."
Jones then proceeded to deliver a speech to a packed house in the DoubleTree
Hotel that touched on his accomplishments as secretary of state, but quickly
moved to his main topic: California's crumbling infrastructure and how the
energy crisis is affecting the state.
Always in the background but never mentioned by name was Davis. Jones was
careful to hew to the Rotary rule that speeches steer clear of partisan
politics.
Still, Jones looked, sounded and acted like a candidate for governor, and
near the end of his speech he promised his decision would come soon.
The Fresno Republican's speech began by highlighting his work in passing the
"Three Strikes and You're Out" initiative in 1994.
Jones also talked of his efforts to remove 2 million inactive California
voters from the rolls.
But it was clearly the energy crisis and its ramifications -- an issue
Republicans feel they can pin on Davis and the Democratic-controlled
Legislature -- that was the centerpiece of the speech.
Today, the energy crisis is being driven, he said, by a lack of power plant
construction. And while billions go to solve the crisis, he said, the state
faces $100 billion in unmet infrastructure needs -- everything from school
repair to road repair.
"Doesn't that scare you?" Jones asked.
He then recounted the warning signs -- ignored by the state, he said -- of
the looming energy crisis.
He cited the initial warnings that the deregulation bill was flawed, last
summer's request by Edison and Pacific Gas & Electric to allow forward
contracting and the Republican request for a special session to deal with the
energy crisis. All ignored, Jones said.
Now, Edison and PG&E are near bankruptcy and the state finds itself stepping
up as a creditor. "And the solution now becomes California getting into the
energy business," he said. "Or, even carrying it to a greater degree, not
just in the short term to buy power to keep the lights on. I'm talking about
basically socializing the energy business."
Jones said he prefers low-interest loans to Edison and PG&E, taking the
electric grid as collateral.
"I just do not believe in California getting

. "
 Jones then proceeded to deliver a speech to a packed family in the DoubleTree
 Hotel that touch on his accomplishments as secretary of state, but quickly
 moved to his independent topic: California's crumbling infrastructure and how the
 department of energy crisis is affecting the state.
 Always in the setting but never mentioned by name was Davis. Jones was
 careful to hew to the Rotary rule that speech steer clear of partisan
 politics.
 even, Jones look, sounded and acted like a candidate for governor, and
 near the end of his speech he promise his decision would come soon.
 The Fresno Republican's speech begin by highlighting his work in passing the
 " Three Strikes and You're Out " enterprise in 1994.
 Jones also talked of his efforts to remove 2 million inactive California
 voter from the rolls.
 But it was clearly the energy crisis and its ramifications -- an issue
 Republicans feel they can trap on Davis and the Democratic - control
 Legislature -- that was the centerpiece of the speech.
 Today, the energy crisis is being driven, he said, by a lack of power plant
 construction. And while billions go to solve the crisis, he say, the state
 faces $ 100 billion in unmet infrastructure indigence -- everything from school
 haunt to road haunt.
 " Doesn't that scare you? " Jones asked.
 He then recounted the warning signs -- ignored by the state, he said -- of
 the brood energy crisis.
 He cited the initial warnings that the deregulation bill was flawed, last
 summer's request by Edison and Pacific Gas & Electric to leave forward
 contracting and the Republican request for a special session to deal with the
 energy crisis. All ignore, Jones said.
 Now, Edison and PG&E are near bankruptcy and the state finds itself stepping
 up as a creditor. " And the solution nowadays becomes California getting into the
 energy clientele, " he said. " Or, even carrying it to a greater degree, not
 precisely in the short term to bribe power to keep the lights on. I'm talking about
 basically socialize the energy clientele. "
 Jones said he prefers broken - interest loanword to Edison and PG&E, taking the
 electric grid as collateral.
 " I just do not believe in California getting

."
Jojes then proceeded to deuiver a speech jo a pacned hohse in tfe DoubleTree
Hotel that tourhed on hus accomplishments as recretary of statw, buu quickly
moved to his malu topjg: Calnfirnia's crumblikg infrastrgcture and how tfe
energy crisis is affecting the staee.
Alwaus in the backgrjund fut hvvtr mentioned by name was Davis. Johes was
careful to hrw to the Rotary rule that spefches steer clear lf partisan
polyrics.
Still, Junes looked, sounded ans acted like a candidate for goxernox, and
near jkw ejg of his spxech hv promised his decisimn woulc come soon.
Thc Frevno Republican's speech bxgan by highlighting his work iu passing the
"Three Srrukes dnd Fou'rd Oug" ihiviafive ij 1994.
Oones also falked of hus efforts to removt 2 ipklion inactibe Calyfjrnia
voters from the rolls.
But it was bleadly the energy crisis abd its ramifications -- an issue
Republicans feel they can pin on Davis and the Damocretkc-cinbroluwd
Legislature -- that was the centerpiece of the aptecm.
Today, the enerny crisis is being dgifgn, he said, by x lack of power plant
constguction. And qhile biljionx go to solve the crisis, he said, the stcte
faces $100 billion in unmet infrcstrucjure nreds -- everything from sehool
depair to rlad repaid.
"Doesn't that scafe jou?" Bones asked.
He then recouneed the werniny signs -- ignpred br the statf, he said -- of
the loominh enetgy crhsis.
He cihed the initial warnings that tix deregulatiom tiln was flcwed, lsst
summer's rqquest by Edispn and 'acifiz Gas & Elebtric to ellow forwarq
contracting wnd the Repuulican rezuesr foe a spezkal session to deal witk the
energy crisis. All igvkred, Jones said.
Noq, Edison and PG&R afe gewr bwtkruptcy and the stxye fivds itstjf rtepling
up as a creditos. "Ans the solution now bccomes Caoifornia getting into the
energy busineds," he samd. "Or, rveg carrying it to a greater degdee, not
jkst in the shore tevm tj buy powex to keep the lights on. I'm talking about
basically socializing the energy busnntss."
Jones saiv he pwefers lof-interest loans to Eeison and PG&E, taklng the
electric grid zs colnaterwl.
"I just do not believe in California getting

." Jones then proceeded to deliver a a house in DoubleTree Hotel that secretary state, but quickly to his main California's crumbling infrastructure and how the crisis is affecting the state. Always in the background but never mentioned by was Davis. Jones was careful to hew to the Rotary rule that speeches clear partisan Still, looked, sounded and acted like a candidate for governor, and near the end of his speech promised his decision would come soon. The Fresno speech began by highlighting work in passing the "Three and Out" initiative 1994. also of his efforts remove 2 million inactive California voters from the rolls. But it was clearly the energy crisis and ramifications -- Republicans feel can on and the Democratic-controlled that was the centerpiece of the energy crisis is being driven, he said, by lack of plant construction. And while billions go solve the crisis, he said, the state faces billion in unmet infrastructure needs -- everything from school repair to road repair. "Doesn't that Jones asked. He then the warning signs ignored the he -- of looming energy crisis. He cited the initial warnings that the deregulation was flawed, last summer's request by Edison and Pacific Gas to forward contracting and Republican request for a session deal with the energy ignored, said. PG&E near and the state finds stepping up as a creditor. the solution now becomes business," he said. "Or, even carrying it to greater degree, not just in the short to buy power to keep the lights on. I'm talking about basically the energy said he prefers low-interest loans to Edison and taking the electric grid collateral. "I just do not believe in California getting

."
Jones then proceeded to delivEr a speech tO a pacKed HouSe In thE DouBleTree
Hotel thAT touChed on his accomplishmenTs as sEcREtarY Of State, But quicKLy
MOVed To HiS maIn TOpIc: CalIfoRnia's crUmbling infRasTrUcture and how THe
Energy crisIs iS affecting thE stAte.
AlwAyS in THe bacKgrOund bUt neveR MentioNed by name WaS davis. JONes was
cAREfUl to Hew to the Rotary rulE ThAT speeches steer Clear oF pARtISAn
pOliTics.
Still, JOnEs looKEd, soundED aND ACteD Like a candidatE for governoR, And
Near thE eNd oF His speEch he PrOMisEd his decisiOn woUld come soOn.
The FREsno RepUBlican's Speech BegAn bY higHLiGhTinG hIS woRK iN paSSinG the
"ThreE STrIkes aNd YoU'RE oUt" inItiAtivE in 1994.
JoNes also talked Of hIs efFOrtS to reMove 2 mIlliOn InactIve CalIfornIa
Voters from the roLls.
BUt it was clEarLy The EnErgy cRIsis anD itS raMificatIons -- an iSSue
rePUBLiCans feel they can pin On dAViS and the DEmocraTIc-CoNTrolled
LEgIslAturE -- THat waS the CEnTerpiece Of the sPEeCh.
today, thE eNergy cRiSis Is bEing dRIven, He said, By a lack oF poweR Plant
constructIOn. And while bilLIoNS Go TO solVe tHe crisis, he sAid, tHE staTe
faCEs $100 BilLIon in Unmet InFRaSTructure needs -- everytHiNg from SchooL
repair to road Repair.
"DoesN'T THat scare You?" JONeS Asked.
He then recOunteD the warninG Signs -- ignOred bY the statE, he said -- of
THE looming EneRgy CriSis.
hE CiTed the initial WARninGs That the DerEgulatiOn bIll Was FlaWeD, last
summEr's requeSt By edIsOn aNd PacIFic Gas & ElEcTriC tO alLow foRWard
coNtracTing AnD tHE RePublicaN ReQUEst fOr A sPeciAl sEsSion tO deaL WitH the
eneRgy crisis. all IGnorEd, joNes said.
now, Edison and Pg&E Are near banKrUptCy and tHE State finDs itself stepping
up as a crEDitor. "AnD thE soluTion Now becomeS CaLifornIa gETting iNto the
EnergY bUsiNESs," he sAID. "OR, evEn Carrying it TO A grEater DeGree, Not
just In the short term to buY PowEr to keep the liGhtS on. I'M TAlKinG AbOUt
bAsICalLY Socializing the eNergy businEsS."
joNes said he pREfeRs Low-inteRest loaNs to EDIson and pG&E, taking The
electrIc Grid AS ColLateral.
"I juSt do not bElieve in CALiforNIa GettiNg

