----- Forwarded by Steven J Kean/NA/Enron on 02/28/2001 01:51 PM -----

	Miyung Buster@ENRON_DEVELOPMENT
	02/28/2001 10:02 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:

Governor Renews Criticism of Regulators
LA Times, 2/28/2001
Energy Crisis Fails to Hamper Selling of California Bonds
LA Times, 2/28/2001

Energy Crisis Is a Benefit to Redding
SF Chronicle, 2/28/2001

Davis: Power-crisis fixes almost finished
Sac Bee, 2/28/2001

Davis passed up Duke Energy's deals
Contra Costa Times, 2/28/2001

Davis fights for backing, takes state plan to D.C.
San Diego Union Tribune, 2/27/2001

Duke Energy Suspends Suits Vs. Calif.
AP, IndividualNews.com, 2/28/2001

Calif. Optimistic About Power Line
AP, IndividualNews.com, 2/28/2001

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

Wednesday, February 28, 2001

Governor Renews Criticism of Regulators

Power: The governor implies that the panel is too ideological. Its approval
is needed if California is to purchase the electricity transmission grid.

By DAN MORAIN and NANCY VOGEL, Times Staff Writers

?????WASHINGTON--Gov. Gray Davis, trying to win support for California's plan
to buy a huge stretch of the state's electrical transmission system, took a
swipe Tuesday at the federal commission that must bless such a deal.
?????Davis noted that President Bush has an opportunity to fill two vacancies
on the five-member Federal Energy Regulatory Commission and will determine
its chairman.
?????"It is my hope," Davis said, "that whoever the president chooses is a
practical businessman or woman who lives in the real world and understands
that when you inherit a mess, your job is to fix it, right the ship and move
forward--as opposed to being a rigid adherent to ideology."
?????Earlier this year, Bush appointed Curt Hebert Jr., a strong free-market
proponent who has served on the commission since 1999, as chairman. But he
can change that appointment.
?????Hebert, a 38-year-old attorney and former Mississippi lawmaker, has said
Davis' plan to have California buy 32,000 miles of high-tension power lines
from the state's ailing utilities would amount to "nationalization" and might
not be in the public interest.
?????The commission has been a strong advocate of electricity deregulation
and, in addition to the dispute over purchase of the power grid, Davis has
criticized its members for refusing to impose limits on soaring wholesale
power prices, which bled California utilities of billions of dollars in the
last nine months.
?????"We have practical problems we have to solve," he said, citing the
billions of dollars the utilities owe power generators and banks. "My hope is
that [Bush] places people on the FERC who understand real-world
considerations."
?????Hebert could not be reached for comment Tuesday. The commission's two
other members, William L. Massey and Linda K. Breathitt, Democrats appointed
by former President Bill Clinton, were also unavailable. There are two
vacancies on the panel.
?????Davis spoke after conferring for 30 minutes with U.S. Energy Secretary
Spencer Abraham about the state's proposal to help the financially ailing
utilities by purchasing the power grid. He presented Abraham with a nine-page
memo detailing the plan and said the energy secretary would probably give him
his views on the plan by the end of the week.
?????Last week, the governor struck a tentative deal with Southern California
Edison to buy its portion of the grid for $2.76 billion, more than twice the
book value. He is working on similar deals with Pacific Gas & Electric and
San Diego Gas & Electric. Utilities could use money from the sale to
restructure their multibillion-dollar debt.
?????Although Abraham has no direct authority over the energy commission, he
presumably holds influence with Bush, and Davis came away from their
conversation buoyed.
?????"If he would endorse the plan," Davis said, "that would be a leg up in
getting FERC's approval. . . . 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.
?????"Believe me," Davis said, "I've been in enough meetings to know when
someone is trying to be helpful and when someone is not. [Abraham] is trying
to be helpful. He wants this problem solved, and . . . I believe he will
support our proposal to get Southern California Edison back into the energy
business."
?????Under federal law, the energy commission would have to approve
California's purchase of the steel towers and aluminum wires of its three
biggest private utilities. The commission could scuttle the purchase if it
determined that state ownership would harm the public interest--a legal
standard that gives the agency much discretion.
?????Walter Ferguson, Hebert's chief of staff, said Tuesday that Davis' plan
would get close scrutiny.
?????"Sure, we have to be open-minded, but I'm skeptical as to how this
helps," he said. "How does this solve the supply issue? How does this impact
the region? Those two questions have got to be answered, because you don't
want to make the problem worse."
?????California's proposal runs counter to the commission's 2-year-old push
to have transmission grids operate on a wide regional scale without heed to
political boundaries. In some parts of the Midwest and South, private
companies have proposed operating transmission systems for profit--a trend
endorsed by Hebert.
?????"I assume Hebert is going to be unenthusiastic, probably very
unenthusiastic [about California's proposal]," said Richard Pierce, a George
Washington University law professor who has observed the commission for
decades.
?????"Nobody at FERC is going to be real happy about a state trying to take
away from FERC jurisdiction over a large portion of a transmission grid," he
said. "I can't imagine any commissioner will like that. So what we're talking
about is the intensity of their dislike and whether it will be so great
they'll say, 'No, we won't approve it.' "
?????Consumer advocates and state Senate leader John Burton (D-San Francisco)
have endorsed state purchase of the transmission grid as a way to get
California out from under some federal oversight. Ownership would, for
example, allow the state to set the transmission fees that electricity
consumers pay. Those fees now amount to about 6% of the average utility
customer's monthly bill and are overseen by the energy commission.
?????Burton has also argued that state ownership would give California
greater control over its own destiny should federal officials try to force
the West to manage its interconnected grid under a single agency.
?????Federal rules already prohibit transmission grid owners from
discriminating, through fees or rules, against the generators and marketers
that use their lines like highways to move electricity from power plants to
buyers.
?????Davis, in trying to win support for state purchase of the grid, has not
focused on the freedom from federal regulators California might gain.
Instead, he has treated the idea as a key part of a financial transaction
necessary to revitalize debt-ridden utilities.
?????Davis said he expects that California would operate the transmission
system within federal restrictions.
?????"I am not looking forward to any additional regulatory burdens from
FERC," Davis said. "Obviously, we will meet the existing regulatory burden
that we have."
?????Whether the commission will approve a state purchase of the grid and how
long it will take to reach a decision are unknown, Edison International Chief
Financial Officer Ted Craver told debt holders Tuesday in a conference call.
He characterized Hebert's recent public statements on the matter as "cryptic."
?????A decision by FERC on sale of the grid could take "many months,"
according to research released Tuesday by Fitch Inc., a credit-rating firm.
?????Fitch called the tentative agreement between Edison and the state "a
favorable step to avoid bankruptcy," but noted that several hurdles remain,
chiefly approval by the state Legislature and the federal commission.
?????State Sen. Steve Peace (D-El Cajon) said that if the commission rejects
California's purchase of transmission lines, the state should simply condemn
the property.
?????"It was President Bush who told Gov. Davis that California should solve
this," said Peace. "Gov. Davis is doing so. Certainly President Bush would
expect the governor to use every tool at his disposal to solve it."
---
?????Times staff writers Richard Simon in Washington and Nancy Rivera Brooks
in Los Angeles contributed to this story.
------------------------------------------------------------------------------
------------------------------------------------------------------------------
--------------------------------------------------------------------------

