KMcCrea@sablaw.com, SMTP:KMcCrea@sablaw.com
fleldejr@sce.com, SMTP: fieldejr@sce.com
harold.ray@sce.com, SMTP:harold.ray@sce.com
dreed@sdge.com, SMTP:dreed@sdge.com

waakaria@sdge.com, SMTP: wsakaria@sdge.com
rahayes@seiworldwide.com, SMTP: rahayes$seiworldwide.com
sjcapoma@seiworldwide.com, SMTP:3jcapoma@seiworldwide.com

mtierney@sempra.com, SMHTP:mtierney@sempra.com
sSonnet.edmonds@southernenergy.com, SMTP: sonnet .edmonds@southernenergy.com
cread@steptoe.com, SMTP:cread@steptoe.com

temoreland@swidlaw.com, SMTP:temoreland@swidlaw.com
julie.greenisen@troutmansanders.com, SMTP: julie.greenisen@troutmansanders.com

alex.goldberg@williams.com, SHTP:alex.goldberg@wiliians.com
((b)(6)]

co: Barbour, Gaylen, EX: /O-USTREASURY/OU=DO/CN=RECIPIENTS/CN=BARBOURG
Curtis Wagner, SMTP:curtis.wagner@ferc. fed,us

Subject: RE: California Energy Group e-mail
Body:

Latest version of Long-Term Contracts Group report,
stabataied + End of message body

Message auditing by MicroData CAMEO Recon

on 1800000010048



VV VV VV VV VV VV

suddenly tripled.

The debt load of PG&E and Edison began to balloon -- to what will be an
estimated $11 billion by the end of 2000 -- as they borrowed to pay for
power while being barred from passing that cost on to consumers.

Suddenly, the glow of deregulation had lost its luster.

It immediately became clear that California's failure to build power
plants as its rapidly growing economy pushed demand upward was 4 serious
problem. Increasingly, the state's growing technology economy depended on
electricity, and new home construction concentrated in hot areas like
Riverside and San Bernardino counties, where air conditioning is a must.

And for all the talk of competition, there was a serious flaw that made
the market singularly uncompetitive.

In order to encourage generators to create as much power as possible,
deregulation guaranteed the highest price for wholesale electricity.

Through a practice known as the “market clearing price," the last bidders

~~ who are invariably the most expensive -- set the price everyone would
receive. In other words, if the first generator bids $30 for a certain amount of
megawatts but the last bids $100, those two bidders and everyone in

between receive $100. As the wholesale price of electricity skyrocketed to
$1,500 per megawatt hour this month from $30 before the storm, the high

cost has been compounded by the fact that everyone receives that amount.

Further, the law had encouraged utilities to sell their generators and
existing electricity supply without guaranteeing access to affordable
Power,

Rather than arranging to buy power on long-term contracts that could
have saved money, they were put in the position of having to buy their power on
a market where profit was the ultimate goal, and they and their consumers
had to pay the price.

Perhaps in the biggest misjudgment, policymakers neglected the huge
amount of money it takes to run power companies and attract customers. Thus, they
overestimated how much competition would flourish in the market.

Running power companies is so costly -- $500 million to build a new
pliant -- that only a handful of companies bought into the market. And once they
were here, the marketing cost of signing up new customers was
astronomical.

Indeed, since choice has become available to California, less than

1 percent of residential customers has changed electricity providers.

The same goes for just 15 percent to 20 percent of industrial customers -- the
class that advocated deregulation in the first place.

At the end of the day, this experiment in deregulation has come at a
staggering cost: $40 billion. That includes the $23 billion already paid
by customers when rates were frozen at artificially high levels, and the
$7.5 billion in bonds financing consumers’ own rate reduction.

Now a new tab is running -- whatever share of the $11 billion in debt
that state utility regulators decide customers should pay.

The state's leaders are now casting around desperately for solutions to
Lane eee Dumpty back together again.

FERC is encouraging the utilities to enter long-term contracts with
Br fing and market clearing pricing is under review. The state's
utilities commission will decide Jan. 4 how much of a rate increase to
grant to PG&E and Edison. And a dozen or so power plants are under
construction,

Meanwhile, consumer advocates are backing a state ballot measure that
would not only re-regulate utilities but essentially make
government function. And they are challenging the utiliti:
pass on their debts to consumers, noting they have also r
profits from selling electricity.

For example, in the quarter covering the summer months when power costs
first went haywire, PG&E's profits amounted to $225 million, a 22 percent
increase over the same period in the previous year.

In the short term, the state is considering ways to encourage energy
conservation the same way it did with water. And the question now being
asked is whether a commodity as central to the well-being of the economy
should ever have been placed almost entirely under the control of free
enterprise.

"There's a discussion on how much we want to rely on market forces

“ 01800000010121



From: Wilcox, David

Sent: Thursday, February 21, 2002 12:51 AM
To: SearchCameo
Subject: ‘CAMEO Recon found a word: Enron sent by Wilcox, David to 'Susan.J.Mara@enron.com' on

1/11/2001 12:37:57 AM

This message was found to have a Critical Word in it. Message Sent to
‘Susan.J.Mara@enron.com', From Wilcox, David, CC to Sachs, Lee, Date 1/11/2001 12:37:57
AM, Subject of message RE: More thoughts

Word{s) found: Enron

-----Original Message-----

From: Wilcox, David

Sent: 1/11/2001 12:37:57 AM

Received: 1/11/2001 12:37:57 AM

To: *Susan.J.Mara@enron.com', SMTP: Susan.J.Mara@enron.ccm

ce: Sachs, Lee, EX: /O=USTREASURY/OU-DO/CN=RECIPIENTS/CN=SachsL

Subject: RE: More thoughts
Body:
I'll be interested to see more specifically about what you have in mind.

~----Original Message-----

From: Susan.J.Mara@enron.com [mailto:Susan.J.Mara@enron.com]
Sent: Wednesday, January 10, 2001 11:14 PM

To: David.wilcox@do.treas.gov; lee.sachs@do.treas.gov
Subject: More thoughts

Lee,
I'm checking on the “market in the west at 5.5 cents" question. I'11 let you know,

David and Lee,

It seems that everyone has pretty much put their big issues out on the table for
consideration in package of solutions. I've been concerned. No one has been talking
about the retail markets. We have spent four years protecting the utilities and getting
them “ready” for retail competition. I've personally spent much of my life those four
years arguing with the utilities and the CPUC to achieve any tiny movement toward a fair,
open and non-discriminatory market for retail suppliers (other than the utilities, Enron
ia the only retail supplier in the room).

Therefore, we cannot move forward with these new subsidies and bailouts unless the
utilities and the state agree to take definitive steps to make the retail market work. To
move this thinking forward, I will prepare a few points of the kinds of steps we would
want to see as part of the overall package.

Sue Mara

~~ End of message body

Message auditing by MicroData CAMEO Recon

6 01800000010014



TIMELINE AND IMPLEMENTATION

{(b)(5)]

01800000010152



[()(5)]

01800000010147



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oa3.do,treas.gov ([10.75.144,136]) by mabr01.do.treas.gov with SMTP (Microsoft
Exchange Internet Mail Service Version $.$.2653.13)

id TCYKZJBG; Mon, 1 Oct 2001 04:27:40 -0400
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O21 Oct 2001 04:33:28 -0400

00500000002517


From: Susan.J.Mara@enron.com

Sont: Wednesday, January 10, 2001 11:17 PM
To: david. wilcox@do.treas.gov, lee.sachs@<o.treas.gov
Subject: Document From Today
al
TIMELINE AND
SPLEMENTATION.6o

Wrong addresses. Duh-uh.
=<--= Forwarded by Susan J Mara/NA/Enron on 01/10/2001 08:16 PM ---==

Susan J Mara

To: david.wilcox@do.treas.com,
01/10/2001 lee. sachs@do.tres.com
08:01 PM ce: alex.goldberg@williams.com,

karen.tomcalafpge-corp.com, pmohleréhewm.com,
dreedBsdge.con
Subject: Document From Today

Here it is.
(See attached file; TIMELINE AND IMPLEMENTATION.doc)

01800000010117



TO DELIVER YOUR ARTICLES, PAPERS, PROCEEDINGS OR MONOGRAPHS THROUGH ENERGY CENTRAL: Energy
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1800000010057



[OUTSIDE SCOPE]

01800000010150



pow ase ag 2002
% ti 12:18 AM
To: SearchCameo
Subject: See ee a amen eel by Soman, Crete fo Seat, Rey on 472572001

This message was found to have a Critical Word in it. Message Sent to Squitieri, Ray,
From Soares, Chris, CC to , Date 4/25/2001 5:28:52 PM, Subject of message RE: EPA-03-A,
EPA's response to Dingell's letter on Barton's draft leg “Electricity Emergency Relief Act

Word(s) found: Enron

-----Original Message-----

From: Soares, Chris

Sent: 4/25/2001 5:28:52 PM

Received: 4/25/2001 5:28:52 PM

To: Squitieri, Ray, EX: /O-USTREASURY/OU=D0/CN=RECIPIENTS/CN=SQUITIERIR

cc:

Subject: RE: EPA-03-A, EPA's cesponse to Dingell's letter on Barton's draft leg
“Electricity Emergency Relief Act
Body:

[OUTSIDE SCOPE , (b)(5)]

Copyright 2001 / Los Angeles Times

Los Angeles Times

April 17, 2001, Tuesday, Home Edition

SECTION: Metro; Part B; Page 1; Metro Desk

LENGTH: 1429 words

HEADLINE: INNOVATIVE SMOG PLAN MAKES LITTLE PROGRESS;

188
01800000010068



From: Klasky, Helaine

Sent: Friday, January 12, 2001 4:41 PM
To: Posner, Steven; Smith, Michelle A.; Weaver, Elizabeth; Gallagher, Una; Buck, Bill; Gensler,
Gary; Sachs, Lee; Stewart, Lawranne; Greene, Michelle; Wilcox, David; Elmendorf, Douglas;
Vandivier, David; Sandberg, Sheryt; Stern, Todd; Cohen, Alan; Wolin, Neal; Moe, Martin
Subject: RE; wires - California Power Talks
{(b)(S)]
<--Original Message=-—-

From: Posner, Steven:

Sent: Friday, January 12, 2001 4:29 PM

To: ‘Smith, Michelle A; Klasky, Milaine; Weaver, Giizabeth; Gallagher, Una; Buck, 88; Gensler, Gary; Sachs, Loe; Stewart, Lawranne;
See ee te ee Tey een ee

Subject: wires - California Power Talks

DJ Principals In Calif Pwr Tatks Set To Reconvene Saturday
Dow Jones international News Service via Dow Jones

WASHINGTON (Dow Jones)--The principal negotiators involved in White
House-brokered talks to solve California's electricity crisis are slated to
profi here Saturday afternoon, the U.S. Treasury Department confirmed

Thre soe en Gt a iesavel was efoto Kops saniing Oiicie repreoornne
the Clinton administration, California, and utilities and power suppliers will
take place at U.S. Department of Energy headquarters at 3:30 p.m. EST.

California Gov. Gray Davis and other key state regulators and lawmakers are to
participate via a video conferencing link.

The pivotal negotiating session comes after two working groups involving
lower-level officials have met since Wednesday In an effort to flesh out the
details of a broad settlement package the principals discussed late Tuesday
during a seven-hour meeting at the Treasury Department.

Knowledgeable sources described Treasury Secretary Lawrence Summers as taking
an active role in attempting to forge an agreement during Tuesday's talks, which
also featured Energy Secretary Bill Richardson, White House economic adviser

Gene Sperling and Federal Energy Regulatory Commission Chairman James Hoecker.

Richardson, who is traveling this weekend in an effort to lobby oil-producing
nations againat » pending production ut, wl ot be atening Seturdays

The working group meetings will wrap up sometime Friday, the Treasury
Department said.

The two groups have separately addressed the two primary features of the
proposed settlement, which involve moving the state's financially ailing

utilities out of volatile spot power markets and into fixed-price forward
contracts while power producers agree to “forbearance” on the huge debt owed by
the utilities

a” 1800000010004



(Chabal Kemer ging Mar be Performante: Treawary Marte Room
weno 1280 PM TomDialeney Darm w
eam

((b)(5)]

* Gagan tage tending in Dra Argentine, and Menten at 00 aime 00 am a 0 a. Cant fe reap

01800000010209



last minute.”
If a breakthrough occurs, he said it would occur before Thursday.

“When I get in the red zone, I like to score," Gramm said. "We're in the red zone. If
we can do it, I want to do it.”

The bill also would reauthorize and make several other changes to the Commodity
Exchange Act, which expired Sept. 30.

Ewing said if there is an agreement, he expects it to be included in one of the final
spending bills. A stand-alone bill, he said, was a long shot.

Representatives from the Treasury Department were not at the meeting, and it was
unclear whether the bill would still be palatable to the administration.

Asked whether the bill would gain administration support, Ewing said, "I hope so,
we're at the point where we all have to compromise.”

Source: CQ Monitor News

1800000010126



{(b)(5)]

01800000010132



((bX5)}

Katigee MP. Byrom
Fee intemal Use Ordy 121001 891 AM

01800000010201



(Gaol Emerging Markets Performance Preenery Market
Tana e134 pony
seme2

{(b)(5)]

+ ates bee baring ene Argent wrt Minos wt 0D a.m. 0 wm, aed 30 am Enter Hoe repay.

01800000010176



If you do not wish to receive any further IssueAlerts from SCIENTECH, please
reply to this message and type "delete" in the subject line

o----- End of message body

Message auditing by MicroData CAMEO Recon

01800000010063



Wilcox, David
Thursday, February 21, 2002 12:47 AM
SearchCameo

CAMEO Recon found a word: Enron sent by Linda Lee to alaxm@calpine.com;
recaenecberbenons bonertmeedben teens Ue beominiets
Sasubncremedocienocs Ra Ray.Sq

From:
Sent:
To:
Subject:

This message was found to have a Critical Word in it. Message Sent to alexmfcalpine.com
jmacias@calpine.com; jason_s._seligman@cea.eop.gov; shg@cpuc.ca.govs
Chris.Soaresédo.treas.gov; David.Wilcox@do.treas,gov: Lee.Sachsédo,treas.govs
Michelle.Greene@do.treas.gov; Ray.Squitieri@do.tri gov; Veronica. Stokes@do.treas.gov;
eisens 1@05M0.com; sbvanleer@duke-energy.com; § newton@dynegy. com;

lynn. lednicky@dynegy.com; smara@enron.com; Curtis Wagner; Martha Altamar;
dan.poffenberger@ferc.ged.us.treas.gov; pmohlerc8hewm.com; rich. +glick#hq.doe.gov;
smutany@iepa.com; karen.tomcala@pge-corp.com; cxg2@pge.com; DxH4@pge.com; RMK4@pge.com;
joebob-perkins@reliantenergy.com: marvin_k_ballard@reliantenergy.com; KMcCrea@sablaw.com;
fieldejr@sce.com; harold.ray@sce.com: dreed@sdge.com; wsakaria@adge.com;
rahayes@seiworldwide.com; sjcapoma@seiworldwide.com; mtierney@sempra. peed

sonnet .edmonds@southernenergy.com; cread@steptoe.com: Ties ores [0
julie.greenisen@troutmansanders.com; alex.goldberg@williams.com: VO).

From Linda Lee, CC to Gaylen,.Barbour@do.treas.gov, Date 1/12/2001 8 139 AM, Subject’ of
message RE: California Energy Group e-mail

Word(s) found: Enron

=----Original Message--~~-

From: Linda Lee

Sent: 1/12/2001 8:55:39 AM

Received: 1/12/2001 8:54:53 AM

To: slexm@calpine.com, SMTP:alexm&calpine.com
jmacias@calpine.com, SMTP: jmacias@calpine.com
jason_s._seligman@cea.eop.gov, SMTP: jason_s,_seligmanicea.eop.gov
shg8cpuc.ca.gov, SMTP:shg@cpuc.ca.gov
Chris.Soares@do.treas.gov, SMTP:Chris.Soares@do.treas.gov
David.Wilcoxédo.t gov, SMTP:David.Wilcox@do.treas.gov
Lee.Sachs@do. t gov, SMTP:Lee.Sachs@do.treas.gov
Michelle.Greene@do.tr +gov, SMTP;Michelle.Greene@do.treas.gov
Ray. Squitieri@do,treas.gov, SMTP:Ray.Squitierig@do.treas.gov
Veronica.Stokes@do.treas.gov, SMTP:Veronica.Stokes@do.treas.gov
eisenstatl@DSMO.com, SMTP:eisenstatl@0SMO.ccm
sbvanleer@duke-energy.com, SMTP: sbvanleer@duke-energy.com
joel. newton@dynegy.com, SMTP: joel.newton@dynegy.com
lynn. lednicky@dynegy.com, SMTP: lynn, lednicky@dynegy.com
smara@enron.com, SMTP: smara@enron.com
Curtis Wagner, SMTP:curtis.wagner@ferc. fed.us
Martha Altamar, SMTP:martha.altamar@ferc.fed.us
dan. pofftenberger@ferc.ged.us.treas.gov, SMTP:dan.poffenbergeré@ferc.ged.us.treas.gov
pmohler@hewm.com, SMTP:pmohler@hewm.com
richard.glick@hq.doe.gov, SMTP:richard.glick@hq.doe.gov
smutany@iepa.com, SMTP: smutany@iepa.com
karen.tomcala@pge-corp.com, SMTP: karen. tomcala@pge-corp.com
cxg2@pge.com, SMTP:cxg2@pge.com
DxH4@pge.com, SMTP: DxH4@pge.com
RMK48pge.com, SMTP:RMK4@pge.com
joebob-perkins@reliantenergy.com, SMTP: joebob-perkins@reliantenergy.ccm
marvin_k ballerd@reliantenergy.com, SMTP:marvin_k_ballard@reliantenergy.com

ce.com, SMTP:
isce.com, SMTP:harold.ray@sce.com
dreed@sdge.com, SMTP:dreed@sdge.com

Oe 1800000010021



West.

Other than that, where's the rub? Under deregulation, consumers were supposed
to get market rates in 2002. Based on the current forward market and the
utilities’ cost of retained generators, 7 conts/kwh for the rest of this year is
@ great deal, For 2002, it's fair, but for 2003-2008, it's terrible. The current
purchase price for those years is about 5 cents. With u! generation
al 3 cents, consumers will be paying 7 cents/kwh when they should be paying 4
cents/kwh,

And the 2.4 cents/kwh compatition transition charge (CTC) that was supposed to

‘end in 2002 has to be extended several more years. The CTC is "non-bypassable,”

which means if you leave the local monopoly for an alternative supplier, you
Still have to send a couple of cents/kwh to the old utility,

Ratepayer groups got about 40 people to storm the PG&E corporate headquarters

this week over the one cent rate increase. Another rate increase would cause
riots and ballot initiatives, and cost Davis his job.

But can consumer groups get people out in the streets over a deal that's great
now, but overcharges them starting in 20037 | doubt it.

Businesses such as Intel Corp. (INTC) will know they are getting the short end
of the stick financially and that power in the western U.S. is still unreliable,

s0 they will decide to build new factories in other states. That's how you
bypass non-bypassable charges. |t will be bad for the state's economic growth,
but California needs to stop adding electricity demand.

The stars are aligned for a deal very soon: eight days left before the
executive branch of the U.S. government changes from one that wants to help
Davis to one that wants to hurt him; about the same amount of time is left
before the uiilities run out of cash; forward power prices have come down a lot
in the past 30 days, but could easily start to rise again; merchant power
company stock prices have been punished for two weeks, and their executives
don't want to kill the golden goose.

How can they not get this done?

-By Mark Golden, Dow Jones Newswires; 201-938-4604; mark.golden@dowjones.com

(END) Dow Jones Newswires 12-01-01
1800GMT

{AP-DJ-01-12-01 1

:TICKER: CPN DUK DYN EIX ENE INTC NRG PCG REI SO SOE

“SUBJECT: EUTL SEMI DI1 Di4 DI2 CA GA MN NC TX COMM

Copyright (c) 2001 Dow Jones and Company, Inc.
Received by NewsEDGE/LAN: 1/12/01 12:55 PM

1800000010101


————

From: Wilcox, David

Sent: Thursday, February 21, 2002 12:47 AM

To: SearchCameo

Subject: ‘CAMEO Recon found a word: Enron sent by Sachs, Lee to 'Susan.J.Mara@enron.com';

Wilcox, David; Sachs, Lee on 1/11/2001 10:45:41 AM

This message was found to have a Critical Word in it. Message Sent to
‘Susan.J.Maraenron.com'; Wilcox, David; Sachs, Lee, From Sachs, Lee, CC to , Date
1/11/2001 10:45:41 AM, Subject of message RE: More thoughts

Word(s) found: Enron

-----Original Message----~

From: Sechs, Lee

Sent: 1/11/2001 10:45:41 AM

Received: 1/11/2001 10:45:41 AM

To: ‘Susan.J.Mara@enron.com', SMTP:Susan.J.MaraBenron.com
Wilcox, David, EX: /O=USTREASURY /OU=00/CN=®RECI PLENTS/CN=WILCOXD
Sachs, Lee, EX: /O*USTREASURY/OU=DO/CN=RECIPIENTS/CN#SachsL

ce:

Subject: RE: More thoughts
Body:

thanks sue.

-----Original Message----~

From: Susan.J.Mara@enron.com [mailto:Susan.J.Mara@enron.com)
Sent: Wednesday, January 10, 2001 11:14 PM

To: David.wilcox@do.treas.gov; lec.sachs@do.treas.gov
Subject: More thoughts

Lee,
I'm checking on the "market in the west at 5.5 cents" question. I'11 let you know,
David and Lee,

It seems that everyone has pretty much put their big issues out on the table for
consideration in package of solutions. I've been concerned. No one has been talking
about the retail markets. We have spent four years protecting the utilities and getting
ther “ready” for retail competition. I've personally spent much of ay life those four
years arguing with the utilities and the CPUC to achieve any tiny movement toward a fair,
open and non-discriminatory market for retail suppliers (other than the utilities, Enron
is the only retail supplier in the rcom).

Therefore, we cannot move forward with these new subsidies and bailouts unless the
utilities and the state agree to take definitive steps to make the retail market work. To
move this thinking forward, I will prepare a few points of the kinds of steps we would
want to see as part of the overall package.

Sue Mara

oneee. - End of message body

Message auditing by MicroData CAMEO Recon

in 01800000010028



Page 3 of 3

((b{5)]

01800000010162
10/21/2002



and snap power lines.

Utility Crews Flock to Ark. To Help
Dec 29, 2000 = LITTLE ROCK, Ark. (AP) = There's a high-wire act going on over Arkansas,
cane and cranky after the second ice storm of the month plunged much of the state into
darkness.

“This Is a Natural Disaster’ Situation in Many Areas Is Going from Bad to Worse Dec
30, 2000 - Tulsa World With power lines and str still covered in 2 inches of ice, the
hospital still had no water Thursday. The maximum- security prison was without
electricity. And half-frozen residents wore straggling into shelters after toughing it out
for days in dark,unheated houses.

TXU ELECTRIC & GAS CREWS RESTORE NEARLY 90% OF ICE VICTIMS Dallas, TX - December
29, 2000 TXU Electric & Gas crews have restored service to nearly $0 percent of customers
affected by a severe ice storm this week.

Legal

For more information about products on this topic visit our Information Marketplace

Baker to Take Charge Resulting From Judgement In ADF Litigation PITTSBURGH--
(BUSINESS WIRE)--Dec. 29, 2000-- Michael Baker Corporation announced today that a
judgement of $10.0 million has been issued against its subsidiary, Baker Mellon Stuart
Construction, Inc., by the U.S. District Court for the Middle District Court of Florida
relative to the previously disclosed claim of ADF International, Inc., in connection with
the Universal Studios CityWalk project.

Plants

For more information about products on this topic visit our Information Marketplace

Huntington Beach, Calif., Power Plant Criticized for Increased Production By Hanh
Kim Quach, The Orange County Register, Calif. Dec. 29 When the AES Pacific Corp. power
plant in Huntington Seach cranked up its noisiest and most polluting power-generating
units this past month, it did not go unnoticed,

Drought Leaves Tacoma, Wash., Hydroelectric Reservoir Resources Below Normal By Al
Gibbs, The News Tribune, Tacoma, Wash. -- Dec. 30 More bad news for Northwest electricity
users: Rainfall and snowpack in the mountains whose streams fill the region's
hydroelectric reservoirs are well below what they should be.

Environmental

For more information about products on this tepic visit our Information Marketplace

Grass Rooftops Save Energy, Cool Air in Cities
By Suzanne Elston, Environmental News Network, Sun Valley, -- Dec. 30 During the summer
months, the temperature of a conventional flat rooftop can soar up to 140 degrees
Fahrenheit -- hot enough to fry an egg.

Nuclear
136

01800000010053



2.2080
Roce
‘Treasury Marvat

[(6)(5)]

FINANCIAL MARKETS:
eee «41S PM

1800000010245



{(b}(5)]

01800000010146



From: Wilcox, David
big peseces Reoreny 21, 2002 12:47 AM
‘oO:
Subject: SAMneO Rosen founda word: papa haalale Aane supra Darn lag
|.macias@calpine.com; peor 5._selgman@oes SPOON:
Chris, Soares@do.treas.gov; Sey ROT ON ae pos reas gov:
Michelle. Greene@do.treas.gov; Ra

This message was found to have a Critical Word in it. Message Sent to alexmécalpine.com;
j-macias@calpine.com; jason_s. seligman@cea.eop.gov; shg@cpuc.ca.gov;
Chris.Soares@do.treas.gov; David.Wilcox@do.treas.gov; Lee.Sachs@do.treas.gov;
Michelle.Greene@do.treas.gov; Ray.Squitieri@do.treas.gov; Veronica.Stokes@do. tre.
eisenstatl@DSMO.com; sbvanleer@duke-energy.com; joel.newton@dynegy.com;
lynn. lednicky@dynegy.com: 31 @enron.com; curtis.wagner@ferc, fed.us;
linda. lee@ferc.fed.us; martha.altamar@ferc.fed.us; dan.poftenberger@ferc.ged.us.treas,govs
pmohler@hewm.com; richard.glick@hq.doe.gov; smutany@iepa.com; karen.tomcala@pge-corp.com;
cagzepge.com; Dxk48pge.com; RHK@pge.com; joebob-perkins@reliantenergy.com:
marvin_k_ballard@reliantenergy.com; fieldejr@sce.com; harold.ray@sce.com: dreed&sdge.com;
wsakaria@sdge. com; rahayes@seiworldwide.com; sjcapoma@seiworldwide.com;
po eney@sempra.com; sonnet.edmonds@southernenergy.com; cread@steptce.com;
Ne) and@swidlaw.com; julia.greenisen@troutmansanders.com; alex.goldberg@williams.con;
(exe) + From Keith McCrea, CC to Gaylen.Barbour@do,treas.gov, Date 1/12/2001
+20 AM, Subject of message RE: California Energy Group - missing e-mail addresses

+gove

Word(s) found: Enron

=----Original Message-----
From: Keith McCrea
Sent: 1/12/2001 8:15:20 AM
Received: 1/12/2001 8:13:33 AM
To: alexm@calpine.com, SMTP:alexmfcalpine.com
j-macias@calpine.com, SMTP:j.macias@calpine.com
jason_s,_seligman@cea.eop.gov, SMTP: jason_s._seligman#cea.cop.gov
shg@cpuc.ca.gov, SMTP:shg@cpuc.ca.gov
Chris.Soares@do.treas.gov, SMTP:Chris.Soares@do.treas.gov
-gov, SMTP:David.Wilcox@do.treas.gov
cha@do.treas.gov, SMTP:Lee.Sachsédo.treas.gov
Michelle.Greene@do.treas.gov, SMTP:Michelle.Greenefde.treas.gov
Ray. Squitieriédo,treas.gov, SMT?:Ray.Squitieri@do,treas.gov
Veronica.Stokes@do.treas.gov, SMTP:Veronica,Stokes@do.treas.gov
cisenstatl@DSMO.com, SMTP:eisenstatl@DSM0.com
sbvanleer@duke-energy.com, SMTP:sbvanleer@duke-energy.com
joel .newton@dynegy.com, SMTP: joel .newton@dynegy.com
lynn. lednicky@dynegy.com, SMTP:lynn. lednickyédynegy.com
smara@enron.com, SMTP: smarafenron.com
curtis.wagner@ferc.fed.us, SMTP:curtis.wagner@ferc. fed.us
linda. lee®ferc.fed.us, SMTP: linda. lee@ferc.fed.us
martha.altamar@ferc.fed.us, SMTP:martha.altamar@ferc.fed.us
dan.poffenberger@ferc,ged,us.treas.gov, SMTP:dan.poffenberger@ferc.ged.us.treas.gov
pmohler@hewm.com, SMTP:pmohler@hewm.com
richard.glick@hq.doe.gov, SMTP:richard.glick@hq.doe.gov
smatany@iepa.com, SMTP:smutany@iepa.com
karen, tomcala@pge-corp.com, SMTP: karen, tomcala@pge-corp.com
exg2@pge.com, SMTP: cxg28pge.com
OxH4@pge.com, SMTP: DxH4épge.com
RHK&pge.com, SMTP: RHK@pge.com
joebob-perkins@reliantenergy.com, SMTP: joebob-perkins@reliantenergy.com
marvin_k_ballard@reliantenergy.com, SMTP:marvin_k_ballard@reliantenergy.com
fieldejrésce.com, SMTP: fieldejr@sce.com
harold. ray@sce,com, SMHTP:harold.ray@sce.com
dreed@sdge.com, SMTP:dreed@sdge.com
105 01800000010024



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139
01800000010056



‘Treasury Market Room 622-2050 GLOBAL FIMANOAL MARKETS
Twmathy Dulaney. Director 12) TS AM

((b)(5)]

1800000010202


‘Treasury Market Room 672-2699 GLOBAL FINANCIAL MARKETS
Timothy Dulaney, Dlesctor 201 12:00PM

{(b)(5))

01800000010208



ees

From: Klasky, Helaine
Sent: Friday, January 12, 2001 4:41 PM

To: Posner, Steven; Smith, Michelle A.; Weaver, Ezabath: Gallagher, Una; Buck, Bill; Gensler,
Vandivier, David: Sandberg, Sheryl; Stern, Todd; Cohen, Alan; Wolin, Neal; Moe, Martin .
Subject: RE: wires - California Power Talks

((b)(5)]

; Rasky, Helaine; Weaver, Blzabeth; Gatagher, Una; Buck, Bill; Gensler, Gary; Sachs, Lee; Stewart, Lawranne;
peep igen pagan aa Elmencert, Oougtas; Vandivier, David; Sandberg, Sheryl; Stern, Todd; Cohen, Alan; Wolin,

DJ Principals In Calif Pwr Talks Set To Reconvene Saturday
Dow Jones Intemational News Service via Dow Jones

WASHINGTON (Dow Jones)--The principal negotiators involved in White
House-brokered talks to solve California's electricity crisis are slated to
reconvene here Saturday afternoon, the U.S. Treasury Department confirmed

Friday,
The resumption of high-level talks top-ranking officials representing
the Clinton administration, |. and utilities and power suppliers will

take place at U.S. Department of Energy headquarters at 3:30 p.m. EST.

Califomia Gov. Gray Davis and other key state regulators and jawmakers are to
participate via a video conferencing link,

The pivotal negotiating session comes after two working groups involving
lower-level officials have met since Wednesday in an effort to flesh out the
details of a broad settlement package the principals discussed late Tuesday
during a seven-hour meeting at the Treasury Department.

Knowledgeable sources described Treasury Secretary Lawrence Summers as taking
an active role in attempling to forge an agreement during Tuesday's talks, which

also featured Energy Secretary Bill Richardson, White House economic adviser

Gene Sperling and Federal Energy Regulatory Commission Chairman James Hoecker.

Richardson, who is traveling this weekend in an effort to lobby oil-producing
nations against a pending production cut, will not be attanding Saturday's
session.

Te Orang Sou RSAMGS Wl rte, wer Sormperne Fide, the Treasury
Department said.

The two groups have separately addressed the two primary features of the
proposed settlement, which involve moving the state's financially ailing

utilities out of volatile spot power markets and into fixed-price forward

contracts while power producers agree to “forbearance” on the huge debt owed by
the utilities

as 01800000010102



{(b)(5)]

01800000010165



last minute."
If a breakthrough occurs, he said it would occur before Thursday.

“When I get in the red zone, I like to score," Gramm said. “We're in the red zone. If
we can do it, I want to do it.”

The bill also would reauthorize and make several other changes to the Commodity
Exchange Act, which expired Sept. 30,

Ewing said if there is an agreement, he expects it to be included in one of the final
spending bills. A stand-alone bill, he said, was a long shot,

Representatives from the Treasury Department were not at the meeting, and it was
unclear whether the biil would still be palatable to the administration.

Asked whether the bill would gain administration support, Ewing said, "I hope 30,
we're at the point where we all have to compromise.”

Source: CQ Monitor News

01800000010124



From: Wilcox, David

Sent: Thursday, February 21, 2002 12:43 AM
To: SearchCameo
Subject: CAMEO Recon found a word: Enron sent by Squitieri, Ray to Elmendorf, Douglas; Wilcox,

David on 12/14/2000 5:24:50 PM

w |
‘ailif elec briefing LS
Enron 1...
This message was found to have a Critical Word in it. Message Sent to
Elmendorf, Douglas: Wilcox, David, From Squitieri, Ray, CC to Chryst, Nancy; Flanagan,

Rosemary; Hambor, John, Oate 12/14/2000 5:24:50 PM, Subject of message briefing memo for
Summers

Word(s) found: Enron

etecietatel Original Message-----

From: Squitieri,

Sent: 12/14/2000 5:24:

Received: 12/14/2000 5:24:50 PM

To: Elmendorf, Douglas, EX: /O=USTREASURY/OU«D0/CN*RECIPIENTS/CNELMENDORFD
Wilcox, David, EX; /OUSTREASURY /OU=DO/CN«RECIPIENTS/CN=WILCOXD

cc: Chryst, Nancy, EX: /O*USTREASURY /OU=DO/CNeRECIPIENTS/CN#CHRYSTN
Flanagan, Rosemary, EX: /O=USTREASURY/OU=D0/CNeRECIPIENTS/CN=FLANAGANR
Hambor, John, EX: /OsUSTREASURY/OU=D0/CN=RECI PIENTS/CN*HAMBORT

Subject: briefing memo for Summers
Body:

{(b)(5) , (b)(6)]
. If you
need something else tonight, send the document plus instructions to my home email address:

{(b)(6)] Alternatively, I'll be available
first thing in the morning.

oneeee End of message body

Message auditing by MicroData CAMEO Recon

01800000010034



oes ee —sn—— — —  _

From: Sachs, Lee
Sent: Wednesday, February 20, 2002 11:55 PM
To: SearchCameo

Subject: CAMEO Recon found a word: Enron sent by Curtis Wagner to alexm@calpine.com;
jmacias@calpine.com; jason_s._seligman@cea.eop.gov; shg@cpuc.ca.gov;
Chris.Soares@do.treas.gov; David. Wilcox@@do.treas.gov; Lee. Sachs@do.treas.gov;

Michelle,Greene@do.treas.gov; Ra

This message was found to have a Critical Word in it. Message Sent to alexm@calpine.com;
jmacias@calpine.com; jason_s._seligmanScea.cop.gov; shg@cpuc.ca.gov;
Chris.Soares@do.treas.gov; David.Wilcox@do. treas.gov; Lee. Sachs@do.treas.gov;
Michelle.Greene@do.treas.gov; Ray.Squitieri@do.treas.gov; Veronica Stokes@do.treas.gov;
eisenstatl@DSMO.com; sbvanleer@duke-energy.com: joel.newton@dynegy.com:

lynn. lednicky@dynegy.com; smara@enron.com; Linda Lee; Martha Altamar;

dan. poffenberger@ferc.ged.us.treas.gov; pmohler@hewm.com: rtichard.glick@hq.doe.gov;
smutany@iepa.com; karen.tomcala@pge-corp.com; cxg2@pge.com; DxH4@pge.com: RMK48pge.com;
joebob-perkins@reliantenergy.com: marvin_k_ballard@reliantenergy.com: KMcCreafsablaw.com;
fieldejrésce.com; harold.ray@sce.com; dreed@sdge.com; wsakaria@sdge.com:
rahayes@seiworldwide.com; sjcapoma@seiworldwide.com; mtierney@sempra.com:
sonnet .edmonds@southernenergy.com: creadSsteptoe.com; temorela: ies iw. COM:
julie.greenisen@troutmensanders,com; alex.goldberg@williams.com; (by( )

From Curtis Wagner, CC to Gaylen.Barbour@do.treas.gov, Date 1/12/2001 2:10:27 PM, Subject
of message RE: California Energy Group e-mail

Word{s) found: Enron

-=---Original Message-----

From: Curtis Wagner

Sent: 1/12/2001 2:10:27 PM

Received: 1/12/2001 2:08:33 PM

To: al icalpine.com, SMTP:alexm@calpine.com
jmacias@calpine.com, SMTP: jmacias@calpine.com
jason_s._seligman@cea.eop.gov, SMTP: jason_s. seligmanfcea.eop.gov
shg@cpuc.ca.gov, SMTP: shg@cpuc.ca.gov
Chris.Soares@do.treas.gov, SMT! ris.Soares@do.tre,
David.Wilcox@do.treas.gov, SMT wid. Wilcox@do. tre,
Lee.Sachs#do,treas.gov, SMTP: Sachs@do.treas.gqov
Michelle.Greene@do.treas.gov, SMTP:Michelle.Greene@do.treas,gov
Ray.Squitieri@do.treas.gov, SMTP:Ray.Squitieri@do.treas.gov
Veronica.Stokes@do.treas.gov, SMTP: Veronica. Stokes@do.treas.gov
eisenstatl#DSM0.com, SMTP:eisenstatl@DSMO.com
sbvanleer@duke-energy.com, SMTP: sbvanleer@duke-energy.com
joel.newton@dynegy.com, SMTP: joel.newton@dynegy.com
lynn. lednicky@dynegy.com, SMTP:lynn. lednickyédynegy.com
smara@enron.com, SMTP: smara@enron.com
Linda Lee, SMTP: linda.lee@ferc.fed.us
Martha Altamar, SMIP:martha.altamar@ferc. fed.us
dan.poffenberger@ferc.ged.us.treas.gov, SMTP:dan.poffenberger$fere.ged.us.treas.gov
pmohler@hewm.com, SMTP:pmohler@hewm.com
richard.glick@hq.doe.gov, SMTP: richard.glick@hq.doe.gov
smutany@iepa.com, SMTP: smutany@iepa.com
karen.tomcala@pge-corp.com, SMTP: karen. tomcalafpge-corp.com
cxg2@pge.com, SMTP: cxg2@pge.com
Dxk4@pge.com, SMTP: DxH4@pge.com
RMK4@pge.com, SMTP: RMK4@pge.com
joebob-peckins@reliantenergy.com, SMTP: joebob-perkins@reliantenergy.com
marvin_k ballard@reliantenergy.com, SMTP:marvin_k_ballard@reliantenergy.com
KMcCrea@sablaw,com, SMTP: KMcCrea@sablaw.com
fieldejr@sace.com, SMTP: fieldejrésce.com
harold. ray@sce.com, SMTP:harold,ray@sce.cca
dreed@sdge.com, SMTP:dreed@sdge.com

ad 1800000010076



{(b)(5))

any other suggestions?