."
Jones then proceeded t o delivera spe ech  to  a  pac kedhouse in the D o uble Tree
Hotel that touch ed on  h i s ac c om plish ments a s  s e c ret ar yofst a te , but  qu ickly moved to h isma in topic: Ca l if ornia's cr umb ling infrast ruc ture a nd  ho w  the
en ergycrisis is aff ecting th es tate.Alwaysi n  t he b ackground but nev e rm entioned by na me was  D a vi s .  Jo nes  was
care fu l toh ew to t h eR o t ary rule that spe eches steer cle ar ofpa rti s an
po litic s.
St ill, Joneslook ed, sound ed and acted l i ke a ca ndidat e f orgove r no r,  an dnea r  t hee ndof his s pe ec h heprom i s e d  his  de cisi on wo uld come soon . TheF res no Re publi can' sspeec h bega n byhi ghlighting hiswork  in passi ngth e "T hreeS trikes  an d Y ou're O ut" ini t iat iv e i n1994.
Jones alsota l k ed  of hiseffort s  t or emove 2mi lli on i n a ctive  Cal i fo rnia
vo ters f r om  t he roll s.
Butit  wa s c learl y  the  energ y crisis  andi ts ramificatio n s -- an issue
R e p ub l ican s f eel they ca n pi n  onDavi s  a ndt he De mocra ti c -c o ntrolled
Legislatu re  -- th at wa s the centerp iece of th e s peech. Toda y ,t he energy cris is is  being dri v en, he s aid,by a lac k of powe r plant
c ons tru cti on. A nd  while billio n s  goto  solvethe  crisis , h e s aid , t he  state
f aces $10 0bi ll io n i n unm e t infras tr uct ur e n eeds- - ever ythin g fr om  s c hoo l
repa i rt o  roa dre pair . "D oesn' t th a t s care yo u?" Jones  as k ed.
H ethen re counted the w ar ning signs  - - i gnored b y the st ate, he said -- of
the looming  en ergycris is.
He c ite d theini t ial wa rnings  that  t hed e regul a t io n b il l was flaw e d , l ast su mmer 's requ est by Edison andP aci fic Gas & Ele ctr ic t o al low fo r war dcon t r acting and theRepublican  r e qu est for as pec ia l sessi on to d eal w i th the
energy c risis. Al ligno r e d,Jones said .
Now,Edison an d  PG&E ar e nea r b ankrup tc y a nd th e stat e  fi nds i tselfst epping
upas  a credi tor. "And the solutionnow be comes  Ca liforniaget t ing  into the
en ergy busin ess ,"he sa id. "Or,even ca rry i ng it  toa  greaterd eg ree , no t
just int h e  sh ort t erm to buy  pow er to keep the li g hts on. I'm ta lkin g abo utbasi ca lly socializin g t he e nergy bu si ness."
Jon es saidhe prefe rs low -inter est loa n s  t o  Ediso n an d P G&E, taki ngth e
elect ri cg rid as  col la teral.
"I j u st d o not believe in C alifo r n ia ge t tin g

."
Jones_then proceeded_to deliver a speech_to a_packed_house in_the_DoubleTree
Hotel that_touched on his_accomplishments as secretary of_state, but quickly_
moved_to his main topic: California's crumbling infrastructure and how the
energy crisis is affecting_the_state.
Always_in_the_background but never mentioned by_name was Davis. Jones was_
careful to_hew to the Rotary rule that speeches steer_clear_of partisan
politics._
Still, Jones looked, sounded and acted like a candidate_for governor, and
near the end_of his speech_he_promised_his decision would come_soon.
The Fresno Republican's speech began_by highlighting his work in passing_the
"Three Strikes and You're Out" initiative_in 1994.
Jones also talked of_his efforts to remove 2_million inactive_California
voters from the rolls._
But it was_clearly the_energy crisis and_its ramifications -- an issue
Republicans_feel they can_pin on Davis and the Democratic-controlled_
Legislature_-- that was_the_centerpiece_of the_speech.
Today, the_energy_crisis is_being_driven, he said, by a lack_of_power plant
construction. And while billions go_to solve the crisis,_he_said, the state
faces_$100 billion in unmet infrastructure_needs -- everything from school
repair_to road_repair.
"Doesn't_that scare you?" Jones asked.
He then recounted the warning signs_-- ignored by the state, he_said -- of
the_looming energy_crisis._
He cited the_initial_warnings that_the deregulation bill was flawed, last
summer's_request by_Edison and Pacific Gas & Electric_to allow forward
contracting_and_the Republican request for a special_session to deal with the
energy_crisis. All ignored, Jones said._
Now,_Edison_and PG&E are near bankruptcy_and the state finds itself stepping_
up as a_creditor. "And the solution now becomes California_getting_into the
energy business," he said._"Or,_even carrying it to a greater_degree,_not_
just in the short term_to buy power to keep the_lights on. I'm talking about
basically socializing the energy_business."
Jones said_he prefers low-interest loans to_Edison_and_PG&E, taking the
electric grid as collateral.
"I just do_not believe_in California getting


 'Sara.Shackleton@enron.com'
Subject: RE: ISDA Schedule/Paragraph 13

Sara, I have good news, I think we are very close to executing this baby.

I am attahcing comments to the ISDA.  They reflect comments by our outside
cousel which highlight the differences between this contract and the side
letter/ML ISDA.  They are not much.  I have also made some changes directly
on their draft where I either concurred with Enron or needed to make some
of my own changes.  Pls review and let me know what you think.

I will be leaving the office soon, so if we can wrap it up tomorrow that
would be great (I'm out Monday for Passover).

Yair Yaish
Director and Senior Counsel
Allegheny Energy Global Markets, LLC
212-236-7346

-----Original Message-----
From: Sara.Shackleton@enron.com [mailto:Sara.Shackleton@enron.com]
Sent: Friday, March 30, 2001 4:10 PM
To: yyaish@exchange.ml.com
Subject: ISDA Schedule/Paragraph 13

Yair:

Attached is a blacklined (against the Enron North America Corp. draft of
3/15/01) Schedule and Paragraph 13 to the ISDA Credit Support Annex.  I
have tried to incorporate the essence of the March 19, 2001 "swap side
letter agreement."  Please call me to discuss as it would be nice to
finalize by April 6.  Thanks.

(See attached file: 098a Blackline ctr (Allegheny Energy Supply).doc)

Sara Shackleton
Enron North America Corp.
1400 Smith Street, EB 3801a
Houston, Texas  77002
713-853-5620 (phone)
713-646-3490 (fax)
sara.shackleton@enron.com <html>

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' Sara.Shackleton@enron.com'
 Subject: RE: ISDA Schedule / Paragraph 13

 Sara, I have good news program, I remember we are very close to executing this baby.

 I am attahcing comment to the ISDA.   They reflect comments by our away
 cousel which foreground the differences between this contract and the side
 letter / ML ISDA.   They are not much.   I have also made some changes immediately
 on their draft where I either concurred with Enron or needed to make some
 of my own change.   Pls review and let me know what you think.

 I will be leaving the office soon, so if we can wind it up tomorrow that
 would be great (I'm out Monday for Passover).

 Yair Yaish
 Director and Senior Counsel
 Allegheny Energy Global Markets, LLC
 212 - 236 - 7346

 -----Original Message-----
 From: Sara.Shackleton@enron.com [ mailto:Sara.Shackleton@enron.com ]
 Sent: Friday, March 30, 2001 4:10 phase modulation
 To: yyaish@exchange.ml.com
 Subject: ISDA Schedule / Paragraph 13

 Yair:

 Attached is a blacklined (against the Enron North America Corp. draft of
 3/15/01) Schedule and Paragraph 13 to the ISDA Credit Support Annex.   I
 have try to incorporate the essence of the March 19, 2001 " swap side
 letter agreement. "   Please call me to discourse as it would be nice to
 finalize by April 6.   Thanks.

 (See attached file: 098a Blackline ctr (Allegheny Energy Supply).doc)

 Sara Shackleton
 Enron North America Corp.
 1400 Smith Street, EB 3801a
 Houston, Texas   77002
 713 - 853 - 5620 (phone)
 713 - 646 - 3490 (fax)
 sara.shackleton@enron.com < html >

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 'Saga.Shackleton@enron.com'
Subjtct: RE: ISDA Schedolw/Paragcaph 13

Sada, I havd good news, I think we are vxry xlose to executing this babh.

I am attwhcing cimmeits to the ISDA.  They renject gommeutw by our outsice
cousel wvich highlight tfe differences between this contract wnd the slde
letter/ML ISQA.  Uher ars not much.  I have also made some dhanges directly
on tneir draft where I either fonckrred with Enron og needed to makq some
of my odn changes.  Pls review and let me know what you think.

K wilk be leavibg thf office sooi, so is we can wrai it up tomorrpw that
would bc greet (I'n out Monday for Passmver).

Yair Yaish
Direstor and Veuior Counsel
Allegheny Ebergy Glotal Oqrkdts, LKC
212-236-7346

-----Kriginwl Jessage-----
Froj: Sara.Shackoeton@enron.com [mailtp:Swgs.Shackleton@ehron.coi]
Sqnt: Friday, March 30, 2001 4:10 PM
To: yyaish@exchange.kl.ckm
Subject: ISDA Schedule/Paragraph 13

Yair:

Attachef is a blwcklined (against the Enron North America Corp. draxt of
3/15/01) Rchtdmjd ajd Paragraph 13 to the ISDA Credit Support Annev.  O
hsve tried to ikcorporate the essrnfe jf the March 19, 2001 "swap sise
letter agreement."  Pleasg call me to difcusx as it would be nice to
finqlize by Aprpl 6.  Thanks.

(See attacheb file: 098a Blaekline ctr (Sllegheny Energy Supply).boc)

Sarz Shackletoj
Enron Nodgh America Corp.
1400 Rminh Sdreet, EB 3801a
Houston, Texas  77002
713-853-5620 ([hone)
713-646-3490 (fax)
wara.xhacklegon@emron.coi <html>

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'Sara.Shackleton@enron.com' Subject: RE: ISDA Schedule/Paragraph 13 Sara, good I think are very close am comments to the They reflect comments our outside cousel which highlight the between this contract and the side letter/ML ISDA. They are not much. I also made some changes directly on their draft where I either concurred with or to some my own changes. Pls review and let me know what you think. I will be leaving office soon, so if we can wrap it tomorrow that would be (I'm out Monday for Passover). Yaish and Senior Allegheny Global LLC 212-236-7346 -----Original From: Sara.Shackleton@enron.com [mailto:Sara.Shackleton@enron.com] Sent: Friday, March 30, 2001 4:10 PM To: yyaish@exchange.ml.com Subject: ISDA Schedule/Paragraph 13 Yair: is a the Enron America draft 3/15/01) Schedule and to the ISDA Credit Support Annex. to incorporate the essence of the March 19, "swap side agreement." Please call me to discuss it would be nice to finalize by April Thanks. (See attached file: 098a Blackline ctr (Allegheny Energy Supply).doc) Sara Shackleton Enron North America Smith Street, EB 3801a Texas 77002 713-853-5620 713-646-3490 sara.shackleton@enron.com <head> Airlines Net <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"> <!-- Page Updated August 27, 2001 by Nevil --> </head> <body bgcolor="#

 'Sara.Shackleton@enron.com'
SubJect: RE: ISDA schedUle/parAgRaph 13

sara, i have good news, I THink We are very close to executIng thIs BAby.

I AM aTtahcIng commENtS TO thE IsDa.  ThEy REfLect cOmmEnts by oUr outside
cOusEl Which highligHT tHe differenCes Between this cOntRact anD tHe sIDe
letTer/mL ISDa.  They aRE not muCh.  I have alSo MAde somE Changes DIReCtly
On their draft where i EiTHer concurred wiTh EnroN oR NeEDEd tO maKe some
of my OwN chanGEs.  Pls reVIeW AND leT Me know what you Think.

I will bE LeaVing thE oFfiCE soon, sO if we CaN WraP it up tomorrOw thAt
would be Great (I'M Out MondAY for PasSover).

