
Date: Wed, 23 May 2001 07:57:00 -0700 (PDT)
From: kristin.walsh@enron.com
To: john.lavorato@enron.com, louise.kitchen@enron.com
Subject: California Update #2, 5/23/01
Cc: christopher.calger@enron.com, phillip.allen@enron.com, tim.belden@enron.com,
jeff.dasovich@enron.com, chris.gaskill@enron.com,
mike.grigsby@enron.com, tim.heizenrader@enron.com,
vince.kaminski@enron.com, steven.kean@enron.com,
rob.milnthorp@enron.com, kevin.presto@enron.com,
claudio.ribeiro@enron.com, richard.shapiro@enron.com,
james.steffes@enron.com, mark.tawney@enron.com,
scott.tholan@enron.com, britt.whitman@enron.com,
lloyd.will@enron.com
Bcc: christopher.calger@enron.com, phillip.allen@enron.com, tim.belden@enron.com,
jeff.dasovich@enron.com, chris.gaskill@enron.com,
mike.grigsby@enron.com, tim.heizenrader@enron.com,
vince.kaminski@enron.com, steven.kean@enron.com,
rob.milnthorp@enron.com, kevin.presto@enron.com,
claudio.ribeiro@enron.com, richard.shapiro@enron.com,
james.steffes@enron.com, mark.tawney@enron.com,
scott.tholan@enron.com, britt.whitman@enron.com,
lloyd.will@enron.com

Republican Plan B
A source reports the following regarding the Republican Plan B proposal:
? Encourage direct access for consumers.  (The problem with this, however, is
that these direct access deals would not have a dedicated rate component, and
too many might undermine the cash flow and credit worthiness of the bonds.)
? The Republicans will "suggest" that generators take a 30% haircut.  "We
think this is doable."
? The Republicans strongly oppose purchasing the transmission assets.
? Restore the invetor-owned utility model for generation.  They would
establish a dedicated rate component for construction of native generation by
the utilities.  They would grant ratepayers equity interest in these plants.
? Resolve the QFs' financial issues.

Assemblyman Cox commented afterward that the Republcans have been trying to
work on a bilateral basis with the Democrats on these issues, but they feel
"frozen out."  Moreover, he senses the Democrats moving back toward having an
option to purchase SoCal's transmission assets, which the Republicans oppose.

Democratic Plan B
A source reports the following regarding the Democratic Plan B:
? The Democrats are formulating a Plan B that incorporates the Governor's
MOU, the Nation Plan B and other ideas that they have.  This plan reportedly
has not yet been introduced into the legislature yet because it is still
being finalized and the Democrats are not certain that it will work.
Specifically, the option to purchase SoCal's transmission assets is
reportedly still being debated.  Some Democrats reportedly believe that this
may be unnecessary.
? The details of the plan are reportedly as follows:
