From: steven.kean@enron.com
To: susan.mara@enron.com
Date: 2001-01-14 13:56:00+00:00
Subject: Re: Update --Third Session -- Day 4 -- PRINCIPALS MEET SATURDAY

Summary of yesterdays meeting attached







	Susan J Mara
	01/14/2001 01:16 AM
		 
		 To: Alan Comnes/PDX/ECT@ECT, Angela Schwarz/HOU/EES@EES, Beverly 
Aden/HOU/EES@EES, Bill Votaw/HOU/EES@EES, Brenda Barreda/HOU/EES@EES, Carol 
Moffett/HOU/EES@EES, Cathy Corbin/HOU/EES@EES, Chris H Foster/HOU/ECT@ECT, 
Christina Liscano/HOU/EES@EES, Christopher F Calger/PDX/ECT@ECT, Craig H 
Sutter/HOU/EES@EES, Dan Leff/HOU/EES@EES, Debora Whitehead/HOU/EES@EES, 
Dennis Benevides/HOU/EES@EES, Don Black/HOU/EES@EES, Donna 
Fulton/Corp/Enron@ENRON, Dorothy Youngblood/HOU/ECT@ECT, Douglas 
Huth/HOU/EES@EES, Edward Sacks/Corp/Enron@ENRON, Eric Melvin/HOU/EES@EES, 
Erika Dupre/HOU/EES@EES, Evan Hughes/HOU/EES@EES, Fran Deltoro/HOU/EES@EES, 
Gayle W Muench/HOU/EES@EES, Ginger Dernehl/NA/Enron@ENRON, Gordon 
Savage/HOU/EES@EES, Harold G Buchanan/HOU/EES@EES, Harry 
Kingerski/NA/Enron@ENRON, Iris Waser/HOU/EES@EES, James D 
Steffes/NA/Enron@ENRON, James W Lewis/HOU/EES@EES, James Wright/Western 
Region/The Bentley Company@Exchange, Jeff Messina/HOU/EES@EES, Jeremy 
Blachman/HOU/EES@EES, Jess Hewitt/HOU/EES@EES, Joe Hartsoe/Corp/Enron@ENRON, 
Karen Denne/Corp/Enron@ENRON, Kathy Bass/HOU/EES@EES, Kathy 
Dodgen/HOU/EES@EES, Ken Gustafson/HOU/EES@EES, Kevin Hughes/HOU/EES@EES, 
Leasa Lopez/HOU/EES@EES, Leticia Botello/HOU/EES@EES, Mark S 
Muller/HOU/EES@EES, Marsha Suggs/HOU/EES@EES, Marty Sunde/HOU/EES@EES, 
Meredith M Eggleston/HOU/EES@EES, Michael Etringer/HOU/ECT@ECT, Michael 
Mann/HOU/EES@EES, Michelle D Cisneros/HOU/ECT@ECT, Mike D Smith/HOU/EES@EES, 
Mike M Smith/HOU/EES@EES, mpalmer@enron.com, Neil Bresnan/HOU/EES@EES, Neil 
Hong/HOU/EES@EES, Paul Kaufman/PDX/ECT@ECT, Paula Warren/HOU/EES@EES, Richard 
L Zdunkewicz/HOU/EES@EES, Richard Leibert/HOU/EES@EES, Richard 
Shapiro/NA/Enron@ENRON, Rita Hennessy/NA/Enron@ENRON, Robert 
Badeer/HOU/ECT@ECT, Roger Yang/SFO/EES@EES, Rosalinda Tijerina/HOU/EES@EES, 
Sandra McCubbin/NA/Enron@ENRON, Sarah Novosel/Corp/Enron@ENRON, Scott 
Gahn/HOU/EES@EES, Scott Stoness/HOU/EES@EES, Sharon Dick/HOU/EES@EES, 
skean@enron.com, Tanya Leslie/HOU/EES@EES, Tasha Lair/HOU/EES@EES, Ted 
Murphy/HOU/ECT@ECT, Terri Greenlee/NA/Enron@ENRON, Tim Belden/HOU/ECT@ECT, 
Tony Spruiell/HOU/EES@EES, Vicki Sharp/HOU/EES@EES, Vladimir 
Gorny/HOU/ECT@ECT, Wanda Curry/HOU/EES@EES, William S Bradford/HOU/ECT@ECT, 
Mike D Smith/HOU/EES@EES, Donna Fulton/Corp/Enron@ENRON, mjackso7@enron.com, 
psmith3@enron.com, Frank W Vickers/NA/Enron@Enron, Ren, Lazure/Western 
Region/The Bentley Company@Exchange, Jubran Whalan/HOU/EES@EES, Richard B 
Sanders/HOU/ECT@ECT, gfergus@brobeck.com, rcarroll@bracepatt.com, Kathryn 
Corbally/Corp/Enron@ENRON, dwatkiss@bracepatt.com, Bruno 
Gaillard/EU/Enron@Enron, Linda Robertson/NA/Enron@ENRON, Tom Riley/Western 
Region/The Bentley Company@Exchange
		 cc: 
		 Subject: Update --Third Session -- Day 4 -- PRINCIPALS MEET SATURDAY

Friday, January 12, 2001

By the end of the day, the Treasury had decided to move forward and hold 
another meeting with the CEOs, Governor Davis and various other Government 
officials.  Governor Davis refused to come to California, so a video 
conference was set up with two locations:  one at DOE in Washington and one 
in Los Angeles for the Governor and his entourage.  It was tentatively set up 
for 2:30 pm CST.  I have had no reports on the meeting yet. Ken Lay, Steve 
Kean and Rick Shapiro attended for Enron.

Long-Term Forward Contracts

Good progress was made and the report was completed by 4 pm.  It includes a 
draft RFO, draft standard contract, a table of utilties' needs, products 
required and a timetable that would have power flowing by February 1.
Participants were fairly pessimistic about the eventual outcome, however, 
given the absence of any buy-in or participation by the State of California.


Debt and Forebearance

Group also worked to have draft documents completed by COB Friday.


QF Contract Reformation

Parties continued discussion
No information was available by COB Friday.

Major Issues

State interest in resolving
State willingness to raise retail rates
Utilties' desire to offload all risk to the State as its portfolio manager
Willingness to "call off the dogs" for the suppliers and to release them from 
legal action
State willingness to offer up sites for power plant development
Ability to reach deal on QF contract reformation


Next Steps

If definitive agreement is not reached by the principals at Saturday meeting, 
this work ends immediately and utilities will likely file for bankruptcy the 
week of Jan 15.

If agreement is reached, a massive amount of work is required immediately, 
such as:
FERC filing of settlement and ISO Tariff change by Tuesday Jan 16.
RFO completion and release by Jan 18
Introduction and passage of necessary legislation to be executed by February 
2.
Preparation of contract between utilities and state (probably DWR)
Preparation of formal agreements among the parties on the terms on this 
settlement

And more...