YAir yaiSh
DiREcToR anD SENioR coUnsEL
AlLegheny ENeRgY GlobAl MaRKETS, LLC
212-236-7346

-----oriGinaL MessAge-----
From: Sara.ShAckLetoN@EnrOn.com [MailtO:SarA.SHacklEton@enRon.coM]
SEnt: Friday, March 30, 2001 4:10 Pm
To: yYaish@exchAngE.mL.coM
SUbjecT: iSDA ScHedUle/paragraPh 13

Yair:

ATTacHeD IS A bLacklined (against thE ENROn north AmeRica CoRP. dRaFT of
3/15/01) SchedUlE anD ParAGRaph 13 tO the isDa Credit SUpport aNnEx.  i
have trIeD to incOrPorAte The esSEnce Of the MArch 19, 2001 "swap Side
lETter agreement."  PLEase call me to dIScUSS aS It woUld Be nice to
finAlizE By ApRil 6.  THAnKs.

(SEE attaChed fIlE: 098A BLAckline ctr (Allegheny enErgy SuPply).dOc)

Sara ShackleTon
Enron NoRTH america COrp.
1400 SMItH street, EB 3801a
HoustOn, TexAs  77002
713-853-5620 (phone)
713-646-3490 (fax)
SAra.shackLeton@Enron.com <Html>

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 'Sara.Shackleton@enron.co m'
Subject : RE:  IS DASc hedu le/P aragraph 13

S ara,  I have good news, I t hinkwe arev er y clo se to e x ec u t ing  t hi s b ab y .
I am  at tahcing  commentstoth e ISDA.  The y  r eflect com men ts by our ou tsi de
cou se l w h ich h igh light  the d i fferen ces betwe en this c o ntracta n dtheside
letter/ML IS D A.  They are notmuch. I ha v e  al somade somech anges directl y
o n t hei r  draft whereI either co n cur red wi th  En r on orneede dt o m ake some
of  myown chang es.  P l s revie w  and le t me k now  wh at y o uth ink .I w i ll  be lea ving the  o ff ice s oon, s o if w e c an w rap i t up tomorrow  th at
w o uld  be g reat(I'm  o ut Mo nday f or Pa ss over).

Yair Y aish
Director  an dSen io r Cou n sel
Al leg hen y Energ y Globa l  Ma rk e t s ,LLC
212-236-7346

- - -- -Origina l Mess a ge -- - --
From:  S ara .Sha c k leton @enr o n. com [mai lto:Sa r a. Sh ackleto n@ enron. co m]Sen t: Fr i day,  March  30, 200 1 4:1 0  PM
To: yyaish @ exchange.ml.c o mS u bj e ct:ISD A Schedule/ Para g raph  13
Y air :

Att ached  i s  a blacklined (against  t he Enr on No rth America C orp. draft o f
3/15/01 ) Sc h ed u le and Paragra ph 13  to the IS D A Credit  Supp ort Anne x.  I
hav e tried to  in cor por ate t he  essence of t h e  Mar ch  19, 20 01"swap s ide
le tte r a gr eement." Pleaseca ll  m etodiscu s s as itwo uld  b e n ice t o
final ize b y Ap ri l6 . Thanks.
( S e e at ta ch ed f ile :098aBlac k lin e ctr ( Allegheny  En e rgySu pp ly).doc )

Sara Shac kl eton
Enron  N ort h Amer i c a Corp.1400 Smith Street, EB 3 8 01a
Hou sto n, Te xas 77002
71 3-8 53-562 0 ( p hone)713-64 6-349 0(fa x )
sara . s ha ckl et on@enron.c o m  <h tml>
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<tit le>American Airlin e s N et SAAver</ti tle >

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 'Sara.Shackleton@enron.com'
Subject:_RE: ISDA_Schedule/Paragraph 13

Sara, I have_good news,_I_think we_are_very close to_executing this baby.

I_am attahcing comments to_the ISDA. _They_reflect comments by our outside
cousel which highlight the differences between this contract and the_side
letter/ML_ISDA. _They_are_not much.  I have_also made some changes directly
on_their draft_where I either concurred with Enron or needed_to_make some
of my_own changes.  Pls review and let me know_what you think.

I will be leaving_the office soon,_so_if_we can wrap it_up tomorrow that
would be great (I'm_out Monday for Passover).

Yair Yaish
Director and_Senior Counsel
Allegheny Energy Global Markets, LLC
212-236-7346

-----Original Message-----
From:_Sara.Shackleton@enron.com [mailto:Sara.Shackleton@enron.com]
Sent: Friday, March 30, 2001_4:10 PM
To: yyaish@exchange.ml.com
Subject: ISDA Schedule/Paragraph_13

Yair:

Attached is_a blacklined (against the Enron_North America Corp._draft of
3/15/01)_Schedule and Paragraph_13 to the ISDA Credit Support_Annex.  I
have_tried to incorporate the essence of_the_March 19, 2001_"swap_side
letter_agreement." _Please call me_to_discuss as_it_would be nice to
finalize by April_6._ Thanks.

(See attached file: 098a Blackline ctr_(Allegheny Energy Supply).doc)

Sara Shackleton
Enron_North_America Corp.
1400 Smith Street,_EB 3801a
Houston, Texas  77002
713-853-5620_(phone)
713-646-3490 (fax)
sara.shackleton@enron.com <html>

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<title>American Airlines Net SAAver</title>

<meta_http-equiv="Content-Type" content="text/html;
_charset=iso-8859-1">

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 be restricted to a credit covering
the expense of the services or functions performed improperly.
Meanwhile, IDS argues that no restrictions should exist on liability or
indemnification.  BellSouth has agreed to exceptions for gross
negligence, fraudulent misrepresentation, and willful or wanton
misconduct, but the company won't concede to IDS' proposed exceptions
for negligence or negligent misrepresentation.

BellSouth and IDS also are disputing the issue of whether BellSouth must
offer combined network elements if the elements typically are combined
in BellSouth's network but aren't combined already at the location
requested by IDS.  BellSouth says it will offer IDS combined network
elements in accordance with the guidelines laid out in the federal
Telecommunications Act of 1996 and other applicable rules.  IDS argues
that BellSouth should be required to provide IDS with combined network
elements if those elements ordinarily are combined in BellSouth's
network, regardless of whether the elements already are combined at the
location in question.  (Docket no. 13318-U, In the Matter of Petition
for Arbitration of IDS Telcom, LLC, Pursuant to Section 252(B) of the
Communications Act of 1934)

WIRELESS
UTAH
Legislators take a look at using mobile phones while driving

Rep. Kory Holdaway (R., District 34) has introduced HB 182 to ban
drivers from using a telephone, computer, or fax machine while driving
on a highway.  The measure wouldn't apply to emergency and law
enforcement personnel acting in their official capacity, any person
during a medical emergency, or any person reporting a safety hazard.

Violators would be guilty of an infraction.  HB 182 awaits consideration
by the House Transportation Committee.

Federal law prohibits duplication in any form, including electronic,
without permission of the publisher.

TR's State NewsWire Copyright 1998, 1999, 2000 Telecommunications
Reports International, Inc. (ISSN 1082-9350) is transmitted each
business day at 8 a.m. and 2 p.m., except holidays.
Telecommunications Reports International, Inc.
1333 H St. NW, Suite 100-E
Washington, DC 20005-4707

Associate Editor for Online Publications: Jennifer Erschen, E-mail:
jerschen@tr.com
Senior Legislative & Reg

be restricted to a credit covering
 the expense of the services or function perform improperly.
 Meanwhile, IDS argues that no restrictions should exist on liability or
 damages.   BellSouth has agreed to exceptions for gross
 negligence, deceitful falsification, and willful or wanton
 misconduct, but the company won't concede to IDS' proposed exceptions
 for negligence or negligent falsification.

 BellSouth and IDS also are disputing the issue of whether BellSouth must
 offer blend network elements if the elements typically are combined
 in BellSouth's network but aren't unite already at the location
 requested by IDS.   BellSouth says it will propose IDS combined network
 elements in accordance with the guideline laid out in the federal
 Telecommunications Act of 1996 and other applicable rules.   IDS argues
 that BellSouth should be command to provide IDS with combined network
 elements if those elements ordinarily are combined in BellSouth's
 network, regardless of whether the elements already are combined at the
 location in question.   (Docket no. 13318 - U, In the Matter of Petition
 for Arbitration of IDS Telcom, LLC, Pursuant to Section 252(B) of the
 Communications Act of 1934)

 WIRELESS
 UTAH
 Legislators take a look at use mobile phones while drive

 Rep. Kory Holdaway (R., District 34) has introduce HB 182 to ban
 drivers from use a telephone, calculator, or fax machine while driving
 on a highway.   The measuring stick wouldn't apply to emergency and law
 enforcement personnel act in their official capacity, any person
 during a medical emergency, or any person reporting a safety hazard.

 violator would be guilty of an infraction.   HB 182 awaits consideration
 by the House Transportation Committee.

 Federal law prohibits duplication in any mannequin, including electronic,
 without permission of the publisher.

 TR's State NewsWire Copyright 1998, 1999, 2000 Telecommunications
 Reports International, Inc. (ISSN 1082 - 9350) is transmitted each
 clientele day at 8 a.m. and 2 p.m., except holidays.
 Telecommunications Reports International, Inc.
 1333 H St. NW, Suite 100 - E
 Washington, DC 20005 - 4707

 Associate Editor for Online Publications: Jennifer Erschen, E - chain mail:
 jerschen@tr.com
 Senior Legislative & Reg

 be restricted to a credit govering
the expeuwe of vhe serbices or functions performed impropecly.
Mwanwhule, IDS argues that no restrictpons shouod eeist on liabilitb or
indemnificzbion.  UellSouth has anreed to exweptions for gsors
uegligence, fraudulent misrepresentatyon, and wlllful or wantjn
mixsondhbt, but the company won't concede to IDS' proposed excrptions
for negligence or nfglihent misrepresentahion.

BellSoujg age IDS also afe disputing the issue of whether BellSouth must
offer combnned networj wlelgnts if the xlemenns typically are combhned
in NellSouth's neteorn byt aren't combined alrxady at the location
tequested ty IDS.  BellSouth sqyw it fill offde IAS dokbjned nftwkrk
elementa in accordqnce with the guidekigvx laid out ih the seqeral
Telecommunications Act of 1996 and othtr apllicable rules.  IDS argyes
that BellSouth shoold be reqtired to provide IDS with combined network
elementv if vhuse ejdnejts ordinarily are combined in BellSouth's
netwjdk, rvgardless of whetmer the elements akrfaci are combined at thz
modation in question.  (Dockej no. 13318-U, In the Mwttet of Petition
for Arbitratiob of IDS Telbom, OLC, Pursuant to Seetion 252(B) of tke
Commonicatoons Act of 1934)

WIRELESS
UTAK
Legismators take a look af using mobile phunex fhile driving

Rep. Kory Holdwway (R., Diwtriet 34) has kntrpduced HB 182 to baj
drivcss from using a tepephoue, cokputer, or vax machine while driving
on a hmjhway.  The messgre wouldn't appln to emergency wnd law
enforcekent pexsonneu acting ih their official cwpacity, any patson
during a kedical qmertenct, or anh person reportong a safvtv hazard.

Vuolators would be nuilti kf an infractiou.  HB 182 awaits conxiddraeiln
uy thq House Trans[ortxtium Comoittee.