Wednesday, February 28, 2001

Energy Crisis Fails to Hamper Selling of California Bonds

By MIGUEL BUSTILLO, Times Staff Writer

?????The energy crisis is apparently not affecting California's ability to
finance its debt.
?????California successfully sold $982 million in bonds Tuesday to provide
funds for a variety of construction projects and already approved ballot
measures, including last year's $2.1-billion parks bond.
?????Most of the sale, $600 million, represents new funding, while the
remainder will be used to refinance older bonds at current, more favorable
interest rates.
?????The general obligation bonds, overseen by state Treasurer Phil
Angelides, will have a 4.8% rate of interest--which is actually lower than
the last few general obligation bonds issued before the energy crisis.
?????A day before the sale, Wall Street credit-rating firm Fitch IBCA blessed
the bond issue with a favorable AA credit rating, and reaffirmed its AA
rating for the state's $22.6 billion in outstanding bond debt. The two other
major rating agencies, Standard & Poor's and Moody's, rated the bonds Aa2 and
AA, respectively.
?????In releasing its rating, Fitch analysts concluded that, although the
energy crisis is taking a substantial toll on California's budget reserves,
that money will eventually be repaid through a $10-billion bond issue that
will be paid off by utility ratepayers.
?????Moreover, Fitch concluded, the state's per-capita debt of $787 is
moderate compared with that of other states--and the California economy has
yet to show any signs of being significantly affected by the crisis.
?????"In anything that's tangible--tax receipts, employment information--we
have yet to see a real effect," said Fitch vice chair Claire G. Cohen.
------------------------------------------------------------------------------
------------------------------------------------------------------------------
--------------------------------------------------------------------------

BUSINESS
Energy Crisis Is a Benefit to Redding
George Raine
?
02/28/2001
The San Francisco Chronicle
FINAL
Page C1
(Copyright 2001)
High energy prices can create strange bedfellows.
Just ask Morpheus Lights Inc., a powerhouse in the entertainment industry
that has provided the lighting for the Academy Awards as well as the concerts
of Bruce Springsteen, Shania Twain, Metallica, and Ringo Starr and his All
Star Band.
A fixture in Santa Clara County, the company shifted its operations three
years ago 225 miles north of San Francisco to Redding, a city resting
comfortably between the Cascades and the Trinity Alps that is known more for
its Pendleton shirts and wily trout.
The move has paid off handsomely. This city of about 78,000 has escaped the
energy deregulation crisis that is roiling California and is, in fact, a
seller of surplus power.
That's good news to Morpheus, which consumes some 25,000 kilowatts a month to
test and manufacture huge performance lighting pieces like its BriteBurst,
which has enough power to light 3Com Park and was used in the 2000 Super Bowl
halftime festivities.
Morpheus is one of several success stories touted by the Economic Development
Corporation of Shasta County, which is attempting to sell businesses on an
outdoorsy quality of life in Redding, through which the Sacramento River
meanders and where labor is plentiful and costs are low.
But there's much more, the pitch goes: Redding is a unique electrical island
unto itself, with its own electric utility and ample surplus power to sell --
this while investor-owned utilities mull bankruptcy and the lights and the
patience of business owners flicker in much of the rest of California .
Other states and regions of the country have initiated economic development
campaigns to capitalize on California 's misfortune, seeking to lure
businesses disgruntled by the energy crisis.
But as much or more aggressive efforts are now being developed within
California to convince businesses they don't need to leave because there are
sanctuaries of electrical stability.
NONPROFIT LOCAL UTILITY
Redding has owned and operated its nonprofit electric utility since 1921. The
utility purchases significant amounts of its energy from the federally
operated Central Valley Project, through the Bonneville Power Administration
in the Northwest, and it generates energy at its own gas-fired power plant.
In fact, Redding Electric Utility (REU) has made so much money selling
surplus power that it expects to pay off its debt a year from now, two years
earlier than originally expected.
"We are a utility that has resources in excess of our needs and that's a nice
place to be," said Jim Feider, director of the REU.
Several months before most Californians knew a long-term energy crisis
loomed, the Economic Development Corporation of Shasta County, which seeks to
attract business and the wealth it generates, began to aggressively pursue
small and midsize Bay Area manufacturing businesses looking to expand and
relocate.
There is a lot of ground to make up in Shasta County, said Jim Zauher, the
EDC president. In 1970, 19 percent of the county's workforce was in
manufacturing and most of that was in the timber industry, which then
tumbled.
Since then, 4,000 jobs have been lost, and manufacturing is at 7 percent.
That figure has been stabilized, with 1,270 new jobs in the past four years.
The EDC has set a goal for the next five years of 1,500 jobs at $15 per hour.
In the Shasta County-area workforce of 84,000 (71,600 in Shasta and another
12,400 in Tehama County), a consultant's survey has identified 18,000
underemployed workers who have the skills, education and experience that
qualify them for a better job, said Zauher.
Two weeks ago, the Shasta County EDC retained a Silicon Valley insider, Bill
Haerle, former vice president for government relations and national accounts
at the American Electronics Association, and former MCI executive, as a
consultant. The EDC wants Haerle to create access to "low-tech" or "mid-tech"
manufacturers.
"First, a company has to decide the threshold question, whether it can
operate in the greater Redding area. Then they look at the cost of doing
business and a large component of that is a reliable source of reasonable
energy. The third is the labor pool," said Haerle.
STAYING IN STATE
"Shasta County offers a solution without leaving the state. But this is a
highly sensitive issue and we don't want to appear to be poaching," he said.
"We are looking for smaller companies that could flourish in the greater
Redding area."
Haerle has yet to reel in a company, but the path has been cleared by
Morpheus Lights, which moved up nearly three years ago, and a handful of
other small and midsize businesses in the past year.
In addition to energy savings, Morpheus has seen other dividends. The
lighting company, which was paying $1.55 a square foot for space in Santa
Clara, pays approximately 25 cents per square foot in Redding. This enabled
the company to move from a 30,000-square-foot space in Santa Clara to one
with 42,000 square feet in Redding.
The extra space enables concert tour stage and lighting designers to conduct
rehearsals with the computerized systems at the Redding site, said Dan
English, Morpheus' vice president of operations.
"We can be anywhere, as long as it's close to a major freeway, because the
equipment travels by truck. There's I-5," said English.
Nearby, Knauf Fiber Glass of Shelbyville, Ind., a leading U.S. manufacturer
of thermal and acoustical fiber-glass insulations, is building a $140 million
plant in Shasta Lake City. Some 2,000 people have applied for the plant's 150
jobs.
Shasta Lake City, too, has its own utility but does not generate power. It
buys power from the federal government and also contracts with Enron for
supplemental needs, and is negotiating for more to ensure a 24-hour operation
for Knauf.
Redding's energy situation is enviable. The REU reaches its demand peak at
215 megawatts in the summer, when its has access to between 285 and 300
megawatts, said director Feider. The excess is sold.
SELF-SUFFICIENCY GOAL
In the early 1990s, REU made a strategic decision to make costly capital
expenditures so that it could be more self-sufficent instead of being subject
to market conditions, said Feider.
When the electricity deregulation bill was signed in 1996, REU worried that
with its debt of $300 million from those improvements it would be at risk in
a competitive environment. As a result, it decided in 1997 to eliminate it
with a controversial 23 percent surcharge on customer bills.
The rates went from 8 cents a kilowatt hour to 10 cents, and the plan in 1997
was for the surcharge to continue through 2004. But Redding has prospered in
the surplus power market and now expects to eliminate the surcharge in early
2002.
Now, if everything goes according to form, the district could see a return to
a rate of 8 cents, said Feider.
Kevin Risse moved his Risse Racing, a high-end bicycle component
manufacturer, from Sunnyvale in June 2000. "We came up and heard the spiel
and power was one thing and, in hindsight, it turned out to be pretty
important," said Risse.
In Sunnyvale, his PG&E bill was $2,000 a month. In Redding, he pays from $800
to $1,000 monthly. Risse moved from a 4,000-square- foot space to an
8,000-square-foot building and cut his rent by more than half. It fell from
$1 per square foot to 35 cents, said Risse, whose company builds bicycle
shock absorbers and forks.
"There are things we miss about the Bay Area, culturally, but, at the same
time, I lived in Redwood City and sometimes it was a 20- minute commute and
sometimes one hour and 20 minutes," he said.
"There are people who worked for me with rents going up and they are caught
in a loop and there's nothing they can do. But now they're paying $400 a
month in Redding rather than $1,000 in the Bay Area."
Chris King Precision Components, also a maker of sophisticated bicycle
components, was synonymous with Santa Barbara for 25 years, but the tight
labor market and cost of living for blue-color workers no longer made
economic sense, said King, who now employes 60 people in Redding.
King said that in 1996, he placed an ad for an assembly worker and got 50
applications. In 1999, he placed the same ad and got one application. "The
labor market was strangling us," he said.
In Redding, he received 2,000 applications for jobs at his plant, where he
will employ about 100 this summer. "But there is a lot of chaff in this
area," he said of the labor pool. "It's a low-cost area that has
traditionally gone boom and bust, mostly bust," said King.
King said he is confident he can maintain a blue-collar workforce adequate to
the test of manufacturing what he described as the "Rolls Royce" standard in
the bicycle industry. However, he said he has concerns about his ability to
attract higher-paid designers with degrees in mechanical engineering.
"You can go skiing in 45 minutes, and the environmental part of the equation
is pretty incredible," King said of the Shasta County area. "But there's no
foreign film theater here, no culture. There's middle-class shopping, and you
need to entertain executive people or engineers or creative people. Unless
they like fishing."

