IN: Paul Kaufman phoned with the following brief report from the Western Governor's Association "Energy Summit" that took place today. Paul will follow up with more detail when he gets back to a computer. The governors issued the following recommendations: California should immediately implement FERC's order issued last Friday and aggressively pursue all available DSM and conservation opportunties. The Western region should likewise be much more aggressive in identifying and implementing DSM and efficiency opportunities. Increase supply as soon as possible. FERC should do an investigation into the potentially negative effects that price caps can cause in the industry. FERC should add to its investigations an investigation into what caused the price spikes in the first week of December. Work with the Bush transition team to make sure that someone from the new administration is focused on the issue. Hoecker said that he is not inclined to impose a region-wide cap until California takes the actions it needs to take to help alleviate the situation (e.g., reforming regs governing utility forward contracts). Jeff

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OUT: Summary of Western Gov's Energy Summit

IN: The PG&E basis position in TDS does not match the FEB/MAR position. The Baja spread was executed as a NOV-MAR position months ago. The only real changes were to Socal basis over time. There is no telling when this might have changed in error. Will you please research the position to see when this position was reduced. I am guessing that a park and loan was executed by Frank Ermis at some point and the basis risk was allocated to GD New by mistake. Thanks,

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OUT: PG&E Citygate Basis position for January

IN: For completeness, Attached are the operational documents that reflect the Gallup Amendments. The Gas Price Letter reflects TW's agreement to provide incremental gas volumes. The confirms to the existing Enfolio deals reflect the value for the gas which flows from Enron North America Corp. to Enron Compression Services Corp. and finally to the LLC. The confirms done with the original Gallup Transaction are not being amended. New confirms are being added to handle the incremental gas from TW. Please let me know if you have any questions.

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OUT: Enfolio Confirms

IN: Sorry for losing my cool with you earlier. I have had a difficult few weeks with some people in your group and took some of my frustration with them out on you. Thanks for your help and thanks for not ripping on me too hard.

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OUT:
Apology