUATION FORMS FOR
DIRECTORS AND BELOW ARE DUE IN HUMAN RESOURCES.

If you have not already done so, supervisors should begin the process of
giving feedback to their employees.  The evaluation forms used to provide
feedback to the employee can be obtained via the Performance Management
System (PEP).

To download the evaluation forms from PEP, please follow the steps below:

1. Log into PEP at http://pep.enron.com .
2. Under Supervisor Services, click Supervisor Evaluation Forms.
3. Right-click on each employee and choose 'Save Target As...' or 'Save Link
As...'
4. Select your own personal directory, choose a file name to save to and
click 'Save'.
5. Repeat for each employee.
6. Now you can complete your evaluation forms from your personal directory
and will not have to access PEP to finalize the form.

Upon completion, please forward the signed evaluation forms to your HR
Representative NO LATER THAN Friday, September 1st 2000.

If you have any questions, please contact the PEP Help Desk at the following
numbers:

In the U.S.:  1-713-853-4777, Option 4
In Europe:  44-207-783-4040, Option 4
In Canada:  1-403-974-6724 (Canada employees only)

Or e-mail your questions to:  perfmgmt@enron.com

Your employees that should receive mid-year evaluations are listed below:

    CRENSHAW, SHIRLEY J
    GANJOO, SHALESH
    GIBNER, PEYTON S
    KOLLAROS, ALEXIOS
    KRISHNARAO, PINNAMANENI V
    MASSON, GRANT S
    RAYMOND, MAUREEN J
    ROBERTS, MICHAEL A
    SERGEEV, MIKHAIL
    SHANBHOGUE, VASANT
    VERNON, CLAYTON J


----- Forwarded by Richard B Sanders/HOU/ECT on 10/16/2000 09:45 AM -----

	John Schwartzenburg@ENRON_DEVELOPMENT
	10/16/2000 07:28 AM

		 To: Richard B Sanders/HOU/ECT@ECT
		 cc:
		 Subject: Re: Enron Gas Liquids Europe S.A.R.L - liquidation

Last note from Kate and others invovled show that this company is either ENA
or EEL, not EECC. I suspect Kate will be fixing her records to show that.
Thanks to all and sundry.

	Richard B Sanders@ECT
	10/15/2000 09:06 AM

		 To: Robert C Williams/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
		 cc: Britt Davis/Corp/Enron@ENRON, John
Schwartzenburg/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
		 Subject: Re: Enron Gas Liquids Europe S.A.R.L - liquidation

Sorry Bob--too late, this case belongs to you. Seriously, I have asked Britt
Davis to help me sort this out. He has been heading up the effort to
(finally) get rid of this case

	Robert C Williams@ENRON_DEVELOPMENT
	10/09/2000 02:39 PM

		 To: John Schwartzenburg/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
		 cc: Sue Kelly/LON/ECT@ECT@ENRON, Kate Cole/Corp/Enron@ENRON, John
Echols/Enron Communications@Enron Communications@ENRON, Justin
Boyd/LON/ECT@ECT@ENRON, Teresa Callahan/Corp/Enron@Enron, Wyndel
McNamara/NA/Enron@Enron, Richard Sanders
		 Subject: Re: Enron Gas Liquids Europe S.A.R.L - liquidation

I think Richard Sanders is managing this litigation.  The other party is
Interfert.  And John, trust me, since I managed this while at ECT (nka ENA),
you don't want to give Richard any reason to transfer it to you (or to me).
Its a pain.  Besides, I can't imagine that this would be under EECC, but the
accounting boys never cease to amaze.

John Schwartzenburg
10/09/2000 01:58 PM
To: Sue Kelly/LON/ECT@ECT@ENRON
cc: Kate Cole/Corp/Enron@ENRON, John Echols/Enron Communications@Enron
Communications@ENRON, Justin Boyd/LON/ECT@ECT@ENRON, Teresa
Callahan/Corp/Enron@Enron, Wyndel McNamara/NA/Enron@Enron, Robert C
Williams/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT

Subject: Re: Enron Gas Liquids Europe S.A.R.L - liquidation

Yikes! Justin, if you folks are litigating a case involving this entity,
then EECC needs to be aware of it, including myself as the GC and our
litigation managers, Bob Williams and Gail Brownfeld. Can you please let me
know what  the nature of  the case is, including it's status, and which Enron
lawyers are handling it?

Kate, it might be that entity is just improperly shown as an EECC entity.
Justin, can you tell us who the Enron commerical people involved with the
case are?