PHOTO (2); Caption: (1) Dan English and Lisa Pendegrast displayed some of
their lights for rock 'n' roll concerts inside the Morpheus Lights testing
facility in Redding, (2) Chris King, who moved his bicycle component plant to
Shasta County a year ago, said he's happy he made the move after learning
that his old site in Santa Barbara was experiencing rolling blackouts. / John
Storey/The Chronicle
------------------------------------------------------------------------------
------------------------------------------------------------------------------
--------------------------------------------------------------------------

Davis: Power-crisis fixes almost finished
By David Whitney
Bee Washington Bureau
(Published Feb. 28, 2001)
WASHINGTON -- California Gov. Gray Davis said Tuesday the state is two weeks
to a month away from completing all the "legislative fixes" to its
electricity crisis, and that with "a little luck and a lot of conservation"
he hopes to avoid power blackouts this summer when demand is at its peak.
"I see light at the end of the tunnel and it's not a train," Davis said
during a luncheon speech before the California State Society. "It is the
lights staying on in the state." But the governor, who spent much of his time
here at the National Governors Association's winter meeting fending off
questions about the state's power situation, left for New York City on
Tuesday afternoon without any firm endorsements from the Bush administration.
And despite his rosy recap of his administration's progress, he acknowledged
that difficult work remains before deals can be reached to revive
cash-starved utilities teetering on bankruptcy, particularly Pacific Gas and
Electric Co.
Davis said that he thought he might have an agreement soon -- perhaps by the
end of the week -- with Southern California Edison permitting it to sell
revenue bonds to repay debts to power wholesalers in exchange for state
acquisition of their electric transmission lines.
"PG&E is taking a little longer," the governor said. "Its debt is two times
as big. It's a little more complicated situation -- two, three four weeks at
the outside and we'll have PG&E worked out."
PG&E declined to comment on the governor's timetable, but spokesman John
Nelson confirmed that company officials will take part in talks with the
Governor's Office this week.
Deals to take over the utilities' power lines would put the state in the
electricity transmission business, even though it's intention is to lease the
day-to-day operations back to the utilities. But Davis said the deals would
complete "all the legislative fixes" and put the state on course toward
stabilizing supplies and price.
"Does this mean we are home free and don't have to worry about anything?" the
governor said. "No, but it means we are basically on the downside of the
problem."
Striking deals with the utilities is not the only remaining problem, however.
State purchase of the transmission lines would require approval by the
Federal Energy Regulatory Commission.
Davis was scouting for help Tuesday from Energy Secretary Spencer Abraham on
that front.
In a brief meeting with reporters, Davis described Abraham as "open" to the
transmission line purchase. Davis said he presented the secretary with a
nine-page memo on the Southern California Edison transaction, and Abraham
said he'd review it and get back to the governor by the end of the week.
"If he would endorse the plan, that would be a big leg up in terms of getting
the FERC's approval," Davis said, even though Abraham cannot simply order the
FERC to approve the deal. "I hope by the end of the week he'll be able to
endorse the proposal or at least endorse a modified proposal that is
satisfactory to us."
In his speech to the California State Society, an organization of
Californians who live and work in the Washington area, Davis said the state
is on course to add new generating plants over three years so that supply
exceeds demand.
But to make it through the summer, Californians are going to have to work
hard to reduce consumption, he said. Residences are being asked to curb usage
by 10 percent, and mechanisms are in place to squeeze similar savings from
industries and commercial buildings through mandatory curtailments and cash
incentives.
"We are practicing what we preach," Davis said.
He said his wife has turned down the thermostat in their home to 55 degrees.
"I go to bed with a heavy sweat shirt on, sweat pants, three blankets and a
comforter," Davis said. "Going to the kitchen is like going to Antarctica. My
office is so dark at night you could develop film in it."
Davis meets today with analysts on Wall Street, where he will carry forward
the same message he delivered Tuesday -- that California is on the road to
energy self-sufficiency.
"We'll have utilities back in business paying their bills," he said. "We'll
have long-term contracts for power at greatly reduced prices. We'll have a
very aggressive conservation program. And we'll have a public power authority
not unlike New York, the state of Washington and Tennessee."
Bee staff writer Carrie Peyton contributed to this report.
------------------------------------------------------------------------------
------------------------------------------------------------------------------
--------------------------------------------------------------------------