<< Pile: EmbtalkY1 State.doc >>

osece Original Message-----
Prom: Rao, Geetha
Sent: Wednesday, July 11, 2001 4:13 PM

Berg, Katie; Sills, Gay; Grewe, Maureen; Resnick, Bonnie; Christopulos,
Greg; Sampliner, Gary

Cc: Donovan, Meg; Mills, Marshall; McDonald, tarry; Radelet, Steve
Subject: RE: Dabhol meeting on Enron/OPIC project at NSC

katie,  [(b)(5)]
We'll go ahead and send forward the points to State to push for a

joint agreement on talking points... Thanks to all.
oo-- Original Message-----

Prom: Berg, Katie

Sent: Wednesday, July 11, 2001 4:09 PM

To: Sills, Gay; Rao, Geetha; Grewe, Maureen; Resnick, Bonnie; Christopulos,
Greg; Sampliner, Gary

Cc: Donovan, Meg; Mills, Marshall; McDonald, Larry; Radelet, Steve
Subject: RE: Dabhol meeting on Enron/OPIC project at NSC

((b)(5)]
-----+ Original Message----~-
From; Sills, Gay
Sent: Wednesday, July 11, 2001 3:54 PM

To: Rao, Geerha; Grewe, Maureen; Resnick, Bonnie; Christopulos, Greg;
Sampliner, Gary

Ce: Donovan, Meg; Mills, Marshall; McDonald, Larry; Radelet, Steve; Berg,
Katie

Subject: RE: Dabhol meeting on Enron/OPIC project at NSC

{(b)(5)] am
katie berg. she does export credits. and eximbank

asasiel Original Message-----
Prom: Rao, Geetha
Sent: Wednesday, July 11, 2001 1:54 PM

To: Grewe, Maureen; Sills, Gay; Resnick, Bonnie; Christopulos, Greg,
Sampliner, Gary

Ce: Donovan, Meg; Mills, Marshall; McDonald, Larry; Radelet, Steve
Subject: RE: Dabhol meeting on Enron/OPIC project at NSC
Importancer High

Attached are the revisions to the OPIC talking points that OPIC sent over late
yesterday. [(b)(5)]
The Charge from the US

00500000002769


something I am
not aware of,

Best regards, Bob
MARSHALLANDLARRY , SCOTANDICHATTEDTHISMORNING
, ANDWEWANTEDTOGI VEYOUSOMEADDIT IONALPOINTSFORYOURCONSIDERA
, Y
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yyybyyybyyybyyibivye = | beyybyPyl «= bPYYbyIPPPPYPyTPbIPPIVTO 6+ =| PPYPbeTy

00500000002520


TABC
PRODUCT DEFINITIONS

01800000010148



From: Wilcox, David

Sent: Thursday, February 21, 2002 12:44 AM
To: SearchCameo
Subject: CAMEO Recon found a word: Enron sent by Flanagan, Rosemary to Summers, Larry on

92/15/2000 11:41:30 AM

was found to have a Critical Word in it. Message Sent to
Summers, Larry, From gan, Rosemary, CC to Wilcox, David; Sandberg, Sheryl; Moc,
Martin; Vandivier, David; Squitieri, Rays Auten, John; Hendershot, Karen; Cononi, Rachel;
Flynn, Timothy, Date 12/15/2000 11:42:30 AM, Subject of message Paul Krugman's Claims
about the California Power Market

Word(s) found: Enron

oonee| Original Message-----

From: Flanagan, Rosemary

Sent: 12/15/2000 11:41:30 AM

Received: 12/15/2000 11:41:30 AK

To: Summers, Larry, EX: /O*USTREASURY/OU=DO/CN=RECIPIENTS/CN=SUMMERSL

cc: Wilcox, David, EX: /O-USTREASURY/OU=D0/CN#RECIPIENTS/CN#WILCOXD
Sandberg, Sheryl, EX: /O=USTREASURY/OU=DO/CN#RECIPIENTS/CN#DOM3 . DOPOS.SandbergS
Moe, Martin, EX: /O*USTREASURY/OU=DO/CN=RECIPIENTS/CN=DOM3 .DOPOS .MoeM
Vandivier, David, EX: /O=USTREASURY/OU=D0/CN=RECIPIENTS/CNeVandivierD
Squitieri, Ray, EX: /O-USTREASURY/OU=D0/CN=RECIPIENTS/CN=SQUITIERIR
Auten, John, EX: /O-USTREASURY/OU-DO/CN*=RECIPIENTS /CN=AUTENT
Hendershot, Karen, EX: /O=USTREASURY/OU=DO/CN=RECIPIENTS/CN*HENDERSHOTK
Cononi, Rachel, EX: /O-USTREASURY /OU=D0/CN=RECIPIENTS/CN=CONONIR
Flynn, Timothy, EX: /O#USTREASURY/OU=DO/CN=RECIPIENTS/CN=FlynnT

Subject: Paul Krugman’s Claims about the California Power Market
Body:

The attached note, prepared by Ray Squitieri, analyzes statements made by Paul Krugman
recently about the California market for electricity. It will be particularly relevant
background for a call from the CEO of Enron, should that occur.

onena= End of message body

Message suditing by MicroData CAMEO Recon

” 1800000010031



‘Gabel Comrping Marhers Performance Toes bles tve Boman
vie aise Tundrsianey, Direrer
e034

{(b)(S))]

+ Kaien Sage irmding 9 Rew, Arpanet Meco oF 00 m0 am. wd 9-20 0. Cater nw Vey

1800000010159



Also, California incumbent utilities must provide electric service to customers
who do not choose to switch. In Texas, as I mentioned, incumbent utilities
must establish affiliated retail units that will serve customers who do

not switch, but it cannot be the TsD operation of the incumbent utility.

That is why we are seeing companies like Reliant Energy submit multiple
applications, covering separate subsidiaries thet will serve different
customer classes.

The market potential for Texas competition appears very strong, which perhaps
more than anything else is due to good planning on the part of Texas legislators
and regulators. However, there are still some lingering concerns about
competition in the Lone Star State, First, there is a shortage of transmission
lines in Texas, especially in the northern half of the state. Although

PUCT officials say that sufficient transmission lines will be put into

place before competition begins, without sufficient lines companies could
experience transmission congestion.

Another concern is that Texas may be relying too much on natural gas. Almost
all of the new plants that have been built in Texas are powered by this

fuel source. As we continue to see the price of natural gas reach alarming
highs, this could pose a problem for the market in Texas. Hedging will

be a key part of a successful strategy for any provider in Texas, especially
considering the rising natural-gas prices. Still, the espoused advantages

of competition (i.e., lower prices for end-users) could fall flat if so
much emphasis is placed on natural gas as the primary power source in the
state. Yet, ironically, customers may still benefit beca: of the multitude
of power plants within the 5: @. Abundant supply in Texas may keep the

cost of power low for end-users, but less profitable for suppliers.

Overall, though, Texas remains the bright shining hope for those who support
energy deregulation in this country. The size of the state's energy market
will continue to attract new participants, at least on the front end of

the restructuring process. Whether they remain in Texas, and whether or

not competition in the state will truly bring benefits to end-users, remains
to be seen,

weesececesserserseceessens
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151
01800000010062



[OUTSIDE SCOPE , (b)(5)}

didn't get very far. -----Original Message-----

From: Ellis, Dina

Sent: Wednesday, April 25, 2001 2:07 PM

To: Cetina, Jill: Cononi, Rachel; Constantine, Eleni; Flynn, Timothy; Gerardi, Geraldine;
Gross, Jared; Hambor, John; Hendershot, Karen; Kiefer, Donald; Kinard, Yvette; McInerney,
Roberta; Paulus, Michael; Rao, Geetha; Soares, Chris; Sokolov, Dan; Squitieri, Ray;
Stokes, Veronica

Subject: FW: EPA-O3-A, EPA‘s response to Pingell's letter on Barton's draft leg
“Electricity Emergency Relief Act

Importance: High

please take a look at this. thanks,

=----Original Messaqe-----

From: LLR

Sent: Wednesday, April 25, 2001 1:53 PM

To: Finch, Glenda; Brown, Lynn; Kinard, Yvette; Wiss, Barbara;
‘yvette.camp@fms.treas.gov'’; "EGRONSET@BPD.TREAS.GOV'; Parcell, John; Snowden, Carolyn;
Murphy, William: Ellis, Dina

Ce: Fishburn, Andy: ‘DelmarR@OIG.treas.gov'; Farrell, Paula; Bailey, Ann; Maryott, Carl;
“tricia. long@fms.treas.gov'; *Tom.Longnecker@fms.tr gov'; ‘PHollenbach@bpd.treas.gov':
Wilson, Carole; Granat, Rochelle; Carro, Richard; Dorsey, Karen; Levy, Ronald; McGivern,
Tom; Vagle, Steven

Subject: EPA-03-A, EPA's response to Dingell's letter on Barton's draft leg "Electricity
Emergency Relief Act

Importance: High

REQUEST FOR COMMENTS
Due Date: APRIL 26, 2001 12:00PM

Subject: EPA-03-A, EPA's response to Dingell's letter on Barton's draft leg
"Electricity Emergency Relief Act”

NOTE: THE HOUSE COMMERCE SUBCOMMITTEE ON ENERGY AND AIR QUALITY WILL BE HOLDING A HEARING
ON THE DRAFT BILL ON MAY 1, AT THIS TIME THERE WILL BE NO ADMINISTRATION WITNESSES AT THE
HEARING.

**SER THREE ATTACHMENTS**

The views of your office are requested on this item, which has been assigned to Karen
Dorsey.Please transmit your comments by e-mail to Karen Dorsey( karen.dorsey@do.treas.gov
) with a copy to ALLR" ( LLRédo.treas.gov }. Use the message space of the e-mail for brief
responses. For more detailed comments, please attach a separate document to your e-mail
reply.

If you are not able to use e-mail to reply, you may fax your response to 622-1188. Please
direct your fax to Karen Dorsey and identify the subject exactly as shown above.

To ensure the fuli development of the Department's position on this matter, it is
important that your office provide comments by the due date. If you can=t meet the
deadline or need assistance, contact Karen Dorsey (622-1192) or the Legislative Staff
(622-0650).

------ End of message body

Message auditing by MicroData CAMEO Recon

01800000010071



substgi.o0_e0Cibo102 + aT

PP99T79 | pate
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{ ¢ __#ubstgi.0_08020018
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beeed
SURY/OU=DO/CN«RECIPIENTS/CN=RAOG
Grewe, Maureen; Hills,
Marshall CMS / Snnore project
George Pickard from CMS called, Problems with Ennore persist.

1) The CMS staff in India has been speaking with WA staff there. He wants to
do the same on this end and called to

con__substgl.O9_OEO3 0018 * wry
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’ _substgi. oO 12
ooo0oo018 eo 8 4
- q tact information for India Country Director, Energy

Specialists, and also the South Asia Executive Director I will check with
Barb on these requests (have you seen requests like these before?)

2) He wants to come in to give us a briefing on where they stand with Ennore.
CMS has worked with State and Commerce fairly closely and wants to loop in
Treasury He ia willing to come in within the next week. Anyone interested?
Shoudl I check with the others who attended the Enron mtg?

_substgi.O_10080016 °
PPIIIITITIIT 8 e ~-8ubsetgl.
o_10090102 e . «9999.

a 3 ~_substgi.O_10350018

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gsubsatgi.0_ 300801202 ¢ -

3 yey? E GEORGEPICKARDFROMCMSC

ALLEDPROBLEMSWITHENNOREPERS IST1) THECMSSTAFPININD IAHASBEENS PEAKINGWITHWBSTAPPTHE
1 P L2PuTt:& repgl25 2 2

n

00500000002512


end in 2002 has to be extended several more years. The CTC Is “non-bypassable,”
which means if you leave the local monopoly for an alternative supplier, you
‘still have to send a couple of cents/kwh to the old utility,

Ratepayer groups got about 40 people to storm the PG&E corporate headquarters
this week over the one cent rate increase. Another rate increase would cause
fiots and ballot initiatives, and cost Davis his job.

But can consumer groups get people out in the streets over a deal that's great
how, but overcharges them starting in 20037 I doubt it,

Businesses such as Intel Corp. (INTC) will know they are getting the short end
Of the stick financially and that power in the western U.S. is still unreliable,

80 they will decide to build new factories in other states. That's how you
bypass non-bypassable charges. It will be bad for the state's economic growth,
but California needs to stop adding electricity demand.

‘The stars are aligned for a deal very soon: eight days left before the
executive branch of the U.S. government changes from one that wants to help
Davis to one that wants to hurt him; about the same amount of time is left
before the utilities run out of cash; forward power prices have come down a lot
in the past 30 days, but could easily start to rise again; merchant power
company stock prices have been punished for two weeks, and their executives
don't want to kill the gokien goose.

How can they not get this done?
-By Mark Golden, Dow Jones Newswires; 201-938-4604; mark,golden@dowjones.com

(END) Dow Jones Newswires 12-01-01
1800GMT

(AP-DJ-01-12-01 1800GMT)

‘TICKER: CPN DUK DYN EIX ENE INTC NRG PCG REI SO SOE
‘SUBJECT: EUTL SEMI DI1 Di4 DI2 CA GA MN NC TX COMM
Copyright (c) 2001 Dow Jones and Company, inc,
Received by NewsEDGE/LAN: 1/12/01 12:55

01800000010106


2s Trossury Market Roan

Tom Dadarey, Office Director
((b)(5))
Jill Cetin
December 7, 001
Wink of Cramer 37, 2000 Ghia Macet Dreger 2

1800000010194


UNCLEARED DRAFT; JANUARY 12,2001
INTERIM REPORT OF THE WORKING GROUP ON
LONG-TERM CONTRACTS

[(6)(5)]

01800000010129



{(b)(5)]

i areas Drafted by: im Sharer
intemal wie? 4:49PM

1800000010157



* & ) 9997 ‘Ff
wanted to give you some additional
points for your consideration for Dervis meetings today (Tim/Adam/Stuart
Please
consider also for Larson meeting tomorrow):

Blocking Terrorist Assets

[OUTSIDE SCOPE , (b)(5)}

Snergy Company Arrearages

Enron and Edison told us on Friday that TEAS has paid them through

June 2001 invoices, reducing arrearages to two months. but it has not yet
paid

the foreign exchange differential, nor has it come up with a plan to stay
current on payments.

TEAS, in a July meeting with export credit agencies, was supposed to come up
with
an action plan for staying current in its payments.

{(b)(5)]

Budget Assumptions for Next Year

[OUTSIDE SCOPE , (b)(5)]

00500000002519


Chabal Eemergimg Martoes Performance Treanary Markit Rowe
(DeWOl Tas AM Tent ntaney, Usrerter

{(b)(5)]

* Ket Gage ty 1 ear Arye, re Amati of 0 a FO rm. nD A ee Br Mon

1800000010203



From: Posner, Steven

Sent: Friday, January 12, 2001 4:29 PM
To: ‘Smith, Michelle A.; Kiasky, Helaine; Weaver, Elizabeth; Gallagher, Una;
Gary; Sachs, Lee; Stewart, Lawranne; Greene, Michelle; Wilcox, David;

Buck, Bill; Gensler,
Elmendorf, Douglas;

Vandivier, David; Sandberg, Shery; Stem, Todd; Cohen, Alan; Wolin, Neal; Moe, Martin

Subject: wires - California Power Talks

DJ Principals In Calif Pwr Talks Set To Reconvene Saturday
Bow Jones international News Service via Dow Jones

WASHINGTON (Dow Jones)—The principal negotiators involved in White
House-brokered talks to solve California's electricity crisis are slated to
reconvene here Saturday afternoon, the U.S. Treasury Department confirmed
Friday.

The resumption of high-level talks among top-ranking officials representing
the Clinton administration, California, and utilities and power suppliers will
take place at U.S. Department of Energy headquarters at 3:30 p.m. EST.

Califomia Gov. Gray Davis and other key state regulators and lawmakers are to
Participate via a video conferencing link,

The pivotal negotiating session comes after two working groups involving
lower-level officials have met since Wednesday in an effort to flesh out the
details of a broad settlement package the principals discussed late Tuesday
during a seven-hour meeting at the Treasury Department,

Knowledgeable sources described Treasury Secretary Lawrence Summers as taking
an active role in attempting to forge an agreement during Tuesday's talks, which
also featured Energy Secretary Bill Richardson, White House economic adviser

Gene Sperling and Federal Energy Regulatory Commission Chairman James Hoecker.

Richardson, who is traveling this weekend in an effort to lobby oil-producing
nations against a pending production cut, will not be attending Saturday's
session.

The working group meetings will wrap up sometime Friday, the Treasury
Department said.

The two groups have separately addressed the two primary features of the
proposed settlement, which involve moving the state's financially ailing

utilities out of volatile spot power markets and into fixed-price forward

contracts while power producers agree to “forbearance” on the huge debt owed by
the utilities

The forbearance and contracts working groups have been meeting separately, and
were to convene a joint session late Friday to compare notes before reporting
back to the principal negotiators who will cut any final deal.

Those famitiar with the talks have expressed a mix of pessimism and optimism
that @ final deal can be struck, given what they described as unrealistic
bargaining demands by Gov. Davis,

He has firmly rejected retail rate increases and resisted demands for the
state to guarantee the nearly $12 billion utilities have paid over the last

%

01800000010107



From: Asics peu

Sent: 21, 2002 12:47 AM

C ieee?

Subject: CAMEO Recon found a word: Enron sent by Gallagher, Sean H. to
‘Gaylen Barbour@do.treas.gov’ on 1/12/2001 9:11:30 AM

Importance: High

This message was found to have a Critical Word in it. Message Sent to
"Gaylen.Barbour@do.treas.gov', From Gallagher, Sean H., CC to
*Michelle.Greenefdo.treas.gov'; ‘david,wilcox@do,treas.gov';
*Veronica.Stokes@do.treas.gov', Date 1/12/2001) 9:11:30 AM, Subject of message RE:
California Energy Group

Word(s) found: Enron

eatin Original Message-----

From: Gallagher, Sean H.

Sent: 1/12/2001 9:11:30 AM

Received: 1/12/2001 9:08:56 AM

To: ‘Gaylen.Barbour@do.treas.gov', SHTP:Gaylen.Barbour@do.treas.gov

cc: ‘Michelle.Greene@do.treas.gov', SMTP:Michelle.Greene@do.treas.gov
‘david.wilcox@do.treas.gov', SMTP;:david.wilcox@do.treas.gov
‘Veronica. Stokes@do.treas.gov', SMTP: Veronica.Stokes@do.treas.gov

Subject: RE; California Energy Group

Body:

Thank you =~ as it tur 5 8 » Iam at home this morning. Would you be able to ask Mr.
Fielder to call me at ft ie y Thanks very much,

Sean Gallagher

California Public Utilities Comnission
Legal Division

505 Van Ness Avenue

San Francisco, CA 94102

(415) 703-2059

(916) 396-6581 - cell

From: Gaylen.Barbour@do.treas.gov (mailto:Gaylen,.Barbour§do.treas.gov)
Sent: Friday, January 12, 2001 6:02 AM

To: shg@cpuc.ca.gov

Subject: RE: California Energy Group

Mr. Gallagher - I passed your request on to John Fielder in the meeting. They will call
you. TI understand Michelle Greene sent you the documents you requested.

-----Original Message~
From: Gailagher, Sean H. [mailto:shg@cpuc.ca.gov]

Sent: Thursday, January 11, 2001 7:41 PM

To: 'Veronica.Stokes@do.treas.gov'

Ce: 'Michelle.Greene$do.treas.gov'; ‘Gaylen.Barbour@do.treas.gov"
Subject: RE: California Energy Group

Thanks. I plan to join the meeting tomorrow morning (friday) by telephone once again, but
I may not be there right at 9:00 (6:00 am out here). Do you have the telephone number in

- 0180000010019



Sent. Wednesday, February
Wed Fe 20, 2002 11:55 PM
To: SearchCameo
‘Subject: CAMEO Recon found a word: rend dismay or odor sntynemnl

per en espscpcm dae nh mina Jason_s._seligman@cea.cop.
shg@cpuc.ca.gov; Soares, Chris; Wilcox, David; Sachs, scche, Unc Goone: Ma Michelle: Squitier,
Ray; Stokes, Veronica

gy

Working Group
report 6.doc (36...

This message was found to have a Critical Word in it. Message Sent to ‘Martha
Altamar'; alexm@calpine.com; jmacias@calpine.com; jason_s. seligman@cea.eop.gov;
shg@cpuc.ca.gov; Soares, Chris; Wilcox, David; Sachs, Lee; Greene, Michelle; Squitieri,
Ray; Stokes, Veronica: eisenstatl@DSMO.com; sbvanleer@duke-energy.com:
joel .newton@dynegy.com; lynn. lednicky@dynegy.com; smara@enron.com; Linda Lee;
dan. pos Cenbergectterc: ged.us.treas.gov; pmohlerBhewm.com; richard.glick#hq.doe.gov;
karen,tomeala@pge-corp.com; cxg2@pge.com; DxH4@pge.com; RMK4@pge.com;
nergy.com; marvin_k_ballard@reliantenergy.com; KMcCrea@sablaw.com;

rahayes@seiworldwide.com; sjcapoma@seiworldwide.com; mtierney@s:
sonnet .edmonds@southernenergy.com; cread@steptoe.com; temoreland! iene
julie.greenisen@troutmansanders.com; alex.goldberg@williams.com;

From Soares, Chris, CC to Barbour, Gaylen; Curtis Wagner, Date 1/12/2001 1:33:52 PM,
Subject of message RE: California Energy Group e-mail

Word(s) found: Enron

-----Original Message-----

From: Soares, Chris

Sent: 1/12/2001 1:33:52 PM

Received: 1/12/2001 1:33:52 PM

To: ‘Martha Altamar', SMTP:martha.altamar@ferc.fed.us
alexm@calpine.com, SMT! lexm@calpine.com
jmacias@calpine.com, :jmacias@calpine.com
jason_s._seligman@cea.eop.gov, SMTP: jason_s. seligman@cea.eop.gov
shg@cpuc.ca.gov, SMTP: shg@cpuc.ca.gov
Soares, Chris, EX: /O=USTREASURY/OU=DO/CN=RECIPIENTS/CN=SOARESC
Wilcox, David, EX: /O*USTREASURY/OU=DO/CN*RECIPIENTS/CN=WILCOXD
Sachs, Lee, EX: /O*USTREASURY/OU=DO/CN“RECIPIENTS/CN=SachsL
Greene, Michelle, EX: /O*USTREASURY/OU-DO/CN=RECIPIENTS/CN=GREENEMI
Squitieri, Ray, EX: /O=USTREASURY/OU*DO/CN*RECIPIENTS/CN*SQUITIERIR
Stokes, Veronica, EX: /O=USTREASURY/OU=D0/CN*RECIPIENTS/CN=STOKESV
eisenstatl@DSMO.com, SMTP:eisenstat1@DSMO.com
sbvanleer@duke-energy.com, SMTP; sbvanleer@duke-energy.com
joel.newton@dynegy.com, SMTP: joel .newton@dynegy.com
lynn. lednicky8dynegy.com, SMTP: lynn. lednicky@dynegy.com
smaragenron.com, SMTP: amara@enron.com
Linda Lee, SMTP: linda. lee@ferc.fod.us
dan.poffenberger@ferc.cged.us.treas.gov, SMTP:dan.poffenberger@ferc.ged.us.treas.gov
pmohler@hewm.com, SMTP:pmohler@hewm.com
richard.glick@hq.doe.gov, SMTP:richard.glick@hq.doe.gov
smutanyfiepa.com, SMT?:amutanySiepa.com
karen.tomcala®pge-corp.com, SMTP: karen. tomcala@pge-corp.com
exg2@pge.com, SMTP:cxg2@pge.com
Dxk4@pge.com, SMTP: DxH4@pge.com
RMK4@pge.com, SMTP: RMK4@pge.com
joebob-perkina@reliantenergy.com, SMTP: joebob-perkins@rellantenergy.com
marvin_k_ballard@reliantenergy.com, SMTP:marvin k ballard@reliantenergy.com

285
1800000010078



Page 2 of 2

{(b{5)]

01800000010211
10/21/2002



eT hnknkhwnaa

oon Taree Penis 2002

Sent: A it. 12:18 AM

To: SearchCameo

Subject: GAMEO Recon found a word: Enron sent by Cononi, Rachel to Squiter, Ray on 4/3/2001

This message was found to have — Critical Word in it. Message Sent to Squitieri, Ray,
From Cononi, Rachel, CC to , Date 4/3/2001 9:54:58 AM, Subject of message memo to
Secretary on follow-up questions

Word{s) found: Enron

~-~=-Original Message-----

From: Cononi, Rachel

Sent: 4/3/2001 9:54:58 AM

Received: 4/3/2001 9:54:59 AM

To: Squitieri, Ray, EX: /OsUSTREASURY/OU-00/CN=RECIPIENTS/CN=SQUITIERIR

cc:
Subject: memo to Secretary on follow-up questions

Body:
Y)

Ray,
NEP ONeill 3 follow:

0330...
I found a couple of t ypos ae on the second page of energy derivatives memo .[(b)(5)]

soneee End of message body

Message auditing by MicroData CAMEO Recon

1800000010073



{(b)(5)]

-----Original Message-----
From: Silla, Gay
Sent: Wednesday, July 11, 2001 3:54 PM
To: Rao, Geetha; Grewe, Maureen; Resnick, Bonnie; Christopulos, Greg;
Sampliner, Gary
Cc: Donovan, Meg; Mills, Marshall; McDonald, Larry; Radelet, Steve; Berg,
Katie
Subject: RE: Dabhol meeting on Enron/OPIC project at NSC

((b)(5)] an
adding katie berg. she does export credits. and eximbank

sees Original Message-----
From: Rao, Geetha
Sent: Wednesday, July 11, 2001 1:54 PM

To: Grewe, Maureen; Sills, Gay; Resnick, Bonnie; Christopulos, Greg;
Sampliner, Gary

Cc: Donovan, Meg; Mills, Marshall; McDonald, Larry; Radelet, Steve
Subject: RE: Dabhol meeting on Enron/OPIC project at NSC
Importance: High

Attached are the revisions to the OPIC talking points that OPIC sent over late
yesterday. [(b)(5)]

The Charae from the US
Sebassy will most likely deliver the points to the GOr. Please comment asap.
‘Thanks.

<< Pile: EmbtalkY¥l.doc >>

aan Original Message-----
From: Grewe, Maureen
Sent: Wednesday, July 11, 2001 12:52 PM
To: Sills, Gay; Resnick, Bonnie; Christopulos, Greg; Sampliner, Gary; Rao.
Geetha
Ce: Donovan, Meg; Mills, Marshall; McDonald, Larry; Radelet, Steve
Subject: Dabhol meeting on Enron/OPIC project at NSC
Importance: High

This is a readout of the meeting at NSC this morning. There is also an ACTION
request. USG agencies are requested to get back to NSC by cob tomorrow with
comments on OPIC’s suggested talking points for a demarche to the GOI by the
Charge in Delhi. I talked to the State reps after the meeting (from South Asia
bureau, Investment office and Larson's office) and they seem to be basically in
the same place as I was on what an appropriate message might be. My proposed
plan ie that Geetha will take a first crack at comments on the talking points
and circulate them within Treasury as early as possible this afternoon. I am
requesting that everyone provide comments by cob today, so that we can circulate
our comments to State and try to come up with joint suggested points to submit

00500000002856


Gallagher’; ‘Sonnet Edmonds’; ‘Steve Vanleer'; ‘Steven Capomaccio'; ‘Sue
Mara’; ‘Terri Moreland’; ‘Tripp Ballard’; ‘Wayne Sakarias’

Ce:Barbour, Gaylen

Subject:RE: California Energy Group

more e-mail corrections included. the document is attached. we

will reconvene in the same conference room (6th floor, metropolitan
square) at 9am tomorrow. any questions, please call lee sachs's office at
622-2245. thanks.

<< File: Working Group report 4.doc >>

o---- Original Message-----

From: Stokes, Veronica

Sent:Thursday, January 11, 2002 4:56 PM

To:Alex Goldberg; Alex Makler; Charles C. Read; Claudia

Greif; Curtis Wagner Jr.; Dan Poffenberger; David Wilcox; Debra Reed; Dede
Hapner; Harold B. Ray; James Macias; Jan Smutney Jones; Jason Seliyman;
Joe Bob Perkins; Joel Newton; John Fielder; Julia Greenisen; Karen A.
Tomcala; Keith McCrea; Larry Eisenstat; Lee Sachs; Linda Lee; Lynn
Lednicky; Martha Altamar; Michael Tierney; Paul Mohler; Rich Glick: Rob
Hayes; Ross Ain ; Roy Kuga; Sean Gallagher; Sonnet Edmonds; Steve Vanleer:
Steven Capomaccio; Sue Mara; Terri Moreland; Tripp Ballard; Wayne Sakarias
Ce:Greene, Michelle; Barbour, Gaylen

Subject: FW: California Energy Group

This is a test to provide a comprehensive listing for those

who participated in the Treasury Department California Energy Group
meetings this week. If you know of anyone else who should be added to
this list, please call at (202) 622-2245.

VVVVV VV VV VV

<< Message: California Energy Group >>

suence End of message body

Message auditing by MicroData CAMEO Recon

01800000010043



{(6)(5)]

01800000010169



ss

From: Eichner, Matthew

Sent: Thursday, June 28, 2001 2:41 PM

To: Novey, Michael; Hammer, Viva; Mikrut, Joseph; Solomon, Eric; Paravano, Jeffrey; Hanson,
Robert

Ce: Gerardi, Geraldine; Kiefer, Donald

Subject: Retail Swaps Study Meeting - 6/28/01

There was another meeting of the retail swaps study group this morning. [(b)(5)]

1800000010093


Page 2 of 2

[(bX(5)]

01800000010197
10/21/2002



{(b)(5))

01800000010168



From: Squitieri, Ray

Sent: Thursday, February 21, 2002 12:19 AM

To: SearchCameo

‘Subject: CAMEO Recon found a word: Enron sent by Flanagan, Rosemary to Summers, Larry on

12/15/2000 11:41:30 AM

wv)

calf elec
dw 1215.00...
This message was found to have a Critical Word in it. Message Sent to

Summers, Larry, From Flanagan, Rosemary, CC to Wilcox, David; Sandberg, Sheryl; Moe,
Martin; Vandivier, David; Squitieri, Ray; Auten, John: Hendershot, Karen; Cononi, Rachel;
Flynn, Timothy, Date 12/15/2000 11:41:30 AM, Subject of message Paul Krugman’s Clains
about the California Power Market

Word(s) found: Enron

~~-~-Original Message-----

From: Flanagan, Rosemar:

Sent: 12/15/2000 11:41:30 AM

Received: 12/15/2000 11:41:30 AM

To: Summers, Larry, EX: /O-USTREASURY/OU=DO/CN=RECIPIENTS/CN=SUMMERSL

CC: Wilcox, David, EX: /O-USTREASURY/OU#DO/CN=RECIPIENTS/CN=WILCOXD
Sandberg, Sheryl, EX: /OUSTREASURY/OU*DO/CN=RECIPIENTS/CN=DOM3 . DOPOS .Sandbergs
Moe, Martin, EX: /O#USTREASURY /OU=D0/CR=RECIPIENTS/CN=DOM3, DOPOS.MoeH
Vandivier, David, EX: /O=USTREASURY/OU=D0/CN=RECIPIENTS/CN=VandivierD
Squitieri, Ray, EX: /O=USTREASURY/OU=D0/CN=RECIPIENTS/CN=SQUITIERIR
Auten, John, EX: /O-USTREASURY/OU=DO/CN=RECIPIENTS/CN=AUTENJ
Hendershot, Karen, EX: /O=USTREASURY/OU#DO/CN=RECI PIENTS/CN*HENDERSHOTK
Cononi, Rachel, EX: /O=USTREASURY/OU=D0/CN=RECIPIENTS/CN=CONCNIR
Flynn, Timothy, EX; /O=USTREASURY/OU=D0/CN«RECIPIENTS/CN=FlynnT

Subject: Paul Krugman’s Claims about the California Power Market
Body:

The attached note, prepared by Ray Squitieri, analyzes atatements made by Paul Krugman
recently about the California market for electricity. It will be particularly relevant
background for a call from the CEO of Enron, should that occur.

=----- End of message body

Message auditing by MicroData CAMEO Recon

ss 1800000010064



wsakaria@sdge.com, SMTP: wsakaria@sdge.com

rahayes@seiworldwide.com, SMTP: rahayes@seiworldwide.com
sjcapoma@seiworldwide.com, SMTP:sjcapoma@seiworldwide.com
mtierney@sempra.com, SMTP:mtierney@sempra.com
sonnet.edmonds@southernenergy.com, SMTP: sonnet .edmonds@southernenergy.com
cread@ésteptoce.com, SMTP: cread@steptoe.com

temoreland§swidlaw.com, SMTP: temoreland@swidlaw.com
julia.greenisen@troutmansanders.com, SMTP: julia.greenisen@troutmansanders.com
alex.goldberg@williams.com, SMTP: alex.goldberg@williams.com

((o)(6)]

Cc: Gaylen.Barbour§do.treas.gov, SMTP:Gaylen.Barbour@do.treas.gov

Subject: RE: California Energy Group - missing e-mail addresses
Body:
Jim Macias’ email address is: jmacias@calpine.com

>>> <Michelle.Greenefdo.treas.gov> 1/11/01 8:16:24 PM >>>

we still have incorrect e-mail addresses for the following people: julie greenisen (sp.?)
(troutman sanders) roy kugen (sp.?) (pgse) jim macias (calpine) dan poffenberger (sp.?)
(ferc) if anyone knows their correct e-mails, piease forward the document to them and add
the correct version of their e-mail to this group list. thanks.

-----Original Message-----

From: Greene, Michelle

Sent: Thursday, January 11, 2001 8:07 PM

To: Stokes, Veronica; ‘alex,goldberg@williams.com'; ‘Alex Makler‘’;
‘Charles C. Read’; ‘Claudia Greif'; ‘Curtis Wagner Jr.';

‘dan. poffenberger@ferc.ged.us'; Wilcox, David; ‘Debra Reed'; ‘Dede
Hapner'; ‘Harold B. Ray’; ‘James Macias’; ‘Jan Smutney Jones’;
*jason_s._seligman@cea.eop.gov'; ‘Joe Bob Perkins
Plelder'; ‘julia.greenisen@troutmansanders.com';
“Keith McCrea'; ‘Larry Eisenstat'; Sachs, Le
“lynn. lednicky@dynegy.com'; ‘Martha Altamar’
Mohler’; "Rich Glick'; "Rob Hayes’; ‘Ross Ain "RHK@pge. com’
Gallagher’; ‘Sonnet Edmonds'; ‘Steve Vanleer‘; ‘Steven Capomaccio'; ‘Sue
Mara'; ‘Terri Moreland’; ‘Tripp Ballard’; ‘Wayne Sakarias‘

Cc: Barbour, Gaylen

Subject: RE: California Energy Group

more e-mail corrections included. the document is attached. we will
reconvene in the same conference room (6th floor, metropolitan square)
at 9am tomorrow. any questions, please call lee sachs‘'s office at
622-2245. thanks.

