Steve, Dan W. et al:

(Dan, can you make sure these charts get to Steve?)

Attached are some updated charts that are more accurate with respect to 
Enron's current estimated cost of peakers in California.  Costs are up and, 
to the extent you use these types of charts, you should use these updated 
ones.  If you do not, this information will get attached somehow to our 
November 22 comments.

In general, the higher the cost to build, the worse a price cap looks in 
terms of disincentives to pursue a project.

Background on the Change:

Our origination people  (Chris Calger)  inform us that building a peaker 
plant in California is now more expensive than Enron estimated back in 
August.  These "August" numbers were circulated in a presentation by Tim 
Belden and were  filed with the FERC.

The peaker charts to reflect a  25% increase in capital costs.  An increase 
in costs is due to things such as: 

 longer development time (Cal ISO has dragged out the schedule)
 local permitting constraints (sound abatement, strict construction schedules)
 labor costs in California
 emission offset credit costs are higher than previously expected

These higher costs, along with the uncertainty created by price caps, has 
caused Enron to stop pursuing certain peaker, including Pleasanton.  Although 
price caps increases uncertainty and increases the cost of capital, I have 
not updated the charts to reflect a higher cost of capital as a conservatism.

Alan Comnes