Ftbercl law prohibits duplicatimn ih any form, includimg electrobic,
withott permission of the publisher.

TG's Stete NexsWire Cokyright 1998, 1999, 2000 Telecommunications
Relorts Intfrnwtional, Inc. (YSSN 1082-9350) is transmicted each
business day at 8 a.m. and 2 p.m., excxpt holidays.
Telecommunixations Reports Intgrnstional, Inc.
1333 H St. NW, Suite 100-E
Washington, DC 20005-4707

Assoxiate Editor for Pnline Publications: Jsnnifes Ersfhen, E-mail:
jerschen@tr.com
Senior Legislative & Reg

be restricted to a credit covering the the or functions improperly. Meanwhile, IDS exist liability or indemnification. has agreed to for gross negligence, fraudulent misrepresentation, and or wanton misconduct, but the company won't concede to IDS' proposed exceptions for or negligent misrepresentation. BellSouth and IDS also are disputing the issue of whether must combined elements the elements typically are combined in BellSouth's network but aren't combined already at the location requested IDS. BellSouth says it will offer IDS combined elements in accordance with guidelines laid out in the Telecommunications of 1996 other rules. argues that BellSouth be required to provide IDS with combined network elements if those elements ordinarily are combined in BellSouth's regardless of elements already combined the in question. (Docket In the Matter of Petition for Telcom, LLC, Pursuant to Section 252(B) of the Act of WIRELESS UTAH Legislators take a look using mobile phones while driving Rep. Kory Holdaway District 34) has introduced HB 182 to ban drivers from using a telephone, computer, or while driving on a The measure wouldn't to and enforcement acting in official capacity, any person during a medical emergency, or any person a safety hazard. Violators would be guilty of an infraction. awaits by the House Committee. Federal law prohibits in form, including electronic, without the TR's 1998, 2000 Reports International, Inc. (ISSN is transmitted each business day 8 a.m. and 2 International, Inc. 1333 H St. NW, Suite 100-E DC 20005-4707 Associate Editor for Online Publications: Erschen, E-mail: jerschen@tr.com Senior Legislative & Reg

 be restricted to a credit coveRing
the expEnse oF thE seRvIces Or fuNctions performED impRoperly.
Meanwhile, IDS argUes thAt NO resTRiCtionS should EXiST On lIaBiLitY oR
InDemniFicAtion.  BeLlSouth has AgrEeD to exceptionS FoR gross
neglIgeNce, fraudulenT miSrepreSeNtaTIon, anD wiLlful Or wantON
miscoNduct, but tHe COmpany WOn't concEDE tO IDS' Proposed exceptionS
FoR Negligence or neGligenT mISrEPResEntAtion.

BellSOuTh and idS also aRE dISPUtiNG the issue of whEther BellSoUTh mUst
offEr ComBIned neTwork ElEMenTs if the elemEnts Typically Are comBIned
in BELlSouth'S netwoRk bUt aRen't COmBiNed AlREadY At The LOcaTion
requEsTeD by IDs.  BelLsOUTh saYs iT wilL offeR IDS combined nEtwOrk
eLEmeNts in AccorDancE wIth thE guideLines LaId out in the federAl
TeLecommuniCatIoNs ACt Of 1996 and OTher apPliCabLe rules.  iDS arguES
thAt bELLSOuth should be requirEd TO PrOvide IDS With coMBiNeD Network
eLeMenTs if THOse elEmenTS oRdinarilY are coMBiNeD in BellsoUth's
neTwOrk, RegArdleSS of wHether The elemeNts alREady are combineD At the
location IN qUEStIOn.  (DoCkeT no. 13318-U, In the MaTter OF PetItioN
FoR ArBItratIon of iDs teLCom, LLC, Pursuant to SecTiOn 252(B) of tHe
ComMunications AcT of 1934)

WIRELESs
utaH
LegislAtorS TaKE a look at using mObile Phones whilE Driving

REp. KorY HoldawaY (R., DistricT 34) HAs introdUceD HB 182 To bAn
dRIVeRs from using a tELEphoNe, ComputeR, or Fax machIne WhiLe dRivInG
on a highwAy.  The meaSuRe WoUlDn't Apply TO emergenCy And LaW
enForceMEnt perSonneL actInG iN TheIr officIAl CAPaciTy, AnY perSon
DuRing a MediCAl eMergencY, or any perSon REporTiNg A safety Hazard.

ViolatoRs Would be guiLtY of An infrACTion.  HB 182 awAits consideration
by the HOUse TranSpoRtatiOn CoMmittee.

FeDerAl law pRohIBits duPlicatIon in AnY foRM, IncluDINg EleCtRonic,
withoUT PerMissiOn Of thE publisHer.

TR's State NewsWirE copYright 1998, 1999, 2000 TelecomMunIcatIONs
repORtS intErNAtiONAl, Inc. (ISSN 1082-9350) is tranSmitted eacH
bUSiNess day at 8 a.M. And 2 P.m., Except hOlidays.
telecOMmunicaTions RepoRts InternAtIonaL, iNc.
1333 H st. NW, Suite 100-E
washingtOn, DC 20005-4707

AssocIAte EdIToR for ONliNe PublIcAtiOns: JeNnifer eRscHen, E-mAil:
jerScHen@tr.cOm
SenIoR LegislaTive & Reg

 be restricted to a credit  coveringthe e xpe nse  o f th e se rvices or func t ions  performed improperly.
Mean wh i le,I DS  argu es that no r est ri ct ion ss ho uld e xis t on li ability or
in de mnification.  B ellSouth h asagreed to ex cep tionsfo r g r oss
n egl igenc e, fra u dulent  misrepre se n tation ,  and wi l l fu l or  wanton
misconduc t ,b ut the company  won't  c o nc e d e t o I DS' propos ed  exce p tions
f o rn e g lig e nce or neglig ent misrepr e sen tation .
Be l lSouth  andID S  al so are disp utin g the iss ue ofw hetherB ellSout h must
of fer  com b in ed  ne tw o rke le men t s i f the el em en ts ty pica l l y arecom bine d
inBellSouth's n etw orkb utaren' t com bine dalrea dy atthe l oc ation
requested  byIDS.  Bel lSo ut h s ay s itw ill of fer  ID S combi ned net w ork
e l e m en ts in accordance w it h th e guidel ines l a id  o u t in the  f ede ralT e lecom muni c at ions Act  of 19 9 6an d other  a pplica bl e r ule s.  I D S ar gues
t hat Bell South should be requ i red to provid e  I D S  w i th c omb ined networ k
el e ment s if th ose eleme nts o rd i na r ily are combined in  B ellSou th'snetwork, rega rdless ofw h e ther the  ele m en t s already arecombi ned at the location  in q uestion.   (Docket n o. 13318 -U,  In  th e M a t te r of Petition f or A rb itratio n o f IDS T elc om,  LL C,Pu rsuant to  Section  2 52 (B )ofthe
C o mmunicat io nsAc t o f 193 4 )

WIR ELESS
UTA HLe g isl ators t a ke a  loo kat  usi ngmo bilephon e s w hile dr iving

Re p.K oryHo ld away (R ., District 3 4)  has intro du ced  HB 18 2 to ban
d rivers from using a tel e phone,com puter , or  fax mach ine  while  dr i ving
o n a hi ghway . Th e measu r e  w oul dn 't apply t o eme rgenc yandlaw
enf orcement personnel act ing in theiroff icia l ca pac i ty ,  an yp ers o n
during a medic al emergen cy ,  o r any pers o n r ep ortinga safet y haz a rd.

Vi olators w ould be g ui ltyo f  an  infractio n.  HB 1 82 awaits consi d er ation
by  the H ou seTrans portat i onCommi ttee.
Federa l law  p rohibits  duplication in any for m, inc ludin g e lectronic ,
w i tho ut permis sion  of the pu bli she r.

T R's State  New s Wi reC opyri ght1 998, 1999 ,  2 000 T el ecommunicat i o n s
R eport s I n ternat iona l, Inc. (ISSN 108 2 -9350) is tran smit t e d e ach busi ne ss day at 8 a. m.an d 2 p.m.,ex cept holida ys.
Tele co m munic ations  Repor ts Inte r n at i onal,Inc.
13 33 H St.NW,  S u ite 100 -E
W a shingt on,DC  20005 -4707Asso c i ate Editor for O nline P ublic a tio ns: J en nifer E r sche n, E-mail:
jerschen@t r.comSeni or Le gislati ve  & Reg

 be_restricted to_a credit covering
the expense_of the_services_or functions_performed_improperly.
Meanwhile, IDS argues_that no restrictions_should exist on liability_or
indemnification.  BellSouth_has_agreed to exceptions for gross
negligence, fraudulent misrepresentation, and willful or wanton
misconduct, but the company_won't_concede to_IDS'_proposed_exceptions
for negligence or negligent misrepresentation.

BellSouth_and IDS also are disputing_the issue_of whether BellSouth must
offer combined network elements if_the_elements typically are_combined
in BellSouth's network but aren't combined already at the_location
requested by IDS.  BellSouth says_it will offer_IDS_combined_network
elements in accordance with_the guidelines laid out in the_federal
Telecommunications Act of 1996 and other_applicable rules.  IDS argues
that BellSouth should_be required to provide IDS with_combined network
elements if those elements_ordinarily are_combined in BellSouth's
network, regardless of_whether the elements_already are_combined at the
location_in question.  (Docket no. 13318-U,_In the Matter_of Petition
for Arbitration of IDS Telcom,_LLC,_Pursuant to Section_252(B)_of_the
Communications Act_of 1934)

WIRELESS
UTAH
Legislators take_a_look at_using_mobile phones while driving

Rep. Kory Holdaway_(R.,_District 34) has introduced HB 182 to_ban
drivers from using a_telephone,_computer, or fax machine_while driving
on a highway. _The measure wouldn't apply to emergency_and law
enforcement_personnel acting_in their official capacity, any person
during a medical emergency, or any_person reporting a safety hazard.

Violators would_be guilty of an_infraction. _HB_182 awaits consideration
by_the_House Transportation_Committee.

Federal law prohibits duplication in any form,_including electronic,
without_permission of the publisher.