<< File: Working Group report 4.doc >>

-----Original Message-----

From: Stokes, Veronica

Sent: Thursday, January 11, 2001 4:56 PM

To: Alex Goldberg; Alex Makler; Charles C. Read; Claudia Greif;
Curtis Wagner Jr.; Dan Poffenberger; David Wilcox; Debra Reed; Dede
Hapner; Harold B. Ray; James Macias; Jan Smutney Jones; Jason Seliyman;
Joe Bob Perkins; Joel Newton: John Fielder; Julia Greenisen; Karen A,
Tomcala; Keith McCrea; Larry Eise 3 Lee Sachs; Linda Lee; Lynn
Ledaicky: Martha Altamar; Michael Tierney; Paul Mohler; Rich Glick; Rob
Hayes; Ross Ain ; Roy Kuga; Sean Gallagher; Sonnet Edmonds; Steve Vanleer;
Steven Capomaccio; Sue Mara; Terri Moreland; Tripp Ballard: Wayne Sakarias
Cc: Greene, Michelle; Barbour, Gaylen

Subject: FW: California Energy Group

This is a test to provide a comprehensive listing for those who
participated in the Treasury Department California Energy Group
meetings this week. If you know of anyone else who should be added to
this list, please call at (202) 622-2245.

VV VV VY VV

ad 01800000010025



{(b)(5)]

01800000010193


From: Wilcox, David

Sent: ‘Thursday, February 21, 2002 12:47 AM
Subject: CAMEO Recon found a word: Enron sent by Curtis Wagner to alexm@calpine.
aword: COM,
Jmacias@calpine.com; jason_ GOV; q

This message was found have a Critical Word in it. Message Sent to alexm@calpine.com;
jmacias@calpine.com; jason_s. seligman@cea.eop.gov; shg@cpuc.ca.gov;
Chris.Soares@do.treas.gov; David.Wilcox@do.treas.gov; Lee.Sachs@do.treas.gov;

Michelle.G; etdo.treas.gov; Ray.Squitieri@do.tr gov; Veronica. Stokes@do.treas.gov;
eise 1@DSMO.com;: inleer@duke-energy.com; 4 wtonédynegy. com;

lynn. lednicky@édynegy.com: smara@enron.com; Linda Lee; Martha Altamar;
dan.poffenberger@ferc.ged.us.treas.gov; pmohlerShewm.com; richard.glick@hq.doe.gov;
smutany@ieps.com; karen.tomcala@pge-corp.com; cxg2@pge.com; DxH4@pge.com; RMK4@pge.com;
joebob-perkins@reliantenergy.com; marvin_k_ballard@reliantenergy.com; KMcCrea@sablaw.com;
fieldejr@sce.com: harold.ray@sce.com; dreed@sdge.com; wsakaria@sdge.com;
rahayes@seiworldwide.com; sjcapoma@seiworldwide.com; mtierney@sempra.com;

sonnet ,edmonds@southernenergy.com; cread@steptoe.com; temoreland@swidlaw.com;
julie.greenisen@troutmansanders.com; alex.goldberg@williams.com;

From Curtis Wagner, CC to Gaylen.Barbour@do.treas.gov, Date 1/12/2001 2:10:27 PM, Subject
of message RE: California Energy Group e-mail

Word(s) found: Enron

soees| Original Message-----

From: Curtis Wagner

Sent: 1/12/2001 2:10:27 PM

Received: 1/12/2001 2:08:33 PM

To: alexm@calpine.com, SMTP:alexm@calpine.com
jmacias@calpine.com, SMTP: jmacias@calpine.com
jason_s._seligman@cea.eop.gov, SMTP:jason_s. seligman#cea.eop.gov
shg@cpuc.ca.gov, SMTP:shg@cpuc.ca.gov
Chris.Soares@do.treas.gov, SMTP:Chris.Soares@do.treas.gov
David.Wilcox@do.treas.gov, SMTP:David.Wilcox@do.treas.gov
Lee .Sachs@do.treas.gov, SMTP:Lee.Sachs@do.treas.gov
Michelle.Greene@do.treas.gov, SMTP:Michelle.Greene@do.treas.gov
Ray. Squitieri@do.treas.gov, SMTP:Ray.Squitieri@do.treas.gov
Veronica.Stokes@do.treas.gov, SMTP:Veronica.Stokes@do.treas.qov
ewisenstatl@DSMO.com, SMTP:eisenstat1@DSMO.com
sbvanleer@duke-energy.com, SMTP:sbvanleer@duke-energy.com
joel.newton@dynegy.com, SMTP: joel.newton@dynegy.com
lynn. lednicky8dynegy.com, SMTP: lynn. lednicky@dynegy.com
smarafenron.com, SMTP: smarafenron.com
Linda Lee, SMTP: linda.lee@ferc.fed.us
Martha Altamar, SMTP:martha.altamar@ferc. fed.us
dan.poffenberger@ferc.ged.us.treas.gov, SMTP:dan.poffenberger@ferc.ged.us.treas.gov
pmohler@hewm.com, SMTP:pmohler§hewm.com
richard.glick@hq.dee.gov, SMTP:richard.glick@hq.doe.gov
smutanyBiepa.com, SMTP: smutanyd?iepa.com
karen. tomcala@pge-corp.com, SMTP: karen. tomcala@pge-corp.com
exg2@pge.com, SMTP: cxg2@pge.com
DxH4@pge.com, SHTP:Dxi4@pge.com
RMK4@pge.com, SMTP: RMK4@pge.com
joebob-perkins@reliantenergy.com, SMTP: joebob-perkins@reliantenergy.com
macvin_k_ballard@reliantenergy.com, SMTP:marvin_k_ ballard@reliantenergy.com
KMcCrea@sablaw.com, SMTP: KMcCrea@sablaw.com
fieldejr@sce.com, SMTP: fieldejr
harold.ray@sce.com, SMTP:harold. zay@sce.com
dreed@sdge.com, SMTP:dreed@sdge.com

* 1800000010037



From: Sachs, Lee

Sent: Thursday, January 11, 2001 10:46 AM

To: ‘Susan.J,Mara@enron.com’; Wilcox, David; Sachs, Lee
Subject: RE: More thoughts

thanks sue.

=H ‘Original Message-----

From: Susan.J.Mara@enron.com [mailto:Susan.J.Marafenron.com)
Sent: Wednesday, January 10, 2001 11:14 PM

To: David.wilcox@do.treas.gov; lee.sachs@do.treas.gov
Subject: More thoughts

lee,

I'm checking on the “market in the west at 5.5 cents" question. I'll let you know,

David and Lee,

it seems that everyone has pretty much put their big issues out on the table for
consideration in package of solutions. I've been concerned. No one has been talking
about the retail mar . We have spent four years protecting the utilities and getting
them “ready” for retail competition. I've personally spent much of my life those four
years arguing with the utilities and the CPUC to achieve any tiny movement toward a fair,
open and non-discriminatory market for retail suppliers (other than the utilities, Enron
is the only retail supplier in the room).

Therefore, we cannot move forward with these new subsidies and bailouts unless the
urilities and the state agree to take definitive steps to make the retail market work. To
move this thinking forward, I will prepare a few points of the kinds of steps we would
want to see as part of the overall package.

Sue Mara

018000000101 15



rahayes@seiworldwide.com, SMTP: rahayes@seiworldwide.com
sjcapoma@seiworldwide.com, SMTP:sjcapoma@seiworldwide.com
mtierney@sempra.com, SMTP erney@sempra.com
sonnet.edmonds@southernenergy.com, SMTP: sonnet.edmonds@southernenergy.com
cread@steptoe.com, SMTP: cread@steptos.com

temorelandSswidlaw.com, SMTP:temoreland@swidlaw.com
julie.greenisen@troutzansanders.com, SMTP: julie.greenisen@troutmansanders.com
alex.goldberg@williams,com, SMTP:alex.goldberqg@williams.com

((b)(6)]

cc: Gaylen.Barbour@do.treas.gov, SMTP:Gaylen,Barbour@do.treas.qov
Curtis Wagner, SMTP:curtis.wagner@ferc. fed.us

Subject: RE: California Energy Group e-mail

Body:

Please add Chief Judge Wagner's name to the mailing list. tis E-mail address is;
curtis.wagner@ferc.fed.us Thanks.

Martha

>>> Linda Lee 01/12/01 08:55AM >>>
The requested address is: daniel.poffenberger@ferc.fed.us Thanks

>>> < Michelle.Greene@do.treas.gov > 01/12/01 08:45AM >>>

Please us ply all to this message when sending items to the group (more
corrected addresses have been added).

thanks,

-----Original Message-----

From: Greene, Michelle

Sent:Thursday, January 11, 2001 8:16 PM

To:Greene, Michelle; Stokes, Veronica: ' alex.goldberg@williams.com* ;
“Alex Makler'; les C. Read’; ‘Claudia Greif'; ‘Curtis Wagner Jr.';

* dan.poffenverger@ferc.god.us’ ; Wilcox, David; ‘Debra Reed'; ‘Dede
‘Harold B. Ray’; mes Macias’; ‘Jan Smutney Jones";
_seligmanfécea.eop.gov’ ; ‘Joe Bob Perkins‘; ‘Joel Newton’; ‘John
Fielder’; 7 julia.greenisen@troutmansanders.com' ; ‘Karen A. Tomeala';
‘Keith McCrea’; ‘Larry Eisenstat'; Sachs, Lee; ‘Linda Lee’;

* lynn.lednicky@dynegy.com' ; "Martha Altamar'; ‘Hichae? Tierney’; ‘Paul
Mohler'; ‘Rich Glick'; 'Rob Hayes"; ‘Ross Ain '; ' RHK@pge.com’ ; ‘Sean
Gallagher’; ‘Sonnet Edmonds'; ‘Steve Vanleer'; ‘Steven Capomaccio'; ‘Sue
Mara’; ‘Terri Moreland’; 'Tripp Ballard'; ‘Wayne Sokarias'; Soares, Chris;
Squitieri, Ray

Ce:Barbour, Gaylen

Subject:RE: California Energy Group - missing e-mail addresses

we still have incorrect e-mail addresses for the following people:

julie greenisen (sp.?7) (troutman sanders)

roy kugen (sp.?) (pase)

jim macias (calpine)

dan poffenberger (sp.?) {ferc)

if anyone knows their correct e-mails, please forward the document to them
and add the correct version of their e-mail to this group list. thanks.

anon Original Message----~

From: Greene, Michelle

Sent:Thursday, January 11, 2001 8:07 PM

To:Stokes, Veronica: ' alex.goldberg@williams.com' ; "Alex

Makler': ‘Charles C, Read'; ‘Claudia Greif’; ‘Curtis Wagner Jr.';

‘ dan.poffenberger@ferc.ged.us' ; Wilcox, David; ‘Debra Reed’; ‘Dede
Hapner'; ‘Harold B. Ray’; ‘James Macias’; ‘Jan Sautney Jones';

* jason_s. seligmanécea.eop.gov' ; ‘Joe Bob Perkins’; ‘Joel Newton’; ‘John
Fielder’; * julia.greenisen@troutmansanders.com’ ; ‘Karen A, Tomcala';
‘Keith McCrea’; ‘Larry Eisenstat'; Sachs, Lee: ‘Linda Lee';

* lynn.lednicky@dynegy.com* ; 'Mactha Altamar'; ‘Michael Ticrney'; ‘Paul
Mohler’; "Rich Glick’; ‘Rob Hayes'; ‘Ross Ain '; ‘ RHK@pge.com' ; ‘Sean

a 1800000010042

VVVV VV VV VV



Gobeil Emereng Marte Performance Trvwomey Mares Kom
1i@e01 413M PeOvtaney, Oerector

((b)(5)}

© Riga bagi rading ents, Arak, an Aas 200 a, rm a Nm Rn Se ty.

01800000010216



[(bX5)]

01800000010136



wsakaria@sdge.com, SMT! karla@sdge.com

rahayes@seiworldwide.com, SMTP: rahayes@seiworldwide.com
sjcapoma@seiworldwide.com, SMTP: sjcapoma@seiworldwide.com
mtierney@sempra.com, SMTP:mtierney@sempra.com

sonnet .edmonds@southernenergy.com, SMTP: sonnet.edmonds@southernenergy.com
cread@steptoe.com, SMTP: cread@steptoe.com

temoreland@swidlaw.com, SMTP: temoreland@awidlaw.com
Julie.greenisen@troutaansanders.com, SMTP: julie.greenisen@troutmansanders.com
alex.goldberg@williams.com, SMTP:alex.goldberg@williams.com

[(b)(6)]

ce: Gaylen.Barbour@do.treas.gov, SMTP:Gaylen.Barbour@do.treas.gov
Subject: RE: California Energy Group e-mail

Body:

Looks good to me. Curtis L. Wagner, Jr, Chief Judge FERC

>>> <Chris.Soares@do,treas.gov> 01/12/01 01:33PM >>>
Latest version of Long-Term Contracts Group report.

=--<== End of message body
Message auditing by MicroData CAMEO Recon

01800000010038



From: Stier. ay ‘
Sent: ursday, February 21, 2002 12:19 AM
To: SearchCameo
Subject: SAMEO Recon found a word: Enron sent by Wilcox, David lo Squier, Ray on 12/14/2000
Importance; High
a)
calif doc (29 KB)

This message was found to have a Critical Word in it. Message Sent to
Squitieri, Ray, From Wilcox, David, CC to Chryst, Nancy: Vandivier, David; Rao, Geetha;
Flanagan, Rosemary: Cononi, Rachel; Flynn, Timothy; Murphy, Edward; Hambor, John, Date
12/14/2000 2:52:41 PM, Subject of message RE: Krugman on Calif power market

Word(s) found: Enron

-----Original Message-
From: Wilcox, David
Sent: 12/14/2000 2:52:41 PM
Received: 12/14/2000 2:52:42 PM
To: Squitieri, Ray, EX: /O*USTREASURY/OU=DO/CN=RECIPIENTS/CN=SQUITIERIR

cc: Chryst, Nancy, EX: /O#USTREASURY /CU=DO/CN=RECIPIENTS/CN=CHRYSTN
Vandivier, David, EX: /OeUSTREASURY/OU=DO0/CN=RECIPIENTS/CN=VandivierD
Rao, Geetha, + /O-USTREASURY /OU=00/CN=RECIPIENTS /CN=RacG
Flanagan, Rosemary, EX: /O-USTREASURY/OU=DO/CN-RECIPIENTS/CN#FLANAGANR
Cononi, Rachel, EX: /O#USTREASURY/OUeDO/CN#RECIPIENTS/CN=CONONIR
Flynn, Timothy, EX: /O-USTREASURY /OU*DO/CN*RECIPIENTS/CN=FlynnT
Murphy, Edward, EX: /O=USTREASURY /OU=DO/CN=RECIPIENTS/CN=MURPHYE.
Hambor, John, EX: /O=USTREASURY/OU*DO/CN*RECIPIENTS/CN=HAMBORT

Subject: RE: Krugman on Calif power market

Body:

Ray: This is a very interesting piece. Please address the questions in the attached to
the best o f your ability, then forward the result to Rosemary for processing to the
Secretary tonight if at all possible.

Rosemary: Please use the following as a transmittal note from me to Larry:

The attached note, prepared by Ray Squitieri, analyzes atatements made by Paul Krugman
recently about the California market for electricity. It will be particularly relevant
background for a call from the CEO of Enron, should that occur.

-----Original Message----~

From: Squitieri, Ray

Sent: Thursday, December 14, 2000 2:12 PM

To: Wilcox, David

Ce: Chryst, Nancy; Vandivier, David; Rao, Geetha; Flanagan, Rosemary: Cononi, Rachel:

Flynn, Timothy; Murphy, Edward; Hambor, John
Subject: Krugman on Calif power market

aeamerted End of message body
Message suditing by MicroData CAMEO Recon

156
01800000010067



weakaria@sdge.com, SMTP: wsakaria@sdge.com

rahayes@seiworldwide.com, SMTP: rahayes@seiworldwide.com
sjcapoma@seiworldwide.com, SMTP:s}capoma@seiworldwide.com
mtierney@sempra.com, SHTP:mtierney@sempra.com

sonnet .edmonds@southernenergy.com, SMTP: sonnet .edmonds§southernenergy.com
cread@steptoe.com, SMTP: cread@steptoe.com

temoreland@swidlaw.com, SMTP: temoreland@swidlaw.com
julie.greenisen@troutaansanders.com, SMTP: julie.greenisen@troutmansanders.com
alex.goldberg@williams.com, SMTP:alex.goldberg@williams.com

{(b)(6)]

ce: Gaylen.Barbour@do.treas.gov, SMTP:Gaylen.Barbour@do.treas,gov

Subject: RE: California Energy Group e-mail
Body:
Looks good to me. Curtis L, Wagner, Jr, Chief Judge FERC

>>> <Chris.Soares@do.treas.gov> 01/12/01 01:33PM >>>
Latest version of Long-Term Contracts Group report.

ataaeated End of message body
Message auditing by MicroData CAMEO Recon

01800000010077



From: Wilcox, David
Sent; Thursday, February 21, 2002 12:44 AM
To: SearchCameo
Subject: Re sae nts RHRRS CARON: 900K By ORION: PY 1 SUNS: LAN OF 12/15/2000
16:
A
Istrief.doc (31 KB)
This message was found to have 4 Critical Word in it. Me ssage Sent to

Summers, Larry, From Chryst, Nancy, CC to Sandberg, Sheryl; Moe, Martin; Wilcox, David;
Vandivier, David; Flanagan, Rosemary; Squitieri, Ray; Cononi, Rachel; Hendershot, Karen:
Flynn, Timothy, Date 12/15/2000 9:16:07 AM, Subject of message Conversation with Steven
Kean (Executive Vice President, ENRON Regarding the California Electricity Market)

Word(s) found: Enron

tate Original Message-----

From: Chryst, Nancy

Sent: 12/15/2000 9:16:07 AM

Received: 12/15/2000 9:16:07 AM

To: Summers, Larry, EX: /O=sUSTREASURY/OU=DO/CN=RECIPIENTS/CN=SUMMERSL

CC: Sandberg, Sheryl, EX: /O=USTREASURY/OU=00/CN=RECIPIENTS/CN=DOM3 . DOPOS.SandbergS
Moe, Martin, EX: /O=USTREASURY/OU=D0/CN=RECIPIENTS /CN=DOM3.DOPOS.MoeM
Wilcox, David, EX: /O=USTREASURY/OU=D0/CN=RECIPIENTS/CN=WILCOXD
Vandivier, David, EX: /OsUSTREASURY/OU=DO/CN=RECIPIENTS/CN=VandivierD
Flanagan, Rosemary, EX: /O=sUSTREASURY/OU=DO/CN=RECIPIENTS/CN=FLANAGANR
Squitieri, Ray, EX: /O=USTREASURY/OU=00/CN=RECIPIENTS/CN=SQUITIERIR
Cononi, Rachel, EX: /O=USTREASURY/OU#DO/CN=RECIPIENTS/CN=CONONIR
Hendershot, Karen, EX: /O=USTREASURY/OU=00/CN=RECI PIENTS/CN=HENDERSHOTK
Flynn, Timothy, EX: /O=USTREASURY/OU=DO/CN*RECIPIENTS/CN=FlynnT

Subject: Conversation with Steven Kean (Executive Vice President, ENRON Regarding the
California Electricity Market)
Body:

The Attached memo when forward to EXEC SEC today.

— End of message body

Message auditing by MicroData CAMEO Recon

01800000010032



From: Linda! com
Sent: , December 05, 2000 2:30 PM
To: lee. .treas.gov; mame, levine@do.treas.gov
Subject: CQ Article on Gramm CEA
Thought you would find this article interesting. Miss you guys!
----- Forwarded by Linda Robertson/NA/Enron on 12/05/2000 02:29 PM -----
Chris Long
To: Richard Shapiro/NA/Enron@Enron, Linda
12/08/2000 Robertson/NA/Enron@ENRON, Tom
01:47 PM Briggs/NA/Enron@Enron, Cynthia
Sandherr/Corp/Enron@ENRON, Lisa
Yoho/NA/Enron@Enron
ect
Subject: CQ Article on Gramm CEA Meeting

BILL TO PERMIT CERTAIN FUTURES TRADES GETS RENEWED EFFORT
By Ted Monoson, CQ Staff Writer

Dec. 4, 2000 - Representatives from the Chicago Board of Trade and Chicago Mercantile
Exchange met Monday with Sen. Phil Gramm, R-Texas, and Rep. Thomas W. Ewing, R-Ill., to
resuscitate a measure (HR 4541) that would permit the trading of single stock futures.

Ewing and a representative for the Mercantile Exchange were optimistic following the
meeting. But Gramm, chairman of the Banking Committee, continued to express reservations
about the measure,

“I think we have the makings of a deal," said Leo Melamed, a chairman emeritus and
senior policy adviser for the Mercantile Exchange.

The House passed the measure 377-4 on Oct 19. Since then, Ewing hes pushed for Senate
Passage, along with Senate Agriculture Chairman Richard G. Lugar, R-Ind., and Sen. Peter
G. Fitzgerald, R-I11l.

Gramm, however, dislikes several provisions. One would explicitly permit the use of a
type of over-the-counter derivative, known as a swap. Although U.S. companies and
financial institutions use them, they are neither explicitly permitted nor prohibited.

Gramm said the bill is not clear enough on what is a banking product vs. what is a
future, and he wants to ensure that swaps are classified as banking products.

He also opposes a provision that he said would expand the jurisdiction of the
Commodity Future Trading Commission.

“We're just continuing to work," Gramm said after the meeting. "I thought we made some
progress, but I've thought that for a long time. Anybody or anything can unravel it at the
last minute,”

If a breakthrough occurs, he said it would occur before Thursday.

"When I get in the red zone, I like to score,” Gramm said. "We're in the red zone. If
we can do it, I want to do it.”

The bill also would reauthorize and make several other changes to the Commodity
Exchange Act, which expired Sept. 30.

“ 0180000010127



Businesses such as Intel Corp. (INTC) will know they are getting the short end
of the stick financially and that power in the western U.S. is still unreliable,

80 they will decide to build new factories in other states. That's how you
bypass non-bypassable charges. It will be bad for the state's economic growth,
but California needs to stop adding electricity demand.

The stars are aligned for a deal very soon: eight days left before the
executive branch of the U.S. government changes from one that wants to help
Davis to one that wants to burt him; about the same amount of time Is left
before the utilities run out of cash; forward power prices have come down a lot
in the past 30 days, but could easily start to rise again; merchant power
company stock prices have been punished for two weeks, and their executives
don't want to kill the golden goose.

How can they not get this done?
-By Mark Golden, Dow Jones Newswires; 201-938-4604; mark.golden@dowjones.com

(END) Dow Jones Newswires 12-01-01
1800GMT

{AP-DJ-01-12-01 1

STICKER: CPN DUK OYN EIX ENE INTC NRG PCG REI SO SOE
SUBJECT: EUTL SEMI Dit Di4 DI2 CA GA MN NC TX COMM
Copyright (c) 2001 Dow Jones and Company, Inc.

Received by NewsEDGE/LAN: 1/12/01 12:55 PM

01800000010114



VVVV VV VV VV VV

and at one point it even appeared that no law would be passed,
That*s when state Sen. Steve Peace took the reins and tried to make
something happen.
The San Diego legislator already had won the respect of his colleagues
for his work on another complex piece of legislation, ceform of the workers’
compensation system.
During a hurried two-week conference in August -- dubbed the “Steve
Peace death march” for his propensity to keep negotiators at the table late into
the night -- the fine points of the energy law were hashed out.
Legislators entrusted their judgment to Peace and the few colleagues
who worked on the bill. There was an abiding sense by a number of participants
that few members of either house knew what was in the bill or even
understood it. It was passed by both houses of the Legislature unanimously
and signed into law the following month.
"People were grateful to Peace and (former Sen. Diane) Martinez for
taking it on," said Debra Bowen, D-Los Angeles, the current chair of the Senate
energy committee, “Historically, utilities were a pretty boring topic, and
I think term limits factored into it.*
The law was to end the monopolistic control that utilities held over
both power production and supply by requiring them to sell off their
generators, It set rates artificially high so they could recover money
from bad investments. And it gave them nearly two years to prepare for
competition.
Moreover, residential customers would be granted an immediate 10
percent rate cut.
The system took effect April 1, 1998, and, at first, things seemed to
work well, Soon, though, there were warning signs.
It turned out the residential rate cut was actually going to be
financed with $7.5 billion in bonds that customers had to pay off. So the reduction
in real terms was closer to only 3 percent, not 10 percent.
Then in early 1999, the California Energy Commission, which tracks the
state's supply and demand, was warning of coming supply shortfa.
Demand was skyrocketing, the agency pointed out in a Senate ergy
committee hearing, and no new significant generation had been built in a
decade. Without more power, California was going to run out. But
construction of new power plants takes at least two years from start to
finish, and the state was already running behind in acccamodating the
growth.
Back in the early 19903, however, the energy commission had painted a
far different picture. At that time, California had an oversupply of power,
perhaps as much as 30 percent more than it needed.
There was 0 much that when the utilities commission set up an auction
for the construction of new facilities in the early 1990s, Edison and San
Diego Gas and Electric Co. appealed to the Federal Energy Regulatory
Commission to halt the auction, arguing there was already too much
generation in California. The FERC obliged.
"If anybody had told us in 1996, or even in 1998, that we would
experience (such) load increases, we would have said, ‘You're crazy," " said D.J.
Smith, a lobbyist for the California Large Energy Consumers Association
and one of the top advocates of deregulation, “Nobody had ever seen load
qo up like that in a mature situation.”
Still, production figures from Edison Electric Institute, which provide
4 crude indicator of demand, show consumption grew by 4 percent in 1996, 3.4
percent in 1997, nearly 5 percent in 1999, and a whopping 10 percent this
year.
And surrounding states, including Arizona, Nevada, Oregon and
Washington, began to experience the same demand growth. Since California imported as
much as 25 percent of its power from those states, the amount available
was suddenly reduced by as much as half.
But considering the long time it takes to build plants, in part because
of public opposition, the warnings were too little, too late. In fact, the
situation remained far off the radar screen of co! rs, since most were
still insulated from price spikes by a rate freeze.
Then this summer, things started to spiral out of control.
San Dlego was the first region to meet the conditions necessary for
full deregulation, and as hot summer months added to demand, customers’ bills

» 01800000010120



From: ‘Sachs, Lee

Sent: Tuesday, December 05, 2000 2:31 PM

To: 'Linda.Robertson@enron.com’; Sachs, Lee; Levine, Marne
Subject: RE: CQ Article on Gramm CEA Meeting