Published Wednesday, February 28, 2001
Davis passed up Duke Energy's deals
The supplier's offers last summer could have helped avoid blackouts this year
By Mike Taugher
TIMES STAFF WRITER
As the California energy crisis was beginning to brew last summer, one of the
state's largest electricity suppliers made Gov. Gray Davis a pair of offers
to smooth the state's energy convulsions.
Looking back, the governor may be regretting that he dismissed the proposals.
Duke Energy said it could sell enough electricity for 2 million homes for
five years at what is now considered a very low price of $50 per
megawatt-hour.
And Duke said that if the governor helped speed up permits, the company could
build enough new portable units to power an additional 500,000 homes.
Those offers embodied what has become two of the governor's top strategies in
dealing with the crisis -- stabilizing the price of electricity through
relatively long-term commitments and boosting generation to avoid blackouts
this summer.
As it was, though, Duke spokesman Tom Williams said his company never
received a response to its July 31 proposal.
In hindsight, Davis' inaction could prove costly. The governor's campaign to
enter into long-term deals for electricity has produced just a handful of
modest contracts, and there is some doubt that the governor's goal to speed
up construction of small portable power plants to power millions of homes
will be reached by summer.
"We're pleased he's got that sense of urgency," Williams said. "We displayed
that sense of urgency on July 31."
Davis spokesman Steve Maviglio said at the time the offer was made, Duke's
proposal was expensive and there was uncertainty about how the energy crisis
would take shape. In hindsight, the Duke proposal "seems like the deal of the
century today," Maviglio said. "The question is, where's that offer today?
... They're not at the table now with a reasonable offer."
Had the governor decided to help Duke get permits for the new "peaker
plants," he could already be halfway to his goal of getting 1,000 megawatts
worth of new peaker plants by this summer.
Now, however, Duke says its offers are off the table. The units the company
would have used in California are now committed to the Midwest, and Duke has
become hesitant to invest more money in a state where it has more than $400
million in uncollected power bills from the state's utilities, according to
Williams.
Moreover, Williams and others said it would be difficult for energy companies
to meet Davis' goal of 1,000 megawatts from new peaker power plants by summer
because, even under a new speedy permitting process announced by Davis three
weeks ago, it still can take months to line up equipment and get it
constructed and on line.
The dilemma for California this summer shapes up like this: various estimates
predict that the amount of electricity that will be available will fall short
of demand by 5,000 megawatts to nearly 7,000 megawatts, or enough electricity
to power 5 million to 7 million homes.
Davis has called for enough conservation to cut demand by 3,700 megawatts and
has unveiled initiatives he hopes will boost generation by 5,000 megawatts.
If successful, that would be enough to avoid rolling blackouts this summer,
according to state energy officials.
Nearly half of the new generation sought by Davis would come from peaker
plants, including 1,000 megawatts of new peaker plants that the governor
wants to attract to the state and another 1,300 megawatts from peaker plants
to be built by energy firms that have signed contracts with the California
Independent System Operator.
There is uncertainty on both counts. The Department of Water Resources, which
has stepped into the energy-buying field because of the financial collapse of
the utilities that have backed the ISO's purchasing, is attempting to
renegotiate some of the contracts energy companies entered into with the ISO.
That has alarmed some contractors.
And even if no agreements are scuttled through renegotiations with the water
resources agency, the ISO never figured on seeing all 1,300 megawatts it
signed up for to actually materialize.
"We viewed the prospect of getting all 1,300 megawatts as unlikely," said
Brian Theaker, ISO's manager of reliability contracts. "It was going to be
very difficult, if not impossible, for all 1,300 megawatts to hit the
ground."
And even with a speedier licensing process, it might be difficult to get the
other 1,000 megawatts of new peakers built in time for summer.
"If you don't have the equipment in hand, it's very difficult to get it at
this late stage of the game," Theaker said, citing conversations with
industry officials.
Still, state officials are confident that the governor's goals to boost power
production from peaker plants and through increased energy conservation will
work.
"With increased generation and the reduction in demand, we should be able to
avoid rolling blackouts this summer," said Energy Commission spokeswoman
Claudia Chandler.
Chandler said the new peaker plants, which can be transported on a flatbed
truck and can be as small as a large backyard storage shed, still could be
running by summer if applications are filed by mid-April.
But the Energy Commission has yet to receive a single application for a new
peaker power plant.
"That kind of is putting us on pins and needles," Chandler said. "We are
talking to developers, though. They indicate they will be submitting
applications late this week or next."
Meanwhile, Davis met in Washington, D.C., with Energy Secretary Spencer
Abraham to discuss California's plans to buy 26,000 miles of electricity
transmission lines now owned by three financially troubled utility companies.
Speculation has surfaced in recent days that federal regulators are opposed
to the plan and would reject it. Curtis Hebert, the chairman of the Federal
Energy Regulatory Commission, has said the state takeover of the lines would
be "against the best interests of the American public."
A spokeswoman for the regulatory commission said Tuesday the panel has not
discussed or taken a position on the California plan.
Hilary McLean, a spokeswoman for the governor, characterized Davis' meeting
with Abraham as "productive" and said the two had pledged to work together
and continue discussing the issue.
Davis is scheduled today to fly to New York, where he will meet with Wall
Street analysts, before flying back to California tonight.
Staff writer Andrew LaMar contributed to this story.
------------------------------------------------------------------------------
------------------------------------------------------------------------------
--------------------------------------------------------------------------

Davis fights for backing, takes state plan to D.C.

'Lots of people' in capital wary of transmission-grid takeover
By Toby Eckert?
COPLEY NEWS SERVICE
February 27, 2001
WASHINGTON -- Gov. Gray Davis, worried about possible federal opposition to
the state's plan to take control of California's power transmission system,
said he will lobby Energy Secretary Spencer Abraham on the plan in a meeting
today.
"Clearly, we have to persuade lots of people in Washington that what we're
doing is the right thing," Davis said yesterday, citing recent news reports
that indicate opposition to the plan from the head of the Federal Energy
Regulatory Commission, or FERC.
The commission appears to have authority over approving the plan.

Hydropower net needs a 'miracle'
Edison: No more money to bury power lines underground
?

After joining other governors in a wide-ranging meeting with President Bush
at the White House, Davis also said "there may be some give" on the Bush
administration's opposition to price controls on wholesale electricity if
power generators are assured a healthy profit. He did not elaborate.
A White House spokeswoman said she was unaware of any change in the
administration's stance on price controls.
FERC Chairman Curtis Hebert has declined to comment on how the commission
might rule on California's plan to acquire 26,000 miles of utility-owned
electricity transmission lines as part of a strategy for solving the state's
power crisis.
But in an interview with the Dow Jones news service last week, he indicated
the plan may run counter to FERC's policy of encouraging the development of
regional transmission organizations, or RTOs, to manage access to power
grids.
"Anything that moves in the opposite direction of RTOs .?.?. is against the
best interests of the American public," he was quoted as saying.
Davis said Hebert's comments "raised concerns in my mind. And I want
Secretary Abraham to understand the motivation for doing this is to solve the
problem, allow the utilities to get back into business, pay off the
generators and the banks, and begin to stabilize the market."
While Abraham does not have direct authority over the issue, he is part of an
energy policy team appointed by Bush. Davis sees winning Abraham's backing of
the plan as a possible key to federal approval.
"I think that team's assessment of the progress we're making will have a lot
to do with how Washington responds, including the FERC," Davis said.
Davis will also pitch his plans for ending the crisis to Wall Street analysts
tomorrow. However, he said he had no meetings planned with FERC officials.
The Democratic governor acknowledged that many California Republicans are
philosophically opposed to the state buying the transmission lines.
"Some people in Washington, I think, see this as more of an ideological
statement" by the Democrat-controlled state government, Davis said. "As a
governor, I see it as a practical solution to a problem we're trying to deal
with."
The state wants to acquire the transmission system from Pacific Gas and
Electric, Southern California Edison and San Diego Gas and Electric as a
condition for helping the utilities pay off some $13 billion in debt they
have accumulated. The debt is a product of soaring costs for wholesale power
that the utilities have been unable to fully recover from consumers under
state law.
Davis announced a tentative agreement last week to buy Edison's power lines
for $2.76 billion.
The purchase plan also will allow the state to upgrade the transmission
system and fix bottlenecks in the flow of electricity within California and
from neighboring states such as Arizona, Davis said.
He and other governors stressed the importance of improving the power grid in
a discussion yesterday with Abraham, Environmental Protection Agency
Administrator Christie Whitman and Interior Secretary Gale Norton.
"We'll need federal approval and, hopefully, federal assistance on the
financing of those improvements" in California, Davis said.
The governor has tangled with FERC on numerous aspects of the power crisis.
The commission, which has authority over the wholesale power market, has
resisted Davis' proposal to cap wholesale prices in the West. Bush and
Abraham have, too.
But Davis suggested that temporary "cost-plus" price limits -- in which
wholesale rates would reflect the cost of producing the power, plus a set
profit margin -- may still be an option.
In San Diego yesterday, House Speaker Dennis Hastert, R-Ill., emphasized that
California needed to resolve its own energy problems and rework its
deregulation plan. But Hastert held out the possibility of caps on the
wholesale price of electricity, which have bipartisan support from California
representatives and senators.
"Maybe we can do that on a short-term, focused way, but you have to go back
and fix the legislation," Hastert said in a meeting with The San Diego
Union-Tribune's editorial board.
Davis indicated that he discussed the power crisis in general terms with Bush
and would have a more detailed talk with Abraham.
Bush "invited me to call on him directly if we need more assistance," Davis
said.
?
------------------------------------------------------------------------------
------------------------------------------------------------------------------
--------------------------------------------------------------------------
Duke Energy Suspends Suits Vs. Calif.

LOS ANGELES (AP) via NewsEdge Corporation  -
Duke Energy Corp. suspended a lawsuit against
the state on Monday after the California Department of Water
Resources agreed to buy power from Duke that was formerly being
provided under contracts with two financially troubled utilities.

Duke said Monday it will suspend until April 30 its lawsuit
against Gov. Gray Davis, who had commandeered Duke's long-term
energy contracts with Southern California Edison and Pacific Gas
and Electric.

Duke sued Davis after the governor announced plans to allow the
California Power Exchange to sell the contracts as a way to pay
debts owed by SoCal Edison and PG&E. The power generator argued
that Davis exceeded his authority under the state's Emergency
Services Act.

Under a settlement announced Monday, the water resources
department will buy power on behalf of residential and business
customers that was previously being delivered to Edison and PG&E.