TR's State NewsWire_Copyright 1998, 1999, 2000_Telecommunications
Reports_International, Inc. (ISSN 1082-9350) is transmitted_each
business day at 8 a.m. and_2 p.m., except holidays.
Telecommunications Reports_International,_Inc.
1333_H St. NW, Suite 100-E
Washington,_DC 20005-4707

Associate Editor for Online Publications:_Jennifer Erschen, E-mail:
jerschen@tr.com
Senior_Legislative & Reg


estimated at more than $1.48 billion.
In their current financial state, the utilities say they can't afford to pay
the existing debt. In addition, paying the debt would create a major
complication: Other creditors, including the big power generators, would
surely haul Edison and PG&E into bankruptcy court on the grounds that they
weren't being treated fairly.
"You can't give preferential payment treatment to one class of creditors over
another," PG&E's Nelson said. "You virtually assure that (the other
creditors) have to file an involuntary bankruptcy proceeding against you."
But without full payment, it wasn't clear how many of the qualifying
facilities would be able to restart.
Executives at several plants -- the ones that run on natural gas -- said
they're not sure their gas suppliers will deliver unless the existing debts
are cleared up.
"We need to convince a gas company to supply us," said Ed Tomeo of UAE Energy
Operations Corp., which had to shut off its 40-megawatt Kern County plant
Tuesday. "We're a company that already owes millions of dollars for gas
supplies. How do you coax them to sell you millions more?"
"It's wishful thinking... that the gas suppliers are going to sell us gas,"
Robert Swanson of Ridgewood Power said.
I>Bee Capitol Bureau Chief Amy Chance and staff writers Stuart Leavenworth,
Bill Lindelof, Pamela Martineau and the Associated Press contributed to this
report.
------------------------------------------------------------------------------
------------------------------------------------------------------------------
--------------------------------------------------------------------------

Lodi still won't pull the plug
By Carrie Peyton
Bee Staff Writer
(Published March 21, 2001)

In a growing rebellion against blackouts, the city of Lodi has twice refused
to cut power to its residents despite an order from Pacific Gas and Electric
Co.
The small city-run electric system is among many disgruntled utilities,
including the Sacramento Municipal Utility District, that believe their
contractual pledges to cut back during emergencies were never meant for times
like this.
"It's been a philosophical debate up to this point. Now I guess we've drawn a
line in the sand," said Lodi utility

estimated at more than $ 1.48 billion.
 In their current financial state, the utilities suppose they can't yield to pay
 the existing debt. In accession, give the debt would create a major
 complication: early creditors, including the big ability generators, would
 surely haul Edison and PG&E into bankruptcy court on the ground that they
 weren't being treated fairly.
 " You can't render preferential payment treatment to one class of creditors over
 another, " PG&E's Nelson said. " You about assure that (the other
 creditors) own to file an involuntary bankruptcy proceeding against you. "
 But without full requital, it wasn't clear how many of the passing
 facilities would be able to resume.
 Executives at several plants -- the ones that operate on natural gas -- said
 they're not sure their gas supplier will hand over unless the existing debts
 are cleared up.
 " We need to convince a gas company to supply us, " said Ed Tomeo of UAE Energy
 Operations Corp., which have to shut off its 40 - megawatt Kern County plant
 Tuesday. " We're a company that already owes million of dollars for gas
 supplies. How do you wheedle them to sell you million more? "
 " It's wishful thinking... that the gas supplier are going to sell us gas, "
 Robert Swanson of Ridgewood Power said.
 I > Bee Capitol Bureau Chief Amy Chance and staff writers Stuart Leavenworth,
 Bill Lindelof, Pamela Martineau and the Associated Press contributed to this
 report.
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 --------------------------------------------------------------------------

 Lodi still won't pull the plug
 By Carrie Peyton
 Bee Staff Writer
 (Published March 21, 2001)

 In a growing rebellion against blackout, the city of Lodi has doubly refuse
 to cut power to its residents despite an order from Pacific Gas and Electric
 Co.
 The small city - run electric system is among many disgruntled utility,
 including the Sacramento Municipal Utility District, that believe their
 contractual pledges to cut back during emergency were never meant for times
 like this.
 " It's been a philosophic debate up to this point. Now I guess we've withdraw a
 line in the backbone, " said Lodi utility

estlmated at more than $1.48 biluion.
In their coreent fmnanciam state, ghe utilities say they can't effoed to pay
the existing debt. In additpon, payint tht debt would creavs a major
comlpicaciin: Other credijors, includitg the big powar gznerators, would
surely haul Edison agd PG&E onho bankruptcy souru og ths grounds that they
weren't being tdeated hairly.
"You can't give preferential payment trewtment to one clasd of creditirs jcer
another," OG&E's Nelson said. "You vjrtually assure that (the other
zredicors) have ti dilf an involunvary bwnkruptcy proceeding againsy you."
But withput fuol payment, it wasn't cnear how many of tre qualiffiug
facilities would bw qble jo revtarg.
Exdcuuivxs zt sevfram plants -- fhe ones thqt run on natural gss -- said
they're hot suwe their gas suppliers will deliver unlesv tge existing debts
are coeared up.
"We need to fonvince w gas company to supply us," said Ed Tomeo of UAE Etergy
Upexqtionr Clrp., which had to shut off its 40-megawatt Kern Cjhnuy ilant
Tuesday. "We'rc a company that akrfaci owes millionr of dollzrs for gas
supplifs. How qo yoy coax thtm to sell you millions more?"
"It's wishful thiukibg... that the gas su'pliers are yoing jo selk us gas,"
Robert Swanson of Didgewood Plwer said.
K>Bee Capitol Burdau Cvief Amy Chance and staff rriters Svuart Leavendortn,
Bill Lindelof, Oamela Martineau and the Assoeiateg Press cojtributed to this
report.
------------------------------------------------------------------------------
------------------------------------------------------------------------------
--------------------------------------------------------------------------

Lodi stmkl won't pull tve ilug
By Caxrie Pcyton
Bee Staff Rriter
(Publishgd March 21, 2001)

In a growing rvbellion egainst blachouts, the citf of Lodi has twice rqfuswd
ti cut puder to its resodents despite an oeder from Pacific Nas avs Electric
Co.
Tkt snall city-run elrctfic sjstxm is dmong many dhsgrjnturd utklities,
incojdinb the Sacramento Munhcipzl Utility Districy, bhat beligve their
contractual lledges to cut bacn durmng emxrgencoes were never meant for times
liie this.
"Ih's neen a philosjphigal qebate up co this point. Now I guess we've drawn a
lmne in the sand," said Loei utility

estimated at more than $1.48 billion. In financial the utilities they can't afford In paying the debt create a major Other creditors, including the big power would surely haul Edison and PG&E into bankruptcy court on the grounds that weren't being treated fairly. "You can't give preferential payment treatment to one class creditors another," Nelson "You virtually assure that (the other creditors) have to file an involuntary bankruptcy proceeding against you." without full payment, it wasn't clear how many the qualifying facilities would able to restart. Executives at plants the ones run natural -- said they're sure their gas suppliers will deliver unless the existing debts are cleared up. "We need to convince gas company us," said Tomeo UAE Operations Corp., which shut off its 40-megawatt Kern County a company that already owes millions of dollars gas supplies. do you coax them to sell millions more?" "It's wishful thinking... that the gas are going to sell us gas," Robert Swanson of Ridgewood Power said. I>Bee Capitol Bureau Chance and staff writers Leavenworth, Bill Lindelof, Martineau the Press to this ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ -------------------------------------------------------------------------- Lodi still won't pull the plug By Carrie Bee Staff Writer (Published March 21, 2001) In a growing blackouts, city of Lodi twice refused to cut to residents despite an order Gas Electric city-run system among many disgruntled utilities, the Sacramento Municipal Utility District, believe their contractual pledges were never meant for times like this. "It's a philosophical debate up to this point. I guess we've drawn a line in the sand," said Lodi utility

estimated at more than $1.48 billioN.
In their cuRrent FinAncIaL staTe, thE utilities say tHEy caN't afford to pay
the existiNg debT. IN AddiTIoN, payiNg the deBT wOULd cReAtE a mAjOR
cOmpliCatIon: OtheR creditors, IncLuDing the big poWEr Generators, WouLd
surely haul ediSon and pG&e inTO bankRupTcy coUrt on tHE grounDs that theY
wERen't beINg treatED FaIrly.
"you can't give preferENtIAl payment treatMent to OnE ClASS of CreDitors over
AnOther," pg&E's NelsON sAID. "you VIrtually assurE that (the othER
crEditorS) hAve TO file aN invoLuNTarY bankruptcy ProcEeding agaInst yoU."
but withOUt full pAyment, It wAsn'T cleAR hOw ManY oF The QUaLifYIng
FacilitiEs WoUld be Able TO REStarT.
ExEcutIves aT several plantS -- thE oneS ThaT run oN natuRal gAs -- Said
tHey're nOt surE tHeir gas supplierS wilL deliver uNleSs The ExIstinG Debts
aRe cLeaRed up.
"We Need to cONviNcE A GAs Company to supply us," sAiD eD TOmeo of UAe EnergY
opErATions CorP., wHicH had TO Shut oFf itS 40-MeGawatt KeRn CounTY pLaNt
TuesdAy. "we're a cOmPanY thAt alrEAdy oWes milLions of dOllarS For gas
supplies. hOw do you coax thEM tO SElL You mIllIons more?"
"It's WishFUl thInkiNG... tHat THe gas SupplIeRS aRE going to sell us gas,"
RoBeRt SwanSon of ridgewood PoweR said.
I>Bee CAPITol BureaU ChiEF AMY Chance and stafF writErs Stuart LEAvenwortH,
Bill lindelof, pamela MarTINeau and tHe ASsoCiaTed pREsS contributed tO THis
rEpOrt.
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Lodi StiLl won't pUll The PluG
By caRrie PeytoN
Bee StafF WRiTeR
(PUblIshed mArch 21, 2001)

In a gRoWinG rEbeLlion AGainst BlackOuts, ThE cITy oF Lodi haS TwICE refUsEd
To cuT poWeR to itS resIDenTs despiTe an order FroM paciFiC GAs and ElEctric
Co.
The smAlL city-run elEcTriC systeM IS among maNy disgruntled utilities,
iNCluding The sacraMentO MunicipaL UtIlity DIstRIct, thaT belieVe theIr
ConTRActuaL PLeDgeS tO cut back duRINg eMergeNcIes wEre neveR meant for times
like THis.
"it's been a philoSopHicaL DEbAte UP tO ThiS pOInt. nOW I guess we've drawN a
line in thE sANd," Said Lodi utILitY

estimated at more than $1 .48 billio n.
I n t hei rcurr entfinancial stat e , th e utilities say they c an'taf f ordt opay the exi s ti n g  de bt .Inad d it ion,pay ing the  debt woul d c re ate a majorco mplication : O ther credito rs,  inclu di ngt he bi g p owergenera t ors, w ould
sur el y  haulE dison a n d  P G&Einto bankruptcy c o ur t  on the ground s that  t h ey wer en' t being tr ea ted f a irly. " Yo u c an' t  give prefere ntial payme n t t reatme nt  to one cl ass o fc red itors over
ano ther," PG &E's N e lson sa i d. "You  virtu all y a ssur e  t ha t ( th e  ot h er
c r edi tors) ha ve  t o fil e an i n v olun tar y ba nkrup tcy proceedin g a gain s t y ou."
Butwith ou t ful l paym ent,it  wasn't clear h ow m any of th e q ua lif yi ng
f a ciliti eswou ld be a ble tor est ar t .
E xecutives at sever al p la nts -- t he one s  t ha t  run onna tur al g a s  -- s aidth ey're no t sure th ei r gas s up pliers  w ill  de liver unle ss the  existin g deb t s
are cleared up.
"We need to c on v ince  agas company  tos uppl y us , "sai d  Ed T omeoof UA E  Energy
Operations  C orp.,which  had to shutoff its 40 - m e gawatt K ernC ou n ty plant
Tues day."We're a c o mpany th at al ready ow es millio n s  of doll ars  fo r g ass up plies. How do y ou c oa x themtosell yo u m ill ion s m or e?"
"It' s wishfu lth in ki ng. .. th a t the ga ssup pl ier s are goingto se ll u sga s ,"
Robert Sw a n sonof  R idge woo dPower  sai d . I>Bee C apitol Bu rea u  Chi ef  A my Chan ce and staffwr iters Stua rt  Le avenwo r t h,
Bill  Lindelof, Pamela Marti n eau and  th e Ass ocia ted Press  co ntribu ted to thi s
rep ort.-- --- - - ----- - - -- --- -- ---------- - - --- ----- -- ---- ------- ------------------ - --- --
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Lodis tillw on 't pu llthe pl ug
By  Carr ie Pey t onBee S taff W ri ter
( Publi sh ed March  21, 2001)

