FYI

	Credit Suisse First Boston <Paul_Patterson@xmr3.com>
	01/25/2001 07:33 AM
		 
		 To: chip.schneider@enron.com
		 cc: 
		 Subject: Governor Gives Limited Information on Auction


Credit Suisse First Boston
Paul Patterson
Good morning,
Here are some of the recent developments in the California power crisis:
? Yesterday evening, Governor Davis revealed preliminary results of the DWR's 
auction for long-term forward power contracts. 39 bidders participated, with 
an average weighted bid of $0.069 per kWh excluding "Super Peak" periods.
? However, the governor did not discuss the quantity of power actually bid, 
the breakdown between offers for base-load, peak, and off-peak power, or 
provisions for ancillary services.  In our opinion, these are exceedingly 
important issues that need to be known to adequately determine the "success" 
of any auction.
? Republican Assembly leader Bill Campbell is reportedly working on an 
alternative bill to Speaker Hertzberg's proposed bill. Reportedly Campbell's 
bill would call for the state to arrange long-term contracts for the 
utilities, in exchange for the option to purchase ownership stakes.
? We believe that the actual results of the long-term contract auctions 
should be a key point of focus for investors and may help determine what 
headroom, if any, the utilities could have. We believe that investors should 
remain aware of the high risk still associated with shares of PCG ($9.94, 
Hold) and EIX ($9.63, Hold).

Paul Patterson, 212-325-5876
Neil Stein, 212-325-4217
Wen-Wen Chen, 212-538-0223
Emily Lao Chua, 212-325-1982

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