``We see this as progress. It's a step that takes us in the
positive direction,'' said Roger Salazar, spokesman for Davis.

Bill Hall, head of Duke's California operations, said the
agreement ``gives California consumers the benefit of the long-term
contract price that was negotiated with the utilities before they
defaulted. And it allows Duke to provide electricity through an
entity that can pay us for it.''

SoCal Edison and PG&E, California's two biggest utilities, have
lost nearly $13 billion in part because the state's deregulation
plan prohibits them from passing on skyrocketing wholesale power
prices to consumers.

With SoCal Edison and PG&E near bankruptcy, the California
Department of Water Resources was authorized last month to buy
power.

Duke said the interim settlement expires April 30, when a court
hearing on Duke's suit is scheduled in U.S. District Court in Los
Angeles.

Also on Monday, Duke suspended a case it brought against the
California Independent System Operator, which manages 75 percent of
the state's power grid.

Duke and other power generators sued the ISO after the water
resources department said it would not pay for power bought on the
expensive spot market. The ISO had said it would bill the nearly
bankrupt utilities for that power.

When power generators tried to pull out of the spot market, the
ISO sued and a federal judge ordered companies to keep selling to
the state. That order was allowed to expire last week while the
state and the generators work on a settlement.
------------------------------------------------------------------------------
------------------------------------------------------------------------------
--------------------------------------------------------------------------
Calif. Optimistic About Power Line

By DAVID HO
Associated Press Writer
WASHINGTON (AP) via NewsEdge Corporation  -
California Gov. Gray Davis said Tuesday that
he is confident the Bush administration will support the state's
$2.7 billion proposal to ease energy woes by buying Southern
California Edison's electricity transmission system.

Supporters of the plan say it could lead to quick improvements
of a bottlenecked system overdue for repairs. But critics contend
the proposal saddles the state with an antiquated network that
could prove costly to fix.

Davis said he presented a nine-page proposal to Energy Secretary
Spencer Abraham and he expects a response by the end of the week.

Abraham ``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.''

Energy Department spokesman Joe Davis said Abraham is reviewing
the proposal but wouldn't comment on whether he would endorse it.

On Friday, the governor announced a deal to purchase the power
lines and require Edison International, the utility's parent
company, to sell cheap power to the state for a decade.

Federal approval is required for the proposal, which does not
include the state's other major investor-owned utilities, Pacific
Gas & Electric and San Diego Gas and Electric.

Negotiations are continuing with all three utilities to buy
their 26,000 miles of transmission lines for a cost that could
range from $4.5 billion to $7 billion.

Edison and PG&E have said they have accumulated nearly $13
billion in losses because the state's 1996 deregulation law
prevented them from passing the true costs of wholesale energy to
their customers. The governor's plan would infuse the utilities
with part of the cash they need to remain solvent.

Some state lawmakers have said the long-term costs of the plan
outweigh the immediate benefits because the transmission lines need
repairs that could cost an estimated $1 billion a year.

Addressing a lunch for the California State Society attended by
members of the state's congressional delegation, Davis outlined his
plans to solve the power problems by building new power plants and
working with the energy industry.

``We have a real challenge this summer and the following
summer,'' he said. ``The third year I think enough generation will
be online so that we're in much better shape.''

Davis has issued executive orders to shorten the approval
process for new plants and expects to gain 5,000 megawatts by
summer _ enough to power about 5 million homes.

In addition to increasing power production, Davis emphasized the
need for greater conservation, advising his state's consumers to
turn off lights in empty rooms, unplug unused appliances and lower
thermostats.

``In my house, my wife has the thermostat down to 55 degrees,''
he said. ``Going to the kitchen in the middle of the night is like
a trip to Antarctica.''


_________________________________________________________________
Get your FREE download of MSN Explorer at http://explorer.msn.com/intl.asp

 - 11-20 1300 Report.xls


Chris,

Please do not ask outside counsel to participate in a call, undertake a task,
or do anything without talking to me, Carlos, or another Enron lawyer
first.

You do not need to call Carolyn and tell her not to participate.  Carlos has
taken care of this already.

Kay

	From:  Chris Booth                           03/23/2001 11:10 AM

To: Kay Mann/Corp/Enron@Enron
cc:

Subject: Conference Call

Kay,

Are you available for a conference call today at 1:00 PM to discuss the
NorthWestern deal/issues.  If so, I will ask Carolyn Campbell not to
participate in the call.

Thanks,

Chris


Hi Heather.

I am in SF today but will be back in the Portland office tomorrow (Thursday) morning. I do have two bikes that I can make available. One is a road bike and one is a mountain bike. Both are in good order.

The question will be how to get them to the Portland office from my house in Hillsboro. I'm sure we can work that out Thursday.

Jeff

 -----Original Message-----
From: 	Dunton, Heather
Sent:	Wednesday, September 05, 2001 10:40 AM
To:	DL-Portland World Trade Center
Subject:	Bikes Needed

I am in need of 4 bikes.
Please let me know if you have a spare.
 -----Original Message-----
From: 	Dunton, Heather
Sent:	Tuesday, September 04, 2001 3:20 PM
To:	DL-Portland World Trade Center
Subject:	Bike Mileage

Please send me your mileage (one way)

Team #1
Christian Yoder 100
Mike Etringer  80
Mike Purcell   75
Kourtney Nelson 95
Jessie Bryson 100
Jim Buerkle   100
Alan Comnes  100

Team #2
Dave Fuller  50
Paul Choi   50
Steve Swain  100
Holden Salisbury  100
Darren Cavanaugh  100
Jim Reyes   60
Susan Rance

Team #3
James Bruce 35
Bala Kandaswamy  50
Chris Mumm  100
Tim Belden   100
Jim Meyer   100
Mike Driscoll  100

Team #4
Dale Rasmussen 100
Kysa Alport 100
Heather Dunton 100
Jeff Richter 100
Bob Badeer 50
Frederick Erisson  100

Team #5
Scotty Gilbert  70
Serena Bishop 100
Steve Hall  90
Jeff Shields  100
Dave Poston  80
Mike Tully

Team #6
Bill Williams
Kate Symes
Leaf Harasin
Eric Linder
Mike Meirs
Craig Dean
Steve Meriss


The IF term should be Nov.1, 2000 - Feb. 28, 2001.  Sorry if I messed up on
the phone.

Thanks,

Susan

From: Stacy E Dickson on 10/04/2000 03:26 PM
To: Susan W Pereira/HOU/ECT@ECT
cc:
Subject: Re: Term of Bazor Contract

Susan,
On your voice mail you said that the Gas Daily term was October 2000 and the
Inside Ferc term was November 30, 2000 through February 28, 2001.  Should it
be Nov 1st instead?

	Susan W Pereira
	10/04/2000 11:29 AM

		 To: Stevens_Hollister@eott.com @ ENRON
		 cc: Stacy E Dickson/HOU/ECT@ECT
		 Subject: Re: Term of Bazor Contract

Stevens-

I've called Stacy Dickson and provided the term changes for the confirmation.

Thanks,

Susan

Stevens_Hollister@eott.com on 10/04/2000 11:04:44 AM
To: Susan.W.Pereira@enron.com
cc: Molly_Sample@eott.com, Dan_Cole@eott.com
Subject: Term of Bazor Contract

Susan,

As we discussed this morning, we would like to change the term of the above
contract to October through February 2001, with the year extension.  Also,
change the October pricing to the "Gas Daily".

Thank you for your patience.

Stevens


BENNETT 4.994
HOMASOTE 4.996
REHEIS 4.93
WHITE  4.695

LC


Yes, it could be used - with of course excessive costs to buy.
We're currently looking at re-working the code to update.

 -----Original Message-----
From: 	Tycholiz, Barry
Sent:	Tuesday, September 18, 2001 8:51 AM
To:	Le Dain, Eric
Subject:	Access Data base

Are you still using the Access Database for PC and if so, do you think this could be applied to Utility Usage , portfolio MTM etc?

