IN: Documentum just called back. They said they manually reviewed everything that has not yet been scanned into the system and cannot find any Agreements or Amendments for New Power Company. I have checked with Karen Cordova since her initials are on the document to see if possibly she had any extra documents, and she does not. I doubt we will be able to get an executed copy of this Amendment. Christy

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OUT: New Power Company Amendment

IN: Tanya: I left you a voice mail earlier this week on the single outstanding issue: paragraph (B) of our setoff language. This provision allows the nondefaulting party to withhold any payment it might owe to the defaulting party under the master until the nondefaulting party can be certain IN ITS REASONABLE DISCRETION that ANY other payments owed to it (under ANY other agreements between the parties) by the defaulting party have been paid. Cargill does not want to "comingle" its business. Remember, we have already given in on "affiliate setoff". [the lawyer never raised the paragraph (B) issue until this week!] Also, Cargill has requested that we change our Credit Support Amount definition (but I provided them with an explanation) AND Cargill has decided to issue transferable L/C's. Please let me hear from you so that we can finalize. I do not know if this is a deal breaker.

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OUT: Cargill, Incorporated

IN: Karen: See highlited section of story below. PG&E's got it right. Recall that DWR was only buying power that it determined was "priced reasonably." Consequently, the net short wasn't getting picked up. That meant that the ISO would have to go to the real-time market to close the gap. The ISO would then charge the utilities for the power purchased. Recall that Bob Glynn referenced the $300 MM/month that continued to pile up on PG&E's balance sheet as one of the several reasons that PG&E put itself into bankruptcy. Now that PG&E's in bankruptcy, the state is now responsible for the full net short, and can't continue to sluff it off onto PG&E's balance sheet. So it's therefore no surprise that the State's daily bill for power purchases has increased dramatically---just not for any of the bogus reasons cited by

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OUT: CA legislature in doubt

IN: All, Further to your recent discussions surrounding the ENA Origination Track I will shortly be scheduling an interview date for you to interview recommended candidates. You have already received the attached list of suggested candidates and as I understand it you have no comments on these individuals thus far. In order to match the success of the ENA Trading Track it requires your 100% commitment and participation in the following areas: 1. Interviewing 2. Training 3. Mentoring 4. Promotion of the Track I will contact each supervisor of the attached list of candidates to gain further feedback on these candidates, prior to contacting them, and ensure their respective buy-in. If you have any questions please call me. I look forward to working with you on this Track. Kind regards,

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OUT:
ENA Origination Track