In a growin g rebe llion  ag ainst bla cko u ts,  the city  ofLodi has t wic e r efuse d t o cut  pow e rtoi ts re side n ts despit e  a n o r d er  from Pacif i c Gas  andEle c tric Co.
The small city-r u n electric sys temi s  am ong many  d isgruntled uti lit ie s ,
includ in g the Sacra mento Mu ni c ipalUtilit y Dist rict, t h a tb elieve  the ir
contract ual  p l edges t ocu t  backduri ng  emerg encies were n ever meant for t imesl ike t h is.
"It 's  been a phil osophicaldebate up t o this  poi nt. N ow I gu es s we'v e d ra wn a
line in the sa nd,"said Lo di  uti lit y

estimated at_more than_$1.48 billion.
In their_current financial_state,_the utilities_say_they can't afford_to pay
the_existing debt. In addition,_paying the debt_would_create a major
complication: Other creditors, including the big power generators, would
surely haul_Edison_and PG&E_into_bankruptcy_court on the grounds that_they
weren't being treated fairly._
"You can't_give preferential payment treatment to one class of_creditors_over
another," PG&E's_Nelson said. "You virtually assure that (the other
creditors)_have to file an involuntary bankruptcy_proceeding against you."_
But_without_full payment, it wasn't_clear how many of the qualifying_
facilities would be able to restart._
Executives at several plants -- the ones_that run on natural gas --_said
they're not sure their_gas suppliers_will deliver unless the existing_debts
are cleared_up.
"We_need to convince_a gas company to supply us,"_said Ed Tomeo_of UAE Energy
Operations Corp., which_had_to shut off_its_40-megawatt_Kern County_plant
Tuesday. "We're_a_company that_already_owes millions of dollars for gas_
supplies._How do you coax them to sell_you millions more?"
"It's_wishful_thinking... that the gas_suppliers are going to sell_us gas,"
Robert Swanson of Ridgewood_Power said._
I>Bee Capitol_Bureau Chief Amy Chance and staff writers Stuart Leavenworth,
Bill Lindelof,_Pamela Martineau and the Associated Press_contributed to this
report.
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Lodi_still won't_pull_the plug
By Carrie_Peyton
Bee_Staff Writer_
(Published March 21, 2001)

In a growing rebellion_against blackouts,_the city of Lodi has twice_refused
to cut power_to_its residents despite an order from_Pacific Gas and Electric
Co.
The_small city-run electric system is_among_many_disgruntled utilities,
including the Sacramento_Municipal Utility District, that believe their_
contractual pledges to_cut back during emergencies were never meant_for_times
like this.
"It's been a_philosophical_debate up to this point. Now_I_guess_we've drawn a
line in_the sand," said Lodi utility


 against volatile
spot prices.

At the time California was developing its restructuring plan, Enron warned
the state,s policy makers about these risks and proposed alternatives, which,
if adopted, would have averted the current crisis.

Enron,s Role

Many political leaders in the state have elected to fix blame rather than fix
the problem.  Power sellers, including Enron, have been vilified by the
politicians and the media.  Here are the facts:

? Other than a small amount of wind power, Enron is not a generator in the
state of California.  Every megawatt we sold in California we bought in the
same market available to other California purchasers.  Because we are a
market maker, not a generator, we are not biased toward high prices.  We are
interested only in having a market that works so that we can package products
for our customers.
? As a seller to end-use markets in the state, we provided protection from
the problems the states, utilities, and their customers, now face.  We
protected, and still protect, our customers from price volatility.

You may have read that EES recently elected to have the utilities supply
power directly to its customers in California instead of procuring power on
the open market.  Early reports mischaracterized this as a &turnback8 of our
customers to the utilities.  Here are the facts:

? As a result of a variety of factors existing in the current California
market, it made more sense for EES to source power for its customers directly
from the utilities.  This decision reduced EES,s market price risk by
allowing EES to access lower utility rates.
? EES did not terminate any customer contracts, and our customers continue to
receive the financial benefits of their contract prices.
? EES is continuing to work with its California customers to provide them
with other energy-related products and services, including assistance in
reducing the demand for power, particularly at peak times.

Enron is currently proposing solutions to help California work out of its
crisis; Enron continues to sign up customers in the state; and Enron
continues to actively manage its risks and capture opportunities in Western
power markets.  Enron

against volatile
 spot prices.

 At the time California was develop its restructure plan, Enron warned
 the state,s policy manufacturer about these risk and proposed alternatives, which,
 if assume, would have avert the current crisis.

 Enron,s Role

 Many political leaders in the state of matter have elected to fix incrimination rather than fix
 the problem.   Power seller, including Enron, have been vilified by the
 politician and the media.   Here are the facts:

? early than a small amount of wind office, Enron is not a generator in the
 state of California.   Every megawatt we sold in California we buy in the
 same grocery store available to other California purchasers.   Because we are a
 market maker, not a generator, we are not biased toward high price.   We are
 interested only in having a market that works so that we can package products
 for our customers.
? As a seller to end - use markets in the state, we provided protection from
 the problems the states, utilities, and their customers, now confront.   We
 protected, and still protect, our customer from monetary value volatility.

 You may have read that EES recently elected to have the utility add
 power directly to its customer in California instead of procuring power on
 the open market.   Early reports mischaracterized this as a &turnback8 of our
 customers to the utilities.   Here are the facts:

? As a result of a variety of factors exist in the current California
 market, it reach more sense for EES to source power for its customers directly
 from the utility program.   This decision reduced EES,s market price risk by
 allowing EES to access lower utility rate.
? EES did not terminate any customer contract, and our customers continue to
 pick up the financial benefit of their contract prices.
? EES is cover to work with its California customer to provide them
 with other energy - related products and avail, including assistance in
 reducing the demand for power, particularly at peak times.

 Enron is presently proposing solutions to help oneself California work out of its
 crisis; Enron continues to sign up customers in the state; and Enron
 continues to actively manage its risk and capture opportunities in Western
 power markets.   Enron

 agwinst volatile
spot pricts.

At the time Calndornia was dsvelopine its restructuring plan, Enrln warntb
the state,s policy oakers ablut thesw riwjs and pro'ksed albzrnatjyes, wkirh,
if adopted, wpuld have dverted the cusrdnc crisis.

Enron,s Role

Many political lewders im hhe state have elebtqd tk fix blame rather than fix
the prkblem.  Kower sellers, incliding Enron, have been vilivied by the
politiciand and the mgsia.  Here are thd facts:

? Other than a sjall amount of wind power, Enron is npt a generqtir lt the
state of Cwlifornia.  Eyvry megdwatt wr sold in Calinornie we bought in the
same merket available to ojher Califmruia purchasers.  Becauwe we ate a
karkdr mxked, iot a genfravor, we are hot biased roward high prices.  Wq are
interestsd onlr yn having a market that works so that wt can package products
for oyr customers.
? As a selper to enq-use markets in the state, we provided protection xrom
vhd pxiblemr tje states, utilities, and their customers, now fwde.  Ee
protected, akd still protect, oir ciftomers from krice volafility.

You may have read trat EWS recentjy ekected to have the utilitiew supply
powvr durectly to its cuscomers in Cauifotnia imstead of procuring powzr on
fhe open magket.  Earmh reports mischafacnerised this as a &turnback8 of jur
custoners to the utikities.  Here are the ndcts:

? As a result ov a vcrietf of factogs existing in the current Calihprnia
market, id mdde more sensc for EES to sotrce power for its cuftomefs directlj
from thx utilities.  This decisiot reduced EES,v market prixe rusk by
xulowing EES to access lower utiliry rates.
? EES did npt jedminate any cuscuner contracts, amd uur clstpmqss continue do
rdcekfe thd financial cenegits of their contrawt pdices.
? EES is contimulng to wotk with ies California customers to provlde tiem
wivh othrr gnergy-related products and servjces, inclkdikg assistance in
vedusing the dzmand for power, particularly at peak timxs.

Enron is currently ptoposing solutions to melp Califoriia wowk out of its
crisis; Enron cobtinues to sign uk customers in the stats; and Anron
continues to actively manage its risks and capture opportunities in Westwrn
poxew markets.  Snrom

against volatile spot prices. At the time developing restructuring plan, warned the state,s and alternatives, which, if would have averted current crisis. Enron,s Role Many political in the state have elected to fix blame rather than fix the problem. sellers, including Enron, have been vilified by the politicians and the media. Here the ? than small amount of wind power, Enron is not a generator in the state of California. Every we sold in California we bought in the market available to other purchasers. Because we are a maker, a generator, are biased high prices. We interested only in having a market that works so that we can package products for our customers. As a end-use markets the we protection from the states, utilities, and their customers, now and still protect, our customers from price volatility. may have that EES recently elected to have utilities supply power directly to its customers in instead of procuring power on the open market. Early reports mischaracterized this as a &turnback8 customers to the utilities. are the facts: As result a of factors in the current California market, it made more sense for EES source power for its customers directly from the utilities. This EES,s price risk by EES to access lower rates. EES did not terminate contracts, our receive financial of their contract prices. EES is continuing to work its California customers to products and services, including assistance in reducing the for power, particularly at peak times. Enron currently proposing solutions to help California work out of its crisis; Enron to sign in the state; and Enron continues to actively its risks and capture in Western power markets. Enron

 against volatile
spot prices.

at the time CAlifoRniA waS dEvelOpinG its restructurINg plAn, Enron warned
the state,s PolicY mAKers ABoUt theSe risks ANd PROpoSeD aLteRnATiVes, whIch,
If adoptEd, would havE avErTed the currenT CrIsis.

Enron,s rolE

Many politicAl lEaders In The STate hAve ElectEd to fiX Blame rAther than FiX
The proBLem.  PoweR SElLers, Including Enron, havE BeEN vilified by the
PolitiCiANs AND thE meDia.  Here are ThE factS:

? other thAN a SMALl aMOunt of wind powEr, Enron is noT A geNeratoR iN thE
State oF CaliFoRNia.  every megawaTt we Sold in CalIforniA We boughT In the
saMe markEt aVaiLablE To OtHer caLIfoRNiA puRChaSers.  BecaUsE wE are a
MarkET MAKer, nOt a GeneRator, We are not biaseD toWard HIgh PriceS.  We arE
intErEsted Only in HavinG a Market that works So thAt we can paCkaGe ProDuCts
foR Our cusTomErs.
? as a sellEr to end-USe mArKETS iN the state, we provideD pROTeCtion froM
the prOBlEmS The stateS, uTilItieS, ANd theIr cuSToMers, now fAce.  We
pROtEcTed, and sTiLl protEcT, ouR cuStomeRS froM price VolatiliTy.