BT


Dear Committee Member:

Here is the weekly docket for PG&E.  Docket entries 2488-2516, are the same
as docket number 2487.

|--------+-----+-------------------------------------------|
|10/4/01 |2487 |Certificate Of Service By James L. Lopes   |
|        |     |for Debtor Pacific Gas and Electric Co. Of |
|        |     |[1898-1] Notice of September 5, 2001       |
|        |     |Deadline for filing Proofs of Claim; (msh) |
|        |     |[EOD 10/05/01] [01-30923]                  |
|--------+-----+-------------------------------------------|
|10/4/01 |2517 |Certificate Of Service By James L. Lopes   |
|        |     |for Debtor Pacific Gas and Electric Co. Of |
|        |     |[2452-1] Application For Interim           |
|        |     |Compensation ( Fees: $819,620.00 , and     |
|        |     |Reimubursement of Expenses: $              |
|        |     |103,548.02)for August,2001. (msh) [EOD     |
|        |     |10/05/01] [01-30923]                       |
|--------+-----+-------------------------------------------|
|10/4/01 |2518 |Certificate Of Service By James L. Lopes   |
|        |     |for Debtor Pacific Gas and Electric Co. Of |
|        |     |[2449-1] Application For Interim           |
|        |     |Compensation ( Fees: $ 429,032.26, and     |
|        |     |Reimbursement of Expenses: $ 37146,17) for |
|        |     |the Period of July 25, 2001 - August 31,   |
|        |     |2001. (msh) [EOD 10/05/01] [01-30923]      |
|--------+-----+-------------------------------------------|
| 10/4/01|2536 |Declaration Of William J. Lafferty filed by|
|        |     |Debtor Pacific Gas and Electric Co. in     |
|        |     |Support of [2535-1] Notice of Intention to |
|        |     |Assume Power Purchase Agreement Between    |
|        |     |Parcific Gas and Electric Company and Big  |
|        |     |Valley Lumber Company. (msh) [EOD 10/09/01]|
|        |     |[Edit date 10/09/01] [01-30923]            |
|--------+-----+-------------------------------------------|
|10/5/01 |2534 |Request by Creditor Utility Reform Network |
|        |     |For Notice. (msh) [EOD 10/09/01] [01-30923]|
|        |     |                                           |
|--------+-----+-------------------------------------------|
|10/5/01 |2535 |Notice Of Intention to Assume Power        |
|        |     |Purchase Agreement Between Pacific Gas &   |
|        |     |Electric Company and Big Valley Lumber     |
|        |     |Company Pursuant to Order of the Court     |
|        |     |Entered August 16, 2001 Filed By Debtor    |
|        |     |Pacific Gas and Electric Co. . (msh) [EOD  |
|        |     |10/09/01] [01-30923]                       |
|--------+-----+-------------------------------------------|
|10/5/01 |2537 |Certificate Of Service By James L. Lopes   |
|        |     |for Debtor Pacific Gas and Electric Co. Of |
|        |     |[2535-1] Notice of Intention to Assume     |
|        |     |Power Purchase Agreement , [2536-1]        |
|        |     |Declaration Of William J. Lafferty filed by|
|        |     |Debtor Pacific Gas and Electric Co. in     |
|        |     |Support of [2535-1] Notice of Intention to |
|        |     |Assume Power Purchase Agreement Between    |
|        |     |Parcific Gas and Electric Company and Big  |
|        |     |Valley Lumber Company . (msh) [EOD         |
|        |     |10/09/01] [01-30923]                       |
|--------+-----+-------------------------------------------|
|10/5/01 |2538 |Notice of Corrected Address Re: [2291-1]   |
|        |     |Notice of Status Conference Filed By:      |
|        |     |Debtor Pacific Gas and Electric Co. . (msh)|
|        |     |[EOD 10/09/01] [01-30923]                  |
|--------+-----+-------------------------------------------|
|10/5/01 |2539 |Declaration Of William V. Manheim filed by |
|        |     |Debtor Pacific Gas and Electric Co. in     |
|        |     |Support of [2040-1] Motion To Sell Kern    |
|        |     |Facility Free and Clear of Liens and       |
|        |     |Interest . (msh) [EOD 10/09/01] [01-30923] |
|--------+-----+-------------------------------------------|
|10/5/01 |2540 |Notice Of Intention to Assume Power        |
|        |     |Purchase Agreement Between Pacific Gas and |
|        |     |Electric Company and Cardinal Cogen        |
|        |     |Pursuant to Order of the Court Made August |
|        |     |16, 2001 Filed By Debtor Pacific Gas and   |
|        |     |Electric Co. . (msh) [EOD 10/09/01]        |
|        |     |[01-30923]                                 |
|--------+-----+-------------------------------------------|
|10/5/01 |2541 |Certificate Of Service By James L. Lopes   |
|        |     |for Debtor Pacific Gas and Electric Co. Of |
|        |     |[2540-1] Notice of Intention to Assume     |
|        |     |Power Purchase Agreement Between Pacific   |
|        |     |Gas and Electric Company and Cardinal Cogen|
|        |     |Pursuant to Order of the Court made August |
|        |     |16, 2001 . (msh) [EOD 10/09/01] [01-30923] |
|--------+-----+-------------------------------------------|
|10/5/01 |2542 |Amended Document Re: [2459-1] Declaration  |
|        |     |Of Tammie Candelario filed by Debtor       |
|        |     |Pacific Gas and Electric Co. in Support of |
|        |     |[2458-1] Third Motion For Order Extending  |
|        |     |Time To Assume, Assume and Assign, Or Real |
|        |     |Property Leases . (msh) [EOD 10/09/01]     |
|        |     |[01-30923]                                 |
|--------+-----+-------------------------------------------|
|10/5/01 |2543 |Certificate Of Service By James L. Lopes   |
|        |     |for Debtor Pacific Gas and Electric Co. Of |
|        |     |[2542-1] Amended Document Re: [2459-1]     |
|        |     |Declaration Of Tammie Candelario filed by  |
|        |     |Debtor Pacific Gas and Electric Co. in     |
|        |     |Support of [2458-1] Third Motion For Order |
|        |     |Extending Time To Assume, Assume and       |
|        |     |Assign, Or Real Property Leases by Pacific |
|        |     |Gas and Electric Co. . (msh) [EOD 10/09/01]|
|        |     |[01-30923]                                 |
|--------+-----+-------------------------------------------|
|10/9/01 |2544 |Brief/Memorandum By Debtor Pacific Gas and |
|        |     |Electric Co. In Opposition To [2209-1]     |
|        |     |Motion For Relief From Stay, ( Fee $ 75.00 |
|        |     |Receipt # 030011014) [2209-2] Motion For   |
|        |     |Abstention Under &28 U.S.C. 1334 (C) ,     |
|        |     |[2209-3] Motion For Extention of Time In   |
|        |     |Which To File Proof of Claim . (jf) [EOD   |
|        |     |10/10/01] [01-30923]                       |
|--------+-----+-------------------------------------------|
|10/9/01 |2545 |Order Granting [2481-1] Application For    |
|        |     |Order Approving Assumption of Executory    |
|        |     |Contract and entering into new Contract For|
|        |     |Licensed Used Nuclear Fuel by Pacific Gas  |
|        |     |and Electric Co. . (jf) [EOD 10/10/01]     |
|        |     |[01-30923]                                 |
|--------+-----+-------------------------------------------|
|10/9/01 |2546 |Order Granting [2478-1] Ex Parte           |
|        |     |Application For Order Approving            |
|        |     |Settlementof Debtor's Claims Against Lord  |
|        |     |Electric Company, Inc. by Pacific Gas and  |
|        |     |Electric Co. . (jf) [EOD 10/10/01]         |
|        |     |[01-30923]                                 |
|--------+-----+-------------------------------------------|
|10/9/01 |2547 |Stipulation By Between Debtor Pacific Gas  |