hiammumam. . . «+

~~~~-Original Message--~--

From: Linda.Robertson@enron.com [mailto:Linda.Robertsonfenron.com)
Sent: Tuesday, December 05, 2000 Oo PM

To: lee.sachs@do.treas.gov; marne.levine@do.treas.gov

Subject: CQ Article on Gramm CEA Meeting

Thought you would find this article interesting. Miss you guys!
setenatahad Forwarded by Linda Robertson/NA/Enron on 12/05/2000 02:29 PM -----

Chris Long
To: Richard Shapiro/NA/Enron#Enron, Linda
12/05/2000 Robertson/NA/Enron@ENRON, Tom
01:47 PM Briggs/NA/Enron@Enron, Cynthia
Sandherr/Corp/Enron@ENRON, Lisa
Yoho/NA/EnrongEnron
cc:
Subject: CQ Article on Gramm CEA Meeting

BILL TO PERMIT CERTAIN FUTURES TRADES GETS RENEWED E¥FORT
By Ted Monoson, CQ Staff Writer

Dec. 4, 2000 - Representatives from the Chicago Board of Trade and Chicago Mercantile
Exchange met Monday with Sen. Phil Gramm, R-Texas, and Rep. Thomas W. Ewing, R-Ill., to
resuscitate a measure (HR 4541) that would permit the trading of single stock futures.

Ewing and a representative for the Mercantile Exchange were optimistic following the
meeting. But G chairman of the Banking Committee, continued to express reservations
about the measure.

“Tt think we have the makings of a deal,” said Leo Melamed, a chairman emeritus and
senior policy adviser for the Mercantile Exchange.

The House passed the measure 377-4 on Oct 19. Since then, Ewing has pushed for Senate
passege, along w. Senate Agriculture Chairman Richard G. Lugar, R-Ind., and Sen, Peter
G. Fitzgerald, R-I11.

Gramm, however, dislikes several provisions. One would explicitly permit the use of a
type of over-the-counter derivative, known as a swap. Although U.S. companies and
financial institutions use them, they are neither explicitly permitted nor prohibited.

Gramm said the bili is not clear enough on what is a banking product vs. what is a
future, and he wants to ensure that swaps are classified as banking products.

Ke also opposes a provision that he said would expand the jurisdiction of the
Commodity Future Trading Commission.

“We're just continuing to work,” Gramm said after the meeting. “I thought we made sone
Progress, but I've thought that for a long time. Anybody or anything can unravel it at the

* 01800000010125



{(o)(5)]

01800000010149



RE: California Energy Group e-mail TEST MESSAGE Page | of 2

From: Tierney, Michael C. (MTiemey@sempra.com]

Sent: Saturday, January 13, 2001 2:07 PM

To: "David. Wilcox@do.treas.gov *; "Lee.Sachs@do.treas.gov *; Soares, Chris;
‘martha.altamar@ferc.fed.us *; ‘alexm@calpine, bs

Corn com *;
‘jason_s._seligman@cea. "shg@cpuc.ca.gov *; ‘Michele.Greene@do.treas.gov ';
.treas.gov " 7 com ';
com * k com '; ‘lynn.lednicky@dynegy.com *; “smara@enron.com ':
‘linda, lee@ferc.fed.us '; ‘dan, |.gov.treas.gov *; com *
‘richard. glicki@hq.doe.gov '; ‘smutany@iepa.com '; 'karen,tomcala@pge-corp.com *;

com *;
com *: Temey, Michael C: iievieladinceisdpeondhversendany com's

‘cread@steptoe.com "; Julie.greenisen@troutmansanders.com ';
Seas * A ADMINGSO teas gov
“ronald_minsk@opd.eop.gov '; 'imdonnell@duke-energy.com *; hjpodewer@duke-energy.com *;
‘Dbailey@duke-energy.com *s‘njdesch com * ‘whhall@duke-energy.com ';
com *; ‘rmk4@pge.com °; 'édr0@pge.com *; 'ip2@pge.com ';
‘starckle@sce.com *; John.gammie@williamns.com *; COM ";
com *: “ .com '; jwhokden@seiworldwide.com ’;

Ce: Barbour, Gaylen; ‘curtis. wagner@ferc.fed.us *
Subject: RE: California Energy Group @-mail TEST MESSAGE

Please add Nick Fels to this mailing list. His email address is nfcls@cov.com

~--Onginal Message-——

From: David, Wilcox@do treas.gov

To: David, Wilcox@do, treas.gov; Lee. Sachs@do,treas, gov; Chris.Soarcs@do, treas.gov; martha altamar@fere.fed.us;
alexmm@)calpine.com; jmacias@calpine.com; lates, etleondiioas COp.gov; shg@cpuc.ca gov;
Michelle.Greene@do.treas gov, Ray Squitiers@do.treas.gov; Veronica Stokes @do.treas.gov; eisenstath@DSMO,com;

sbvanteer{ijduke-energy.com; joc.newton@dynegy.com; lynn. pompcarhar septh

linda.tee@)ferc. fed.us; dan.poffenberger@ferc. ged gov.treas., richard. glick@bq.doe.gov;

smutany@iepa.com; karen.tomcala@)pge-corp.com; compas. com; Se RMK4@pge.com; joebob-

perk i com; marvin_k_ballard@ireliantenergy.com; KMcCrea@sablaw.com; fieldejr@isce.com;

harold.ray@isce.com; i ; SjcapomaG)seiworkdwide.com,

mticmey@sempra.com; sonneLedmonds@southemenergy.com; cread@steptoe.com, temoreland@swidlaw.com;

julie.greenisen@troutmansanders.com; slex, gnidberg@williama.cons; { 'b 6)) + ADMIN@do.treas. gov;

ronald_minsk@opd.eop.gov; jmdonnelh@duke-energy.com; com, bbailey@duke-energy.com;

com; wihall@duke-cnergy.com, sbvanleer(@duke-cnergy.com; peer ne ddrO@pge.com;

Sptanen com; starckle@sce.com; john.gammie@willi ; roharris@)seiworldwide.com; ler @seiworldwide.com;

Jjwholden@seiworkdwide.com; richard shapiro@jenron.com; badeen@enron,com

Ceo: Gaylen.Barbour@yo.treas.gov; curtis. wagner@fere.fed.us
Sent: 1/12/01 2:51 PM
Subject: RE: California Energy Group e-mail TEST MESSAGE

01800000010153
10/21/2002



Received: from [199.77.210.37] by franklin-a-hme0.state.gov via smtpd
(for InterscanA.state.gov [169.253.8.3)} with SMTP; Mon,

Received: by am21.irm. state.gov with Internet Mail Service (5.5.2654.89)
id <TTX3VA65>; Mon, 01 Oct 20012 04:31:27 -c400

Date: Mon, 01 Oct 2001 04:31:26 -0400

Prom: "Silverman, Robert J" <SilvermanRestate.gov>

Subject: Additional Points for DERVIS Meetings on Monday

To: marshall.mills@do,.treas.gov, larry.mcdonaldedo.treas.gov

Cc: "Marciel, Scot" <MarcielSe@state.gov>,

*Zuniga-Brown, Timothy (Main State)" <Zuniga-BrownTrestate.gov>,

“Dwyer, Stuart A(Main State)" <DwyerSA@state.gov>,

“Jeffrey, dames" <JeffreyJestate.gov>,

“Dunnigan, Robin L" <DunniganRLéstate.gov>,

*Shub, Adam M(E)* <ShubAMestate.gov>

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<4933FDC939C8D4 118BD100508BEE250630F03Fwankarasnteft .ankara.state.gov>

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oye nf T Silverman, Robert
J SMTP SilvermanR@state.gov
Silverman, Robert
a SMTP: SILVERMANR@STATE .GOV
SMTP
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*  sppereerree? & --Subst
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*  -gerrresirriy7 s
_ 8-ubet¢12-. ~OCILFOOILE e 1
oviy K Silvermankestate.gov

Marciel, Scot; Zuniga-Brown, Timothy(Main State);
Dwyer, Stuart A(Main State); Jeffrey, James; Dunnigan, Robin L; Shub, Adam
M(E) marshall.mil
lsédo.treas.gov; larry.mcdonaldgdo.treas.gov Additional Points for
DERVIS Meetings on Monday
Marshall and Larry,

Scot and I chatted this morning, and

. _substg1,0_GOEO020018 * sy
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{(b)(5)]

01800000010143



long-term solutions to California's chronic electricity

shortage and skyrocketing prices.
if the Friday talks failed to make as much progress as

negotiations on Tuesday to prevent the of PG&E Corp
<PCG.N> and Edison International <E1X.N>, which could ripple
throughout the national economy.

Both utilities say they have run out of cash because of
runaway prices wholesale power, which are now tenfold higher
than one year ago. Under California's landmark 1996
deregulation law, the higher wholesale prices cannot be passed
through to consumers.

The two utilities want a 90-day reprieve in repaying
billions of dollars to out-of-state power generators, as well
as the ability to sign long-term contracts to lock in lower

REUTERS
Rir 15:29 01-12-01
:TICKER: PCG EIX

“SUBJECT: CRUD COBO MU ENER UTIL USA

Copyright (c) 2001 Reuters
Received by NewsEDGE/LAN: 1/12/01 3:24 PM

=DJ POWER POINTS: By The Numbers, Calif Pwr Deal Looks Good
Dow Jones International News Service via Dow Jones

By Mark Golden
A Dow Jones Newswires Column

NEW YORK (Dow Jones)--Grandstanding by negotiators in Washington, D.C., on the
California electricity crisis indicates the sides are too far apart for an

agreement this weekend, but the actual numbers involved raise the question: How
can they not get this done?

California Gov. Gray Davis, on behalf of the utilities that contribute so
generously to his campaign funds, is demanding three-year supply contracts at
5.5 cents a kilowatt-hour. "We've got to stop the hemorrhaging of utility cash,
but | can't possibly have another rate increase or any state bailout,” the
governor is saying.

According to sources, U.S. Treasury Secretary Lawrence Summers and the
generating company chief executives looked at Davis with a "What are you
smoking?” several times Tuesday night. The generators’ stance is that
the market price is 8.5 cents/kwh and only if the contracts run for eight years.

But that’s all just negotiating position. The customers of Edison
International's (EIX) Souther California Edison currently pay the company 7.6
cents/kwh just for energy. That price includes last week's one-cent raise, but
not other charges such as transmission and distribution,

Edison generates half the power it needs at a cost of about 3 cents/kwh. So,
purchasing the other half at 5.5 cents/kwh would do a lot more than stop the
hemorrhaging, Hf the cost of purchased power were 5.5 cents, Edison's average

= 01800000010104



For more information about products on this topic visit our Information Marketplace

HENWOOD DETAILS SUMMER 2001 ELECTRICITY FORECASTS THROUGH RELEASE OF WSCC
INTERCONNECTS AND POWER FLOWS MAP December 29, 2000 Sacramento, CA Henwood Exergy
Services, Inc. announced the release of a newly-developed WSCC market power map detailing
forecasts for Summer 2001. The Henwood WSCC 2001 Interconnects and Power Flows Map defines
the Summer 2001 power needs for the WSCC including California.

international

For more information about products on this topic visit our Information Marketplace

Spain govt approves avg 1.52 pet cut in 200] electricity tarifé Dec 29, 2000 -
MADRID (AFX) - The cabinet has approved an average 1,52 pet reduction in electricity
tariffs for 2001, the government said.

Tokyo Electric Power to Move Into Rival Tohoku's Turf (UpdateS) Dec 27, 2000 =
Bloomberg Tokyo Electric Power Co., Japan's biggest power utility, said it will supply
electricity in the northern Tohoku region, an area where Tohoku Electric Power Co. has
long been the dominant power supplier.

Mexican State-Owned Power Company Loses 3.6 Billion Pesos
Dec 28, 2000 - Tnfolatina 5.A. de C.V. Mexican state-owned electricity company Luz 6
Fuerza del Centro during the first half of 2000 lost 3.6 billion pesos despite the fact
that it received federal subsidies totaling 4.4 billion pesos.

Endesa confirms 42 bin ptas investment with Elecnor in Argentina Dec 27, 2000 -
MADRID (AFX) - Endesa SA said it has signed an agreement with Elecnor SA to form the 50-50
joint venture Energias Argentinas SA {Enarsa) which will invest an initial 42 bln ptas in
wind-energy projects in Argentina.

EU commission reportedly may oblige Spain's power cos to pay back govt subsidy Dec
27, 2000 - AFX News Limited The European Commission may cblige Spanish power companies to
pay back part of the subsidies received from the government, yesterday's El Pais reported.

Spain 2000 electricity demand up 6.25 pet vs yr-earlier ~ Red Electrica Dec 28,
2000 - MADRID (AFX) - Red Electrica de Espana SA said electricity demand rose 6.25 pct in
2000 from a year earlier,

EGCOMP seen affected by power surplus in 2001: Seamico Securities Dec 28, 2000 -
BANGKOK (AFX-ASIA) - Electricity Generating Ple is expected to be negatively affected by
an electricity surplus in 2001 due to the company's plan to invest in independent producer
projects and small producer projects, a report by Seamico Securities said.

Union Fenosa sees 2001 overseas ops revenue 2.530 bln cur vs 1.448 in 2000 Dee 29,
2000 - MADRID (AFX Union Electrica Fenosa SA said revenue from its overseas operations
are expected to nearly double in 2001 to 2.530 bln eur from 1.448 bln in 2000.

Telenor exercises 10 pet VIAG put option; BT to pay more than 20 bln nkr Dec 25,
2000 ~ APX News Limited Telenor ASA said it is exercising an option to sell its 10 pct
stake in VIAG Interkom GmbH to British Telecommunications PLC,

“ 1800000010055



From: Wilcox, David

Sent: ‘Thursday, February 21, 2002 12:47 AM

To: SearchCameo
CAMEO Recon found a word: aad
Somaerermaamenant be See iene tara 0 oy aes
Michelle.Greene@do.treas.gov; R- es

This message was found to have a Critical Word in it. Message Sent to alexm@calpine.com:
jmacias@calpine.com: jason_s._seligman@cea.eop.gov; shg@cpuc.ca.gov)

Chris. Soares@do.treas,gov; David.Wilcox@do.treas.gov: Lee,Sachsédo,treas.gov:
Michelle.Greenefdo.treas.gov; Ray.Squitieri@do.treas.gov; Veronica. Stokes@do.treas.gov;
e@isenstatl@OSMO.com; sbvanleer@duke-energy.com; joel.newton@dynegy.com;

lynn. lednicky@dynegy.com; smara@enron.com; Linda Lee;

dan.poffenberger@ferc.ged.us.t. gov: pmohler@hewn.com; richard.glick@hq.doe.gov;
smutany@iepa.com: karen.tomcala@pge-corp.com: cxg2@pge.com: ODxH4@pge.com; RMK4Epge.com;
joebob-perckins@reliantenergy.com: marvin_k_ballard@reliantenergy.com: KMcCrea@sablaw.com;
fleldejrésce.com: harold.ray@sce.com: dreed#sdge,com; wsakaria@sdge.com;
rahayes@seiworldwide.com: sjcapoma@seiworldwide.com: mtierney@sempra.com:

sonnet .edmonds@southernenergy.com; cread@steptce.com; temoreland@swidlaw.con;
juliec.greenisen@troutmansanders.com; slex.goldberg@williams.com;[(b)(6)]

‘com Martha Altamar, CC to Gaylen.Barbour@do.treas.gov; Curtis Wagner, Date 1/12/2001
9:28:23 AM, Subject of message RE: California Energy Group e-mail

Word(s) found: Enron

-----Original Message--~--

From: Martha Altamar

Sent: 1/12/2001 9:28:23 AM

Received: 1/12/2001 9:26:14 AM

To: alexm@calpine.com, SMTP: alexm@calpine.com
jmacias@calpine.com, SMTP: jmacias@calpine.com
jason_s. seligman@cea.eop.gov, SHTP:jas0n_s._seligman@cea.eop.gov
shg@cpuc.ca.gov, SMTP:shg@cpuc.ce.gov
Chris.Seares@do.treas.gov, SMTP:Chris.Soares@do.treas.gov
David.Wilcox@do.treas.gov, SMTP:David.Wilcox@do,treas.gov
Lee. Sachs@do.t -gov, SMTP: Lee.Sachs@do.treas.gov
Michelle.Greeneldo. a3.gov, SMTP:Michelle.Greene@do.treas.gov
Ray.Squitieri@do.treas.gov, SMTP:Ray.Squitieri@do.treas.gov
Veronica, Stokes@do.treas.gov, SMTP:Veronica.Stokes@do.treas.gov
eisenstatl@DSMO.com, SMTP:eisenstatl@DSMO.com
sbvanleer@duke-energy.com, SMTP: sbvanleer@duke-energy.com
joel .newton@dynegy.com, SMTP: joel. newton@dynegy.com
lynn. lednicky@dynegy.com, SMTP:lynn,lednicky@dynegy.com
smaragenron.com, SMTP:smara@enron.com
Linda Lee, SMTP:linda.lee@ferc.fed.us
dan.poffenberger@ferc.ged.us.treas.gov, SMTP:dan.potfenberger@ferc.ged.us.treas.gov
pmohler@hewm.com, SMTP:pmohler@hewn.com
richard.glick@hq.doe.gov, SMTP: richard.glick@hq.doe.gov
smutany@iepa.com, SMTP: smutany@ieps.com
karen.tomcala@pge-corp.com, SMTP: karen.tomcala@pge-corp.com
exg2@pge.com, SMTP: cxg2@pge,com
OxH4@pge.com, SMTP: Dxli4@pge.com
RMK42pge.com, SMTP: RMK4@pge.com
Joebob-perkins@reliantenergy.com, SMTP: joebob-perkins@reliantenergy.com
marvin _k ballard§reliantenergy.com, SMTP:marvin_k_ballard@reliantenergy.com
KMcCrea@sablaw.com, SMTP:KMcCrea@sablaw.com
fieldejr@sce.com, SMTP:fieldejr@sce.com
harold.ray@sce.com, SMTP:harold.rayésce.com
dreed@. com, SMTP:dreed@sdge.com
wsakaria@sdge.com, SMTP: wsakaria@sdge.com

”

01800000010041



{(6)(5))

1800000010171



executives of electric power companies tentatively planned to
meet on Saturday to finalize a fix for California's power mess,
SB iraere loge b> tee nepeelices seid on ey,

The high-level was set to take place al the Energy
Department at 3:30 p.m. EST (2030 GMT), with some California
officials participating via teleconference, the source said.

The state narrowly averted rotling power blackouts on
Thuray a randy oh suppose

dangerously low levels because of a severe storm,

Friday marked the fourth day of negotiations among
lower-level aides to map out detailed proposals for short- and
Jong-term solutions to California's chronic electricity

and skyrocketing prices,

if the Friday talks failed to make as much progress as
hoped, the Saturday session could be downgraded to another day
of negotiations among lower-level officials on technical
issues, according to another source.

‘Summers and Energy Secretary Bill Richardson launched the
negotiations on Tuesday to prevent the bankruptcy of PG&E Corp
<PCG.N> and Edison International <EIX.N>, which could ripple
throughout the national economy.

Both utilities say they have run out of cash because of
runaway prices wholesale power, which are now tenfold higher
than one year ago. Under California's landmark 1996
deregulation law, the higher wholesale prices cannot be passed
through to consumers.

The two utilities want a 90-day reprieve in repaying
billions of dollars to out-of-state power generators, as well
88 the ability to sign long-term contracts to lock in lower
prices.

((washington.commodsenergy.newsroom@reuters.com))

REUTERS
Rir 16:29 01-12-01
STICKER: PCG EIx

“SUBJECT: CRUD COBO MU ENER UTIL USA

Copyright (c) 2001 Reuters
by NewsEDGE/LAN: 1/12/01 3:24 PM

=DJ POWER POINTS: By The Numbers, Calif Pwr Deal Looks Good
Dow Jones International News Service via Dow Jones

By Mark Golden
A Dow Jones Newswires Column

Pred hal isabortin en chewed les cp arpia he elal aa D.C., on the

California electricity crisis indicates the sides are too far apart for an
agreement this weekend, but the actual numbers involved raise the question: How
can they nol get this done?

California Gov. Gray Davis, on behalf of the utilities that contribute so
generously to his campaign funds, is demanding three-year supply contracts at
5.5 cents a kilowatt-hour. "We've got to stop the hemorrhaging of utility cash,
but | can't possibly have another rate increase or any state bailout,” the
governor is saying.

According to sources, U.S. Treasury Secretary Lawrence Summers and the
generating company chief executives looked at Davis with a "What are you
smoking?" expression several times Tuesday night. The generators’ stance |s that

8 01800000010099



From: Wilcox, David

Sent: Thursday, February 21, 2002 12;50 AM

To: SearchCameo

Subject: CAMEO Recon found a word: Enron sent by Wilcox, David to Elmendorf, Douglas; Squitieri,

Ray; Flanagan, Rosemary; Chryst, Nancy on 12/14/2000 11:16:04 PM

This message was found to have a Critical Word in it. Message Sent to Elmendorf, Douglas;
Squitieri, Ray; Flanagan, Rosemary: Chryst, Nancy, From Wilcox, David, CC to, Date

a)
bebrief.doc (32 KB)
12/14/2000 11:16:04 PM, Subject of messa ge RE: california electricity

Word(s) found: Enron

coves Original Message--~~~

From: Wilcox, David

Sent: 12/14/2000 11:16:04 mH

Received: 12/14/2000 11:16:04 PM

To: Elmendorf, Douglas, EX: /O=USTREASURY/OU=00/CN=RECIPIENTS/CN=ELMENDORFD
Squitieri, Ray, EX: /OsUSTREASURY/OU=D0/CN=RECI PIENTS/CN=SQUITIERIA
Flanagan, Rosemary, EX: /O=USTREASURY /OU=00/CN@RECIPIENTS/CN«FLANAGANR
Chryst, Nancy, EX: /O-USTREASURY/CU=DO/CN#RECIPIENTS/CN=CHRYSTN

cc:

Subject: RE: california electricity

Body:

This is a really super effort, and illustrates the value, Ray, of your having kept an eye
on current developments in the energy field. Thanks to Doug for a wonderful editing job.
Please transmit to Larry ASAP.

--==-Original Message-~---~-

From: Elmendorf, Douglas

Sent: Thursday, December 14, 2000 6:11 PM
To: Wilcox, David

Subject: ealifornia electricity

{(b)(5)]

<< File: lsbrief.doc >>

End of message body

Message auditing by MicroData CAMEO Recon

7 01800000010015



executives of electric power companies tentatively planned to
meet on Saturday to finalize a fix for California's power mess,
@ source close to the negotiations said on Friday,

The high-level meeting was set to take place at the Energy
Department at 3:30 p.m. EST (2030 GMT), with some California
officials participating via teleconference, the source said.

‘The state narrowly averted rolling power blackouts on
Hine: dnrhacha ect aca bouiteger petenti dong
dangerously low levels because of a severe storm.

Friday marked the fourth day of negotiations among
lower-level aides to map out detailed proposals for short- and
long-term solutions to California's chronic electricity

and skyrocketing prices.

If the Friday talks failed to make as much progress as
hoped, the Saturday session could be downgraded to another day
lagers belay eerie hry rapes

Secretary B
negotiations on Tuesday to prevent the bankruptcy of PG&E Corp
<PCG.N> and Edison Intemational <E/X.N>, which could ripple
the national economy.

Both utilities say they have run out of cash because of
runaway prices wholesale power, which are now tenfold higher
than one year ago. Under California's landmark 1996
deregulation law, the higher wholesale prices cannot be passed
through to consumers.

The two utilities want a 90-day reprieve in repaying
billions of dollars to out-of-state power generators, as well
‘as the ability to sign long-term contracts to lock in lower

{(washington.commodsenergy.newsroom@reuters.com))
REUTERS
Rtr 15:29 01-12-01

STICKER: PCG EIX
:SUBJECT: CRUD COBO MU ENER UTIL USA
Copyright (c) 2001 Reuters

Received by NewsEDGE/LAN: 1/12/01 3:24 PM
=DJ POWER POINTS: By The Numbers, Calif Pwr Deal Looks Good
Dow Jones Intemational News Service via Dow Jones

By Mark Golden
A Dow Jones Newswires Column

NEW YORK (Dow Jones)~Grandstanding by negotiators in Washington, D.C., on the

California electricity crisis indicates the sides are too far apart for an

agreement this weekend, but the actual numbers involved raise the question: How

can they not get this done?

California Gov. Gray Davis, on behalf of the utilities that contribute so
generously to his campaign funds, is demanding three-year supply contracts at
5.5 cents a kilowatt-hour. "We've got to stop the hemorrhaging of utility cash,
but | can’t possibly have another rate increase or any state bailout,“ the

governor is saying.

According to sources, U.S. Treasury Secretary Lawrence Summers and the
generating company chief executives looked at Davis with a "What are you
smoking?" expression several times Tuesday night. The generators’ stance is that

61

01800000010011



‘The forbearance and contracts working groups have been meeting separately, and
were to convene a joint session late Friday to compare notes before reporting
back to the principal negotiators who will cut any final deal.

‘Those familiar with the talks have expressed a mix of pessimism and optimism
that a final deal can be struck, given what they described as unrealistic
bargaining demands by Gov. Davis.

He has firmly rejected retail rate increases and resisted demands for the
State to guarantee the nearly $12 billion utilities have paid over the last
eight months for wholesale power but been unable to pass along under
state-mandated frozen retail rates_

Further complicating the talks have been demands by Davis that the proposed
Jong-term power contracts be at rates far below the production costs of
electricity generators.

But lately the pessimism has been tempered by signals that Davis may be
persuaded to relent Saturday in his opposition to a state-backed securitization
of the utilities’ undercollections.

“Let's see their plan, and then we'll talk about that,” Steve Maviglio, the
govemor'’s spokesman, said late Thursday.

Davis reportedly has been under increasing pressure from Wall Street and
Clinton administration officials to reconsider his opposition to securitization.

Without a state credit guarantee, a work-out plan can't be struck, the
utilities will enter bankruptcy and the state's power grid will collapse into
blackouts, sources familiar with the talks warn,

The affected utilities are Southern California Edison Co., a unit of Edison
International (EIX), and Pacific Gas & Electric Co., a unit of PG&E Corp. (PCG).

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

(END) Dow Jones Newswires 12-01-01

2100GMT
(AP-DJ-01-12-01 2100GMT)
STICKER: EIX PCG SRE

‘SUBJECT: EUTL STGO DI7 Dit Di4 DI2 CA COBO COMM

Copyright (c) 2001 Dow Jones and Company, Inc,
Received by NewsEDGE/LAN; 1/12/01 3:55 PM

Calif power talks aim to reach solution on Saturday

WASHINGTON, Jan 12 (Reuters) - Treasury Sooeny, Lawrence
Summers, other senior Clinton administration officials and top
executives of electric power companies tentatively planned to
meet on Saturday to finalize a fix for California's power mess,
merce cree fa bie negoteeone sae on Eee,

The high-level meeting was set to take place at the Energy
Department at 3:30 p.m. EST (2030 GMT), with some California
Officials participating via teleconference, the source said.

The state narrowly averted rolling power blackouts on

among
lower-level aides to map out detailed proposals for short- and
2

1800000010103



Page | of 3

Cetina, Jill

Friday, December 07, 2001 4:45 PM

To: _DL_Market Group; snneroy Sacee cte otal: “Sito Oto) ane “Holinen: Lundsager,
Meg; ‘Paul Reid’; 'PMalmgren’; ‘Wayne’

Subject: Market Weekly Report, Dec 3-7

{(b)(5)]

i

01800000010160
10/21/2002



((6)(5))

Prepared by:

Treasury Market Room Staff

01800000010163



[(0)(5)]

01800000010167



square) at 9am tomorrow, any questions, please call lee sachs's
office at 622-2245. thanks.

<< File: Working Group report 4.doc >>

cnaen| Original Message-----

From: Stokes, Veronica

Sent: Thursday, January 11, 2001 4:56 PM

To: Alex Goldberg; Alex Makler; Charles C. Read; Claudia
Greif; Curtis Wagner Jr.; Dan Poffenberger; David Wilcox; Debra Reed;
Dede Hapner; Harold B. Ray; James Macias; Jan Smutney Jones; Jason
Seliyman; Joe Bob Perkins; Joel Newton: John Fielder: Julia Greenisen;
Karen A. Tomcala: Keith McCrea; Larry Eisenstat; Lee Sachs: Linda Lec;
Lynn Lednicky: Martha Altamar; Michael Tierney; Paul Mohler; Rich
Glick; Reb Hayes; Ross Ain ; Roy Kuga; Sean Gallagher; Sonnet Edmonds;
Steve Vanleer; Steven Capomaccio; Sue Mara; Terri Moreland: Tripp Ballard; Wayne
karias

SEV MSE MEINE NM

Ce: Gr Michelle; Barbour, Gaylen
Subject: FW: California Energy Group

This is a test to provide a comprehensive listing for those who
participated in the Treasury Department California Energy Group
meetings this week. If you know of anyone else who should be added to
this list, please call at (202) 622-2245.

vvvvV VY

<< Message: California Energy Group >>
oooone End of message body
Message auditing by MicroData CAMEO Recon

a 01800000010023



{(b}5))

01800000010173



“Sue Mara’: ‘Terci Moreland’; ‘Tripp Ballard’; ‘Wayne Sakarias'
Ce: Barbour, Gaylen
Subject: RE: California Energy Group

more e-mail corrections included. the document is attached. we will
reconvene in the same conference room (6th floor, metropolitan square)
at 9am tomorrow. any questions, please call lee sachs's office at
622-2245. thanks.

<< File: Working Group report 4.doc >>

Stokes, Veronica

Sent: Thursday, January 11, 2001 4:56 PM

To: Alex Goldberg: Alex Makler; Charles C. Read; Claudia Greif;
Curtis Wagner Jr.; Dan Poffenberger; David Wilcox; Debra Reed; Dede
Hapner; Harold 8. Ray: James Macias; Jan Smutney Jones; Jason
Seliyman; Joe Bob Perkins; Joel Newton; John Fielder; Julia Greenison;
Karen A. Tomcala; Keith McCrea; Larry Eisenstat; Lee Sachs; Linda Lee:
Lynn Lednicky; Martha Altamar; Michael Tierney; Paul Mohler; Rich
Glick; Rob Hayes: Ross Ain ; Roy Kuga; Sean Gallagher; Sonnet Edmonds;
Steve Vanleer: Steven Capomaccio; Sue Mara; Terri Moreland; Tripp Ballard; Wayne
karias

Ce: Greene, Michelle; Barbour, Gaylen

Subject: FW: California Energy Group

gvYVVV VV
2
EI

This is a teat to provide a comprehensive listing for those who
participated in the Treasury Department California Energy Group
meetings this week. If you know of anyone else who should be added to
this list, please call at (202) 622-2245.

vVvvV¥VY VV

<< Message: California Energy Group >>

01800000010113



(Clabal Easerping Markets Performance Treavery Mactes Aom
Wee 1290 rM ‘Tomtnateney, Divevsor
ene

((b)(5)]

* pen tage acing rah, Argan, ane Mace AD mare 30. em Se py

01800000010206



State Of California
Request for Offers
January __, 2001

{(b)(5)}

01800000010134



‘Treasury Market Room 622-2650 GLOBAL FINANCIAL MARKETS:
Timothy Outaney, Olrector tare. ets eM

((b)(5)]

01800000010175



From: Squitier, Ray

Sent: Thursday, February 21, 2002 12:19 AM

To: SearchCameo

Subject: CAMEO Recon found a word: Enron sent by Soares, Chris to 'Martha Altamar’;

alexm@calpine.com; jmacias@calpine. 1_S._seligman@cea.eop.gov;
on svalcox, Desi: Sacha, Loe; Ontona, Mohahe Michelle; Squitier,

wy

‘Working Group

report 6.doc (36...

This message was found to have a Critical Word in it. Message Sent to ‘Martha
Altamar'; alexm@calpine.com; jmacias@calpine.com; jason_s._seligman8cea.cop.gov;
shg@cpuc.ca.gov; Soares, Chris; Wilcox, David; Sachs, Lee; Greene, Michelle; Squitieri,
Ray: Stokes, Veronica; eisenstatl@DSMO.com; sbvanleer@duke-energy.com;
joel.newton@dynegy.com; lynn. lednicky@dynegy.com; smara@enron.com; Linda Lee;
dan. poffenberger@ferc.ged.us.treas.gov; pmohler@hewm.com; richard.click@hq.doe.gov;
Smutany@iepa.com; karen.tomcala@pge-corp.com; cxg2@pge.com; DxH4@pge.com; RMK4@pge.com:
jJoebob-perkins@reliantenergy.com; marvin_k ballard@reliantenergy.com; KMcCrea@sablaw.com;
fieldejr@sce.com; harold.ray@sce.com; dreed@sdge.com; wsakaria@sdge.com;
rahayes@seiworldwide.com; sjcapoma@seiworldwide.com; mtierney@sempra.com;
sonnet .edmonds@southernenergy.com; cread@steptoe.com; temoreland@swidlaw.com;
julie.greenisen@trovtmansanders.com; alex.goldberg@williams.com; }
From Soares, Chris, CC to Barbour, Gaylen; Curtis Waqner, Date 1/12/2001 1:33:52 PM,
Subject of message RE: California Energy Group e-mail

Word(s) found: Enron

setae Original Message-----

From: Soares, Chris

Sent: 1/22/2001 1:33:52 PM

Received: 1/12/2001 1:33:52 PM

To: ‘Martha Altamar', SMTP:martha.altamar@ferc.fed.us
alexm@calpine.com, SMTP:alexm@calpine.com
jmaci ‘alpine.com, SMTP:jmacias@calpine.com
jason_s. seligman@cea.eop.gov, SMTP: jason_s._seligman@cea.eop.gov
shg@cpuc.ca.gov, SMTP: shg@cpuc.ca.qov
Soares, Chris, EX: /O=USTREASURY/OU=DO/CN«RECI PIENTS/CN=SOARESC
Wilcox, David, EX: /O-USTREASURY/OU=DO/CN«RECIPIENTS/CN=WILCOXD
Sachs, Lee, EX: /O-USTREASURY/OU=DO/CN=RECIPIENTS/CN=SachsL
Greene, Michelle, EX: /O-USTREASURY/OU*DO/CN+RECIPIENTS /CN*GREENEMI
Squitieri, Ray, EX: /O-USTREASURY/OU=D0/CN*RECIPIENTS/CN=SQUITIERIR
Stokes, Veronica, EX: /O-USTREASURY /OU+DO/CN-RECIPIENTS/CN*STOKESV
eisenstatl@DSMO.com, SMTP:eisenstatl@DSMO.com
sbvanleer@duke-energy.com, SMTP: sbvanleer@duke-energy.com
joel. newton@dynegy.com, SMTP: joel.newton@dynegy.com
lynn. lednicky@dynegy.com, SMTP: lynn. lednicky@dynegy.com
smara@enron.com, SMTP: smara@enron.com
Linda Lee, SMTP: linda. lee@ferc. fed.us
dan.poffenberger@ferc.ged.us.treas.gov, SMTF:dan.poffenberger@ferc.ged.us.treas.gov
pmohler@hewm.com, SHTP:pmohler@hewn.com
richard.glick@hq.doe.gov, SMTP:richard.glick@hq,doe.gov
smutanyG@iepa,com, SMTP: smutanyBiepa.com
karen.tomecalafpge-corp.com, SMTP: karen.tomcela@pge-corp.com
cxg2@pge.com, SMTP: cxg2@pge.con
DxH4@pge.com, SMTP:Dx#4@pge.con
RMK4@pge.com, SMTP: RMK4@pge.con
joehoh-perkins@reliantenergy.com, SMTP: joebob-perkins@reliantenergy.com
marvin_k_ballard@reliantenergy.com, SMTP:marvin_k_ballard@reliantenergy.com

130
01800000010047



Re rey eh ee cree Cate), Dineay DYN), Souham Enoray (SOE) and
Duke Energy (DUK), can’t get their prices down to 5.5 cents/kwh in California
given the current market price of natural gas.

But they don't need anything close to 8.5 cents for eight years, The forward
price for wholesale power in California for the balance of this year is 18
cents/kwh for the on-peak hours, which is what the utilities mostly need to buy.
The on-peak price drops to 11 cents/kwh for a three-year contract because new
generators and new gas supplies are expected to come on line. For an eight-year
contract, the price drops to about 7.3 cents/kwh.

At7.3 cents, PG&E would be heading to bankruptcy court. But the generators
will get to sell PG&E some off-peak power, too, which brings the average price
down a little further. If the governor guarantees really quick licensing for a
couple of new power plants in northern California, the price comes down a lot.

What's more, to save deregulation in the U.S. the generators are willing to
cut to the bone. The stocks of Dynegy, Enron Corp. (ENE), etc., have high
price-to-eamings ratios because their earnings are expected to continue strong
growth under electric deregulation. They are the emerging masters of a
deregulated universe, but if deregulation were to throw PG&E and Edison into
bankruptcy court, there woukin't be any deregulated electric universe to master.

As one electricity trader put it: “Thay have got to get a deal done. If they
don't get ‘The California Energy Crisis’ off of CNBC every 30 minutes, I'm going
to be out of a job.”

Generators’ stock prices have been getting hammered since the first of the
year due to several factors, such as profit-taking after a great 2000, according
to Credit Suisse First Boston utility analyst Paul Patterson, Duke's stock has
fallen to $66 from $85 since Dec. 29, for example.

Prices of generator stocks have come down hard, in part, because a California
catastrophe would derail deregulation in many states and the forecasts for

generators’ earnings growth would be questioned, according to Solomon Smith
Somey analyst Rey Nise

That's the finances, The physical reality is that the westem U.S. probably
won't have enough electricity to meet demand for the rest of this year. Starting
in February, if a deal is done, California utilities won't be the last in line

to get their power, and the threat of blackouts will be spread out across the
West.

Other than that, where's the rub? Under deregulation, consumers were supposed
to get market rates in 2002. Based on the current forward market and the

utilities’ cost of retained generators, 7 cents/kwh for the rest of this year is
8 great deal. For 2002, it's fair, but for 2003-2008, it's terrible. The current
purchase price for those years is about 5 cents. With utility-owned generation

at 3 cents, consumers will be paying 7 cents/kwh when they should be paying 4
cents/kwh,

And the 2.4 cents/kwh competition transition charge (CTC) that was supposed to
end in 2002 has to be extended several more years. The CTC is *non-bypassabie.”
which means if you leave the focal monopoly for an alternative supplier, you
stil have to send a couple of cants/kwh to the old utility.

Ratepayer groups got about 40 people to storm the PG&E corporate headquarters
this week over the one cent rate increase. Another rate increase would cause
riots and ballot initiatives, and cost Davis his job.

But can consumer groups get people out in the streets over a deal that's great
now, but overcharges them starting in 20037 | doubt it.
ce]

01800000010110



From: Squitiesi, Ray

Sent: Thursday, February 21, 2002 12:19 AM
To: SearchCameo
Subject: ro lla Enron sent by Chryst, Nancy to Summers, Larry on 12/15/2000
©)
Isbrief doc (31 KB)
This message was found to have a Critical Word in it. Me ssage Sent to

Summers, Larry, From Chryst, Nancy, CC te Sandberg, Sheryl; Moe, Martin; Wileox, David;
Vandivier, David; Flanagan, Rosemary; Squitieri, Ray; Cononi, Rachel; Hendershot, Karen:
Flynn, Timothy, Date 12/15/2000 9:16:07 AM, Subject of message Conversation with Steven
Kean (Executive Vice President, ENRON Regarding the California Zlectricity Market)

Word(s) found: Enron

-----Original Message----~

From: Chryst, Nancy

Sent: 12/15/2000 9:16:07 AM

Received: 12/15/2000 9:16:07 AM

To: Summers, Larry, EX: /O=USTREASURY/OU=DO/CN*RECIPIENTS/CN=SUMMERSL

cc: Sandberg, Sheryl, EX: /OUSTREASURY/OU=DO/CN=RECIPIENTS/CN#DOM3 . DOPOS .Sandbergs
Moe, Martin, EX: /O-USTREASURY /OU=DO/CN=RECIPIENTS/CN#DOM3 .DOPOS,.MoeM
Wilcox, David, EX: /O=USTREASURY/OU*DO/CN=RECIPIENTS/CN=WILCOKXD
xr, David, EX: /O=USTREASURY /OU=DO/CN=RECIPIENTS/CN=VandivierD
Rosemary, EX: /OsUSTREASURY /OU*D0/CN*RECIPIENTS/CN=FLANAGANR
Squitieri, Ray, EX: /O-USTREASURY/OU*DO/CN*RECIPIENTS/CN=SQUITIERIR
Cononi, Rachel, EX: /C-USTREASURY/OU*DO/CN*RECIPIENTS/CN=CONONIR
Hendershot, Karen, EX: /O-USTREASURY/OU*DO/CN=REC1 PIENTS/CN=HENDERSHOTK
Flynn, Timothy, EX: /O=USTREASURY/OU=DO/CN=RECIPIENTS/CN=FlynnT

Subject: Conversation with Steven Kean (Executive Vice President, ENRON Regarding the
California Electricity Market)
Body:

The Attached memo when forward to EXEC SEC today.

End of message body

Message auditing by MicroData CAMEO Recon

154
01800000010065



From: Wilcox, David

Sent: Thursday, February 21, 2002 12:48 AM

To: SearchCameo

Subject: CAMEO Recon found a word: Enron sent by Kuga, Roy to ‘David. Wilcox@do.treas.gov’ on
1/12/2001 5:56:34 PM

This message was found to have a Critical Word in it. Message Sent to
*David.Wilcox@do.treas.gov', From Kuga, Roy, CC te , Date 1/12/2001 5:56:34 PM, Subject of
message RE: California Energy Group e-mail TEST MESSAGE

Word(s) found: Enron

SSUESIER: Original Message----~

From: Kuga, Roy

Sent: 1/12/2001 5:56:34 PM

Received: 1/12/2001 5:57:35 PM

To: *David.Wilcox@do.treas.gov', SMTP: David.Wilcox@do.treas.gov

cc:

Subject: RE: California Energy Group e-mail TEST MESSAGE

Body:

David,

I didn't get your second message with attachments. Can you pls. resend to me. I know Les
Starck of Edison just got it. Thanks for all your help over the past few days. Roy

w----Original Message-----
From: David.Wilcox@do.treas.gov [mailto:David.Wilcox@do.treas.gov]
Sent: Friday, January 12, 2001 2:31 PM
To: David.Wilcox@do.treas.gov; Lee.Sachs@do.treas.gov; Chris.Soares#do.treas.gov;
martha.altamar@ferc.fed.us; elexm@calpine.com; jmacias@calpine.com
<mailto:jmacias@calpine.com> ; jason_s._seligman@cea.eop.gov; shg@cpuc.ca.gov7
Michelle,Greene@do.treas.gov; Ray.Squiticri@do.treas.gov; Veronica.Stokes@do,treas.gov;
eisenstatl@0SMO.com; sbvanleer@duke-energy.com; joel.newton@dynegy.com:
lynn, lednicky@dynegy.com; smarafenron.com; linda. lee@ferc. fed,us;
dan. poffenberger@ferc.ged.gov.treas.gov; pmohler@hewm.com; richard.glick@hq.doe.gov;
smutany@iepa.com; Tomcala, Karen (Corp); Greif, Claudia; Hapner, Dede; Kuga, Roy; joebob-
perkins@reliantenergy.com; marvin_k_ballard@reliantenergy.com; KMcCrea@sablaw.com:
fieldejr@sce.com; harold.ray@sce.com; dreed@sdge.com; wsakaria@sdge
rahayes@seiworldwide.com; sjcapoma@seiworldwide.com,
sonnet .edmonds@southernenercy.com; cread@steptoe.com; temoreland@awidlaw.com;
julie. greenisen&trouteansanders.c:
alex. goldberg@williams.com; (oN ; ADMING@do.treas.qov;
ronald_minsk@opd.eop.gov: jmdonnell@duke-energy.com; hjpodewer@duke-energy.com;
bbailey@duke-energy.com; njdeschane§duke-energy.com; wfhall@duke-energy.com;
sbvanleer@duke-energy.com; Kuga, Roy; Richard, Daniel Jr.; Peters, Roger (Law);
starkle8sce.com; john.gammie@williams.com; reharris@seiworldwide.com;
smfuller@seiworldwide.com; dlmillerfseiworldwide.com; jwholden@seiworldwide.coms
richard.shapiro@enron.com; robert.badeerfenron.com

: Gaylen.Barbour@do.treas,gov; curtis.wagner#ferc.fed.us
Subject: RE: California Energy Group e-mail TEST MESSAGE

Pseyettorey End of message body

Messago auditing by MicroData CAMEO Recon

s 1800000010017



——————
From: LaKritz, Robb

Sent: Tuesday, January 08, 2002 2:45 PM

To: Bair, Sheila

Ce: McCardell, Dan; Adams, Tim; Dam, Ken; Gross, Jared; Kupter, Jeffrey
Sheila,

Do you have time tomorrow to mect with Dan McCardell and me to discuss an internal policy
roundtable we are hoping put together on issues related te the Enron situation and

ancil Yary developments?
Thanks.

Robb Lakritz

id 01800000010088



Embassy will most likely deliver the points to the GOI. Please comment asap.
Thanks.

<< File: EmbtalkYl.doc >>

-----Original Message-~--~--~-
From: Grewe, Maureen
bees Wednesday, July 11, 2001 12:52 PM

To: Sills, Gay; Resnick, Bonnie; Christopulos, Greg; Sampliner, Gary; Rao,
Geetha

Ce: Donovan, Meg; Mills, Marshall; McDonald, Larry; Radelet, Steve
Subject: Dabhol meeting on Enron/OPIC project at NSC

Importance: High

This is a readout of the meeting at NSC this morning. There is also an ACTION
request. USG agencies are requested to get back to NSC by cob tomorrow with
comments on OPIC's suggested talking points for a demarche to the GOE by the
Charge in Delhi. 1 talked to the State reps after the meeting (from South Asia
bureau, Investment office and Larson's office) and they seem to be basically in
the same place as I was on what an appropriate message might be. My proposed
plan is that Geetha will take a first crack at comments on the talking points
and circulate them within Treasury as early as possible this afternoon. I am
requesting that everyone provide comments by cob today, so that we can circulate
our comments to State and try to come up with joint suggested points to submit
to NSC by cob tomorrow. Please let me know if you have any concerns about this
plan.

Readout of meeting:

Attendees: NSC, State (£8 front office and investment office, South Asia
Bureau), Treasury (Grewe, Rac, Sampliner), Commerce, OPIC (President Peter
Watson, GC Ron Jonkers and several others)

{(b(5)]

00500000002770


——_—_—_—_—_—_—_—_—_—OoOoOoOo

From: Paes Sey >

Sent: \ 1, 2002 12:

an Thursday, February 12:19 AM

Subject: CAMEO Recon found a word: Enron sent by Wilcox, David to Elmendorf, Douglas; Squitieri,

Ray; Flanagan, Rosemary; Chryst, Nancy on 12/14/2000 11:16:04 PM

This message was found to have a Critical Word in it, Message Sent to Elmendorf, Douglas;
Squitieri, Ray; Flanagan, Rosemary; Chryst, Nancy, From Wilcox, David, CC to , Date

a)
Isbrief.doc (32 KB)
12/14/2000 11:16:04 PM, Subject of messa ge RE: california electricity

Word(s) found: Enron

onan ‘Original Message-----

From: Wilcox, David

Sent: 12/14/2000 11:16:04 PM

Received: 12/24/2000 11:16:04 PM

To: Elmendorf, Douglas, 5X: /O-USTREASURY/OU=DO/CN=RECIPIENTS/CN*ELMENDORFD
Squitieri, Ray, EX: /O*USTREASURY /OU=DO0/CN=RECIPIENTS/CN=SQUITIERIR
Flanagan, Rosemary, EX: /O-USTREASURY /OU=00/CN=RECIPIENTS/CN=FLANAGANR
Chryst, Nancy, EX: /OeUSTREASURY /OU=DO/CN=RECIPIENTS/CN=CHRYSTN

ce:

Subject: RE: california electricity

Body:

This is a really super effort, and illustrates the value, Ray, of your having kept an eye
on current developments in the enercy field. Thanks to Doug for a wonderful editing job.
Please transmit to Larry ASAP.

~----Original Message-----

From: Elmendorf, Douglas

Sent: Thursday, December 14, 2000 6:11 PM
To: Wilcox, David

Subject: california electricity

I've cleaned up Ray's memo 4 little (based in part on your previous comments and on the
phone conversation with the ENRON guy), but you should look it over. Ray should also
ceview it in the morning to be sure that I didn’t introduce any factual errors.