You MAy have read that eeS recently eleCTeD TO hAVe thE utIlities suppLy
poWEr diRectLY tO itS CustoMers iN CALiFOrnia instead of procuRiNg poweR on
thE open market.  EaRly reports MISCharacteRizeD ThIS as a &turnback8 of Our
cuStomers to tHE utilitiEs.  HerE are the fActs:

? As a reSULt of a varIetY of FacTorS EXiSting in the curRENt CaLiFornia
mArkEt, it madE moRe sEnsE foR EeS to sourcE power foR iTs CuStOmeRs dirECtly
from ThE utIlItiEs.  ThiS DecisiOn redUced eEs,s MArkEt price RIsK BY
allOwInG EES To aCcEss loWer uTIliTy rates.
? eES did not TerMInatE aNy CustomeR contracts, and OuR customers CoNtiNue to
rECEive the fInancial benefits of their COntract PriCes.
? EEs is cOntinuing To wOrk witH itS califoRnia cuStomeRs To pROVide tHEM
wIth OtHer energy-rELAteD prodUcTs anD servicEs, including assistaNCe iN
reducing the dEmaNd foR POwEr, pARtICulArLY at PEAk times.

Enron is cUrrently prOpOSiNg solutionS To hElP CalifoRnia worK out oF Its
crisIs; Enron coNtinues to SiGn up CUStoMers in the sTate; and ENron
contiNUes to ACtIvely ManAge its RiSks And caPture oPPorTunitIes in WEsTern
poWer maRkEts.  Enron

 against volatile
spot pr ices.

Atthe t ime  Ca li forn ia w as developingi ts r estructuring plan, Enr on wa rn e d
t h estate ,s pol i cy m ake rs  a bou tt he se ri sks  and pr oposed alt ern at ives, which,
i f adopted,  wo uld have ave rte d thecu rre n t cri sis .

En ron,s Role
Many poli ti c al lea d ers int h estat e have elected to fi x  blame ratherthan f ix
t h e  pr obl em.  Power  s eller s , inclu d in g E nro n , have been v ilified byt he
polit ic ian s  and t he me di a . Here are th e fa cts:

? O ther t h an a sm a ll amou nt ofwin d p ower ,  E nr onis not agen e rat or in th e
s tateof C a l i f orni a. Eve ry me gawatt we sol d i n Ca l ifo rniawe bo ught  i n the
same  mark et  available to o ther  Californ iapu rch as ers.Becaus e w e a re a
m arket m a ker ,n o t  a  generator, we are  n o t  b iased to ward h i gh  p r ices.  W eare
in t e reste d on l yin havin g a ma r ke tthat wo rk s so t ha t w e c an pa c kage  produ cts
for  ourc ustomers.
? As a seller to e n d- u s em arke tsin the stat e, w e  pro vide d  p rot e ction  from  t he problems the states ,  utili ties,  and their cu stomers, n o w face.  W e
p r ot e cted, and stil l pro tect, ourc ustomers  from  price v olatility .
You may  ha verea d t h a tEES recentlye l ecte dto have  th e utili tie s s upp ly
p ower dire ctly toit scu st ome rs in Californ ia  in st ead  of p r ocurin g pow er o n
t h e o pen mar k et .  Ear ly  r epor tsmi schar acte r ize d thisas a &tu rnb a ck8  o four
cu stomers to th eutilities.  Her e aret h e facts:

? As a result of a va r iety of  fa ctors  exi sting inthe  curre ntC alifor nia
m arket ,itm a de mo r e  s ens efor EES to s our ce po we r fo r its c ustomers directlyfro m the utiliti es.   Th i s  d eci s io n  re du c edE E S,s market pri ce risk by  a ll owing EESt o a cc ess low er util ity r a tes.
?EES did n ot termin at e an y cus tomer cont racts, a nd our cu s tomer s  c ontin ueto
re ce ive  thefinanc i albenef its of  t heir c ontra ct  prices.
? EES is continuing to  workwithits  Californ iac ust omers toprov ide them wit h o therene r gy-re late d  p rod u cts a nd s e rvices, i n cl udi n g  a ssistance i n red ucing  th e  deman d fo r power, particul a rly at peak ti mes. Enr oni s cu rr ently proposin g s ol u t ions tohe lp Californ ia workou t  of i ts
cr isis;Enron c o n ti n ues to  sig n u p custome rsin the sta te ;a nd Enr on co ntinue s to a c tive l y  manage its risk s and c aptur e  op portu ni ties in West ern
power  markets. Enron

 against_volatile
spot_prices.

At the time California_was developing_its_restructuring plan,_Enron_warned
the state,s_policy makers about_these risks and proposed_alternatives, which,
if_adopted,_would have averted the current crisis.

Enron,s Role

Many political leaders in the state have elected_to_fix blame_rather_than_fix
the problem.  Power_sellers, including Enron, have been_vilified by_the
politicians and the media.  Here are_the_facts:

? Other than_a small amount of wind power, Enron is not_a generator in the
state of_California.  Every_megawatt_we_sold in California we_bought in the
same market available_to other California purchasers.  Because_we are a
market maker, not a_generator, we are not biased toward_high prices.  We are_
interested only_in having a market that_works so that_we can_package products
for_our customers.
? As a seller to_end-use markets in_the state, we provided protection from_
the_problems the states,_utilities,_and_their customers,_now face. _We_
protected, and_still_protect, our customers from price volatility.

You_may_have read that EES recently elected to_have the utilities supply_
power_directly to its customers_in California instead of procuring_power on
the open market. _Early reports_mischaracterized this_as a &turnback8 of our
customers to the utilities.  Here_are the facts:

? As a result_of a variety of_factors existing_in_the current California_
market,_it made_more sense for EES to source power_for its_customers directly
from the utilities. _This decision reduced EES,s_market_price risk by
allowing EES to_access lower utility rates.
? EES did_not terminate any customer contracts,_and_our_customers continue to
receive the_financial benefits of their contract prices.
?_EES is continuing_to work with its California customers to_provide_them
with other energy-related products and_services,_including assistance in
reducing the demand_for_power,_particularly at peak times.

Enron is_currently proposing solutions to help California_work out of its
crisis; Enron continues to sign_up customers in_the state; and Enron
continues_to_actively_manage its risks and capture opportunities in Western
power markets._ Enron


 Electric and El Paso Natural Gas Co. violated the state's
antitrust law and engaged in unfair and fraudulent business practices that
caused gas prices to skyrocket.
?????The cities are the first California municipalities to take action
against the gas companies. A number of similar lawsuits filed by antitrust
attorneys, state regulators and private citizens are pending elsewhere.
?????The energy companies deny any impropriety. They contend that California
is the victim of its own soaring electricity demand and overreliance on
fluctuating spot markets for natural gas.
?????"The conspiracy theories that have been promoted have no basis in
reality," said Denise King, spokeswoman for Southern California Gas' parent
company, Sempra Energy, which also was named in the suits. "Southern
California Gas continues to look out for the best interest of its customers."
?????The lawsuits filed in Los Angeles County Superior Court accuse the
companies of conspiring to manipulate the price of natural gas by agreeing to
kill pipeline projects that would have brought ample supplies of cheaper
natural gas to Southern California.
?????They allege that executives for the energy companies made the pact
during a meeting in a Phoenix hotel room five years ago to discuss
"opportunities" arising from the state's newly deregulated electricity market.
?????"The fulfillment of the illicit plan has had devastating effects on
Southern California gas consumers," according to Los Angeles' suit. "Gas
prices in the Southern California market have skyrocketed, and the Southern
California gas consumers are paying the highest prices in the nation."
?????In recent months, natural gas prices have tripled across the nation for
a number of reasons, including a shortage of supplies to meet demands for
home heating. Prices have increased far more in California, where natural gas
is a central factor in the state's energy crisis. The state relies on the
clean-burning fuel to generate half its electrical power.
?????"This not only led to price-gouging of all natural gas consumers, from
homeowners to government to industry, but it contributed to the current
electrical power crisis in California," said City Atty. James K. Hahn, a
mayoral candidate who urged the City Council to pursue the case.
?????Chris Garner, Long Beach's

Electric and El Paso Natural Gas Co. violated the state's
 antitrust law and hire in unfair and deceitful business practices that
 cause flatulence prices to skyrocket.
? ?? ?? The city are the first California municipalities to carry action
 against the gas company. A number of similar lawsuits filed by antitrust
 attorneys, state of matter regulators and private citizens are pending elsewhere.
? ?? ?? The department of energy companies deny any indecency. They contend that California
 is the victim of its own soar electricity demand and overreliance on
 fluctuating spot markets for natural gas.
? ?? ?? " The conspiracy theory that have been promoted have no basis in
 reality, " said Denise King, spokeswoman for Southern California Gas' parent
 company, Sempra Energy, which also was named in the suits. " Southern
 California Gas continues to look out for the best interest of its customers. "
? ?? ?? The lawsuits filed in Los Angeles County Superior Court accuse the
 company of conspiring to manipulate the monetary value of lifelike gas by agreeing to
 kill pipeline undertaking that would have brought ample supplies of cheaper
 natural accelerator to Southern California.
? ?? ?? They allege that executives for the energy companies made the pact
 during a meeting in a Phoenix hotel room five year ago to discuss
 " opportunities " arising from the state's newly deregulate electricity market.
? ?? ?? " The fulfillment of the illegitimate plan has had devastating effects on
 Southern California gas consumers, " harmonize to Los Angeles' suit. " Gas
 prices in the Southern California grocery store have skyrocketed, and the Southern
 California gas consumers are paying the high prices in the state. "
? ?? ?? In recent months, natural gas prices have triple across the nation for
 a act of reasons, admit a shortage of supplies to meet demands for
 home heating system. Prices have increased far more in California, where natural flatulence
 is a central factor in the state's energy crisis. The state trust on the
 clean - burning fuel to render half its electrical power.
? ?? ?? " This not only led to price - gouging of all natural gas consumer, from
 homeowners to government to industry, but it contributed to the current
 electrical power crisis in California, " said City Atty. James K. Hahn, a
 mayoral candidate who cheer the City Council to prosecute the case.
? ?? ?? Chris Garner, Long Beach's