|        |     |and Electric Co., Creditor Harold Wood and |
|        |     |Order Granting [2209-1] Motion For Relief  |
|        |     |From Stay, ( Filing Fee $ 75.00 Receipt #  |
|        |     |030011014) . (jf) [EOD 10/10/01] [01-30923]|
|        |     |                                           |
|--------+-----+-------------------------------------------|
|10/9/01 |2548 |Certificate Of Service By James L. Lopes   |
|        |     |for Debtor Pacific Gas and Electric Co. Of |
|        |     |[2539-1] Declaration Of William Manheim    |
|        |     |filed by Debtor Pacific Gas and Electric   |
|        |     |Co. in Support of [2040-1] Motion To Sell  |
|        |     |Kern Facility Free and Clear of Liens and  |
|        |     |Interest . (jf) [EOD 10/10/01] [01-30923]  |
|--------+-----+-------------------------------------------|
|10/9/01 |2549 |Certificate Of Service By James L. Lopes   |
|        |     |for Debtor Pacific Gas and Electric Co. Of |
|        |     |[2538-1] Notice of Corrected Address Re:   |
|        |     |[2291-1] Notice of Status Conference by    |
|        |     |Pacific Gas and Electric Co. . (jf) [EOD   |
|        |     |10/10/01] [01-30923]                       |
|--------+-----+-------------------------------------------|
|10/9/01 |2550 |Motion By Debtor Pacific Gas and Electric  |
|        |     |Co. For Order Authorizing Incurrence of    |
|        |     |Post-Petition Secured Debt In Connection   |
|        |     |With Agreement With Natural Gas Exchange.  |
|        |     |(jf) [EOD 10/10/01] [01-30923]             |
|--------+-----+-------------------------------------------|
|10/9/01 |2550 |Notice of Motion Re: [2550-1] Motion For   |
|        |     |Order Authorizing Incurrence of            |
|        |     |Post-Petition Secured Debt In Connection   |
|        |     |With Agreement With Natural Gas Exchange.  |
|        |     |by Pacific Gas and Electric Co. Scheduled  |
|        |     |For 9:30 10/29/01 at San Francisco         |
|        |     |Courtroom 22 (jf) [EOD 10/10/01] [01-30923]|
|        |     |                                           |
|--------+-----+-------------------------------------------|
|10/9/01 |2550 |Memorandum of Points and Authorities filed |
|        |     |by Debtor Pacific Gas and Electric Co. in  |
|        |     |Support of: [2550-1] Motion For Order      |
|        |     |Authorizing Incurrence of Post-Petition    |
|        |     |Secured Debt In Connection With Agreement  |
|        |     |With Natural Gas Exchange. . (jf) [EOD     |
|        |     |10/10/01] [01-30923]                       |
|--------+-----+-------------------------------------------|
|10/9/01 |2551 |Declaration Of Raymond Welch filed by      |
|        |     |Debtor Pacific Gas and Electric Co. in     |
|        |     |Support of [2550-1] Motion For Order       |
|        |     |Authorizing Incurrence of Post-Petition    |
|        |     |Secured Debt In Connection With Agreement  |
|        |     |With Natural Gas Exchange. . (jf) [EOD     |
|        |     |10/10/01] [01-30923]                       |
|--------+-----+-------------------------------------------|
|10/9/01 |2552 |Certificate Of Service By James L. Lopes   |
|        |     |for Debtor Pacific Gas and Electric Co. Of |
|        |     |[2550-1] Motion For Order Authorizing      |
|        |     |Incurrence of Post-Petition Secured Debt In|
|        |     |Connection With Agreement With Natural Gas |
|        |     |Exchange. , [2550-1] Motion Notice of,     |
|        |     |[2550-1] For Points and Authorities        |
|        |     |Memorandum in Support of: [2550-1] Motion  |
|        |     |For Order Authorizing Incurrence of        |
|        |     |Post-Petition Secured Debt In Connection   |
|        |     |With Agreement Natural Gas Exchange.       |
|        |     |[2551-1] Declaration Of Raymond Welch filed|
|        |     |by Debtor Pacific Gas and Electric Co. in  |
|        |     |Support of [2550-1] Motion For Order       |
|        |     |Authorizing Incurrence of Post-Petition    |
|        |     |Secured Debt In Connection With Agreement  |
|        |     |With Natural Gas Exchange. (jf) [EOD       |
|        |     |10/10/01] [01-30923]                       |
|--------+-----+-------------------------------------------|
|10/9/01 |2553 |Certificate Of Service By James L. Lopes   |
|        |     |for Debtor Pacific Gas and Electric Co. Of |
|        |     |[2550-1] Motion For Order Authorizing      |
|        |     |Incurrence of Post-Petition Secured Debt In|
|        |     |Connection With Agreement With Natural Gas |
|        |     |Exchange. , [2550-1] Motion Notice of,     |
|        |     |[2550-1] For Points and Authorities        |
|        |     |Memorandum in Support of: [2550-1] Motion  |
|        |     |For Order Authorizing Incurrence of        |
|        |     |Post-Petition Secured Debt In Connection   |
|        |     |With Agreement Natural Gas Exchange. ,     |
|        |     |[2551-1] Declaration Of Raymond Welch filed|
|        |     |by Debtor Pacific Gas and Electric Co. in  |
|        |     |Support of [2550-1] Motion For Order       |
|        |     |Authorizing Incurrence of Post-Petition    |
|        |     |Secured Debt In Connection With Agreement  |
|        |     |With Natural Gas Exchange. (jf) [EOD       |
|        |     |10/10/01] [01-30923]                       |
|--------+-----+-------------------------------------------|
|10/9/01 |2554 |Stipulation By and Between U.S. Trustee    |
|        |     |Linda Ekstrom Stanley, Debtor Pacific Gas  |
|        |     |and Electric Co. Regarding Submission of   |
|        |     |Fee Applications To The United States      |
|        |     |Trustee By Winston and Strawn As Special   |
|        |     |Council To Debtor. (jf) [EOD 10/10/01]     |
|        |     |[01-30923]                                 |
|--------+-----+-------------------------------------------|
|10/9/01 |2554 |Order Granting [2554-1] Stipulation By and |
|        |     |Between U.S. Trustee Linda Ekstrom Stanley,|
|        |     |Debtor Pacific Gas and Electric Co.        |
|        |     |Regarding Submission of Fee Applications To|
|        |     |The United States Trustee By Winston and   |
|        |     |Strawn As Special Council To Debtor . (jf) |
|        |     |[EOD 10/10/01] [01-30923]                  |
|--------+-----+-------------------------------------------|
|10/9/01 |2555 |Order Regarding [1446-1] Order Granting    |
|        |     |[752-1] Motion For Entry of Order Requiring|
|        |     |Production of Documents By California      |
|        |     |Independent System Operator Corporation and|
|        |     |California Power Exchange Corporation      |
|        |     |Pursuant To Federal Bankruptcy Rule 2004   |
|        |     |and Regarding [2251-1] Order Granting      |
|        |     |[1843-1] Motion For Access By Key Personnel|
|        |     |To Responsive Information Produced by The  |
|        |     |ISO and the PX Pursuant To Federal         |
|        |     |Bankruptcy Rule 2004 Order . (jf) [EOD     |
|        |     |10/10/01] [01-30923]                       |
|--------+-----+-------------------------------------------|
|10/9/01 | --  |Filing Fee Paid in Full RE: [395-1]        |
|        |     |Application To Appear Pro Hac Vice for     |
|        |     |(Carl A. Eklund) by Enron Canada Corp.,    |
|        |     |Enron North America Corp. ( Filing Fee $   |
|        |     |60.00 Receipt # 3326839) (jf) [EOD         |
|        |     |10/11/01] [01-30923]                       |
|--------+-----+-------------------------------------------|
|10/9/01 | --  |Filing Fee Paid in Full RE: [506-1]        |
|        |     |Application To Appear Pro Hac Vice (Donald |