btw, Jon Talisman says that the CPI change will be in the tax bill that is about to be
passed.

<< Pile: Isbrief.doc >>
------ End of message body
Message auditing by MicroData CAMEO Recon

155
01800000010066



—eeeeeeeeee——  -  Ohnhvooa

Sent ear Sanh 1, 2002 12:18 AM
A 21, 12:1
To: SearchCameo
Subject: CAMEO Racon found a word: Enron sent by Gross, Jared to Squitier, Ray on 4/5/2001

This message was found to have a Critical Word in it. Message Sent to Squitieri, Ray,
From Gross, Jared, CC to , Date 4/5/2001 1:28:33 PM, Subject of message RE: memo to
Secretary on follow-up questions

Word(s) found: Enron

~ws=-Original Message-----

From: Gross, Jared

Sent: 4/5/2001 1:26:33 PM

Received: 4/5/2001 1;28:33 P&M

To: Squitieri, Ray, EX: /O=USTREASURY/OU=DO/CN*RECIPIENTS/CN=SQUITIERIR

co:

Subject: RE: memo to Secretary on follow-up questions

Body:

The typo comments are fine (I assume that you have already made them). I haven't found
anything to provide the type of analysis Rachel suggests... do you know of anything? As I
recall from the President's Working Group study on OTC derivatives industry, there is very
little data on the OTC markets broadly.

{(b)(5))

~-Original Message~
From: Squitieri, Ray

Sent: Thursday, April 05, 2001 1:16 PM

To: Gross, Jared

Subject: FW: memo to Secretary on follow-up questions

Here are several comments by Rachel. Would you read them, decide whether any changes are
necessary to your section, end if so send me a new version? Thanks.

----- Original Message-----
From: Cononi, Rachel
Sent: Tuesday, April 03, 2001 9:55 AM
To: Squitieri, Ray
Subject: memo to Secretary on follow-up questions

Ray,
I found a couple of typos on the second page of energy derivatives memo. [(b)(5)]

<< Pile: NEP ONeill 3 follow up Qs 0330.doc >>
w---== End of message body

Message auditing by MicroData CAMEO Recon

01800000010072



Embassy will most likely deliver the points to the GOI. Please comment asap.
Thanks -

<< Pile: EmbtalkY1.doc >>

oreee Original Message-----
Prom: Grewe, Maureen
Sent: Wednesday, July 11, 2001 12:52 PM

To: Sills, Gay; Resnick, Bonnie; Christopulos, Greg; Sampliner, Gary; Rao,
Geetha

Cc: Donovan, Meg; Mills, Marshall; McDonald, Larry; Radelet, Steve
Subject: Dabhol meeting on Enron/OPIC project at NSC

Importance: High

Thie ie a readout of the meeting at NSC this morning. There ia also an ACTION
request. USG agencies are requested to get back to NSC by cob tomorrow with
comments on OPIC's suggested talking points for a demarche to the GOI by the
Charge in Delhi. I talked to the State reps after the meeting (from South Asia
bureau, Investment office and Larson's office) and they seem to be basically in
the same place as I was on what an appropriate message might be. My proposed
plan ie that Geetha will take a first crack at comments on the talking points
and circulate them within Treasury as early as possible this afternoon. I am
requesting that everyone provide comments by cob today, so that we can circulate
our comments to State and try to come up with joint suggested points to submit
to NSC by cob tomorrow. Please let me know if you have any concerns about this
plan.

Readout of meeting:

Attendees: NSC, State (EB front office and investment office, South Asia
Bureau), Treasury (Grewe, Rao, Sampliner), Commerce, OPIC (President Peter
Watson, GC Ron Jonkers and several others)

{(b)(5)]

00500000002684


Both utilities say they have run out of cash because of
tunaway prices wholesale power, which are now tenfold higher
than one year ago. Under California's landmark 1996
deregulation law, the higher wholesale prices cannot be passed
through to consumers.

The two utilities want a 90-day reprieve in repaying
billions of dollars to out-of-state power generators, as well
‘a8 the ability to sign long-term contracts to lock in lower

prices.
((washington,commodsenergy newsroom@reuters.com))
REUTERS
Rtr 15:29 01-12-01
STICKER: PCG EIx
‘SUBJECT: CRUD COBO MU ENER UTIL USA
coe (c) 2001 Reuters
Received by NewsEDGE/LAN: 1/12/01 3:24 PM
=DJ POWER POINTS: By The Numbers, Calif Pwr Deal Looks Good
Dow Jones International News Service via Dow Jones

By Mark Golden
A Dow Jones Newswires Column

ill thi ecdsariny i cheebammenies el opie nied D.C., on the

Califomia electricity crisis indicates the sides are too far apart for an
agreement this weekend, but the actual numbers involved raise the question: How
can they not get this done?

California Gov, Gray Davis, on behalf of the utilities that contribute so
generously to his campaign funds, is demanding three-year supply contracts at
5.5 cents a kilowatt-hour. "We've got to stop the hemorrhaging of utility cash,
but | can't possibly have another rate increase or any state bailout," the
governor is saying.

According to sources, U.S, Treasury Secretary Lawrence Summers and the
generating company chief executives looked at Davis with a “What are you

several times Tuesday night. The generators’ stance is that
the market price is 8.5 cents/kwh and only if the contracts run for eight years.

But that's all just negotiating position. The customers of Edison
International's (EIX) Southern California Edison currently pay the company 7.6
cents/kwh just for energy. That price includes last week's one-cent raise, but
not other charges such as transmission and distribution.

Edison generates hall the power it needs at a cost of about 3 cents/kwh. So,

the other half at 5.5 cents/kwh would do a lot more than stop the
hemorrhaging. If the cost of purchased power were 5.5 cents, Edison's average
cost would be 4.3 cents, for which they are getting paid 7.6 cents. That 3.3
cents/kwh profit on the 83 billion kwh Edison sells a year comes to a whopping
$2.7 billion annually, End of credit problem,

PG&E Corp.'s (PCG) situation is more difficult. Their customers pay less for
electricity, and PG&E only generates a third of its own power, but they have
lower generating costs than Edison. Bottom fine: if PG&E could buy supplies at
5.5 cents/kwh, they would be left with 1.9 cents/kwh profit.

Unfortunately for the ufilities, California independent generators, such as
F:)

1800000010109



expecting to find more cheap credits, but instead discovered that Power companies had
bought most of them, driving up prices for the few that were left over. All the while, air
quality officials did not push business to install controls and instead trusted them to
make wise choices. Indeed, that was the very goal of the program. "For seven years, the
program did absolutely nothing,” seid an EPA official familiar with it. “Businesses got
used to cheap credits, Nobody did what they were supposed to do: responsible planning.”
RECLAIM was born during an economic downturn when business groups demanded a flexible
alternative to traditional regulations. Many economists and conservative politicians
continue to favor market-driven programs, and such approaches are expected to figure
prominently in the Bush administration's attempt to have a clean environment for less coat
and red tape, Representatives of big businesses, which control about 85% of the nitrogen
oxide credits, say RECLAIM has saved them money while contributing to record clean air the
region experienced during the 1990s. Air quality officials ascribe most of that progress
to cleaner car exhaust. Companies saved an estimated 41% on compliance costs under RECLAIM
compared to traditional regulations, although most of the savings occurred because
Pollution controls were delayed for so long. At the Arco refinery in Carson, engineers
arching for ways to reduce emissions under RECLAIM recently turned smog into cash. They

uted propylene gas, a byproduct of oil refining, from boilers into a processing plant
where they converted it to plastic pellets for water bottles, patio furniture and
Strawberry crates, reducing about 500 tons of pollutants annually. “Now the polypropylene
plant is a revenue-generating plant,” said Susan Livingston, environmental manager for
British Petroleum. In trying to fix the program, AQMD officials face a difficult balancing
act: They want to help lower credit prices by removing the power plants from the program,
But if the credits become too cheap again, companies won't have any financial incentive to
reduce emissions. It's the same scenario that made the program ineffective in the first
place. The agency's governing board meets May 11 to consider amendments to the program.
The agency is already planning to require 36 of the biggest polluters to begin submitting
plans detailing how and when they will install additional pollution controls. Among those
targeted are California Portland Cement in Colton, the Los Angeles Department of Water and
Power, and Equilon Enterprises, which operates a refinery in Wilmington. Industry
initially balked at the demand, but relented after air quality officials dropped a federal
enforcement PAGE 4 Los Angeles Times April 17, 2001, Tuesday, requirement. The AQMD
governing board also approved a regulation last month to allow companies to clean up
heavy-duty diesel engines in exchange for emission credits for use at factories. The EPA
has not approved similar rules by the AQMD, and state air quality officials frown on the
practice, Barry R. Wallerstein, executive officer of the AQMD, said Proposed changes to
RECLAIM should help restore confidence and improve the performance of the program. "I
don't think we're looking at Humpty Dumpty,” he said. "The sorts of changes we are
proposing will fix the difficulties the program perienced over the last year. This
is a bump in the road, a perturbation, and with cule amendments we will be back on the
path of achieving the design objectives.”

-~----Original Message~--~-

From: Squitieri, Ray

Sent: Wednesday, April 25, 2001 4:00 PM

To: Soares, Chris

Subject: ? EPA-O03-A, EPA's response to Dingell's letter on Barton's draft leg
“Electricity Emergency Relief Act

Importance: High

[OUTSIDE SCOPE , (b)(5)]

1800000010070



Global Emerging Markers Peefermance Trewmery Marte Km
Vwar 745 AM Pimrtaney, Oerecter
aapawy

{(b)(5)]

* pane ang Wing Breet Angee tet Men a 4m 20m 0 nm nee Ro renee

01800000010200



cost would be 4.3 cents, for which they are getting paid 7.6 cents. That 3.3
cents/kwh profit on the 83 billion kwh Edison sells a year comes to a whopping
$2.7 billion annually, End of credit problem.

PG&E Corp.'s (PCG) situation is more difficult. Thelr customers pay less for
electricity, and PG&E only generates a third of its own power, but they have
jower generating costs than Edison. Bottom line: if PG&E could buy supplies at
5.5 cents/kwh, they would be left with 1.9 cents/kwh profit.

for the utilities, California independent generators,
Reliant Energy (REI), NRG Energy (NRG), Dynegy (DYN), Souter Enorgy (SOE) and
Duke Energy (DUK), can't get their prices down to 5.5 cents/kwh in California
given the current market price of natural gas.

But they don't need anything close to 8.5 cents for eight years. The forward
price for wholesale power in California for the balance of this year is 18
Cents/kwh for the on-peak hours, which is what the utilities mostly need to buy.
The on-peak price drops to 11 cents/kwh for a three-year contract because new
generators and new gas supplies are expected to come on line. For an eight-year
contract, the price drops to about 7.3 cents/kwh,

At 7.3 cents, PG&E would be heading to bankruptcy court. But the generators
will get to sell PG&E some off-peak power, too, a Gidbeaoe
down a litte further. If the governor guarantees really quick licensing for a
peal lligeieeibiad sity tlael sagtdn-ced ayes the price comes down a lot.

What's more, to save deregulation in the U.S. the generators are willing to
Cut to the bone. The stocks of Dynegy, Enron Corp. (ENE), etc., have high
price-to-earnings ratios because their earings are expected to continue strong
growth under electric deregulation. They are the emerging masters of a
deregulated universe, but if deregulation were to throw PG&E and Edison into
bankruptcy court, there wouldnt be any deregulated electric universe to master.

As one electricity trader put it: "They have got to get a deal done. If they
oer get The Calteetn oeray Celt Biot CNC every 0 mine, Fm pong
to be out of a job~

Generators’ stock prices have been getting hammered since the first of the
year due to several factors, such as profit-taking after a great 2000, according
to Credit Suisse First Boston utility analyst Paul Patterson. Duke's stock has.
fallen to $66 from $85 since Dec. 29, for example.

Prices of generator stocks have come down hard, in part, because a California
catastrophe would derail deregulation in many states and the forecasts for
generators’ earnings growth would be questioned, according to Solomon Smith
Bamey analyst Ray Niles.

That's the finances. The physical reality is that the western U.S. probably
won't have enough electricity to meet demand for the rest of this year. Starting
in February, if a deal is done, California utilities won't be the last in line
to get their power, and the threat of blackouts will be spread out across the
West.

Other than that, where's the rub? Under deregulation, consumers were supposed
to get market rates in 2002. Based on the current forward market and the

utilities’ cost of retained generators, 7 cents/kwh for the rest of this year is

@ great deal. For 2002, it's fair, but for 2003-2008, it's terrible. The current
purchase price for those years is about 5 cents. With generation

at 3 cents, consumers will be paying 7 cents/kwh when they should be paying 4
cants/kwh.

And the 2.4 cents/kwh competition transition charge (CTC) that was supposed to

* 0180000001005



Office of Legislative Affairs

Department of the Treasury
(202) 622-0725

katie.quinn@do.treas.gov

1800000010081



Page 2 of 2

{(b)(5)]

01800000010192
10/21/2002



[(b)(5)]

Cenhed by: Jen Sharer
For Internat Use Onty wise2 439PM

01800000010195



Sent: Thureday, February 21, 2002 12:19 AM
ai ‘CAMEO Recon
found a word: Enron sent by Jone-Lin Wang to 'Ray.Squitieri@do.treas.gov’
on 1/2/2001 3:28:44 PM bo =

This message was found to have a Critical Word in it. Message Sent to
‘Ray .Squitieri@do.treas.gov', From Jone-Lin Wang, CC to , Date 1/2/2001 3:28:44 PM,
Subject of message FW: Daily Electric Power News ~ 01-02-01

Word(s) found: Enron

---<=Original Message----~

From: Jone-Lin Wang

Sent: 1/2/2001 3:28:44 PM

Received: 1/2/2001 3:26:22 PM

To: "Ray, Squitieri@do.treas.gov', SMTP:Ray.Squitieri@do.treas.gov

ce:

Subject: FW: Daily Electric Power News - 01-02-01

Body:

Try this too...woof

“Original Message----~

From: news@mail.energycentral.com (mailto:newsmail.energycentral.com)
Sent: Monday, January 01, 2001 7:20 PM

To: jwang@cera.com

Subject: Daily Electric Power News - 01-02-01

Enron Energy Information Solutions

HOME | NEWSRCOM | EVENTS | JOBS | BUSINESS CENTERS | DIRECTORIES | DATABASES
TUESDAY, JANUARY 2, 2001

ENERGY CENTRAL NEWS SPONSORS

Want to hire the best professionals the energy industry has to offer? Post your
open positions in the Energy Central Job Center. FREE with every posting is one
announcement in our Job Watch e-mail! Circulated to more than 25,000 industry
professionals weekly, the Job Watch will put your position in front of the best candidates
possible. Your first 30-day posting is absolutely FREE! Click here for your FREE posting:
http: //www.energycentral.com/sections/jobs/

Looking for that last piece of information? Sign up for a FREE trial of the Energy
Central Data Center to get the information you need to complete your analysis, Available
immediately, the Data Center includes: FERC Form 1, EIA Form 861, Deregulation
Legislation, and Rate Tariff databases. The Date Center is your desktop research center.
Visit today to claim your FREE database trials:
http: //www,energycentral. com/sections/datacenter/datacenter_home.cfm

TOP STORIES

se 1800000010049



Sent: Thureday, February 21, 2002 12:19 AM
C3
Subject: CAMEO Rooon found « word nap henna mrt wi ope aa

Eiwis Sooroegpdo bese gov: Deked vi Weoebeteernee Lee Seche@do teas,
Michelle.Greene@do.treas.gov; Ra sa

This message was found to have a Critical Word in it, Message Sent to alexmfcalpine.com;:
jmacias@calpine.com; jason_s._seligman@cea.eop.gov; shg@cpuc.ca.govs
Chris.Soares@do.treas.gov; David.Wilcox@do.treas.gov; lee, Sachsédo.treas.gov;
Michelle.Greene@do.treas.gov; Ray.Squitieri@do.treas.gov; Veronica. Stokes@do.treas.gov;
eisenstatl@DSM0.com; sbvanleer@duke-energy.com; joel.newton@dynegy.com:

lynn. lednicky@dynegy.com; smarafenron,com; Linda Lee; Martha Altamar;
dan.poffenberger@ferc.ged.us.treas.gov; pmohlerfhewm.com; richard.glick@hq.doe.govs
smutany@iepa.com; karen.tomcala@pge-corp.com; cxg2@pge.com; DxH4@pge.com: RMK4@pge.com:
joebob-perkins@reliantenergy.com; marvin_k_ballard@reliantenergy.com: KMcCrea@sablaw.com:
tieldejr@sce.com; harold. ray@sce.com; dreed@sdge. com; wsakaria@sdge,com;
rahayes@seiworldwide.com; sjcapoma@seiworldwide.com; mtierney@sempra.com:

sonnet .edmonds@southernenergy.com; cread@steptoe.com; temoreland#swidlaw.com;
juiie.greenisen@troutmansanders.com; alex.goldberg@williams.com; [(

From Curtis Wagner, CC to Gaylen.Barbourédo.treas.gov, Date 1/12/2001 2:10:27 PM, Subject
of message RE: California Energy Group e-mail

Word(s) found: Enron

-----Original Message-----
From: Curtis Wagner
Sent; 1/12/2001 2:10:27 PM
Received: 1/12/2001 2:06:33 PM
To: alexm@calpine.com, SMTP:alexm@calpine.com
jmacias@calpine.com, SMTP: jmacias$calpine.com
jason_s._seligman@cea.eop.gov, SMTP: jason_s._seligman@cea.eop.gov
shg@cpuc.ca.gov, SMTP: shg@cpuc.ca.gov
Cheis.Soares@do.treas.gov, SMTP:Chris.Soares@do.treas.gov
Wilcox@do.treas.gov, SMTP:David.Wilcox@do.treas.gov
chs@do.treas.gov, SMTP: lee.Sachs@do,treas.gov
Michelle,Greene@do.treas.gov, SMTP:Michelle,Greene&do.treas.gov
Ray. Squitieri@do,treas.gov, SMTP:Ray.Squitieri@do,treas.gov
Veronica.Stokes@do.treas.gov, SMTP:Veronica.Stokes@do,treas.gov
eisenstatl@DSMO.com, SMTP:eisenstatl@DSMO.com
sbvanleer@duke-energy,com, SMTP: sbvanleer@duke-energy.com
joel. newtonSdynegy.com, SNMTP:joel.newton@dynegy.com
lynn.lednicky@dynegy.com, SMTP: lynn. lednicky@dynegy.com
smaraGenron.com, SMTP: smara@enron.com
Linda Lee, SMTP: linda. lee@ferc.fed.us
Martha Altamar, SMTP:martha.altamaré@ferc. fed.us
dan.poffenberger@ferc.ged.us.treas.gov, SMTP:dan.poffenberger@ferc.ged,us.treas.gov
pmohler@hewm.com, SMTP:pmohler@hewm.com
richard.glick@hq.doe.gov, SMTP:richard.glick@hq.doe.gov
smutany@iepa.com, SMTP: smutany@iepa.com
karen.tomcala®pge-corp.com, SMTP: karen. tomcala@pge-corp.com
exg2Qpge.com, SMTP:cxg2@pge.com
DxE4@pge.com, SMTP:DxH4@pge.com
RMK4@pge.com, SMTP: RMK4@pge.com
joebob-perkins@reliantenergy.com, SMTP:joebob-perkins@reliantenergy.com
marvin_k_ballard@reliantenergy.com, SMTP:marvin_k_ballard@reliantenergy.com
KécCrea@sablaw.com, SMTP:KMcCrea@sablaw.com
fielde}résce.com, SMTP: fieldejrésce.com
harold.ray@sce.com, SMTP:haroid.ray@sce.com
dreed@sdge.com, SMTP:dreed@sdge.com

128
01800000010045



cost would be 4.3 cents, for which thay are getting paid 7.6 cents, That 3.3
cents/kwh profit on the &3 billion kwh Edison sells a year comes to a whopping
$2.7 billion annually, End of credit problem,

PG&E Corp.'s (PCG) situation is more difficult. Their customers pay less for
electricity, and PG&E only generates a third of its own power, but they have
lower generating costs than Edison. Bottom line: if PG&E could buy supplies at
5.5 cents/kwh, they would be left with 1.9 cents/kwh profit.

Unfortunately for the utilities, California independent generators, such as
Reliant Energy (REI), NRG Energy (NRG), Dynegy (DYN), Southern Energy (SOE) and
Duke Energy (DUK), can’t get their prices down to 5.5 cents/kwh in Califomia
given the current market price of natural gas.

But they don't need anything close to 8.5 cents for eight years. The forward
price for wholesale power in California for the balance of this year is 18
cents/kwh for the on-peak hours, which is what the utilities mostly need to buy.
The on-peak price drops to 11 cents/kwh for a three-year contract because new
generators and new gas supplies are expected to come on line, For an eight-year
contract, the price drops to about 7.3 cents/kwh,

At 7.3 cents, PG&E would be heading to bankruptcy court. But the generators
will get to sell PG&E some off-peak power, too, which brings the average price
down 2 little further, If the governor guarantees really quick licensing for a
couple of new power plants in northern California, the price comes down a lot.

What's more, to save deregulation in the U.S. the generators are willing to
cut to the bone. The stocks of Dynegy, Enron Conp. (ENE), etc., have high

growth under electric deregulation. They are the emerging masters of a
deregulated universe, but if deregulation were to throw PG&E and Edison into
bankruptcy court, there wouldn't be any deregulated electric universe to master,

As one electricity trader put it: “They have got to get a deal done. if thay
chant oe Coane Energy Crisis’ off of CNBC every 30 minutes, I'm going
to be out of a job.”

Generators’ stock prices have been getting hammered since the first of the
year due to several factors, such as profit-taking after a great 2000, according
to Credit Suisse First Boston utility analyst Paul Patterson. Duke's stock has
fallen to $66 from $85 since Dec. 29, for example.

Prices of generator stocks have come down hard, in part, because a California
catastrophe would derail deregulation in many states and the forecasts for
generators’ eamings growth would be questioned, according to Solomon Smith
Bamey analyst Ray Niles.

That's the finances. The physical reality is that the westem U.S. probably
won't have enough electricity to meet demand for the rest of this year. Starting
in February, if a deal is done, California utilities won't be the last in line
to get their power, and the threat of blackouts will be spread out across the
West.

Other than that, where's the rub? Under deregulation, consumers were supposed
to get market rates in 2002. Based on the current forward market and the

utilities’ cost of retained generators, 7 cents/kwh for the rest of this year is

@ great deal. For 2002, it's fair, but for 2003-2008, it's terrible. The current
purchase price for those years is about 5 cents. With utllity-owned generation

at 3 cents, consumers will be paying 7 cents/kwh when they should be paying 4
cents/kwh.,

And the 2.4 cents/kwh competition transition charge (CTC) that was supposed to
7

1800000010007



‘rahayes@seiworldwide.com', SMTP:rahayes@seiworldwide.com
capoma@seiworldwide.com’, SMTP: sjcapoma@seiworldwide.com
mtierneySsempra.com', SMTP:mtierney@sempra.com

‘sonnet .edmonds@southernenergy.com’, SMTP:sonnet.edmonds@southernenergy.com
‘cread@steptoe.com', SMTP: cread@steptoe.com

“temoreland@swidlaw,com', SMTP; temoreland@swidlaw,com
"julie.greenisen@troutmansanders.com', SMTP:julie.greenisen@troutmansanders.com
ONG > maa -com', SMTP: alex. goldberg@williams.com

‘ (Oey EX: /O=USTREASURY /OU=DO/CN=RECI PIENTS /CN=Groupwise/ca=Treasury.DOPO.ADMIN
‘ronald _minsk@opd.cop.gov', SMTP:ronald_minsk@opd.eop.gov

ce: Barbour, Gaylen, EX: /O=USTREASURY/OU=DO/CN#RECIPIENTS/CN*BARBOURG
"Curtis Wagner’, SMTP:curtis.wagner@ferc. fed.us

Subject: RE: California Energy Group e-mail
Body:
adding ron minsk. ronald_minsk@opd.eop.gov

-----Original Message-----

From: Soares, Chris

Sent: Friday, January 12, 2001 1:34 PM

To: ‘Martha Altamar'; alexm@calpine.com; jmacias@calpine.com; jason_s.
_Seligman@cea.eop.gov; shg@cpuc.ca.gov; Soa: Ch: Wilcox, David; Sachs, Lee; Greene,
Michelle; Squitieri, Ray; Stokes, Veronica; eisenstat1@DSMO.com; sbvanleer@duke-
energy.com; joel.newton§dynegy.com; lynn. lednicky@dynegy.com; smara@enron.com; Linda Lee:
dan, potfenberger@ferc.ged.us.treas.gov; pmohler@hewm.com; richard.glick#hq.doe.gov:
smutanyBiepa.com; karen,tomcala@pge-corp.com; cxg2@pge.com; DxH4@pge.com; RMK4@pge.com:
joebob-perkins@reliantenergy.com; marvin_k_ballard@reliantenergy.com; KMcCrea@sablaw.com;
fieldejr@sce.com; harold.ray@sce.com: dreed@sdge.com; wsakaria@sdge.com;
rahayes@seiworldwide.com; sjcapoma@seiworldwide.com; mtierneyésempra.com:
sonnet.edmonds@southernenergy.com: creadésteptoe.com; temoreland@awidlaw.com;
julie.greenisen@troutmansanders.com: alex.goldberg@williams.com; {(b)(6)]

Ce: Barbour, Gaylen; Curtis Wagner

Subject: RE: California Energy Group e-mail

Latest version of Long-Term Contracts Group report.

------ End of message body
Message auditing by MicroData CAMEO Recon

01800000010036



harold.ray8sce.com, SMTP:harold.ray@sce.com

dreed@sdge.com, SMTP:dreed@sdge.com

waekaria@sdge.com, SMTP:wsakaria@sdge.com

rohayes@seiworldwide.com, SMTP: rahayes@seiworldwide.com
sjcapoma@seiworldwide.com, SMTP: sjcapoma@seiworldwide.com
mrierney@sempra.com, SMTP:mtierney@sempra.com
sonnet.edmonds@southernenergy.com, SMTP:sonnet.edmonds@southernenergy.com
cread@steptoe.com, SMTP: cread@steptoe.com

temoreland@swidlaw.com, SMTP: temoreland@swidlaw.com
julie.greenisen@troutmansanders.com, SMTP: julie.greenisen#troutmansanders.con
alex.goldberg@williams.com, SMTP:alex.goldberg@williams.com

((b)(6)]

ce: Barbour, Gaylen, EX: /O-USTREASURY/OU=DO/CN=RECI PIENTS/CN=BARBOURG
Curtis Wagner, SMTP:curtis.wagner@ferc, fed.us

Subject: RE: California Energy Group e-mail
Body:

Latest version of Long-Term Contracts Group report.
-----= End of message body

Message auditing by MicroData CAMEO Recon

1800000010040



AIR QUALITY: AFTER EIGHT YEARS, THE SOUTHLAND‘’S PROGRAM ALLOWING FIRMS TO TRADE POLLUTION
CREDITS HAS FALLEN WELL BELOW EXPECTATIONS. IDEAS TO FIX IT ARE MIRED IN CONTROVERSY.
BYLINE: GARY POLAKOVIC, TIMES ENVIRONMENTAL WRITER

BODY:

It was supposed to be a revolutionary way to clean up the environment, a business-friendly
strategy to slash industrial emissions without the heavy hand of government. But the
Southland's market basket experiment has been a serious disappointment. The Regional Clean
Air incentives Market, or RECLAIM, has fallen well short of expectations. Eight years into
the program, smog cuts have been minimal, companies are failing to meet pollution
reduction targets, and proposals to rescue the operation are mired in controversy.
Manufacturers, power plants and refineries have reduced emissions by a scant 16%--much
less than was anticipated by this time. Businesses were given 10 years to eliminate about
13,000 tons of pollution annually, but as the program nears its end they have eliminated
just 4,144 tons, according to projections by the South Coast Air Quality Management
District. Over the course of the program, the AQMD has received a trickle of applications
from companies to upgrade pollution control capacity, Air quality officials say that if
the number of retrofits doesn’t dramatically increase, the program will fail. So little
progress has been made that the AQMD is now telling businesses to slash their air
pollution at more than twice the rate they have over the t seven y Meanwhile, the
agency estimates that industry will emit an extra 3,373 tons of health-threatening
pollutants into the air this year, 14% more than it is allowed under the program. Business
representatives are divided in their reactions to the program. PAGE 2 Los Angeles Times
April 17, 2001, Tuesday,

“We're going to see the benefits of RECLAIM. It's just taking a little longer than we
expected,” said Bill Quinn, vice president of the California Council for Environmental and
Economic Balance, which represents business and labor groups. But some companies are
resisting pressure to reduce emissions. Some seek to eliminate the penalty they risk if
they pollute beyond their limits. Others would like to escape the program entirely by
paying a fee of $ 7.50 per pound of pollution, no matter how much smog they make, Many
businesses are insisting on a fresh infusion of credits in return for cleaning up cars,
boats and trucks instead of factories, smelters and refineries. RECLAIM “hasn't done as
well as the regulations it replaced," said Mike Scheible, deputy executive officer for the
state Air Resources Board. "I don't think it has worked yet to achieve the emission-
reduction goals that it set out to do, The reductions we've anticipated have been delayed
and won't be achieved for a couple more years." The program was launched in 1993 as the
first market-driven system to clean urban air and quickly became a model for others around
the world. The Los Angeles-area program, which relies on a system of trading pollution
credits, was supposed to cut industrial pollution by stimulating technological innovation
and reducing burdensome new costs on businesses. Nearly 400 companies participate,
including Walt Disney Co., ExxonMobil Corp. and Northrop Grumman Corp. Each facility
receives a certain number of credits representing a pound of pollution. Companies that do
not pollute to maximum allowable levels can sell credits to firms that emit more than
their limits. The total credit supply shrinks about 8% annually for a decade, thus
trimming pollution. The program was seriously compromised when power producers in the Los
Angeles region operated far beyond pollution limits last year. Power companies gobbled
emissions credits as they increased production to keep the lights on. That caused a
pollution credit shortage. The market price of a credit soared as demand outstripped
supply. A credit for one pound of nitrogen oxide gas that cost an average of 25 cents in
the early years of the program climbed to more than $ 50 late last year. Nitrogen oxide
contributes to ozone and haze, the main ingredients in smog. Local air quality officials
and business advocates say the program was working fine until the electricity crisis. But
critics, including the U.S. Environmental Protection Agency, the state air board,
environmentalists and some scholars, disagree. They say the energy crisis revealed
structural flaws in the program that were bound to surface sooner or later. “The
simplistic explanation as to why RECLAIM failed is the market was much more volatile than
people expected and that is due to the electricity situation, an anomaly, an unmanageable
spike rippling through the market, But that's not the whole story," said Tom Canaday,
environmental engineer for the EPA. Local air quality officials acknowledge that, from its
inception, the program PAGE 3 Los Angeles Times April 17, 2001, Tuesday, was embedded with
powerful disincentives to cut smog. That is because they seeded it with too many credits,
about 40% more than real-world emissions. Credits were so plentiful and cheap for so long
that companies grew addicted to buying them instead of spending more for pollution
controls. The system crashed last year when manufacturers returned to the marketplace

159
01800000010069



MASTER POWER PURCHASE AND SALE AGREEMENT
VE) ET

((b)(5))

01800000010140



TABA
DRAFT RFO

01800000010133



to NSC by cob tomorrow. Please let me know if you have any concerns about this
plan.

Readout of meeting:
Attendees: NSC, State (EB front office and investment office, South Asia

Bureau), Treasury (Grewe, Rao, Sampliner), Commerce, OPIC (President Peter
Watson, GC Ron Jonkers and several others)

((b)(5)]

00500000002857


{(b)(5))

01800000010135



From: Squitieri, Ray

Sent: Thursday, February 21, 2002 12:25 AM

To: SearchCameo

Subject: SAIES Recon found  woed: Freon sent by Squier, Ray to hreng®cera.com on 71112001
IssueMert

L1_OL.temd (15 KB.

This message was found to have a Critical Word in it. Message Sent to
jwang@cera.com, From Squitieri, Ray, CC to , Date 7/11/2001 3:14:09 PM, Subject of message
Fw: TradeSpark Emerges as Leader in Online Trading, Edges In On EnronOnline

Word(s) found: Enron

ences Original Message-----

From: Squitieri, Ray

Sent: 7/11/2001 3:14:09 PM

Received: 7/11/2001 3:14:09 PM

To: jwanggcera.com, SMTP: jwang@cera,.com

ce:

Subject: FW: TradeSpark Emerges as Leader in Online Trading, Edges In On EnronOnline
Body:

may be of interest. Woof!

Original Message-
From: SCIENTECH IssueAlert [mailto:IssueAlert@scientech.com]

Sent: Wednesday, July 11, 2001 8:50 AM

Subject: TradeSparck Emerges as Leader in Online Trading, Edges In On EnronOnline

-- End of message body
Message auditing by MicroData CAMEO Recon

01800000010044



NSC

Ap ‘+ +/a.
PO1lTBKCIO2

T.
IPM.Note
Dabhol meeting on Enron/OPIC project at
EX: /OsUSTREASURY/OU*DO/CN«RECIPIENTS/CN=GREWEM

User

/OsUSTREASURY/OU«{DO/CNsRECIPIENTS/CN  substgi-o_

_subseatg1l.0_O002A0018

00500000002570


{((b)(5)]

01800000010172


Page | of 2

From: Cetina, Jill
Sent: Monday, December 03, 2001 12:48 PM
To: DL_Market Group; ‘Andrew Sacher’; ‘ClayLowery’; "Eric Otto’; ‘Griffiths’; ‘Hoffman’; Lundsager,
Meg; ‘Paul Reid’; 'PMalmgren’; ‘Wayne’
Subject: Market Noon Report.
((b)(5)]

01800000010210
10/21/2002



Page 2 of 3

(()(5)]

— 01800000010161



state will have to register with the PUCT to retail electricity.

TNPC is among @ total of 11 companies that have filed for certification

with the PUCT, and the list of providers is impressive and diverse. Competitors
that TNPC will face in Texas include Green Mountain Energy, First Choice

Power (the competitive spin-off of Texas-New Mexico Power Company), TXU

Energy Services, Sempra, Shell, and Reliant, Interestingly, Enron Energy
Services also has applied for certification, Since Enron is one of the

key members of TNPC, it ebviously is planning to penetrate the Texas market
from several angles.

Conspicuously absent from the list of those that have applied for certification
is AEP. Anything I might say about AEP's absence from the list would be

purely speculative, but I do find it meaningful that the company has not
matched its competitors’ aggressive entry into the Texas retail market.

One indicator might be comments that Linn Draper, AEP"s CEO, made in a
conversation I had with him several months back. At that time, Draper disclosed
uncertainty about how the retail business would factor in to AEP's future
strategy. In fact, Draper said, "We're not so sure that retail is a business
for us." AEP has approximately one million retail customers in the state

of Texas. If AEP is to remain in the retail market in the state, by law

those customers must be served by an unregulated affiliate of the company.
However, at least as of today, no such affiliate has filed an application

with the PUCT.

Some may say it’s still rather early in the game for all the flurry of

interest surrounding Texas, given that even the limited pilot program is

still six months away. The increasing interest could be based on the success

of pilot programs in other states, such as Pennsylvania, which was actually
the largest electric pilot program in the nation, with more than 230,000
residential and commercial customers participating, Yet, probably more
important is the sheer size of the Texas market-which presumably will translate
inte huge profits for those energy providers that gain a lock on the market-and
the hope surrounding how competition in Texas might develop. After so much
negative press about the flawed system in California, Texas will be the

next big state to open its market to competition. Thus, a great deal is

hinging om how effectively deregulation unfolds in this state.

Moreover, the onset of competition in Texas is a major development for

the energy industry. With regard to population, Texas representa the second
largest energy market (behind California), offering a market value of about
$20 billion. Texas officials have been watching California closely all

summer long, and remain confident that the power supply problems faced

there won't happen in Texas. This is largely because Texas has avoided
making some of the critical mistakes made in California. One important
distinction between the two states is that Texas regulators have allowed

for power plants to be built in about half the construction time that has
been common in other states such as California. Since 1995, 22 new plants
have started operations in Texas, generating 5,700 MW. By the time competition
starts in little over a year, 15 more plants and 10,000 MW are scheduled

to come online. As a result, Texas officials say that-unlike California-their
state has more than enough generating capacity to meet peak demand and
provide at least a 15-percent reserve for the next few years.

In addition, there are significant differences between the market structures
in Texas and California. First, California's structure is based on an auction
pool, which the state modeled on the United Kingdom, Integral to California's
system is a Power Exchange, into which power suppliers submit power that
they want to sell on the competitive market. California's PX discourages
4 healthy bilatera! contract market from forming because generators can
make more money selling into the PX. Texas, on the other hand, has no Power
Exchange and in fact has encouraged bilateral contracts as the way in which
electric service contracts will take p) . In Texas, customers are encouraged
to establish long-term bilateral contracts with suppliers to secure the
best rates, which won't put them at the mercy of wholesale market prices
as customers in San Diego discovered this summer.

150

1800000010061



From: Wikox, David
Sent: Thursday, February 21, 2002 12:50 AM
To: SearchCameo
Subject: Ee ag as ee IN SIRE. YI: ME ED SEN FAY TALON
Importance: High
a]
calif doc (29 KB)

This message was found to have a Critical Word in it. Message Sent to
Squitieri, Ray, From Wilcox, David, CC to Chryst, Nancy; Vandivier, David; Rao, Geetha;
Flanagan, Rosemary; Cononi, Rachel; Flynn, Timothy; Murphy, Edward; Hambor, John, Date
12/14/2000 2:52:41 PM, Subject of message RE; Krugman on Calif power market

Wordis) found; Enron

--Original Message
From: Wilcox, David
Sent: 12/14/2000 2:52:41 PM

Received: 12/14/2000 2:52:41 PM

To: Squitieri, Ray, EX: /O-USTREASURY/OU=DO/CN®RECI PIENTS/CN=SQUITIERIR

cc; Chryst, Nancy, EX: /O-USTREASURY/OU=DO/CN@RECIPIENTS/CN@CHRYSTN
Vandivier, David, EX: /O-USTREASURY/OU=DO/CN=RECIPIENTS/CNeVandivierD
Rao, Geetha, EX: /O*USTREASURY /OU=DO0/CN=RECIPIENTS/CN=RacG
Flanagan, Rosemary, EX: /O-USTREASURY/OU=DO/CN*RECIPIENTS/CN*FLANAGANR
Cononi, Rachel, EX: /O=USTREASURY /OU=DO/CN=RECIPIENTS/CN<CONONTR
Flynn, Timothy, EX: /O=USTREASURY/OU=DO/CN*RECIPIENTS/CN=FlynnT
Murphy, Edward, EX: /O=USTREASURY/OU=D0/CN=RECIPIENTS/CN-MURPHYE
Hambor, John, EX: /O=USTREASURY/OU=D0/CN=RECIPIENTS/CN*HAMBORJ

Subject: RE: Krugman on Calif power market

Body:

Ray: This is a very interesting piece. Please address the questions in the attached to
the best o f your ability, then forward the result to Rosemary for processing to the
Secretary tonight if at all possible.

Rosemary: Please use the following as a transmittal note from me to Larry:

The attached note, prepared by Ray Squitieri, analyzes statements made by Paul Krugman
recently about the California market for electricity. It will be particularly relevant
background for a call from the CEO of Enron, should that occur.

-----Original Message-----
From: Squitieri, Ray
Sent: Thursday, December 14, 2000 2:12 PM

To: Wilcox, Oavid

Cc: Chryst, Nency; Vandivier, David; Rao, Geetha; Flanagan, Rosemary; Cononi, Rachel;
Flynn, Timothy; Murphy, Edward; Hambor, John

Subject: Krugman on Calif power market

End of message body

Message auditing by MicroData CAMEO Recon

* 01800000010016



eT - kvwa—————————

From: Squitieri, Ray

— Truredey. February 21, 2002 12:19 AM

o:
GAMED Rosen found a word: Enron sent by Jone-Lin Wang to Squiteri@do.treas.gov’
on 12/15/2000 12:01:52 PM bis

This message was found to have a Critical Word in it. Message Sent to

“Ray. Squitieri@do.treas.gov', From Jone-Lin Wang, CC to , Date 12/15/2000 12:01:52 PM,

Subject of message FW: Competition Accelerates in Texas, A Year Before Full Deregula
tion Is To Start

Word(s) found: Enron

waren ‘Original Message-~--~

From: Jone-Lin Wang

t; 22/15/2000 12:01:52 PM

ived: 12/15/2000 11:59:28 AM

To: ‘Ray. Squitieri@do.treas.gov', SMTP:Ray.Squitieri@do.treas.gov

cc:

Subject: FW: Competition Accelerates in Texas, A Year Before Full Deregula tion Is To
Start

Body:

[OUTSIDE SCOPE , (b)(5))

-----Original Message-----

From: IssueAlert [ mailto: IssueAlert@scientech.com]

Sent: Thursday, December 14, 2000 7:13 AM

Subject: Competition Accelerates in Texas, A Year Before Full
Deregulation Is To Start

http: //www,.consultrci.com

FERNS EERE EERE EERE EERE EEE EEE EEELEEEEEEEE EEE EHEEEH EAE EE EEE EEE EEED

Dear IssueAlert Subscriber,

I would like to take a moment to describe our energy information products
39 that you will know which products are free (like IssueAlert), which
products you can buy by the slice on our web site and which products carry
a subscription fee.

SCIENTECH sends IssueAlert to you for free every business day as a courtesy
because you are involved in or interested in the energy industry. IssueAlerts
are stored in a free database on our site at:

http://www. consultrei.com/web/infostore.nsf/Products/IssueAlert

We also post IssuesWatch every Monday at:

http://www, consultrci.com/web/infostore.nsf/Products/IssuesWatch

This column apsul the news of the past week and is also a free service.
Past IssuesWatches ar 30 available for free.

Powerfitters articles are posted every other wook. PowerHitters, the movers
and shakers of the energy industry, are interviewed by our analysts. All
the interviews of the past six months are availeble, They can be purchased
by the slice in our InfoStore with your VISA or Mastercard, or you can
phone, toll-free, at 888-972-8676.

46

01800000010059



{(©)(5)]

01800000010144



General

For moré information about products on this topic visit our Information Marketplace

Boosting Public Power
Dec 28, 2000 - Bond Buyer Public power weathered the deregulation and legislative squalls
of 2000 fairly well and faces what appears to be a relatively bright and stable future in
2002, according to market participan’ ind analysts.

Joint Ventures & Alliances

For more information about products on this topic visit our Information Marketplace
Topic Sponsor: LineSoft

LineSoft Corp. ~ Specializing in Engineering Line Design & Optimization - Visit us at
DistribuTECH, Booth #710, Feb. 5 - 7 in San Diego!

Ocals/Contracts

For more information about products on this topic visit our Information Marketplace

Gas Natural wins contract to supply electricity to Madrid military hospital Dec 29,
2000 - MADRID (AFX) ~ Gas Natural SDG SA said its La Energia unit has won a contract to