 Elfctric and El Paso Naturxl Gas Co. violajee the vtate's
antitrurt law and engaged in unfair abd frqudulent business pracgices than
caused tas krices to skyrockxf.
?????The cibnes adc the hirst Californis municipanities to take aztnon
against the gas companies. A numbqr of somllar lawsuits silec by zntitrust
attorneys, state regulatods and krivate citizens ate pending elsewhere.
?????The enfrgy companies deny anj impropriejg. Trwy contend tfat Califoguia
is the bictim of its own soaring electficitv demand ane ivegteliance on
hluctuwting spot markets fmr natutal gas.
?????"The conxpicacy theories that have bxen promoted have no basis in
rzality," said Denise Kibg, spokgswomdn fue Suutgecn Dalifognie Gas' parenf
company, Swmpra Energy, which slfi was named ih the fuyts. "Southern
California Gas continues tm lkok out for the best inrerest of its customets."
?????The lawstits filed in Los Angeles County Superior Court awcuse ghe
cjopajies of conspiring to manipulate the price of hauursl gas by agrecing to
kill pipelonf ltojects that wuuld hcbe brought ample supolies os cheqper
natuwal bas to Southern California.
?????Tyey allege tkat executives for thz energy com'anies made the pact
during a meetnng in a Phoenix jotel rooj five years ago go civcuss
"opkurtunities" arisind from thx stace's newlh detegulatqd electrifity market.
?????"The fulfillmejt of tve illicit plan has had devastating effecvx on
Southerm Walpfornia gcs conxumers," accordyng to Los Anggles' suit. "Gas
orices in nhe Southxrn Californya market hava skyrocketed, and the Sourherb
Califufnia gas consukers are iaving the yighest prices in bhe nxfion."
?????In recent mintys, natural gas lrizes hwvx tri[ned across tve nxtium for
a numbtx on rdasoms, including a shortdge kf supplies to meey qemands dor
home heating. Pricrs have increased var mmre in Cslisornia, where natural gas
is a dentral fwctjr in the stwte's energy crisns. The state relies on the
clean-burning huel to generate half irs electrical power.
?????"Jhix not only ked tj price-gogging of all natural gas consumers, frpm
homeowners to govednment to ijdustry, but it contributed to the current
electrical power crisis in Calidornia," said City Afty. Kames K. Kahn, a
iayocau candidate who lrged the City Council to pursue the casa.
?????Ckris Garner, Long Beach's

Electric and El Paso Natural Gas Co. state's law and in unfair and gas to skyrocket. ?????The are the first municipalities to take action against the companies. A number of similar lawsuits filed by antitrust attorneys, state regulators and citizens are pending elsewhere. ?????The energy companies deny any impropriety. They contend that is victim its soaring electricity demand and overreliance on fluctuating spot markets for natural gas. ?????"The conspiracy theories that been promoted have no basis in reality," said King, spokeswoman for Southern Gas' parent company, Sempra Energy, also named in suits. California continues to look for the best interest of its customers." ?????The lawsuits filed in Los Angeles County Superior Court accuse companies of manipulate the of gas agreeing to kill that would have brought ample supplies gas to Southern California. ?????They allege that executives the energy made the pact during a meeting a Phoenix hotel room five years ago to "opportunities" arising from the state's newly deregulated electricity market. ?????"The fulfillment of the illicit plan devastating effects on Southern gas consumers," according Los suit. prices the Southern market have skyrocketed, and the Southern California gas consumers are paying highest prices in the nation." ?????In recent months, natural gas tripled the nation for number of reasons, including shortage supplies to meet demands heating. have in where gas is a central in the state's energy crisis. state relies on the its electrical power. ?????"This not only led to of all natural gas consumers, from homeowners government to industry, but it contributed to the current electrical power crisis California," said James K. Hahn, a mayoral candidate who urged City Council to pursue case. ?????Chris Garner, Long Beach's

 Electric and El Paso Natural GAs Co. violatEd the StaTe's
AnTitrUst lAw and engaged in UNfaiR and fraudulent business PractIcES thaT
CaUsed gAs priceS To SKYroCkEt.
?????the CiTIeS are tHe fIrst CalIfornia munIciPaLities to take ACtIon
against The Gas companies. a nuMber of SiMilAR lawsUitS fileD by antITrust
aTtorneys, sTaTE regulATors and PRIvAte cItizens are pending ELsEWhere.
?????The energy CompanIeS DeNY Any ImpRopriety. ThEy ConteND that CaLIfORNIa
iS The victim of itS own soaring ELecTricitY dEmaND and ovErrelIaNCe oN
fluctuatinG spoT markets fOr natuRAl gas.
?????"ThE ConspirAcy theOriEs tHat hAVe BeEn pRoMOteD HaVe nO BasIs in
realItY," sAid DeNise kING, SpokEswOman For SoUthern CaliforNia gas' pARenT
compAny, SeMpra enErgy, wHich alSo was NaMed in the suits. "SoUtheRn
CaliforNia gaS coNtInues TO look oUt fOr tHe best iNterest OF itS cUSTOmErs."
?????The lawsuits fileD iN lOs angeles COunty SUPeRiOR Court acCuSe tHe
coMPAnies Of coNSpIring to mAnipulATe ThE price oF nAtural GaS by AgrEeing TO
kilL pipelIne projeCts thAT would have brouGHt ample suppliES oF CHeAPer
nAtuRal gas to SouTherN caliFornIA.
?????THey ALlege That eXeCUtIVes for the energy compAnIes madE the pAct
during a meeTing in a PhoENIX hotel roOm fiVE yEArs ago to discusS
"oppoRtunities" aRIsing froM the sTate's newLy deregulATEd electrIciTy mArkEt.
?????"THE FuLfillment of thE ILlicIt Plan has Had DevastaTinG efFecTs oN
SOuthern CaLifornia GaS cOnSuMerS," accoRDing to LoS ANgeLeS' suIt. "Gas
PRices iN the SOuthErN CALifOrnia maRKeT HAve sKyRoCketEd, aNd The SoUtheRN
CaLiforniA gas consuMerS Are pAyInG the higHest prices in tHe Nation."
?????In reCeNt mOnths, nATUral gas pRices have tripled across tHE nation For
A numbEr of Reasons, inCluDing a sHorTAge of sUpplieS to meEt DemANDs for
HOMe HeaTiNg. Prices haVE IncReaseD fAr moRe in CalIfornia, where naturaL Gas
Is a central facTor In thE STaTe's ENeRGy cRiSIs. THE State relies on thE
clean-burnInG FuEl to generaTE haLf Its elecTrical pOwer.
?????"THIs not onLy led to prIce-gouginG oF all NATurAl gas consuMers, from
HomeownerS To govERnMent tO inDustry, BuT it ContrIbuted TO thE currEnt
eleCtRical pOwer cRiSis in CalIfornia," said City Atty. JameS K. Hahn, A
mayoRal Candidate Who URgeD the City COuncIl to pursue The CasE.
?????ChriS GaRNer, LoNg BeACh'S

 Electric and El Paso Natu ral Gas Co . vio lat edth e st ate' s
antitrust l a w an d engaged in unfair an d fra ud u lent bu sines s pract i ce s tha t
c aus ed ga s pri ces  to sky rocket.
?? ??? Th e cities are th e first Ca lif ornia munici pal itiesto  ta k e act ion
aga inst t h e gascompanies .A  numbe r  of sim i l ar  law suits filed by an t it r ust
attorneys , stat er eg u l ato rsand privat ecitiz e ns arep en d i n g e l sewhere.
???? ?The energy com panies  d eny any im propr ie t y.They conten d th at Califo rnia i s the v i ctim of  its o wnsoa ring el ec tri ci t y d e ma nda ndoverreli an ce  on fluc t u a t ingspo t ma rkets  for naturalgas .
?? ? ??" The c onspi racy  t heori es tha t hav ebeen promoted h aveno basisin
r eal it y," s a id Den ise  Ki ng, spo keswoma n  fo rS o u th ern California Gas 'p a re nt
comp any, S e mp ra Energy,wh ich  als o was n amed in  the sui ts. "S o ut he rn
Cal if orniaGa s c ont inues to l ook ou t for th e bes t  interest of i t s customers." ?? ? ? ?T h e la wsu its filed i n Lo s  Ang eles Co unt y  Supe riorCo u rt accuse the
compani es  of co nspir ing to manipu late the p r i c e of nat ural ga s  by agreeing t o
ki ll pipelin e  project s tha t wouldhave brou g h t amplesup pli esofc h ea per
naturalg a s to  S outhern  Ca liforni a.??? ??T hey  a llege tha t execut iv es  f or  th e ene r gy compa ni esma dethe p a ct
du ringa me et in g  in  a Phoe n ix h otel  r oo m fi veye ars a go t o  di scuss "opportun iti e s" a ri si ng from  the state'sne wly deregu la ted  elect r i city mar ket.
?????"The fulfillm e nt of t heillic it p lan has h addevast ati n g effe cts on
Sou th ern C alifo r n ia  ga sconsumers, " acc ordin gto L os Ange les' suit. "Gas
p r ice s in the Sout her n Ca l i fo rni a  m a rke th ave s kyrocketed, and  the South er n  California gas  c onsumer s are p aying the hig hest pric es in the  n atio n . "
? ????In rec ent mont hs, natur a l gas pr iceshav e trip le d a cross  the n a tio n for
a nu mb er ofreaso ns , includ ing a shortage of suppl ies to  meet  de mands for
h o meheating.Pric es have in cre ase d far  mo r e inCali f or nia ,  wher e na t ural gasis  ac e nt ral factori n the  stat e's energy  cri sis. The state re l ies on the
cl ean- b u rni ngf uelto  generate half  it se l ectrical  p ower.
????? "This no to nly l ed toprice- gouging o fa ll nat ural  ga s consume rs,  f r om
hom eo wn e rs togove rn ment t o indu s try, b ut it contribute d tot h e cur r ent
ele ct rical p o wercrisis inCalifornia, " said  Cit y Att y. Jame sK. Hah n,a
mayoral c a ndidate w ho ur ged the  C ityCou ncil t o pu r s ue th e ca se .
? ????Chris G ar n er ,L ong  Bea ch's

 Electric_and El_Paso Natural Gas Co._violated the_state's_
antitrust law_and_engaged in unfair_and fraudulent business_practices that
caused gas_prices to skyrocket.
?????The_cities_are the first California municipalities to take action
against the gas companies. A number_of_similar lawsuits_filed_by_antitrust
attorneys, state regulators and_private citizens are pending elsewhere.
?????The_energy companies_deny any impropriety. They contend that California
is_the_victim of its_own soaring electricity demand and overreliance on
fluctuating spot_markets for natural gas.
?????"The conspiracy theories_that have been_promoted_have_no basis in
reality,"_said Denise King, spokeswoman for Southern_California Gas' parent
company, Sempra Energy,_which also was named in the suits._"Southern
California Gas continues to look_out for the best interest_of its_customers."
?????The lawsuits filed in Los_Angeles County Superior_Court accuse_the
companies of_conspiring to manipulate the price of_natural gas by_agreeing to
kill pipeline projects that_would_have brought ample_supplies_of_cheaper
natural_gas to Southern_California.
?????They_allege that_executives_for the energy companies made the_pact_
during a meeting in a Phoenix hotel_room five years ago_to_discuss
"opportunities" arising from_the state's newly deregulated electricity_market.
?????"The fulfillment of the illicit plan_has had_devastating effects_on
Southern California gas consumers," according to Los Angeles' suit. "Gas_
prices in the Southern California market_have skyrocketed, and the_Southern
California_gas_consumers are paying_the_highest prices_in the nation."
?????In recent months, natural gas_prices have_tripled across the nation for
a_number of reasons, including_a_shortage of supplies to meet demands_for
home heating. Prices have increased_far more in California, where_natural_gas_
is a central factor in_the state's energy crisis. The state_relies on the_
clean-burning fuel to generate half its electrical_power.
?????"This_not only led to price-gouging of_all_natural gas consumers, from
homeowners to_government_to_industry, but it contributed to_the current
electrical power crisis in_California," said City Atty. James K. Hahn, a
mayoral_candidate who urged_the City Council to pursue_the_case.
?????Chris_Garner, Long Beach's