|        |     |Gaffney) by Arizona Public Service Co. (   |
|        |     |Filing Fee $ 60.00 Receipt # 3326838) (jf) |
|        |     |[EOD 10/11/01] [01-30923]                  |
|--------+-----+-------------------------------------------|
|10/9/01 |2556 |Winston and Strawn's Cover Sheet           |
|        |     |Application By David Agay for Debtor       |
|        |     |Pacific Gas and Electric Co. For           |
|        |     |Compensation ( Fees: $ 181,297.75,         |
|        |     |Expenses: $ 16,381.43) For The Period of   |
|        |     |August 1, 2001 Thru August 31, 2001. (jf)  |
|        |     |[EOD 10/11/01] [01-30923]                  |
|--------+-----+-------------------------------------------|
|10/9/01 |2557 |Time Records of David Agay for Debtor      |
|        |     |Pacific Gas and Electric Co. for the period|
|        |     |of August 1, 2001 Thru August 31, 2001 RE: |
|        |     |[2556-1] Winston and Strawn's Cover Sheet  |
|        |     |Application For Compensation ( Fees: $     |
|        |     |181,297.75, Expenses: $ 16,381.43) For The |
|        |     |Period of August 1, 2001 Thru August 31,   |
|        |     |2001 . (jf) [EOD 10/11/01] [01-30923]      |
|--------+-----+-------------------------------------------|
|10/9/01 | --  |Hearing Dropped RE: [2242-1] Motion For    |
|        |     |Relief From Stay, by Romanie C. Rajhboy .  |
|        |     |(jf) [EOD 10/11/01] [01-30923]             |
|--------+-----+-------------------------------------------|
|10/9/01 | --  |Hearing Held Re: [2209-3] Motion For       |
|        |     |Extention of Time In Which To File Proof of|
|        |     |Claim by Harold Wood, [2209-2] Motion For  |
|        |     |Abstention Under &28 U.S.C. 1334 (C) by    |
|        |     |Harold Wood, [2209-1] Motion Notice of .   |
|        |     |(jf) [EOD 10/11/01] [01-30923]             |
|--------+-----+-------------------------------------------|
|10/9/01 | --  |Hearing Continued Re: [2291-1] Notice of by|
|        |     |Pacific Gas and Electric Co. ; Status      |
|        |     |Conference set for 1:00 12/4/01 at San     |
|        |     |Francisco Courtroom 22 . (jf) [EOD         |
|        |     |10/11/01] [01-30923]                       |
|--------+-----+-------------------------------------------|
|10/9/01 | --  |Hearing Held Re: [2040-1] Motion To Sell   |
|        |     |Kern Facility Free and Clear of Liens and  |
|        |     |Interest by Pacific Gas and Electric Co. . |
|        |     |(jf) [EOD 10/11/01] [01-30923]             |
|--------+-----+-------------------------------------------|
|10/9/01 | --  |Hearing Held Re: [2043-2] Motion To Enter  |
|        |     |into Lease, License and Permit Agreements  |
|        |     |for the Use of Third-Party Property, In    |
|        |     |each Case within Specified Parameters; by  |
|        |     |Pacific Gas and Electric Co. . (jf) [EOD   |
|        |     |10/11/01] [01-30923]                       |
|--------+-----+-------------------------------------------|
| 10/10/0|2577 |Order to Set Hearing RE: [2236-1]          |
|    1   |     |Disclosure Statement Deadline for filing   |
|        |     |Objections to Disclosure Statement,        |
|        |     |Deadline for Filing Contentions Re Need for|
|        |     |Adversary Proceeding(S); and Status        |
|        |     |Conference Re Hearing on Disclosure        |
|        |     |Statement by Pacific Gas and Electric Co.  |
|        |     |Scheduled For 9:30 12/19/01 at San         |
|        |     |Francisco Courtroom 22 . (msh) [EOD        |
|        |     |10/12/01] [01-30923]                       |
|--------+-----+-------------------------------------------|
|10/10/01|2578 |Notice of Entry of Order RE: [2555-1] Order|
|        |     |Regarding [1446-1] Order Granting [752-1]  |
|        |     |Motion For Entry of Order Requiring        |
|        |     |Production of Documents By California      |
|        |     |Independent System Operator Corporation and|
|        |     |California Power Exchange Corporation      |
|        |     |Pursuant To Federal Bankruptcy Rule 2004   |
|        |     |and Regarding [2251-1] Order Granting      |
|        |     |[1843-1] Motion For Access By Key Personnel|
|        |     |To Responsive Information Produced by The  |
|        |     |ISO and the PX Pursuant To Federal         |
|        |     |Bankruptcy Rule 2004 Order . (msh) [EOD    |
|        |     |10/12/01] [01-30923]                       |
|--------+-----+-------------------------------------------|
|10/10/01|2579 |Certificate Of Service By James L. Lopes   |
|        |     |for Debtor Pacific Gas and Electric Co. Of |
|        |     |[2540-1] Notice of Intention to Assume     |
|        |     |Power Purchase Agreement Between Pacific   |
|        |     |Gas and Electric and Big Valley Lumber     |
|        |     |Company pursuant to Order of the Court     |
|        |     |Entered August 16, 2001; and Declaration of|
|        |     |William J. Lafferty in Support of Notice of|
|        |     |Intention by Pacific Gas and Electric Co. .|
|        |     |(msh) [EOD 10/12/01] [01-30923]            |
|--------+-----+-------------------------------------------|
|10/10/01|2580 |Certificate Of Service By James L. Lopes   |
|        |     |for Debtor Pacific Gas and Electric Co. Of |
|        |     |[2540-1] Notice of Intention to Assume     |
|        |     |Power Purchase Agreement Between Pacific   |
|        |     |Gas and Electric Company and Cardinal Cogen|
|        |     |Pursuant to Order of the Court made August |
|        |     |16, 2001 . (msh) [EOD 10/12/01] [01-30923] |
|--------+-----+-------------------------------------------|
|10/10/01|2581 |Notice of Removal from Court's Calendar    |
|        |     |Filed by Creditor Romanie C. Rajhboy RE:   |
|        |     |[2142-1] Motion For Relief From Stay Re    |
|        |     |Non-Bankruptcy Litigation ( Filing Fee $   |
|        |     |75.00 Receipt # 030010958) by Ex Rel. Dept |
|        |     |of Water Resources . (msh) [EOD 10/12/01]  |
|        |     |[01-30923]                                 |
|--------+-----+-------------------------------------------|
|10/11/01|2582 |Certificate Of Service By James L. Lopes   |
|        |     |for Debtor Pacific Gas and Electric Co. Of |
|        |     |[2546-1] Order Granting [2478-1] Ex Parte  |
|        |     |Application For Order Approving            |
|        |     |Settlementof Debtor's Claims Against Lord  |
|        |     |Electric Company, Inc. . (msh) [EOD        |
|        |     |10/12/01] [01-30923]                       |
|--------+-----+-------------------------------------------|
|10/11/01|2583 |Certificate Of Service By James L. Lopes   |
|        |     |for Debtor Pacific Gas and Electric Co. Of |
|        |     |[2470-1] Motion for Order Approving        |
|        |     |Stipulation Modifying Automatic Stay by    |
|        |     |Pacific Gas and Electric Co. . (msh) [EOD  |
|        |     |10/12/01] [01-30923]                       |
|--------+-----+-------------------------------------------|


Susan:

A few items to follow up with:

(1)  I understand that you are finalizing the Enron Corp. guaranty with
Clement Abrams.  Please let me know when all is agreed and I will arrange
with Clem for an executed guaranty.

(2)  Stephanie Panus will fax to you the power of attorney for EEFT to act
for ECTRIC.  The acronyms will be obvious in the fax.

(3)  Euros are fine for Termination and Contractual Currency.

(4)  I am considering your proposed certificate in lieu of a board resolution
and checking your tax rep.

I will be out of the office Dec. 7 & 8.  You can contact Stephanie Panus in
my absence.

Regards.  Sara