supply electricity to the Gomez Ulla military hospital in Madrid.

Power Pricing/Supply

For more information about products on this topic visit our Information Marketplace

Silicon Valley preps for energy crisis
SAN FRANCISCO, Dec 28 (AFP) - High-tech companies in California's Silicon Valley are
scrambling for backup power sources as the state's energy crisis continues,

Transmission & Reliability

For more information about products on this topic visit our Information Marketplace

PECO Energy Goes to Full Emergency Alert for New Year's Weekend Snowstorm
PHILADELPHIA, Dec. 29 /PRNewswire/ With a potential major Nor'Easter storm approaching the
region, PECO Energy Company said it has moved into an Alert status for its customer
service, operations and support personnel to prepare for emergency response.

OGSE Reports Progress in Restoring Electric Service After Ice Storm
OKLAHOMA CITY, Dec. 30 /PRNewswire/ OGSE Electric Services today reported progress in
restoring electric service to thousands of its customers left without power after the ice
storm of Dec. 25-26,

Arkansas Utility Companies Battle Cold, Bad Weather
Arkansas Democrat-Gazette --Dec. 29--SPRINGDALZ, Ark. Utility companies made slow progress
restoring power to Northwest Arkansas customers Thursday as ice continued to topple trees

us
01800000010052



From: Stem, Todd
Sent: Friday, January 12,2001 5:21 PM
To: Klasky, Helaine; Posner, Steven; Smith, Michelle A,; Weaver, Elizabeth; Gallagher, Una;
Buck, Bill; Gensler, Gary; Sachs, Lee; Stewart, Lawranne; Greene, Michelle; Wilcox, David:
Elmendorf, Douglas; Vandivier, David; Sandberg, Sheryl; Cohen, Alan; Wolin, Neal; Moe,
Martin
Subject: RE: wires - California Power Talks
{(b)(5)]
-—Original Message-——
From: Kiasky, Helaine
Sent: Friday, January 12, 2001 4:41 PM
To: Posner, Steven; Senith, Michelle A; Weaver, Elizabeth; Gallagher, Una; Buck, Bil; Gensler, Gary; Sachs, Lee; Stewart, Lawranne;
Perey ape as tae a a ae ca as baa Cohen, Alan; Woilin,
‘Subject: RE: wires - California Power Talks

{(b)(5)}

DJ Principals in Calif Pwr Talks Set To Reconvene Saturday
Dow Jones Intemational News Service via Dow Jones

WASHINGTON (Dow Jones}-The principal negotiators involved in White

take place at U.S, Department of Energy headquarters at 3:30 p.m. EST.

California Gov, Gray Davis and other key state regulators and lawmakers are to
participate via a video conferencing link,

The pivotal negotiating session cornes after two working groups involving
lower-level officials have met since Wednesday in an effort to flesh out the
details of a broad settlement package the principals discussed late Tuesday
during a seven-hour meeting at the Treasury Department,

Knowledgeable sources described Treasury Secretary Lawrence Summers as taking
‘an active role in attempting to forge an agreement during Tuesday's talks, which
also featured Energy Secretary Bill Richardson, White House economic adviser
Gene Sperling and Federal Energy Regulatory Commission Chairman James Hoecker.

Richardson, who is traveling this weekend in an effort to lobby oil-producing
nations against a pending production cut, will not be attending Saturday's

” 01800000010009



>
> << Message: California Energy Group >>

The information contained in this message from
Sutherland Asbill 6 Brennan LLP and any attachments
is confidential and intended only for the named
recipient(s). If you have received this message
in error, you are prohibited from copying,
distributing or using the information. Please
contact the sender immediately by return email

and delete the original message.

wer--> End of message body
Message auditing by MicroDate CAMEO Recon

107

01800000010026


Page | of |

From: Sachs, Lee

Sent: Friday, January 12, 2001 5:57 PM

To: Barbour, Gaylen

Subject: FW: California Energy Group e-mail TEST MESSAGE

pls print both. also, pls fax to governors office (attn: john stevens) & speakers office (attn; rick simpson
916-319-2140)
---Original Message-—-—-
From: Wilcox, David
Sent: Friday, January 12, 2001 5:51 PM
To: Wilcox, David; Sachs, Lee; Soares, Chris; ‘Martha Altamar’; ‘alexm@calpine.com’; ‘jmacias@calpine.com';
Lenmar. arpa gear ‘shg@cpuc.ca.gov’; Greene, Michelle; Squitiert, Ray; Stokes, Veronica;
com’; ‘sbvanleer@duke-energy.

sholdent@selworidwide. com ‘richard. shapiro@enron.com’; ‘robert.badeer@enron.com’
Cc; Barbour, Gaylen; ‘Curtis Wagner’
Subject: RE: California Energy Group e-mail TEST MESSAGE

01800000010155
10/21/2002



wsakaria@sdge.com, SMTP:wsakaria@sdge.com

rahayes@seiworldwide.com, SMTP: rahayes@seiworldwide.com
sjcapoma@seiworldwide.com, SMTP: sjcapoma@seiworldwide.com
mtierney€sempra.com, SMTP:mtierney@sempra.com

sonnet .edmonds@southernenergy.com, SMTP: sonnet .ednonds@southernenergy.com
cread@steptoe.com, SMTP:cread@steptoe.com

temoreland§swidlaw.com, SMTP: temoreland@swidlaw.com
julie.greenisen@troutmansanders.com, SMTP: julie.qreenisen@troutmansanders.com
alex.goldberg@williams.com, SMTP:alex.goldberg@williams.com

{(o)(6)]

CC: Gaylen.Barbour@do.treas.gov, SMTP:Gaylen.Barbour@do.treas.gov

Subject: RE: California Energy Group e-mail
Body:
Looks good to me. Curtis L. Wagner, Jr, Chief Judge FERC

>>> <Chris.Soares@do.treas.gov> 01/12/01 01:33FM >>>
Latest version of Long-Term Contracts Group report.

oe = End of message body

Message auditing by MicroData CAMEO Recon

01800000010046



the market price Is 8.5 cents/kwh and only if the contracts run for eight years.

But that's all just negotiating position, The customers of Edison
International's (E\X) Southem California Edison currently pay the company 7.6
cents/kwh just for energy, That price includes last week's one-cent raise, but
not other charges such as transmission and distribution.

Edison generates half the power it needs at a cost of about 3 cents/kwh. So,
purchasing the olher half at 5.5 cents/kwh would do a lot more than stop the
hemorrhaging. If the cost of purchased power were 5.5 cents, Edison's
cost would be 4.3 cents, for which they are getting paid 7.6 cents. That 3.3
cents/kwh profit on the 83 billion kwh Edison sells a year comes to a whopping
$2.7 billion annually. End of credit problem.

PG&E Corp.'s (PCG) situation is more difficult. Their customers pay less for
electricity, and PG&E only generates a third of its own power, but they have
lower generating costs than Edison. Bottom line: if PG&E could buy supplies at
5.5 cents/kwh, they would be left with 1.9 cents/kwh profit.

Unfortunately for the utilities, California independent generators,
Reliant Energy (REI), NRG Energy (NRG), Dynegy (DYN), Souter Enery (SOE) and
Duke Energy (DUK), can’t get their prices down to 5.5 cents/kwh iin
given the current market price of natural gas.

But they don’t need anything close to 8.5 cents for eight years, The forward
price for wholesale power in California for the balance of this year is 18
cents/kwh for the on-peak hours, which is what the utilities mostly need to buy.
The on-peak price drops to 11 cents/kwh for a three-year contract because new
generators and new gas supplies are expected to come on line. For an eight-year
contract, the price drops to about 7.3 cents/kwh.

At7.3 cents, PG&E would be heading to bankruptcy court. But the generators
will get to sell PG&E some off-peak power, too, which brings the average price
down a little further. If the governor guarantees really quick licensing for a
couple of new power plants In northem California, the price comes down a lot.

What's more, to save deregulation in the U.S. the generators are willing to
Cut to the bone. The stocks of Dynegy, Enron Corp. (ENE), etc., have high

price-to-earnings

growth under electric deregulation, They are the emerging masters of a
deregulated universe, but if deregulation were to throw PG&E and Edison into
bankruptcy court, there woukin't be any deregulated electric universe to master.

As one electricity trader put it “They have got to get a deal done. If they
don't get ‘The California Energy Crisis’ off of CNBC every 30 minutes, I'm going
to be out of a job.”

Generators’ stock prices have been getting hammered since the first of the
year due to several factors, such as profit-taking after a great 2000, according
to Credit Suisse First Boston utility analyst Paul Patterson. Duke's stock has
fallen to $66 from $85 since Dec. 29, for example.

Prices of generator stocks have come down hard, in part, because a California
catastrophe would derail deregulation in many states and the forecasts for
generators’ eamings growth would be questioned, according to Solomon Smith
Bamey analyst Ray Niles.

That's the finances, The physical reality is that the western U.S, probably
won't have enough electricity to meet demand for the rest of this year. Starting
in February, if a deal is done, California utilities won't be the last in line
to get their power, and the threat of blackouts will be spread out across the

e@ 1800000010012



{(b)(5))

01800000010142


KMcCrea@sablaw.com, SMTP:KMcCrea@sablaw.com
fieldejr@sce,com, SMTP: fieldejrésce.com

harold.rcay@sce.com, SMTP:harold. ray@sce.com
ige.com, SMTP:dreed@sdge.com

eiworldwide.com, SMTP: rahayes@seiworldwide.com
sjcapoma8selworldwide.com, SMTP:3jcapoma@seiworldwide.com

mtierney@sempra.com, SMTP:mtierney@sempra.com
sonnet.edmonds@southernenergy.com, SMTP:sonnet .edmonds@southernenergy.com
cread@steptoe.com, SMTP:cread@steptoe.com

temoreland@swidlaw.com, SMTP: temoreland@swidlaw.com
julie.gceenisen@troutmansanders.com, SMTP: julie. greenisen@troutmansanders.com

{bye idberg@williams.com, SMTP:alex.goldberg@williams.com

CC: Barbour, Gaylen, EX: /O=USTREASURY/OU=DO/CN=RECIPIENTS/CN=BARBOURG
Curtis Wagner, SMTP;curtis.wagner@ferc,fed.us

Subject: RE: California Energy Group e-mail
Body:

Latest version of Long-Term Contracts Group report.
oscoce End of message body

Message auditing by MicroData CAMEO Recon

01800000010079



((b)(5)]

01800000010170



From: Wilcox, David

Sent: Thursday, February 21, 2002 12:44 AM

To: SearchCameo

Subject: ‘CAMEO Recon found a word: Enron sent by Elmendorl, Douglas to Wilcox, David on
12/14/2000 6:10:47 PM

This message was found to have a Critical Word in it. Message Sent to Wilcox, David, From
Elmendorf, Douglas, CC to , Date 12/14/2000 6:10:47 PM, Subject of message california
electricity

Word(s) found: Enron

-----Original Message-----

From: Elmendorf, Douglas

Sent: 12/24/2000 6:10:47 PM
Received: 12/14/2000 6:10:47 PM

w)

bebrief.doc (38 KB)
To: Wilcox, David, EX:/O=USTRE ASURY/OU=D0/CN=RECIPIENTS/CN=WILCOXD
cc:
Subject: california electricity
Body:
{(b)(5)]

~~ End of message body

Message auditing by MicroData CAMEO Recon

me 1800000010033



OOo —

From: Squitieri, Ray

Sent: Thursday, February 21, 2002 12:10 AM

To: SearchCameo

Subject: CAMEO Recon found a word: Enron sent by James_Mietus@omb.eop.gov to

paula.tarrell@do.treas.gov; kevin.kelly@terc. fed.us; dan.larcamp@erc.doe gov. treas.gov;
.treas.gov; Alexander_M._Brill@cea.eop.gov; Wallace_P. sas ate

ray squitieri@do.
_Mullin@cea.eop.gov; arthur.

This message was found to have a Critical Word in it. Message Sent to
paula.farrell@do.treas.gov; kevin. kelly@ferc.fed.us; dan.larcamp@ferc.doe.gov.treas.gov;
ray. squitieri@do.treas.gov; Alexander M._Brill@cea.cop.gov; Wallace _P. Mullin§cea.eop.gov;
arthur.rypinski@dow.hq.gov.treas.gov, From James Mietus@omb.eop.gov, CC to, Date
7/16/2001 11:57:48 AM, Subject of message FYI on TVA: Critics attack TVA secrecy

Word(s) found: Enron

-----Original Message----~-

From: James _Mietus@omb.eop.gov

Sent: 7/16/2002 11:57:48 AM

Received: 7/16/2001 11:57:21 AM

To: pavla.farrell@do.treas.gov, SMTP:paula.farrell@do.treas.gov
kevin. kelly@ferc.fed.us, SMTP:kevin.kelly@ferc. fed.us
dan. larcamp@ferc.doe.gov.treas.gov, SMTP:dan. larcamp@ferc.doe.gov.treas.gov
ray-squitieri@do.treas.gov, SMTP: ray.squitieri@do.treas.gov
Alexander _M. Brill@cea.eop.gov, SMTP:Alexander_ M. Brill@cea.eop.gov
Wallace P. Mullin@cea.eop.gov, SMTP:Wallace_P. Mullin@cea.eop,gov
arthur. rypinski@dow.hq.gov.treas.gov, SMTP: arthur. rypinskig@dow.hq.gov.treas.gov

ce:

Subject: FYI on TVA: Critics attack TVA secrecy

Body:

Here's a news article from this morning's Chattanooga paper, in which an independent power
producer alleges TVA is being inappropriately secretive with respect to price, cost and
production information.

Chattanooga Times Free Press - Monday, July 16, 2001

Critics attack TVA's secrecy

By Dave Flessner

Business Editor

Tennessee Valley Authority's power load center in the bowels of its downtown Chattanooga
complex is designed to be secure against bombs, missiles and terrorists. But the secrecy
of the power center is now under attack. The federal utility no longer discloses current
information about power loads, business operations or even if one of its nuclear plants
has shut down. For the first time, TVA officials aren't telling what they expect the peak
power demand to be this year in the Tennessee Valley. TVA officials say such information
could sometimes push up the cost of power the agency buys or lower the amount it receives
for electricity it generates and sells to other utilities. "We're on a trading floor now
and if the market knows that one of our units is down, power markets can more easily raise
the price of what they sell to us," TVA President 0.J. "Ike" Zeringue said. "That's a
never a good situation." But critics claim the government utility is often shielded from
public scrutiny and is blocking information needed for a competitive market to operate
freely. "Under the guise of ‘potential business competition,’ TVA is withholding a lot of
information," said Michael Knauff, a former TVA power trader who now heads Tennessee Power
Co., am independent power producer in Chattanooga. “The exchange of data is necessary to
have a fluid and effective market, but TVA doesn't want anyone to know what they are doing
sO no one can criticize them. If TVA is going to operate just like a private business,
maybe it should just be one.” OLD DEBATE FOR NEW DEAL AGENCY The dispute over how much
freedom TVA should have in its power operations is as old as the New Deal agency itself.
When President Franklin Roosevelt established TVA in 1933, he envisioned “a corporation
clothed with the power of government but possessed of the flexibility and initiative of a
private enterprise." Unlike most utilities, TVA is free to set its own rates and conduct

216
01800000010074



{(b)(5)]

01800000010174


(()(5)]

Drafted by: Jim Sharer
‘For Internal Use Only 12001 4:59PM

1800000010214



Missouri Commission Approves Empire, UtiliCorp Merger
JOPLIN, Mo.-~(BUSINESS WIRE)--Dec. 28, 2000-- The Empire District Electric Company
received an order today from the Missouri Public Service Commission approving the proposed
merger of Empire and UtiliCorp United Ine.

Electricity Generating close to acquiring stake in BLCP Co Dec 28, 2000 - BANGKOK
{AFX-ASIA) - Blectricity Generating Plc is close to finalising a deal with China Light
Power to buy shares in BLCP Co, the operator of a coal<fired power plant with a capacity
of 1,400 megawatts under the independent power producer scheme, the Bangkok Post quoted
Egcomp president Sitthiporn Ratanopad as saying.

Aboitiz Equity acquires Northern Mini liydro Corp for 395 mln pesos Dec 28, 2000 -
MANILA (AFX-ASIA) = Aboitiz Equity Ventures said it had acquired Northern Mini Hydro
Corporation for 395 min pesos.

Huaneng Power, Shandong Huaneng to merge Dec 31
Dec 29, 2000 - SHANGHAI [AFX-ASIA) - Huaneng Power International Inc and Shandong Huaneng
Power Development Co Ltd will merge on Dec 31, the China Daily reported.

Rates

For more information about products on this topic visit our Information Marketplace

PG&E Tells Puc Bankruptcy Looms without Rate Hike / Utility Wants 26% More for
Supplying Electricity Dec 30, 2000 - The San Francisco Chronicle Pacific Gas and Electric
Co. officials defended their request for a 26 percent rate hike today, telling an
emergency meeting of state regulators that the utility may go bankrupt without an
immediate infusion of cash.

California energy companies lobby for hicher rates
SAN FRANCISCO, Dec 28 (AFP) - California's investor-owned utilities need a surge in
electricity rates to save them from bankruptcy brought on by poorly-handled deregulation,
the companies argued Thursday.

California Utility Officials Continue to Press for Higher Rates By Jack Chang,
Contra Costa Times, Walnut Creek, Calif. --Dec. 29--SAN FRANCISCO-- Utility officials
continued pleas for massive rate hikes before # state commission Thursday and outlined
plans for even more increases in 2001 if wholesa nergy costs don't drop soon.

Unitil /Concord Electric Company and Unitil/Exeter & Hampton Electric Company Fuel
and Purchased Power Rates to Increase January 1 Hampton, NH - December 29, 2000
Unitil/Concord Electric Company and Unitil/Exeter & Hampton Electric Company ,
subsidiaries of Unitil Corporation , today announced that the New Hampshire Public
Utilities Commission has approved increases to their Fuel and Purchased Power Adjustment
charges for effect on January 1, 2001.

Many Utilities Request Natural-Gas Hate Hikes; High Costs to Continue Through 2003
issueAlert, Dec. 29 (Scientech) The first blast of winter temperatures has resulted in
some real-world impacts from the natural-gas shortage and related high prices on the
wholesale market. A growing number of electric utilities across the country have requested
rate increases in order to cover their expenses for obtaining the power, especially
natural gas, that they must provide to customers.

Special Offer from this Publisher!

01800000010051



its own business without approval or oversight by any state regulatory board. TVA is also
exempt from direct oversight by the Federal Energy ory Commission and isn't covered
by many antitrust laws, But until recently, TVA was still beholden to the U.S. Congress
for money to pay for its nonpower programs. As @ government agency, TVA also regularly
disclosed its plans for buying, generating and transmitting power around its seven-state
service territory, Congress cut off TVA funding three years ago, however. At the same
time, the growing competition and deregulation in the electricity industry encouraged TVA
to keep quiet about many of its operations. TVA now limits access for even its own staff
to the trading rocm adjacent to the power load center where TVA buys and sells power each
day. "There is a problem when we are out purchasing power if other people know that our
plants aren't operating or they know what we are planning to buy that day," Mr. Zeringue
said. "If they know one of our big assets is down, then the price that is available to us
for buying power will probably be just under what it would cost if we fired up cur gas
turbines (TVA's most expensive power generation). We get taken to the cleaners on it.
That's why we are a little hush-hush.” Mr. Zeringue said TVA is keeping most information
about the current status of its power operations to itself, although he said information
about plant operations could be disclosed later. Many of the inquiries about TVA's power
status come from competitors interested in gaining a price advantage, not from consumers
trying to ensure TVA keeps its costs down. “We occasionally get calls from strange places
wanting to know this, that and the other. We just don't respond to the calls,” Mr.
Zeringue said. Even years after power trading deals are completed, TVA is sometimes
unwilling to disclose any of their terms. Earlier this year, for instance, a power
marketing arm of Enron Corp, settled one of TVA's biggest lawsuits for an undisclosed
amount. TVA sued Enron after it failed to provide enough power during the summers of 1998
and 1999. But the terms of the multimillion-dollar settlement prevented TVA or Enron from
disclosing any of the details of their trading arrangements or monetary settlement. WHO'S
WATCHING THE STORE? Environmentalists complain that the increased secrecy over costs of
generating and trading power makes it difficult to evaluate TVA's decisions and
operations. “I think it is a very dangerous trend," said Stephen Smith, executive director
of the Southern Alliance for Clean Energy, a Knoxville-based consumer and environmental
group. "We don't necessarily want TVA to be at a competitive disadvantage, but whether or
not a plant is running is certainly information that the public has a right to know
about." Dr, Smith said his group's assessment about the costs of operating TVA's oldest
coal plants compared to generating power from cleaner sources is being undermined by TVA's
refusal to disclose its costs of operations. “This lends itself very easily to abuse,” he
said. But supporters of deregulation insist the market discipline of competition will help
ensure utilities are well run and meet consumer demands. Public power enthusiasts also
note that government agencies are subject to state and federal open records requirements,
unlike investor-owned utilities. “We're regulated by our customers who own us and are our
neighbors,” said Alan Richards, president of the American Public Power Association. "I
think more information about power activities is better than 1 and, in general, public
power is much more open than are our investor-owned counterparts.” But private utilities
disagree. “There's always been a problem of disclosure by TVA because they are not subject
to the same oversight that the investor-owned utilities are through FERC and state public
service boards," said John Howes, executive director of TVA Exchange, a lobbying group
that monitors TVA for other Southern utilities, "As the market becomes more regional and
nationel, TVA needs to operate under the same rules of disclosure that its neighboring
utilities do.” “If TVA is a federal agency and enjoys the exceptions and benefits of a
government agency, why don't they behave like a public identity?” Mr. Knauff asked.

wvr77= End of message body

Message auditing by MicroData CAMEO Recon

217
01800000010075



Sent: Tuesday, January 02, 2001 2:23 PM

To: Squitieri, Ray; Sachs, Lee; Paulus, Michael; Greene, Michelle; Gross, Jared
Ce: Carleton, Norman; Nickoloff, Peter; Soares, Chris; Cetina, Jill

Subject: SF Chronicle Article on Cal Energy

This was sent to me by a former DoE employee who now works for an private-sector energy
company in Houston. It's a good, comprehensive background piece. Unfortunately I don't
have it in electronic form, and the hardcopy (margin) format is a bit strange.

Deceaber 31, 2000 (SF Chronicle)

Genesis Of State's Energy Fiasco/String of bad decisions on deregulation
could end up costing consumers $40 billion

Christian Berthelsen

Next month, about 10 million Californians may begin paying as much as
30 percent more for electricity, in a maddening coda to one of the most
costly public policy mistakes ever made.

When the state's leaders started moving the energy system toward
deregulation six years ago, they envisioned a brand new day in which
utility companies’ long-standing monopoly would be broken and rates would
decline by as much as 25 percent,

Instead, when it is over, it may cost customers of the state's
investor-owned utilities $40 billion, perhaps more. In the coming year, it could
harm the world's sixth-largest economy and send a ripple effect throughout
the globe for those dependent on California's continued prosperity.

This is the story of what went wrong with deregulation, and how
planning lapses, serious policy blunders -- and warnings that came too late -- set
California's two main utilities, Pacific Gas & Electric Co. and Southern
California Edison, toward a train wreck,

Power plant construction lagged while demand expanded. Leaders
misjudged how much competition there would be to supply California with juice. And
flawed deregulation laws left utilities and their customers at the mercy
of power companies, extracting the highest price for electricity.

"There was a blind adherence te free-market ideology that couldn't
possibly work,” said Eugene Coyle, a former utility securities analyst,
economist and early opponent of deregulation. “There were poorly
thought-out specifics.”

In the early 1990s, businesses were fleeing the state amid the worst
economic times since the Great Depression. Energy rates were 50 percent
higher than they were on average across the nation, because of commitments
to more expensive, environmentally friendly power and cost overruns for
nuclear power plant construction.

Large customers such 4s steel makers, mining concerns and cement
makers, for which electricity costs make up 25 percent of their overhead, saw that
independent power producers were offering power much more cheaply. They
began to insist on change.

The United States had deregulated long-distance telephone service,
airlines and a host of other industries, often with resulting competition
that was a boon to consumers. Why not do the same for electricity?

So California embarked on a pioneering experiment. In 1993 and 1994,
the California Public Utilities Commission began to draft such a policy. It
allowed large users to buy power directly from independent producers and
froze customer rates at artificially high levels so utilities could
recover their investments in costly plants.

The utilities sought to have the terms codified in law, and in early
1996, a number of bills were introduced in the Legislature to do so.

Some observers say that what happened next contributed to the overall
> plan's flaws. Months passed while the discussion meandered and faltered,

VV VV VV VV VV VV

VVVV¥V¥V¥ VV

v

01800000010119



{(oX5)]

For internat Use Orty et te
ea Lal

1800000010207



> alone when it comes to electricity," Bowen said. “Do we want to subject
> ourselves to times when rates are really low and really high?”

> POWER DEREGULATION CHRONOLOGY --

-April 1994: California Public UtilitiesCommission indicates it favors deregulation.
“October 1995: Framework of deregulation laid out in memorandums between large users,
energy providers and utilities. --

-January 1996: Bills introduced in legislature to codify

deregulation plan. --

“August 1996: The "Steve Peace death march” hashes out fine points of law. It passes both
houses unanimously. --

“Sept. 23, 1996: Gov. Pete Wilson signs the deregulation bill. --

~April 1, 1998: After a four-month delay, deregulation begins. --

-June 2000: San Diego has satisfied conditions for deregulation, and the rate cap there is
lifted. Shortages drive prices up 300 percent in some cases. --

=September 2000: The utilities begin to warn of billions in mounting debt and seek an end
to the rate cap that has prevented them from passing costs on to customers. --

“November, December 2000: More shortages put energy system in state of perpetual crisis,
despite fall being a season of traditional low demand; state regulators consider
utilities’ requests for rate increases. A decision is expected Jan. 4,

> ====-= PLAYERS IN THE DEREGULATICN DRAMA <=

“Steve Peace:

> Took control of the legislative process while a state senator and drove
> deregulation into law. ==

<0.J. Smith:

> Lobbyist for large, industrial electricity customers and an early
advocate of deregulation. --

~Diane Martinez:

> As state senator, helped with the deregulation legislation. --

~Greg Conlan:

> Sympathetic to industrial consumers with high bills while serving on
the California Public Utilities Commission. --

Pete Wilson:

> Saw deregulation as an answer to California's then-ailing economy. ~~
“Kenneth Lay:

> Noted in 1997, as chief executive of Enron Corp. in Houston, that
little competition had emerged. “It's like California announced a party but
nobody's showing up," he said. --

Gordon Smith:

> As chief executive of PG&E, supported deregulation, one point noting
there had been a “ceiling on our profits" under the old system.

> E-mail Christian Berthelsen at cherthelsen@sfchronicle.com.

Deanne eee ren nn asenanen ne: a meee nencwnensecesneeees eres eesneeecsress

> Copyright 2000 SF Chronicle

* 01800000010122



the rcom that the working group has been meeting in, so that I might call into it in the
morning? Alternatively, could you ask one of the meeting participants to try me
periodically if I do not answer the call at 6:00.

Also, if you have or receive either the Draft Interim Report or any of the Tabs/supporting
documents in electronic form, I would appreciate it if you could email them to me,
Finally, pls fax any documents which you do not have to me at 415-703-2262. ‘Thanks!

Sean Gallagher

California Public Utilities Commission
Legal Division

505 Van Ness Avenue

San Francisco, CA 94102

(415) 703-2059

(916) 396-6581 - cell

--Original Message-----

From: Veronica.Stokes@do.treas.gov | mailto:Veronica.Stokes@do.treas.gov)
Sent: Thursday, January 11, 2001 1:56 PM

To: alexgoldberg@williams.com; alexm@calpine.com; cread@steptoe.com:
exg2@pge.com; curtis.wagner@ferc.fed.us; dan.poffgnberger@ferc. fed.us;
david.wilcox@do.treas.gov; dreed@sdge.com; OxH4@pge.com:
harold.ray@sce.com; j.macias@calpine.com; smutany@iepa.com:
jason_s._seliyman@cea.eop.gov; joebob-perkins@reliantenergy. com;
joel.newton@dynegy.com: fieldejr@sce.com;:
julie.greenisen@trontmansanders.com.treas.gov;

karen. tomcala@pge-corp.com; KMcCrea@sablaw.com; eisenstatl@DSMO.com:
lee, sachs@do.treas.gov; linda. lee@ferc.fed.us; lale@dyngy.com.treas.gov;
martha.altamar@ferc.fed.us; mtierney@sempra.com: pmohler@hewm.com:
richard.qlick@hq.doe.gov; rahayes@seiworldwide.com;

[(b)(6)] 7 RMK@pge.com; shg@cpuc.ca.govs

sonnet .edmonds@southernenergy.com; sbvanleer@duke-energy.com;
sicapoma@seiworldwide.com; smara@enron.com; temoreland@swidiaw.com;
marvin_k_ballard@reliantenergy.com; wsakaria@sdge.com

Ce: Michelle.Greene@do.treas.gov; Gaylen.Barbour@édo.treas.gov

Subject: FW: California Energy Group

This is a test to provide a comprehensive listing for those who participated
in the Treasury Department California Energy Group meetings this week. If
you know of anyone else who should be added to this list, please call at
(202) 622-2245.

<<California Energy Group>>

anes End of message body

Message auditing by MicroData CAMEO Recon

1800000010020



RE; California Energy Group e-mail TEST MESSAGE Page 2 of 2

<<Final pt]. doc>> <<Final pt2.doc>>

1800000010154
10/21/2002


Page 1 of 2

From: Cetina, Jill

Sent: Wednesday, December 05, 2001 12:57 PM

To: _DL_Market Group; ‘Andrew Sacher’; 'ClayLowery’; ‘Eric Otto’; ‘Griffiths’; ‘Hoffman’: Lundsager,
Meg; ‘Paul Reid’; 'PMalmgren’; ‘Wayne’

Subject: Market Noon Report, Dec 5th — "Recession over” mood prevails

{(b)(5)]

01800000010191
10/21/2002



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usc OKWITHMETOADD INTPSONDAMAG INGCONSEQUENCESONPD I IAMNOTBOTHE
REDBYEMPHAS ISONOPIC/EXIMBECAUSEISNTTHATPOINT <62CC6FS

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BEIBAZO027AICOSams02 .do.treas.gov>

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L 9 5 ((b)(5)]
{(6)(5)]
ihe Original Message--~-~
From; Rao, Geetha
Sent: Thureday, July 12, 2001 11:01 AM

To: Rao, Geetha; Berg, Katie; Sille, Gay; Grewe, Maureen; Resnick, Bonnie;
Christopulos, Greg; Sampliner, Gary

Ce: Donovan, Meg; Mills, Marshall; McDonald, Larry; Radelet, Steve
Subject: RE: Dabhol meeting on Enron/OPIC project at NSC

Importance: High

Attached are the talking points that State sent over this morning. Please
review and send back any comments by 1:30 pm TODAY. We need to submit a joint

set of TPs today. {(b)(5)]

00500000002768


{(b{5)]

1800000010137



{()(5)]

01800000010145



((b)(5)]

01800000010151



Wileox, David
Thursday, February 21, 2002 12:47 AM
SearchCameo

psn Ainwehponit rubella east ac tegen gale
com; 'imacias@calpine. ‘jason_s._seligman@cea.eop.gov';
Debeetenonr, Wites Dene trees Michelle; Squitieri, Ray; Stokes, Veronica; ‘else

This message was found to have a Critical Word in it. Message Sent to Soares, Chris;
‘Martha Altamar'; ‘alexm@calpine.com'; ‘jmacias@calpine.com'; "jason_s.
_seligmanfcea.eop.gov'; ‘shg@cpuc.ca.gov'; Wilcox, David; Greene, Michelle; Squitieri,
Ray; Stokes, Veronica; ‘eisenstatl@DSM0.com'; 'sbvanleer@duke-energy.com';
*joel.newtonfdynegy.com'; ‘lynn.lednicky@dynegy.com'; ‘smara@enron.com'; ‘Linda Lee‘;
‘dan.poffenberger@ferc.ged.us.treas.gov'; ‘pmohler@hewn.com'; ‘richard.glick@hq.doe.gov';
‘smutany@iepa.com'; ‘karen.tomcala@pge-corp.com'; ‘cxg2@pge.com’; 'DxH4@pge.com'; 'RMK4
@pge.com'; 'joebob-perkins@reliantenergy.com'; 'marvin_k_ballard@reliantenergy.com';
‘KMcCrea@sablaw.com'; ‘fieldejr@ace.com'; ‘harold.ray@sce.com'; ‘dreed@adge.com';
‘wsakaria@sdge.com'; ahayes@seiworldwide.com'; 'sjcapoma@seiworldwide.com';
‘mtierney@sempra,com'; ‘sonnet.edmoends@southernenergy.com'; ‘cread@steptoe.com';
‘temorelandé@swidlaw. com’; *julie. reenisen@troutmansanders.com’;
‘alex.goldberg@williams.com'; (bit ) ? , Admin; ‘ronald minsk@opd.eop.gov',
From Sachs, Lee, CC to Barbour, Goylen; ‘Curtis Wagner’, Date 1/12/2001 3: S6 PM,
Subject of message RE: California Energy Group e-mail

Word{s) found: Enron

Original Message-----

From: Sachs, Lee

Sent: 1/12/2001 3:13:56 PM

Received: 1/12/2001 3:13:56 PM

To: Soares, Chris, EX: /OsUSTREASURY/OU=00/CN#RECIPIENTS/CN#SOARESC
‘Martha Altamar', SMTP:martha.altamar@ferc.fed.us
*alexm@calpine.com', SMTP:alexmicalpine.com
*jmacias@calpine.com’, SMTP; jmacias@calpine.com
‘jason_s._seligman@cea.cop.gov', SMTP: jason_s._seligmanécea.eop,gov
*shg@cpuc.ca.gov', SMTP: shg@cpuc.ca.gov
Wilcox, David, + /O#USTREASURY /OU=DO/CN=RECIPIENTS/CN=WILCOXD
Greene, Michelle, EX: /O=USTREASURY /OU*D0/CN*RECIPIENTS/CN=GREENEMI
Squitieri, Ray, EX: /O=USTREASURY /OU#DO0/CN~! IPIENTS/CN=SQUITIERIR
Stokes, Veronica, EX: /O=USTREASURY /OU~DO/CN=RECIPIENTS/CN=STOKESV
‘eisenstatl@DSMO.com', SMTP:eisenstatl@DSMO.com
*sbvanleer@duke-energy.com’, SMTP: sbvanleer@duke-energy.com
'Joel.newton@dynegy.com', SMTP: joel. newtongdynegy.com
‘lynn. lednicky@dynegy.com', SMTP:lynn.lednicky@dynegy.com
‘smara@enron.com’, SMTP: smara@enron.com
‘Linda Lee’, SMTP: linda. lee@ferc. fed.us
‘dan. poffenberger@ferc.ged.us.treas.gov',

SMTP: dan.poffenbergeréferc.ged.us.treas.gov

‘pmohler@hewm.com', SMTP:pmohler@hewn.com

*richard,glick@hq.doe.gov', SMTP:richard.glick@hg.doe.gov

‘smutany@iepa.com', SMTP: smutany@iepa.com

*karen.tomcala@pge-corp.com', SMTPrkaren.tomcala@pge-corp.com

‘exg2@pge.com', SMTP:cxg2@pge.com

*DxH4@pge.com', SMTP: DxH4@pge.com

"RMK4Gpge.com', SMTP:RMK4@pge.com

'joebob-perkins@reliantenergy.com', SMTP: joebob-perkins@reliantenergy.com

*marvin_k_ballard@reliantenergy.com', SMTP;marvin_k_ballard@reliantenergy.com

*KMcCreafsablaw.com', SMTP:KMcCrea@sablaw.com

*fieldejr@sce.com’, SMTP: fieldejr@sce.com

*harold.ray@sce.com', SMTP:harold.ray@sce.com

"dreed@sdge.com', SMTP:dreed@sdge.com

‘waakaria@adge.com', SMTP: wsakaria@sdge.com

1

1800000010035



((b)(5)}

Geetha will circulate revised points today. Please comment as quickly as you
can and by cob today if possible, so we can try to coordinate with State. Call
me or Geetha if you have any questions or need other background.

Thanks.

* 9 L2Pue)-
e Frepgi25 2 ¢
“n

00500000002685


Wilcox, David
Thursday, February 21, 2002 12:47 AM
SearchCameo

CAMEO Recon found a word: Enron sent by Susan.J.Mara@enron.com to
david.wilcox@do.treas.gov; lee.sachs@do.treas.gov on 1/10/2001 11:17:14 PM.

TIMELINE AND
PLEMENTATION.Go_
This message was found to have a Critical Word in it. Message Sent to
david.wilcox@do.t. gov; lee.sachs@do.treas.gov, From Susan.J.Mara@enron.com, CC to ,
Date 1/10/2001 11:17:14 PM, Subject of message Document From Today

Word(s) found: Enron

From: Susan.J.Hara@enron. com

Sent: 1/10/2001 11:17:14 PM

Received: 1/10/2001 11:14:56 2M

To: david.wilcox@do.treas.gov, SMTP:david.wilcox@do.treas.gov
lee.sachs@do.treas.gov, SHTP:lee.sachs@do.treas.gov

ce:

Subject: Document From Today

Body:

Wrong addresses. Duh-uh.

oases Forwarded by Susan J Mara/NA/Enron on 01/10/2001 08:16 PM ----~
Susan J Mara

To: david.wilcox@do.treas.com,

01/10/2001 lee.sachs@do.tres.com

08:01 PM alex.goldberg@williams.com,
.tomcala@pge-corp.com, pmohler@hewm.con,
dreed@sdge.com

Subject: Document From Today

Here it is.
(See attached file: TIMELINE AND IMPLEMENTATION.doc)

oneeee End of message body

Message auditing by MicroData CAMEO Recon

ss 01800000010029



From: Susan.J.Mara@enron.com
— Wednesday, January 10, cog tld nl
‘0: David.wilcox@do.treas.gov; lee.sachs@do.treas.gov
Subject: More thoughts
Lee,

I'm checking on the “market in the west at 5.5 cents" question. I'11 let you know,
David and Lee,

It seems that everyone has pretty much put their big issues out on the table for
consideration in package of solutions. I've been concerned. No one has been talxing
about the retail markets. We have spent four years protecting the utilities and getting
them “ready” for retail competition. I've personally spent much of my life those four
years arguing with the utilities and the CPUC to achieve any tiny movement toward a fair,
open and non-discriminatory market for retail suppliers (other than the utilities, Enron
ids the only retail supplier in the room).

Therefore, we cannot move forward with these new subsidies and bailouts unless the
utilities and the state agree to take definitive steps to make the retail market work. To
move this thinking forward, 1 will prepare a few points of the kinds of steps we would
want to see as part of the overall package.

Sue Mara

1800000010118


end in 2002 has to be extended several more years. The CTC is “non-bypassabie,”
which means if you leave the local monopoly for an alternative supplier, you
still have to send a couple of cents/kwh to the old utility.

Ratepayer groups got about 40 people to storm the PG&E corporate headquarters.
this week over the one cent rate increase. Another rate increase would cause
rots and ballot initiatives, and cost Davis his job.

But can consumer groups get people out in the streets over a deal that's great
now, but overcharges them starting in 2003? | doubt It.

Businesses such as Intel Corp. (INTC) will know they are getting the short end
of the stick financially and that power in the western U.S. is still unreliable,

so they will decide to build new factories in other states. That's how you
bypass non-bypassable charges. It will be bad for the state's economic growth,
but California needs to stop adding electricity demand.

The stars are aligned for a deal very soon: eight days left before the
‘executive branch of the U.S. government changes from one that wants to help
Davis to one that wants to hurt him; about the same amount of time is left
before the utilities run out of cash; forward power prices have come down a lot
in the past 30 days, but could easily start to rise again, merchant power
company stock prices have been punished for two weeks, and their executives
don’t want to kill the goklen goose,

How can they not get this done?

-By Mark Golden, Dow Jones Newswires; 201-938-4604; mark.golden@dowjones.com

(END) Dow Jones Newswires 12-01-01
1800GMT

(AP-DJ-01-12-01 1800GMT)

:TICKER: CPN DUK DYN EIX ENE INTC NRG PCG REI SO SOE
>SUBJECT: EUTL SEM! DI1 DI4 DI2 CA GA MN NC TX COMM
Copyright (c) 2001 Dow Jones and Company, Inc,
Received by NewsEDGE/LAN: 1/12/01 12:55 PM.

01800000010008



{(b(5)}

Geetha will circulate revised points today. Please comment as quickly as you
can and by cob today if possible, so we can try to coordinate with Stare. call
me or Geetha if you have any questions or need other background.

Thanks.

bp pt LzFu,
xh repgi25 2 ©

00500000002858


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sills,
Gay EX: /OsUSTREASURY/OU*DO/
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2 ’ Rao, Geetha; Berg, Katie; Grewe,
Maureen: Resnick, Bonnie; Christopulos, Greg; Sampliner,
Gary Dabhol meeting on Enron/OPIC project at
NSC OKWITHMETOADD INTPSONDAMAG INGCONSEQUENCESONFDI LAMNOTBOTHE
REDBYEMPHASISONOPIC/EXIMBECAUSEISNTTHATPOINT <62CC6FS

DSPABD4118F1B00SO8BE38A20021F2308ame02 .do.treas.gov> <62CC6FSDSFABDA118F1B00S
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1 yyy 5S = ok with me to add in

tps on damaging consequences on fdi.
i am not bothered by emphasia on opic/exim because isn't that point of
demarche.

dialed Original Message----~-
From: Rao, Geetha
Sent: Thursday, July 12, 2001 11:01 AM

To: Rao, Geetha; Berg, Katie; Sills, Gay; Grewe, Maureen; Resnick, Bonnie;
Christopulos, Greg; Sampliner, Gary

Cc: Donovan, Meg; Mills, Marshall; McDonald, Larry; Radelet, Steve
Subject:  Dabhol meeting on Enron/OPIC project at NSC

Importance: High

Attached are the talking points that State sent over this morning. Please
review and send back any comments by 1:30 pm TODAY. We need to submit a joint
set of TPs today. [(b)(5)]

00500000002682


{(b)(5)]

01800000010130



eight months for wholesale power but been unable to pass along under
‘state-mandated frozen retail rates,

Further complicating the taiks have been demands by Davis that the proposed
long-term power contracts be at rates far below the production costs of
electricity generators.

But lately the pessimism has been tempered by signals that Davis may be
persuaded to relent Saturday in his opposition to a state-backed securitization
of the utilities’ undercolections,

“Let's see their plan, and then we'll talk about that,” Steve Mavigtio, the
governor's spokesman, said late Thursday.

Davis reportedly has been under increasing pressure from Wall Street and
Clinton administration officials to reconsider his opposition to securitization.

Without a state credit guarantee, a work-out plan can't be struck, the
utilities will enter bankruptcy and the state's power grid will collapse into
blackouts, sources familiar with the talks warn,

The affected utilities are Southern California Edison Co., a unit of Edison
international (EIX), and Pacific Gas & Electric Co., a unit of PG&E Corp. (PCG).

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

(END) Dow Jones Newswires 12-01-01
2100GMT

{AP-DJ-01-12-01 2100GMT)

:TICKER: EIX PCG SRE

‘SUBJECT: EUTL STGO Di7 Dit Di4 DI2 CA COBO COMM
Copyright (c) 2001 Dow Jones and Company, Inc.

Received by NewsEDGE/LAN: 1/12/01 3:55 PM

Calif power talks air to reach solution on Saturday

WASHINGTON, Jan 12 (Reuters) - Treasury Secretary Lawrence
Summers, other senior Clinton administration officials and top
executives of electric power companies tentatively planned to
meet on Saturday to finalize a fix for California's power mess,

@ source close to the negotiations said on Friday.