Sue Kelly@ECT
10/09/2000 01:29 PM
To: Kate Cole/Corp/Enron@ENRON
cc: John Schwartzenburg/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT@ENRON, John
Echols/Enron Communications@Enron Communications@ENRON, Justin
Boyd/LON/ECT@ECT, Teresa Callahan/Corp/Enron@Enron, Wyndel
McNamara/NA/Enron@Enron

Subject: Re: Enron Gas Liquids Europe S.A.R.L - liquidation

Hello ther

I understand from Justin that this is ongoing and will not be finalised until
outstanding litigation is resolved.  I understand that you guys in Houston
are running this one?

Sue.

Kate Cole@ENRON
09/10/2000 16:06
To: John Schwartzenburg/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, John
Echols/Enron Communications@Enron Communications, Sue Kelly/LON/ECT@ECT,
Justin Boyd/LON/ECT@ECT
cc: Teresa Callahan/Corp/Enron@Enron, Wyndel McNamara/NA/Enron@Enron

Subject: Re: Enron Gas Liquids Europe S.A.R.L - liquidation

John - I knew that this was tickling my memory and suddenly I remembered!
Back in 1997 John Echols was appointed liquidator to continue the process of
liquidating Enron Gas Liquids Europe S.A.R.L. (which I presume is the same
entity to which you refer).

By copy email I'm asking John Echols, Sue Kelly and Justin Boyd what happened
to the liquidation proceedings.  Does the entity still exist and if not, how
can we get copies of the liquidation evidence.

Thanks Kate

Kate B. Cole
Director, Corporate Services
Enron Corp.
Tel: (713) 853-1624
FAX: (713) 646-8007
Email: kate.cole@enron.com

	John Schwartzenburg@ENRON_DEVELOPMENT
	10/02/2000 12:05 PM

		 To: Kate Cole/Corp/Enron@ENRON
		 cc: Wyndel McNamara/NA/Enron@ENRON, Teresa Callahan/Corp/Enron@Enron
		 Subject: Re: Enron Hydro Modernization Company

Hi, Kate. It surely can wait that long.

By the wasy, we have another company that somehow has been allocated to us,
Enron Gas Liquids, a French Company, that EECC was surprised to find it owns
and has no use for, so we would like to liquidate it as well. Is that
something your gang would handle as well, just to make sure that no other
Enron entity needs it?

Kate Cole@ENRON
09/29/2000 05:06 PM
To: Wyndel McNamara/NA/Enron@ENRON
cc: John Schwartzenburg/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Teresa
Callahan/Corp/Enron@Enron

Subject: Re: Enron Hydro Modernization Company

Hopefully this can wait until w/c 10/9 as Teresa and I will be out of the
office until then.  Teresa will send out a dissolution memo to ensure that
everybody is on the same page and then Corporate Legal will prepare the
documents.  You don't have to do anything else! Thanks Kate

Kate B. Cole
Director, Corporate Services
Enron Corp.
Tel: (713) 853-1624
FAX: (713) 646-8007
Email: kate.cole@enron.com

	Wyndel McNamara
	09/29/2000 03:26 PM

		 To: Kate Cole/Corp/Enron@ENRON
		 cc: Teresa Callahan/Corp/Enron@Enron, John
Schwartzenburg/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
		 Subject: Enron Hydro Modernization Company

I have been instructed to dissolve the above listed domestic company.  Please
tell me what I need to do to accomplish this task.

Thank you for your help in this matter,

Wyndi


Sheila:  I received a requst from you.  Please advise if:

(1)  You sent explanation to Ted Murphy stating purpose for account.
(2)  Agreement reflect DB Alex Brown LLC to clear trades with prime broker of
our choice
(3)  Why is this a Deutsche Bank agreement?  Who is "Frost Securities, Inc."?
(4)  Do we contact "Janet" at 214/515-4495 with markup?


Here's the electronic file.


I'm glad to know that she is home.  I can just imagine how much fun those
oxygen treatments will be!  I know that you will be thankful to have your
whole family under the same roof.  --Sally

	Barry Pearce @ ENRON COMMUNICATIONS
	12/01/2000 05:47 PM

To: Sally Beck/HOU/ECT@ECT@ENRON
cc:
Subject: Olivia

Olivia came home this afternoon at 4pm.

Hopefully much better.

She'll have the oxygen treatment every 2 hours off some massive & complicated
contraption.

B.


Three cheers for our neighbor, Brad Odom, who has successfully negotiated the removal of the 18,000 sofas and other junk that had piled up next to the building at the corner of Hopkins and Fairview!

This Saturday morning, Brad, and volunteers (anyone who wants to help - bring your shovel and come along) will be landscaping the area, with funds donated by the owner of the property.  The landscaping is being done in an effort to discourage future dumpings in this spot.

Over and above the call of duty - these are East Montrose residents!

Amy B

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