The high4evel meeting was set to take place at the Energy
Department at 3:30 p.m. EST (2030 GMT), with some California
officials participating via teleconference, the source said.

The state narrowly averted rolling power blackouts on
Thursday as already tight supplies of electricity fell to
dangerously low levels because of a severe storm.

Friday marked the fourth day of negotiations among
lower-level aides to map out detailed proposals for short- and
long-term solutions to California's chronic electricity
shortage and skyrocketing prices.

If the Friday talks failed to make as much progress as
hoped, the Saturday session could be downgraded to another day

negotiations on Tuesday to prevent the bankruptcy of PG&E Corp
<PCG.N> and Edison International <EIX.N>, which could ripple
throughout the national economy.

a

1800000010108



RECENT TOP STORIES
These stories have been most requested by Energy Central members in the last two
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4. Activists Blast Davis" Energy Plans / Rate Increases Should Not Be Used to Bail Out
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osesas End of message body

Message auditing by MicroData CAMEO Recon
41

01800000010058



West.

Other than that, where's the rub? Under deregulation, consumers were supposed
to get market rates in 2002. Based on the current forward market and the

utilities’ cost of retained generators, 7 cents/kwh for the rest of this year is

@ great deal. For 2002, it's fair, but for 2003-2008, it's terrible. The current
purchase price for those years is about 5 cents. With generation

at 3 cents, consumers will be paying 7 cents/kwh when they should be paying 4
cents/kwh.

And the 2.4 cents/kwh competition transition charge (CTC) that was supposed to
end in 2002 has to be extended several more years. The CTC is “non-bypassabie,”
which means if you leave the local monopoly for an altemative supplier, you
Still have to send a couple of conts/kwh to the old utility.

Ratepayer groups got about 40 people to storm the PG&E corporate headquarters
this week over the one cent rate increase. Another rate increase would cause
fiots and ballot initiatives, and cost Davis his job.

But can consumer groups get people out in the streets over a deal that's great
now, bul overcharges them starting in 20037 | doubt it.

Businesses such as Intel Corp. (INTC) will know they are getting the short end
of the stick financially and that power in the western U.S. is still unreliable,
‘so they will decide to build new factories in other states. That's how you
bypass non-bypassabie charges. It will be bad for the state's economic growth,
but California needs to stop adding electricity demand.

The stars are aligned for a deal very soon: eight days left before the
executive branch of the U.S. government changes from one that wants to help
Davis to one that wants to hurt him; about the same amount of time is left
before the utilities run out of cash; forward power prices have come down a lot
in the past 30 days, but could easily start to rise again: merchant power
company stock prices have been punished for two weeks, and their executives
don't want to kill the golden goose.

How can they not get this done?

-By Mark Golden, Dow Jones Newswires; 201-938-4604; mark goiden@dowjones,com

(END) Dow Jones Newswires 12-01-01
1800GMT

(AP-DJ-01-12-01 1800GMT)

‘TICKER: CPN DUK DYN EIX ENE INTC NRG PCG REI SO SOE
;SUBJECT: EUTL SEMI Dit Di4 DI2 CA GA MN NC TX COMM
Copyright (c) 2001 Dow Jones and Company, Inc.
Received by NewsEDGE/LAN: 1/12/01 12:55 PM

01800000010013



{(b)(5)]

01800000010141



{(b)(5)]

Geetha will circulate revised points today, Please comment as quickly as you
can and by cob today if possible, so we can try to coordinate with State. Call
me or Geetha if you have any questions or need other background.

Thanks.

© 9 LaPua}-
é repgi25 2°
“sn

00500000002771


TABB
DRAFT CONTRACT

01800000010139



Page | of 2

From:  Cetina, Jill
Sent: Tuesday, December 04, 2001 12:27 PM

To: _DL_Market Group; ‘Andrew Sacher’; 'ClayLowery’; ‘Eric Otto’; ‘Griffiths’; "Hoffman’; Lundsager,
Weg: 'Paul Reid’; 'PMalmgren’; Wayne’
Subject; Market Noon Report — Dec 4th

((b(5)}

01800000010196
10/21/2002



From: Wilcox, David
Sent: Thursday, February 21, 2002 12:48 AM
Baby CAMEO Recon found a word: Enron by Reed, Debra ‘David.
ject: a i ‘sent Lito" |. Wiicox@do.treas.gov'
on 1/12/2001 5:56:38 PM

This message was found to have a Critical Word in it. Message Sent to
"David.Wilcox@do.treas.gov’, From Reed, Debra L., CC to , Date 1/12/2001 5:56:36 PM,
Subject of message RE: California Energy Group e-mail TEST MESSAGE

Word(s) found: Enron

wenn Original Message-----

From: Reed, Debra L.

Sent: 1/12/2001 5:56:38 PM

Received: 1/12/2001 5:54:15 PM

To: "David. Wilcox@do.treas.gow', SMTP: David.Wilcox@do.treas.gov

ce:

Subject: RE: California Energy Group e-mail TEST MESSAGE

Body:

Are you just testing sending attachments, or are these for review?

This is her assistant, Martha and I just need some clarification while she's traveling
please, Thanks.

asonat Original Message~---~~

From: David.Wilcoxfédo.treas.gov [mailto:David.Wilcox@do.treas.gov]

Sent: Friday, January 12, 2001 2:51 PM

To: David.Wilcox@do,treas.gov; Lee.Sechs@do.treas.gov; Chris.Soares@do.treas.gov;
martha.altamar@ferc.fed.us; alexm@calpine.com; jmacias@calpine.com; jason_s.
_seligmanfcea.eop.gov; shg@cpuc.ca.gov; Michelle.Greene§do.treas.gov;

Ray. Squitieri@do.treas.qov; Veronica.Stokes@do.treas.gov; eisenstatl@0SMO.com:
sbvanleer@duke-energy.com; joel.newton@dynegy.com; lynn. lednicky@dynegy.com:
smarafenron.com; linda. lee@ferc.fed.us; dan.poffenberger@ferc.ged.gov.treas.gov;
pmohler@hewm.com; richard,glick@hq.doe.gov; smutany@iepa.com; karen.tomcala@pge-corp.com;
exg2@pge.com; Dxi4épge.com: RMK4@pge.com: joebob-perkins@reliantenergy.com;
marvin_k_ballard@reliantenergy.com: KMcCrea@sablaw.com; fielde}
harold. ray@sce.com; dreedtsdge.com; waakaria@sdge.com; rahayes'
sjcapoma@seiworldwide.com; mtierney@sempra.com; sonnet.edmonds@southernenercy.com;
cread@steptoe.com: fewsgebost (°)"(:)) agian julie.greenisen@troutmansanders.com;
alex.goldberg@williams com; [(b)(6) ; ADMIN@do.treas.govs

ronald minsk@opd.,eop.gov; jmdonnell@duke-energy.com; hjpodewer@duke-energy.com;
bbailey@duke-energy.com; njdeschane@duke-energy.com; wfihall@duke-energy.com:
sbvanleer@duke-energy.com; rmk4@pge.com; ddr0@pge.com; rjp2@pge.com; starckle®sce.com;
john.gammie@williams.com; reharris@seiworldwide.com; smfuller@seiworldwide.com;
dimiller@seiworldwide.com; jwholden@seiworldwide.com; richard. shapiro@enron.com;
robert .badeer@enron.com

Cc: Gaylen.Barbour@do.treas,gov; curtis.wagner@ferc. fed.us

Subject: RE: California Energy Group e-mail TEST MESSAGE

-----~ End of message body

Message auditing by MicroData CAMEO Recon
[ 01800000010018



((6X5)}

01800000010164



THT Tay AM

((b{5)]

Jen Sheree
For internal Use Onty a2 6:19AM

01800000010198



((b)(5)]

remod.wpd (9 KB)

01800000010095



{(o)(5)]

01800000010138



From: Dawson, Michael

Sent; Wednesday, January 16, 2002 11:48 AM

To: Murden, Bill; Fox, William; Zarate, Juan; Kupfer, Jeffrey
Subject: FW:

[OUTSIDE SCOPE}

——Onginal Message-—

From: Quinn, Katie

Sent: Wednesday, January 16, 2002 11:39 AM

a Aufheuser, David; Bair, Shella; Gurulé, Jimeny; Lawson, Kenneth; Duncan, John; Dawson, Miche

David Aufhauser and | spoke with Steve Kroll, Steve Harris and Patience Singleton from the Senate Banking Committee
to get a more detailed understanding of their interests and expectations related to Ken Dam's testimony on January 29th.
The following is a summary of our conversation with the staff.

GENERAL THEMES FOR HEARING:
[OUTSIDE SCOPE , (b)(5)]

GENERAL QUESTIONS THAT MAY BE ASKED:
{OUTSIDE SCOPE , (b)(5)}

CURRENT WITNESSES:

Kenneth Dam, Deputy Secretary of the Treasury
Michael Chertoff, DOJ Criminal Division,

Richard Spillenkothen, Director of Market Reg at the Fed
Annette Nazareth, Director of Market Reg at the SEC

‘neers ree, sam Comsien 0 OREN for ur inp regenera Prete On Mie Pane mietetey 1 am running this by Mr.
m's 5

Kate Quinn
Deputy Assistant Secretary
(Enforcement)

01800000010080



‘Treasury Market Room 622-2650 GLOBAL FINANCIAL MARKETS
Temathy DuiLaney, Ovector ‘eet tn08 PM

((bX5)]

01800000010205



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McDonald, Larry; Radelet, Steve Rao, Geetha; Berg, Katie; Sills, Gay; Grewe,
Maureen; Resnick, Bonnie; Christopulos, Greg; Sampliner,

Gary Dabhol meeting on Enron/OPIC project at
usc ATTACHEDARETHETALKINGPOINTSTHATSTATESENTOVERTHISMORNINGP
LEASEREV 1 EWANDSENDBACKANYCOMMENTSBY 1: 30PMTOD <62CC6FS
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Attached are the talking pointe that State sent over this morning. Please
review and send back any comments by 1:30 pm TODAY. We need to submit a joint

set of TPs today. [(b)(5)}

any other suggestions?

Sent: Wednesday, July 11, 2002 4:13 PM

To: Berg, Katie; Sills, Gay; Grewe, Maureen; Resnick, Bonnie; Christopulos,
Greg; Sampliner, Gary

Cc: Donovan, Meg; Mills, Marshall; McDonald, Larry; Radelet, Steve
Subject: RE: Dabhol meeting on Enron/OPIC project at NSC

Katie, {(6y5)]
We'll go ahead and send forward the points to State to push for a

joint agreesent on talking points... Thanks to all.

dedi Original Message-----
Prom: Berg, Katie
Sent: Wednesday, July 11, 2001 4:09 PM

To: Sills, Gay; Rao, Geetha; Grewe, Maureen; Resnick, Bonnie; Christopulos,
Greg; Sampliner, Gary

Cc: Donovan, Meg; Mills, Marshall; McDonald, Larry; Radelet, Steve
Subject; RE: Dabhol meeting on Enron/OPIC project at NSC

00500000002855


ur _  OoOoOm—. —————

From: Eichner, Matthew

Sent: Monday, June 11, 2001 10:57 AM

To: Novey, Michael; Hammer, Viva; Solomon, Eric; Mikrut, Joseph; Hanson, Robert; Paravano,
Ce: Gerardi, Geraldine; Kiefer, Donald

Subject: ‘Swap Study Meeting

{(b)(5)]

1800000010094



Treasury Market Room 622.2660 GLOGAL FIMANCAL MARKETS:
Trsothy DuLaney, Director wna SAM

{(b)(5)]

01800000010199



the market price is 8.5 cants/kwh and only if the contracts run for eight years.

But that's all just negotiating position. The customers of Edison
International's (EIX) Southem Califomia Edison currently pay the company 7.6
cents/kwh just for energy. That price includes last week's one-cent raise, but
not other charges such as transmission and distribution.

Edison generates half the power it needs at a cost of about 3 cents/kwh. So,
the other half at 5.5 cents/kwh would do a lot more than stop the
hemorrhaging. If the cost of purchased power were 5.5 cents, Edison's average
cost would be 4.3 cents, for which they are getting paid 7.6 cents. That 3.3
cents/kwh profit on the 83 billion kwh Edison sells a year comes to a whopping
$2.7 billion annually. End of credit problem.

PG&E Corp.'s (PCG) situation is more difficult. Their customers pay less for

naw. and PG&E only generates a third of its own power, but they have
lower generating costs than Edison. Bottom line: # PG&E could buy supplies at

5.5 cents/kwh, they would be left with 1.9 cents/kwh profit.

Unfortunately for the utilities, California independent generators, such as

Reliant Energy (REI), NRG Energy (NRG), Dynegy (OYN), Southem Energy (SOE) and
Duke Energy (DUK), can't get their prices down to 5.5 cents/kwh in
given the current market price of natural gas.

But they don't need anything close to 8.5 cents for eight years. The forward
price for wholesale power in California for the balance of this year is 18
cents/kwh for the on-peak hours, which is what the utilities mostly need to buy.
The on-peak price drops to 11 cents/kwh for a three-year contract because new
generators and new gas supplies are expected to come on line. For an eight-year
contract, the price drops to about 7.3 cents/kwh.

At 7.3 cents, PG&E would be heading to bankruptcy court. But the generators
‘will get to sell PG&E some off-peak power, too, which brings the average price
down a little further. If the governor guarantees really quick licensing for a
couple of new power plants in northern California, the price comes down a lot.

What's more, to save deregulation in the U.S. the generators are willing to
cut to the bone. The stocks of Dynegy, Enron Corp. (ENE), etc., have high
price-to-earnings ratios because their earnings are expected to continue strong
growth under electric deregulation. They are the emerging masters of a
deregulated universe, but if deregulation were to throw PG&E and Edison into
bankruptcy court, there wouldn't be any deregulated electric universe to master,

As one electricity trader put il: "They have got to get a deal done, If they
don't get The California Energy Crisis’ off of CNBC every 30 minutes, I'm going
to be out of a job.”

Generators’ stock prices have been getting hammered since the first of the
year due to several factors, such as profit-taking after a great 2000, according
to Credit Suisse First Boston utility analyst Paul Patterson, Duke's stock has
fallen to $66 from $85 since Dec. 29, for example.

Prices of generator stocks have come down hard, in part, because a California
catastrophe would derail deregulation in many states and the forecasts for
generators’ earnings growth would be questioned, according to Solomon Smith
Bamey analyst Ray Niles,

That's the finances. The physical reality is that the westem U.S. probably
‘won't have enough electricity lo meet demand for the rest of this year. Starting
in February, if a deal is done, California utilities won't be the last in line
to get their power, and the threat of blackouts will be spread out across the

19

01800000010100


Page 2 of 2

{(b)(5)]

10/21/2002
1800000010213



{(b)(5)]

(Oratied ty. 2m Brew
Fer tetarmat Une Cnty wee) as Pe

01800000010204



From: Wilcox, David

Sent: Thursday, January 11, 2001 12:38 AM
To: “Susan.J.Mara@enron.com’

Cc:

From: Susan.J.Mara@enron.com [mailto:Susan.J.Mara@enron.com]
Sent: Wednesday, January 10, 2001 11:14 PM

To: David.wilcox@do.treas.gov; lee.sachs@do.treas.gov
Subject: More thoughts

Lee,

I‘m checking on the “market in the west at 5.5 cents" question. I'll let you know.

David and Lee,

It seems that everyone has pretty much put their big issues out on the table for
consideration in package of solutions. I've been concerned. No one has been talking
about the retail markets. We have spent four years protecting the utilities and getting
them “ready” for retail competition. I've personally spent much of my life those four
years arguing with the utilities and the CPUC to achieve any tiny movement toward a fair,
open and non-discriminatory market for retail suppliers (other than the utilities, Enron
is the only retail supplier in the room).

Therefore, we cannot move forward with these new subsidies and bailouts unless the
utiliti ind the state agree to take definitive steps to make the retail market work. To
move this thinking forward, I will prepare a few points of the kinds of steps we would
want to see as part of the overall package.

Sue Mara

ed 01800000010116



For more information about products on this topic visit our Information Marketplace

Lithuania secures EU funding to shut down reactor
VILNIUS, Dec 29 (AFP) - Lithuania's government said Friday it had obtained a loan of 45
million euros (42 million dollars) from the European Union to help it decomission the
first reactor unit at Ignalina nuclear power station,

Disputed Czech N-plant powering up again after glitch
PRAGUE, Dec 29 (AFP) - A disputed Czech nuclear plant plagued by technical problems has
Powered up to 29 percent of its capacity, and is due to be re-connected to the national
power grid Saturday, a spokesman said Friday.

Jordan to launch first nuclear power plant in year's time AMMAN, Dec 31 (AFP) -
Jordan will start operating a small nuclear power reactor in early 2002 for scientific
research and other non-military purposes, Jordan's energy minister was quoted Sunday as
saying.

PPL's Susquehanna Nuclear Plant Sets Generation Record
ALLENTOWN, Pa., Jan. 1 /PRNewswire/ PPL's Susquehanna nuclear plant produced more
electricity in 2000 than it has in any year since the plant began operation in 1983.

EU grants Lithunia govt 45 min eur for Ignalina nuclear plant decommissioning Dec
29, 2000 - AFX News Limited The £U has granted Lithuania 45 mln eur to help decommission
the first block of the Ignalina nuclear power plant, the minister for foreign affairs
said.

Financial

For more information about products on this topic visit our Information Marketplace

Greenspan's California Power Crisis Talks Boost Hopes for US Rate Cut Dec 27, 2000
- The Independent - London HOPES THAT the US Federal Reserve may cut interest rates early
in the new year resurfaced yesterday as Alan Greenspan, the chairman, met the Governor of
California in Washington to discuss a crisis that threatens to bankrupt the state's two
biggest power utilities.

PG&E Workers May Lose Their Annual Bonuses / PG&E Workers May Lose Their Annual
Bonuses Bec 30, 2000 - The San Francisco Chronicle As Northern California consumers face
the prospect of big increases in their power bills, employees of Pacific Gas and Electric
Co. are looking at the likelihood that annual performance-based bonuses will be reduced or
even eliminated this year.

Black Hills Corporation Obtains Holding Company Approval and Announces Shelf
Registration for Future Capital Offerings RAPID CITY, S.D., Dec. 28 /PRNewswire/ ~~ Black
Mills Corporation today announced the culmination of approvals resulting in the formation
of a holding company business structure. Shareholders had earlier ratified the change at
the Company's annual meeting on June 20, 2000. Effective December 22, 2000, outstanding
shares were automatically exchanged on a one-for-one basis for shares of the holding

company.

Product Annoucement

1800000010054



SourceBook Weekly is the electric industry's premier journal of issues
and analysis. We publish four to six articles a week on our site as an
e-zine. When you buy a year's subscription, you will receive a password
which entitles you to read the current issue and the past twenty months
of articles which are reserved for you in a full text, searchable database.

If you need to know the electric business, you need to read SourceBook
Weekly.

You will find this week's articles listed below.

I hope that this description helps you acquire the information you need
to succeed in today's electric industry. Your free IssueAlert follows this
week's SourceBook Weekly titles.

Sincerely,

Jane Pelz

Director of Marketing Communications
SCIENTECH, Inc.

This week's SourceBook Weekly articles are listed below

TEAR N ENA E RTE E EEE EEE GEER HEEETEENEEHAEEEEEESER EEE REEEEES SOHO EREEREE
WIRES COMPANIES: RISKY BUSINESS?

http: //www.consultrei .com/web/rciweb.nsf/Web+Pages/SBEntrance. html
ererrrr ert erat irre’

FUROR OVER FUEL CELLS
hetp: //www,
rererresy
PGSE'S HYDROELECTRIC ASSETS: PLAYING BOTH SIDES OF THE GAME

http: //waw.consultrei.com/web/reiweb.nsf£/Web+Pages/SBEntrance. html

PecP PPP Tete t ieee eter eer Teer eter rete e terre reer rer er Terre errr r rrr sy
SOUTHERN COMPANY: SPINOFF OF SOUTHERN ENERGY PLANNED FOR APRIL
http://www. consultred.com/web/reiweb.nsf/Web+?, .
te eeenene
BEYOND PANTELLOS AND ENPORION: NICHE SUPPLY CHAIN EXCHANGES ATTEMPT TO
FIND SEAT AT THE TABLE

http: //www.consultrci.com/web/rciweb.nsf/Web+Pages/SBEntrance. html

HEE E TEEN EEE E REE RETRO AEEE EEE EERE EEA ESEREEEE EEE E EERE EEA EEE H EES
SIERRA PACIFIC AND PORTLAND GENERAL: MOVING FORWARD ON MERGER

http: //www.consultrci.com/web/rciweb.nsf/Web+Pages/SBEntrance html

SETAE EERE EEE THR ER ERE AERA ER Rees ee eeeeeeeee *

eee e enter cneneneness. - se aumeccos
SCIENTECH IssueAlert, December 14, 2000

Competition Accelerates in Texas, A Year Before Full Deregulation Is To
Start

By: Will McNamara, Director, Electric Industry Analysis

TNPC, Inc., the parent company of The New Power Company, announced that

it is the first residential and small business energy provider to be certified
by the Public Utility Commission of Texas (PUCT). On Feb. 15, 2001, customers
in Texas can begin signing up with retail electric providers to participate

in the state's pilot program, scheduled to begin in June. Full competition
will begin in Texas in January 2002.

ANALYSIS: TNPC may be the first certified energy service provider in Texas,
which it claims will provide a “first mover advantage,” but it definitely
faces increasing competition in the state. Just within the last couple
of months, there has been a spate of new activity surrounding the Lone
Star State, a year before full competition will be available to all customers
of investor-owned utilities in Texas. (The state's rural electric cooperatives
and municipal utilities can opt out of competition). Restructuring law
in Texas requires utilities within the state to ate various businesses,
for instance power generation, power delivery and rgy services. Thus,
even those utilities that have historically had a large presence in the

199

1800000010060



Page | of 2

From:  Cetina, Jill
Sent: Tuesday, December 04, 2001 7:53 AM

To: _OL_Market Group; ‘Andrew Sacher’; '‘ClayLowery’; ‘Eric Otto’; ‘Griffiths’; ‘Hoffman’; Lundsager,
Meg; 'Paul Reid’; ‘PMalmgren’; ‘Wayne’

Subject: Market Moming Report, Dec 4th
{(b)(5))

01800000010212
10/21/2002



The forbearance and contracts working groups have been meeting separately, and
were to convene a joint session late Friday to compare notes before reporting
back to the principal negotiators who will cut any final deal.

Those familiar with the talks have expressed a mix of pessimism and optimism
that a final deal can be struck, given what they described as unrealistic
bargaining demands by Gav. Davis.

He has firmly rejected retail rate increases and resisted demands for the
state to guarantee the nearly $12 billion utilities have paid over the last
eight months for wholesale power but been unable to pass along under
state-mandated frozen retail rates.

Further complicating the talks have been demands by Davis that the proposed
jong-term power contracts be at rates far below the production costs of
electricity generators.

But lately the pessimism has been tempered by signals that Davis may be

securitization

persuaded to relent Saturday in his opposition to a state-backed
of the utilities’ undercollections.

“Let's see their plan, and then we'll talk about that,” Steve Mavigiio, the
governor's spokesman, said late Thursday.

Davis reportedly has been under increasing pressure from Wall Street and
Clinton administration officials to reconsider his opposition to securitization.

‘Without a state credit guarantee, a work-out plan cant be struck, the
utilities will enter bankruptcy and the state's power grid will collapse into
blackouts, sources familiar with the talks warn,

The affected utilities are Southem California Edison Co., a unit of Edison
Intemational (EIX), and Pacific Gas & Electric Co., a unit of PG&E Corp, (PCG).

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

(END) Dow Jones Newswires 12-01-01

2100GMT
(AP-DJ-01-12-01 2100GMT)
:TICKER: EIX PCG SRE

:SUBJECT; EUTL STGO DI7 Dit Di4 DI2 CA COBO COMM
Copyright (c) 2001 Dow Jones and Company, Inc.
Received by NewsEDGE/LAN: 1/12/01 3:55 PM

Calif power talks aim to reach solution on Saturday

WASHINGTON, Jan 12 (Reuters) - Treneity Seen rer
Summers, other senior Clinton administration officials and top
executives of electric power companies tentatively planned to
meet on Saturday to finalize a fix for Caltfomia's power mess,

@ source close to the negotiations said on Friday.

The high-level meeting was set to take place at the Energy
poseahaainhrtared ayoaforss A aracedtael with some California
officials participating via teleconference, the source said.

The state narrowly averted roiling power blackouts on
Thursday as already tight suppties of electricity fell to
dangerously low levels because of a severe storm.

Friday marked the fourth day of negotiations among
lower-level aides to map out detailed proposals for short- and

3s

1800000010005



Treasury Market Room 622-2650 GLOBAL FINANCIAL MARKETS:
‘Timothy OuLaney, Director wena is PM

{(b)(5)]

01800000010158



hh

From: Stern, Todd
Sent: Friday, January 12, 2001 5:21 PM
To: Klasky, Helaine; Posner, Steven; Smith, Michelle A.; Weaver, Elizabeth; Gallagher, Una;
Buck, Bill; Gensler, Gary; Sachs, Lee; Stewart, Lawranne; Greene, Michelle; Wilcox, David;
Brnenior, Douglas; Vandivier, David; Sandberg, Sheryl; Cohen, Alan; Wolin, Neal; Moe,
Subject: RE: wires - California Power Talks
{((b)(5)]
Original Message-—
From: lasky, Helaine
Sent: Friday, January 12, 2001 4:41 PM
To: Posner, Steven; Smith, Michelle A; Weaver, Gizabeth; Gallagher, Una; Buck, Bill; Gensler, Gary; Sachs, Lee; Stewart, Lawranne;

DJ Principals In Calif Pwr Talks Set To Reconvene Saturday
Dow Jones Intemational News Service via Dow Jones

WASHINGTON (Dow Jones)--The principal negotiators involved in White
House-brokered talks to solve California's electricity crisis are slated to
reconvene here Saturday afternoon, the U.S, Treasury Department confirmed
Friday.

The resumption of high-level talks among top-ranking officials representing
the Clinton administration, California, and utilities and power suppliers will
take place at U.S. Department of Energy headquarters at 3:30 p.m. EST.

California Gov. Gray Davis and other key state regulators and lawmakers are to
participate via a video conferencing link.

The pivotal negotiating session comes after two working groups involving
lower-level officials have met since Wednesday in an effort to flesh out the
details of a broad settlement package the principals discussed late Tuesday
during a seven-hour meeting at the Treasury Department.

Knowledgeable sources described Treasury Secretary Lawrence Summers as taking
‘an active rote in attempting to forge an agreement during Tuesday's talks, which

also featured Energy Secretary Bill Richardson, White House economic adviser

Gene Sperling and Federal Energy Regulatory Commission Chairman James Hoecker,

Richardson, who is traveling this weekend in an effort to lobby oll-producing
nations against a pending production cut, will not be attending Saturday's

6 1800000010097



session,

The working group meetings will wrap up sometime Friday, the Treasury
Department said.

The two groups have separately addressed the two primary features of the
Proposed settlement, which involve moving the state's financially ailing

utilities out of volatile spot power markets and Into fixed-price forward

contracts while power producers agree to “forbearance” on the huge debt owed by
the utilities

The forbearance and contracts working groups have been meeting separately, and
‘were to convene a joint session late Friday to compare notes before reporting
back to the principal negotiators who will cut any final deal.

Those familiar with the talks have expressed a mix of pessimism and optimism
that a final deal can be struck, given what they described as unrealistic
bargaining demands by Gov, Davis.

He has firmly rejected retail rate increases and resisted demands for the
state to guarantee the nearly $12 billion utilities have paid over the last
‘eight months for wholesale power but been unable to pass along under
state-mandated frozen retail rates.

Further complicating the talks have bean demands by Davis that the proposed
long-term power contracts be at rates far below the production costs of
electricity generators.

But lately the pessimism has been tempered by signals that Davis may be
persuaded to relent Saturday in his opposition to a state-backed securitization
Of the utilities’ undercollections.

“Let's see their plan, and then we'll talk about that,” Steve Maviglio, the
governor's spokesman, said late Thursday.

Davis reportedly has been under increasing pressure from Wall Street and
Clinton administration officials to reconsider his opposition to securitization.

Without a state credit guarantee, a work-out plan can't be struck, the
utilities will enter bankruptcy and the state's power grid will collapse into
blackouts, sources familiar with the talks warn.

The affected utilities are Southem California Edison Co., a unit of Edison
Internationa! (E1X), and Pacific Gas & Electric Co., a unit of PG&E Com. (PCG).

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

(END) Dow Jones Newswires 12-01-01
2100GMT

(AP-DJ-01-12-01 2100GMT)

STICKER: EIX PCG SRE

:SUBJECT; EUTL STGO Di7 Dit DI4 DI2 CA COBO COMM

Gonviont (c) 2001 Dow Jones and Company, Inc.
Received by NewsEDGE/LAN: 1/12/01 3:55 PM

Calif power talks aim to reach solution on Saturday
WASHINGTON, Jan 12 (Reuters) - Treasury Secretary Lawrence

‘Summers, other senior Clinton administration officials and top
«

01800000010010



From: Wilcox, David

Sent: Thursday, February 21, 2002 12:47 AM

To: SearchCameo

Subject: Gooauaion poisaraloeet aes meee
alexm@calpine.com; jmacias@calpine.com; jason_s. See Coenen
shg@cpuc.ca.gov; Soares, Chris; Wilcox, David; . Lee; Greene, Michelle; Squitieri,
Ray; Stokes, Veronica

Working Group
report 6.doc (36...

This message was found to have a Critical Word in it. Me ge Sent to ‘Martha
Altamar'; alexm@calpine.com; jmacias@calpine.com; jason_s._seligman@cea.eop.govs
shg@cpuc.ca.gov; Soares, Chris; Wilcox, David; Sachs, Lee; Greene, Michelle; Squitieri,
Ray; Stokes, Veronica; eisenstatl@DSMO.com; sbvanleer@duke-energy.com;
joel.newton@dynegy.com; lynn.lednicky@dynegy.com; smara@enron.com; Linda Lee;
dan.poffenberger@ferc.ged.us.treas.gov; pmohler@hewn.com; richard.glick@hq.doe.gov;
smutany@iepa.com; karen.tomcala@pge-corp.com; cxg2@pge.com; DxH48pge.com; RMK4@pge.com;
joebob-perkins@reliantenergy.com; marvin_k_ballard@reliantenergy.com; KMcCrea@sablaw.com;
fieldejr@sce.com; harold.ray@sce.com: dreed@sdge.com; wsakaria@sdge.com:
rahayes@seiworldwide.com: sjcapoma@seiworldwide.com: mtierney@sempra.com;
sonnet .edmonds@southernenergy.com: cread@steptoe.com; temoreland! eye) iw. coms
julie.greenisen@troutmansanders.com; alex.goldberg@williams.com;
From Soares, Chris, CC to Barbour, Gaylen; Curtis Wagner, Date 1/12/2001 1:33:52 PM,
Subject of message RE: California Energy Group ¢-mail

Word(s) found: Enron

-----Original Message-----
From: Soares, Chris
Sent: 1/12/2001 1:33:52 PM
Received: 1/12/2001 1:33:52 PM
To: ‘Mactha Altamarc', SMTP:martha.altamar@ferc.fed.us
alexm@calpine.com, SMTP: al
jmacias@calpine.com, SMTP: jmacias@calpine.com
jason_s. seligman@cea.eop.gov, SUTP:jason_s._seligman@cea.eop.gov
shg@cpuc.ca.gov, SMTP: shg@cpuc.ca.gov
Soares, Chris, EX: /O=USTREASURY/OU=D0/CN=RECIPIENTS/CN*SOARESC
Wilcox, David, EX: /O*USTREASURY/OU=DO/CN#RECIPIENTS/CNeWILCOXD
Lee, EX: /O=USTREASURY/CU=DO0/CN*RECIPIENTS/CNeSachsL
, Michelle, EX: /O=USTREASURY/OU=00/CN=RECIPIENTS/CN*GREENEMI
Squitieri, Ray, EX: /O=USTREASURY/OU=DO/CN=RECIPIENTS/CN=SQUITIERIR
Stokes, Veronica, EX: /O=USTREASURY/OU=D0/CN=RECIPIENTS/CN*STOKESV
eisenstatl@DSMO.com, SMTP: eisenstatl@DSMO.com
sbvanleer@duke-energy.com, SMTP: sbvanleer@duke-energy.com
joel.newton@dynegy.com, SMTP: joel. newtonddynegy.com
ednicky@dynegy.com, SMTP:lynn, lednicky@dynegy.com
mron.com, SMTP: smara@enron.com
Linda Lee, SMTP: linda, lee@ferc. fed.us
dan.poffenberger@ferc.ged.us.treas.gov, SMTP:dan.poffenberger@ferc.ged.us.treas.gov
pmohler@hews.com, SMTP:pmohler@hewn.com
richard.glick@hq.doe.gov, SMTP:richard.glick@hq.dce.gov
smuteny@iepa.com, SMTP: smutany@ieps.com
karen.tomcalapge-corp.com, SMTP: karen. tomcalaSpge-corp.com
cxg2@pge.com, SMTP: cxg2#@pge.com
CxH4@pge.com, SMTP: DxH48pge.com
RMK4@pge.com, SMTP: RMK4@pge.com
joebob-perkins@reliantenergy.com, SMTP: joebob-perkins@reliantenergy.ccom
marvin _k ballard@reliantenergy.com, SMTP:marvin_k_ballarcd@reliantenergy.com

* 01800000010039



Page | of |

From: Cohen, David [(DCohen@wiimer.com]
Sent: Sunday, January 13, 2002 11:22 PM
To: Kupfer, Jeffrey

Subject; Scowt

I've been meaning for months to call/e-mail you, but for one reason of another never got around to it. But seeing
your suspicious gaze coming at me from the NYT magazine today finally got me over the hump,

Part of the reason | have not been in touch is that I've been in Houston (where | am even as | write this) for much
of the past three months working on the Enron matter. Enough said about that, | don’t even know if | told you that
| decided to join Wilmer, Cutler. | started on Oct. 22 and shipped out for Houston on Oct. 28, Someday | will
come back to DC for good. When | do, Ml give you a call, Who knows, by then it may be time to start playing
tennis again.

| hope all is weil with you and you're stil enjoying things at Treasury. Shoot me an email if you get a chance.

Talk to you later.

~ David

Firm Fax: (202) 663-6363
OCohen@wilmer com

10/21/2002 1800000010091



wsakaria@sdge.com, SMTP: wsakariafsdge.com

rahayes@seiworldwide.com, SMTP: rahayes@seiworldwide.com
sjcapoma@seiworldwide.com, SMTP:sjcapoma@seiworldwide.com
mtierney@sempra.com, SMTP:mtierney@sempra.com

sonnet .edmonds@southernenergy.com, SMTP: sonnet .edmonds@southernenergy.com
cread@steptce.com, SMTP: cread@steptoe.com

temoreland@swidlaw.com, SMTP: temoreland@swidlaw.com
julie.greenisenftroutmansanders.com, SMTP: julie.greenisen@troutmansanders.com
alex.goldberg@williams.com, SMTP:alex.goldberg@williams.com

((6)(6)]

CC: Gaylen.Barbour@do.treas.gov, SMTP:Gaylen.Barbour@do.treas.gov

Subject: RE: California Energy Group e-mail
Body:
The requested address is: daniel.poffenberger@ferc.fed.us Thanks

>>> <Michelle.Greenefido.treas.gov> 01/12/01 08:45AM >>>

please use reply all to this message when sending items to the group (more corrected
addresses have been added).

thanks.

---=-Original Message-----

From: Greene, Michelle

Sent: Thursday, January 11, 2001 6:16 PH

To: Greene, Michelle; Stokes, Veronica; %.goldberg@williams.com';
‘Alex Makler'; "Charles C. Read’; ‘Claudia Greif': ‘Curtis Wagner
IJr.‘; "dan. poffenberger@ferc.ged # Wilcox, David; ‘Debra Reed';
“Dede Hapner'; ‘Harold B. Ray’; ‘James Macias’; ‘Jan Smutney Jones’;
‘jason_s._seligmanfcea.eop.gov'; ‘Joe Bob Perkins’; ‘Joel Newton';
‘John Fielder’; 'julia.greenisen@troutmansanders.com'; ‘Karen A.
Tomcala’; 'Keith McCrea‘; ‘Larry Eisenstat'; Sachs, Lee; ‘Linda Lee';
‘Lynn. lednicky@dynegy.com'; ‘Marth: tamar’; ‘Michael Tierney’: ‘Paul
Mohler’; "Rich Glick’: "Rob Hayes'; ‘Ross Ain '; 'RHK@pge.com'; ‘Sean
Gallagher’; ‘Sonnet Edmonds’; ‘Steve Vanieer'; ‘Steven Capomaccio':
‘Sue Maca’; ‘Terri Moreland’; ‘Tripp Ballard'; ‘Wayne Sakarias';
Soares, Chris: Squitieri, Ray

Ce: Barbour, Gaylen

Subject: RE: California Energy Group - missing e-mail addresses

we still have incorrect e-mail addresses for the following people:

julie greenisen (sp.?) (troutman sanders) roy kugen (sp.?) (pase)

jim macias (calpine)

dan poffenberger (sp.?) (ferc}

if anyone knows their correct e-mails, please forward the document to them
and add the correct version of their e-mail to this group list. thanks.

Sent: Thursday, January 11, 2001 8:07 PM

To: Stokes, Veronica; ‘alex.goldberg@williams.com'; ‘Alex
Makier’; "Charles C, Read’; ‘Claudia Greif’; "Curtis Wagner Jr.';
‘dan.poffenberger@ferc.ged.us'; Wilcox, David; "Debra Reed'; ‘Dede
Hapner'; ‘Harold B. Ray’; ‘James Macias’: ‘Jan Snutney Jones';
*jason_s._seligman@cea.eop.gov'; ‘Joe Bob Perkins’; ‘Joel Newton’;
greenisen@troutmansanders.com'; ‘Karen A.
Tomcala'; ‘Keith McCrea’; ‘Larry Eisenstat'; Sachs, Lee; ‘Linda Lee‘;
‘Lynn. lednicky@dynegy.com'; ‘Martha Altamar'; 'Michae! Tierney’; Paul
Mohler’; "Rich Glick’; ‘Reb Hayes'; ‘Ross Ain '; 'RHK@pge.com'; ‘Sean
Gallagher"; "Sonnet Edmonds'; ‘Steve Vanieer'; "Steven Capomaccio';
“Sue Mara’; 'Terri Moreland’; ‘Tripp Ballard'; ‘Wayne Sakarias’

Ce: Barbour, Gaylen

Subject: RE: California Energy Group

more e-mail corrections included. the document is atteched. we will
reconvene in the same conference room (6th floor, metropolitan

103 01800000010022

VV VV VV VV VV VV VV



{(b)(5)]

01800000010166


((b)(5)]

1800000010131



Jong-term solutions to California's chronic electricity
shortage and skyrocketing prices.

Wf the Friday talks failed to make 38 much progress as
hoped, the Saturday session could be downgraded to another day

‘Summers and Energy Secretary Bill Richardson launched the
negotiations on Tuesday to prevent the bankruptcy of PG&E Corp
<PCG.N> and Edison International <ELX.N>, which could ripple

the national economy.

Both utilities say they have run out of cash because of
funaway prices wholesale power, which are now tenfold higher
than one year ago. Under California's landmark 1996
deregulation law, the higher wholesale prices cannot be passed
through to consumers.

The two utilities want a 90-day reprieve in repaying
billions of dollars to out-of-state power generators, as well
28 the ability to sign long-term contracts to lock in lower
prices.

((washington.commodsenergy.newsroom@reuters.com))
REUTERS
Rir 15:29 01-12-01
:TICKER: PCG EIX
SUBJECT: CRUD COBO MU ENER UTIL USA
Copyright (c) 2001 Reuters
Received by NewsEDGE/LAN: 1/12/01 3:24 PM
=DJ POWER POINTS: By The Numbers, Calif Pwr Deal Looks Good
Dow Jones Intemational News Service via Dow Jones

By Mark Golden
A Dow Jones Newswires Column

NEW YORK (Dow Jones)}~Grandstanding by negotiators in Washington, 0.C., on the

California electricity crisis indicates the sides are too far apart for an
agreement this weekend, but the actual numbers involved raise the question: How
can they not get this done?

California Gov, Gray Davis, on behalf of the utilities that contribute so
generously to his campaign funds, os Cormeen [veto Sey Cora
5.5 cents a kilowatt-hour. "We've got to stop the hemorrhaging of utility cash,
but | can't possibly have another rate increase or any state bailout,” the
governor is saying.

According to sources, U.S. Treasury Secretary Lawrence Summers and the
company chief executives looked at Davis with a "What are you
expression several times Tuesday night. The generators’ stance is that

a ranted oven le BF cochanh and arty Wine norecte in for ail youre,

But that’s ail just negotiating position. The customers of Edison
International's (EIX) Southern California Edison currently pay the company 7.6
cents/kwh just for energy. That price includes last week's one-cent raise, but
not other charges such as transmission and distribution,

Edison generates haif the power it needs at a cost of about 3 cents/kwh. So,
purchasing the other half at 5.5 cents/kwh would do a lot more than stop the
hemorrhaging. If the cost of purchased power were 5,5 cents, Edison's average

56

01800000010006



Genesis of State's Energy Fiasco / String of Bad Decisions on Deregulation Could
End Up Costing Consumers $40 Billion Dec 31, 2000 - The San Francisco Chronicle Next
month, about 10 million Californians may begin paying as much as 30 percent more for
electricity, in a maddening coda to one of the most costly public policy mistakes ever
made

End Run Around PGSE Envisioned / Commission Wants Plan on S.F. Ballot Dec 30, 2000
~ The San Francisco Chronicle San Francisco voters may get a chance next year to form a
municipal utilities district -- a crucial step toward creating a public power system in
the city.

California Utility Outrages Customers with Request for 40-Percent Rate Hike By
Carrie Peyton, The Sacramento Bee, Calif. --Dec, 29-=SAN FRANCISCO With national focus on
California's electricity crisis growing, Pacific Gas and Electric Co. began notifying
customers that it wants to boost their electric bills up to 40 percent by the end of 2001.

Calif Power Rate Hearings ind
Dec 28, 2000 = LOS ANGELES, Dec. 28 (UPI) =~ Hearings aimed at giving consumer advocates
and utility officials the chance to air their views on a looming electricity rate increase
concluded late Thursday, setting the stage for a decision by regulators that very well may
not please anyone.

Nuclear Power May Endure in the U.S. Power Business
Dec 27, 2000 - Bloomberg Two decades after the near-disaster at Three Mile Island soured
Americans on nuclear energy, the industry is showing signs of a comeback, partly because
of the soaring cost of other fuels.

Competition & Deregulation

For more information about products on this topic visit our Information Marketplace

Topic Sponsor: Energy Central Deregulation Legislation Database The Deregulation
Legislation Database, one of the industry's most comprehensive and current compilations,
is available now in the Data Center. Sign up for your free trial for access to this
database and related reports. Click here:

http://www. energycentral.com/sections/datacenter/datacenter_home.cfm

Open Forum; Another Utility Bailout Should Leave US Cold
Dec 31, 2000 - The San Francisco Chronicle OUR CURRENT energy problems are urgent and
serious, But before the governor and the Public Utilities Commission cut yet another desl
costing consumers billions of dollars, perhaps they should pause te ask the public what
kind of system it wants and what it will end upwith after investing billions more.

California at Energy Impasse
Dec 30, 2000 - Tulsa World Gov. Gray Davis failed to broker a compromise Thursday between
utility executives and consumer advocates who are livid over looming increases in
electricity bills for 10 million Californians.

Mergers, Acquisitions & Divestitures

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AES buys 61.7 pet of Gener for $41 mln usd after Chilean offer closes Dec 28, 2000
= SANTIAGO (AFX) - AES Corp has acquired 61.7 pct of Gener SA for 841.2 mln usd after its
offer, launched in Chile on Nov 3, closed yesterday, the Santiago bourse said.

133
01800000010050



Ewing said if there is an agreement, he expects it to be included in one of the final
spending bills. A stand-alone bill, he said, was a long shot.

Representatives from the Treasury Department were not at the meeting, and it was
unclear whether the bill would still be palatable to the administration.

Asked whether the bill would gain administration support, Ewing said, "I hope so,
we're at the point where we all have to compromise.”

Source: CQ Monitor News

a

01800000010128



fielde|r@sce.com: julia.greenisen@troutmansanders.com; Tomcala, Karen (Corp); .
KMcCrea@sablaw.com, eisenstati(@DSMO.com; Lee | treas.gov;
jaiese ohare pl arr nna oon martha .altamar@ferc.fed.us;

rayeageeworidwe, com; .gov;
corn; {(b)(6)) a opens peas

Ray. Squitieri@do.treas.gov
Ce: Barbour, Gaylen
Subject: RE: Califomia Energy Group - missing e-mail addresses

Roy's address is rmk4@pge.com

~~~==Original Message-----

From: Michelle.Greene@do.treas.gov [mailto:Michelle.Gr:

Sent: Thursday, January 11, 2001 8:16 PM

To: Michelle.Greene@do.treas.gov; Veronica.Stokes@do.treas.gov:

alex.goldberg@williams.c lexm@calpine.com: cread@steptoe.com: Greif, Claudia;

curtis.wagner@ferc.fed.us; dan.poffenberger@ferc.ged.us.treas.gov;

David.Wilcox@do.treas.gov; dreed@SDGE.com; Hapner, Dede; harold.ray@sce.com;

j.macias@calpine.com; smutany@iepa.com; jason_s._seligman@cea.eop.gov; joebob-

perkins@reliantenergy.com; joel.newton@dynegy.com; fieldejr@sce.com;

julia.greenisen@troutmansanders.com; Tomcala, Karen (Corp); KMcCrea@sablaw.com;

eisenstatl@0SMO.com; Lee.Sachs@édo.treas.gov; linda. lee@ferc. fed.us;

lynn. lednicky@dynegy.com; martha.altamar@ferc.fed.us; mtierney@senpra.com;
hlerBhewm.com; richard.glick@hq.doe.gov; rahayes@seiworldwide.com;:

b 6) + RHK@pge.com; shg@cpuc.ca.gov; sonnet .edmonds@southernenergy.com;
sbvanloer@duke-energy.com; sjcapomaSseiworldwide.com; smarafenron.com;
temoreland@swidlaw.com; marvin_k ballard@reliantenergy.com: waakaria@SDGE.com;
Chris.Soares@do.treas.gov; Ray.Squitieri@do.treas.gov
Ce: Gaylen.Barbour@do.treas.gov
Subject: RE: California Energy Group - missing e-mail addresses

ebdo.treas.gov)

we still have incorrect e-mail addresses for the following people: julie greenisen (sp.7)
(troutman sanders) roy kugen (sp.?) (pgse) jim macias (calpine) dan poffenberger (sp.?)
(fere) if anyone knows their correct e-mails, please forward the document to them and add
the correct version of their e-mail to this group list. thanks.

enone Original Message-----
From: Greene, Michelle
Sent: Thursday, January 11, 2001 8:07 PM

To: Stokes, Veronica; ‘alex.goldberg@williams.com'; ‘Alex Makler';
‘Charles C, Read'; ‘Claudia Greif'; ‘Curtis Wagner Jr.';
“dan.poffenberger@ferc.ged.us'; Wilcox, David; ‘Debra Reed’; 'Dede
Mapner'; ‘Harold B. Ray’; ‘James Macias’; ‘Jan Smutney Jones';
“jason_s._seligman@cea.aop.gov Joe Bob Perkins’; ‘Joel Newton’;
"John Fielder’; ‘julia. greenisen@troutmansanders.com'; "Karen A.
Tomeala’; ‘Keith McCrea’; ‘Larry Eisenstat'; Sachs, Lee; ‘Linda Lee’;
"lynn. lednicky@dynegy.com'; ‘Martha Altamar'; ‘Michael Tierney’; ‘Paul
Mohler'; 'Rich Glick’; ‘Rob Hayes’; ‘Ross Ain '; ‘RHK@pge.com'; ‘Sean
Gallagher’; ‘Sonnet Edmonds’; ‘Steve Vanleer'; ‘Steven Capomaccio';

vV¥ VV VY VV

1800000010112



—-___—_—_—— oY _—_—_—_—_——-  1—OOOXm—~—X—OO

From: Sachs, Lee

Sent: Thursday, January 11, 2001 10:46 AM

To: “Susan.J. Mara@enron.com’; Wilcox, David; Sachs, Lee
Subject: RE; More thoughts

thanks sue.

peter bisa Original Message---~~

From: Susai Mara@enron,com [mailto:Susan.J.Mara@enron.com]
Sent: Wedn y, January 10, 2001 11:14 PM

To: David.wilcox@do.treas.gov; lee.sachs@do.treas.gov
Subject: More thoughts

Lee,
I'm checking on the “market in the west at 5,5 cents” question. I'll let you know.

David and Lee,

It scems that everyone has pretty much put their big issues out on the table for
consideration in package of solutions. I've been concerned, No one has been talking
about the retail mar! .« We have spent four years protecting the utilities and getting
them “ready” for retail competition. I've personally spent much of my life those four
years arguing with the utilities and the CPUC to achieve any tiny movement toward a fair,
open and non-discriminatory market for retail suppliers (other than the utilities, Enron
is the only retail supplier in the room).

Therefore, we cannot move forward with these new subsidies and bailouts unless the
utilities and the state agree to take definitive steps to make the retail market work. To
move this thinking forward, I will prepare a few points of the kinds of steps we would
want to see as part of the overall package.

Sue Mara

1800000010114



{(b)(5)]

any other suggestions?
<< Pile: EmbtalkYl State.doc >>

oeeee Original Message-----

From: Rao, Geetha

Sent: Wednesday, July 11, 2001 4:13 PM

To: Berg, Katie; Sills, Gay; Grewe, Maureen; Resnick, Bonnie; Christopulos,
Greg; Sampliner, Gary

Cc: Donovan, Meg; Mills, Marshall; McDonald, Larry; Radelet, Steve
Subject: RE: Dabhol meeting on Enron/OPIC project at NSC

xatie, [(b)(5)]

We'll go ahead and send forward the points to State to push for a

joint agreement on talking points... Thanks to all,
-+--- Original Message-----

From: Berg, Katie

Sent: Wednesday, July 11, 2001 4:09 PM

To: Sills, Gay; Rao, Geetha; Grewe, Maureen; Resnick, Bonnie; Christopulos,
Greg; Sampliner, Gary

Cc: Donovan, Meg; Mills, Marshall; McDonald, Larry; Radelet, Steve
Subject: RE: Dabhol meeting on Enron/OPIC project at NSC

I must admit to never having heard of this problem. Geetha's revised talking
points look good to me, but I would suggest that OPIC clear with Exim in
addition to State and Treasury if ExIm is involved.

ones Original Message-----
Prom: Sills, Gay
Sent: Wednesday, July 11, 2001 3:54 PM

To: Rao, Geetha; Grewe, Maureen; Resnick, Bonnie; Christopulos, Greg;
Sampliner, Gary

Ce: Donovan, Meg; Mills, Marshall; McDonald, Larry; Radelet, Steve; Berg,
Katie

Subject: RE: Dabhol meeting on Enron/OPIC project at NSC

b)(5)

am
adding ess berg. she does export credits. and eximbank

re Original Message-----
Prom: Rao, Geetha
Sent: Wednesday, July 11, 2001 1:54 PM

To: Grewe, Maureen; Sills, Gay; Resnick, Bonnie; Christopulos, Greg;

Sampliner, Gary

Cc: Donovan, Meg; Mills, Marshall; McDonald, Larry; Radelet, Steve
Subject: RE: Dabhol meeting on Enron/OPIC project at NSC
Importance; High

Attached are the revisions to the OPIC talking points that OPIC sent over late
yesterday. [(b)(5)]
The Charge from the US

00500000002683


_ ee — oe

From: Gathers, Shirley

Sent: Friday, January 11, 2002 8:22 AM

To: Aufhauser, David; Kupfer, Jeffrey; Curry, Paul; Bair, Shella; Fisher, Peter; Smith, Chris; Mejia,
Annabella; Matera, Cheryt; Glasgow, Launa; Johnson, Linda; Davis, Michele

Ce: Strickler, Marie; Pringle, Veronica; Vannoy, Elizabeth; Hunt, Betty Ann; Ridgway, Diana; Hart,

Anna; Woodard, Genevieve
Subject: Briefing
Please plan on attending a briefing w/David Aufhauser and Tim Adams re: Enron as follows:
Date: Friday, Jan. 11
Time: 10:30am - 10:45am
Location: Room 3408

Thanks,

* 1800000010082



From: Wilcox, David

‘Sent: Thursday, February 21, 2002 12:47 AM
To: SearchCameo
Subject: SNe Fae NE i ee By eens enon.
Joys dba david.wilcox@do. treas.gov; ea erage nonn cab Gh 1711/2001
a)
Making a Retail
Market That Wo...
This message was found to have a Critical Word in it. Message Sent to

(y6)] 1 david.wilcox@do.treas.gov; lee.sachs@do.treas.com, From
jusan.J.Mara@enron.com, CC to , Date 1/11/2001 3:13:17 PM, Subject of message New Doc tor

our meetings

Word(s) found: Enron

oreen ‘Original Message----=-
From: Susan.J.Mara@enron.com
Sent: 1/11/2001 3:13:17 PM
pra 8 ‘li 3:11:03 PM

+ (OyS)) wilcox@do.treas.gov, SMTP:david.wilcox@do.treas.gov
lee.sachs@do.treas.com, SMTP: lee.sachs#do.treas.com

cc:

Subject: New Doc for our meetings

Body:

Here I go tilting at windmills again. Could someone please print this out and bring it
over to our meetings? Thanks.

Enron
Sue Mara

(See attached file: Making 4 Retail Market That Works.doc)
--<<=<~ End of message body

Message auditing by MicroData CAMEO Recon

aut 01800000010027


Page | of |

From: Sachs, Lee
Sent: Friday, January 12, 2001 3:14 PM

To: ea suites ‘alexm@calpine.com’, 'macias@calpine.
‘pson_ S._seligman@oea.cop, Go rapa gov: When, Davi, rene, chee; Ser,
fe energy.

‘temoreland@swidlaw.com’; ‘julie.greenisen@troutmansanders.com’; ‘alex.gokiberg@wilams.com';
[(b)(6)) :, Admin; ‘ronald_minsk@opd.eop.gov’

Ce: Barbour, Gaylen; ‘Curtis Wagner’

Subject: RE: Califomis Energy Group e-mail

adding ron minsk. ronald_minsk@opd.cop.gov

Sent: Friday, January 12, 2001 1:34 PM

To: ‘Martha Altamar’; alexm@calpine.com; jmacias@calpine.com; jason_s._seligman@cea.cop, atl
shg@cpuc.ca.gov; Soares, Chris; Wilcox, David; Sachs, Lee; Greene, Michelle; Squitieri, Ray; Stokes,
Veronica; eisenstat@DSMO.com; sbvanieer@duke-energy.com; joel. newton@dynegy.com;
lynn.Jednicky@dynegy.com; smare@enron.com; Linda Lee; dan.poffenberger@ferc. ged.us.treas.gov;
pmohier@hewm.com; richard.glick@hq,.doe.gov; smutany@lepa.com; karen.tomcala@pge-corp.com;
xg2@pge.com; DxH4@pge.com; RMK4@pge.com; joebob-perkins@reliantenergy.com;
marvin_k_ballard@reliantenergy.com; KMcCrea@sablaw.com; fieldejr@sce.com; harold.ray@sce.com;
dreed@sdge.com; wsakaria@sdge.com; rahayes@seiworldwide.com; sxcapoma@selworldwide.com;
miierney@sempra.com; sonnet.edmonds@southernenergy.com; cread@steptoe,com:

fore temoreland@swidiaw.com; julie. greenisen@troutmansanders.com; alex,goldberg@williams.com;
Ce: Barbour, Gaylen; Curtis Wagner

Subject: RE; California Energy Group e-mail

Latest version of Long-Term Contracts Group report.

10/21/2002 01800000010156



ee ee ee —_- nh —=<SOxKOhlO ee

From: Sachs, Lee

Sent: Tuesday, December 05, 2000 2:31 PM

To: ‘Linda.Robertson@enron.com’; Sachs, Lee; Levine, Marne
Subject: RE; CO Article on Gramm CEA Meeting

hmmmemeam.. +++

RRR TS Original Message----~

From: Linda.Robertson@enron.com (mailto:Linda.Robertson@enron.com)
Sent: Tuesday, December 05, 2000 2:30 PM

To: lee.sachs@de.treas.gov; marne. levine@do.treas.gov

Subject: CQ Article on Gramm CEA Meeting

Thought you would find this article interesting. Miss you guys!

aeoee Forwarded by Linda Robertson/NA/Enron on 12/05/2000 02:29 PM -

Chris Long
To: Richard Shapiro/NA/Enron@Enron, Linda

12/08/2000 Robertson/NA/Enron@ENRON, Tom

01:47 PM Briggs/NA/EnrongEnron, Cynthia
Sandherre/Corp/Enron@ENRON, Lisa
Yoho/NA/Enron@Enron
ect
Subject: CQ Article on Gramm CEA Meeting

BILL TO PERMIT CERTAIN FUTURES TRADES GETS RENEWED EFFORT
By Ted Monoson, CQ Staff Writer

Dec. 4, 2000 - Representatives from the Chicago Board of Trade and Chicago Mercantile
Exchange met Monday with Sen. Phil Gramm, R-Texas, and Rep. Thomas W. Ewing, R-Il1., to
resuscitate a measure (HR 4541) that would permit the trading of single stock futures.

Ewing and a representative for the Mercantile Exchange were optimistic following the
meeting. But Gramm, chairman of the Banking Committee, continued to express reservations
about the measure.

“I think we have the makings of a deal,” said Leo Melamed, a chairman emeritus and
senior policy adviser for the Mercantile Exchange.

The House passed the measure 377-4 on Oct 19. Since then, Ewing has pushed for Senate
passage, along with Senate Agriculture Chairman Richard G. Lugar, R-Ind., and Sen. Peter
G. Fitzgerald, R-I11l.

Gramm, however, dislikes several provisions. One would explicitly permit the use of a
type of over-the-counter derivative, known as a swap. Although U.S. companies and
financial institutions use them, they are neither explicitly permitted nor prohibited.

Gramm said the bill is not clear enough on what is a banking product vs, what is a
future, and he wants to ensure that swaps are classified as banking products.

He also opposes a provision that he said would expand the jurisdiction of the
Commodity Future Trading Commission.

"We're just continuing to work,” Gramm said after the meeting. “I thought we made some
progress, but I've thought that for a long time. Anybody or anything can unravel it at the

° 01800000010123



session.
The working group meetings will wrap up sometime Friday, the Treasury
Department said.

The two groups have separately addressed the two primary features of the
proposed settlement, which involve moving the state's financially ailing

utilities out of volatile spot power markets and into fixed-price forward
ea ee ee ee ee ee ee

The forbearance and contracts working groups have been meeting separately, and
were to convene a joint session late Friday to compare notes before reporting
back to the principal negotiators who will cul any final deal.

Those familiar with the talks have expressed a mix of pessimism and optimism
that a final deal can be struck, given what they described as unrealistic
bargaining demands by Gov. Davis.

He has firmly rejected retail rate increases and resisted demands for the
state to guarantee the nearly $12 billion utilities have paid over the last
eight months for wholesale power but been unable to pass along under
state-mandated frozen retail rates,

Further complicating the talks have been demands by Davis that the proposed
long-term power contracts be at rates far below the production costs of
electricity generators.

But tately the pessimism has been tempered by signals that Davis may be
persuaded to relent Saturday in his opposition to a state-backed securitization
Of the utilities’ undercollections.

“Let's see their plan, and then we'll talk about that,” Steve Maviglio, the
governor's spokesman, said late Thursday.

Davis reportedly has been under increasing pressure from Wall Street and
Clinton administration officials to reconsider his opposition to securitization.

Without a state credit guarantee, a work-out plan can'l be struck, the
utilities will enter bankruptcy and the state's power grid will collapse into
blackouts, sources familiar with the talks warn,

The affected utilities are Southern Califomia Edison Co., a unit of Edison
international (EIX), and Pacific Gas & Electric Co., a unit of PG&E Corp. (PCG).

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

(END) Dow Jones Newswires 12-01-01
2100GMT

{AP-OJ-01-12-01 2100GMT)

:TICKER: EIX PCG SRE

‘SUBJECT: EUTL STGO DI? Dit Di4 O12 CA COBO COMM
Copyright (c) 2001 Dow Jones and Company, inc.

Received by NewsEDGE/LAN: 1/12/01 3:55 PM

Calif power talks aim to reach solution on Saturday

WASHINGTON, Jan 12 (Reuters) - Treasury Secretary Lawrence
Summers, other senior Clinton administration officials and top
7

01800000010098



From: Wilcox, David

Sent: Thursday, February 21, 2002 12:47 AM

To: SearchCameo

Subject: CAMEO Recon found a word: Enron sent by Susan.J.Mara@enron.com to

David. wilcox@do.treas.gov; lee.sachs@do.treas.gov on 1/10/2001 11:14:19 PM

This message was found to have a Critical Word in it. Message Sent to
David.wilcoxé@do.treas.gov; lee,sachs@do.treas.gov, From Susan.J.Mara@enron,com, CC to ,
Date 1/10/2001 11:14:19 Pu, Subject of message More thoughts

Word(s) found: Enron

=----Original Message-----

From: Susan.J.Mara@enron.com

Sent: 1/10/2001 11:14:19 PM

Received: 1/10/2001 11:11:51 PM

To: David.wilcox@do.treas.gov, SMTP:David.wilcox@do.treas.gov
lee.sachs@do.treas.gov, SMTP: lee.sachs@do.treas.gov

cc:

Subject: More thoughts
Body:

Lee,

I'm checking on the “market in the west at 5.5 cents” question. 1'11 let you know.
David and Lee,

It seems that everyone has pretty much put their big issues out on the table for
consideration in package of solutions. I've been concerned. No one has been talking
about the retail markets. We have spent four years protecting the utilities and getting
them “ready” for retail competition. I've personally spent much of my life those four
years arguing with the utilities and the CPUC to achieve any tiny movement toward a fair,
open and non-discriminatory market for retail suppliers (other than the utilities, Enron
is the only retail supplier in the room).

Therefore, we cannot move forward with these new subsidies and bailouts unless the
utilities and the state agree to take definitive steps to make the retail market work, To
move this thinking forward, I will prepare a few points of the kinds of steps we would
want to see as part of the overall package.

Sue Mare

-- End of message body

Message auditing by MicroData CAMEO Recon

ue 1800000010030