To help focus our discussion, here is a sample clause (from the McDonald's 
contract):

     "Taxes and Fees.  Allocation and Indemnity for Taxes.  Seller shall pay 
all Taxes applicable to Energy prior to delivery to each Facility.  Buyer 
shall pay all Taxes applicable to Energy at and after delivery . . . , 
including without limitation Taxes imposed on the purchase or sale of Energy, 
on Buyer's possession, consumption, use or disposition of Energy, or on any 
payment by Buyer to Seller hereunder.  "Taxes" means all taxes (except taxes 
based on net income), fees, charges, surcharges or royalties, and any 
interest and penalties thereon."

Please also consider the following variations:  

     1.  What if clause does not include first sentence so that all "Taxes" 
are allocated to Buyer?

     2.  What if the definition of "taxes" is defined as follows:

     "Taxes" means any and all new or existing governmental or 
quasi-governmental taxes, assessments, levies, duties, fees, charges and 
withholdings of any kind or nature whatsoever and howsoever described, 
including . . . generation, . . . regulatory, . . . energy, consumption, . . 
. ."

     3.  What if the definition also included "energy resource surcharges"?  
(UC/CSU)

     4.  What if the definition also included "energy procurement charges"? 

 -----Original Message-----
From:  Williams, Robert C.  
Sent: Tuesday, May 22, 2001 8:42 AM
To: 'mday@gmssr.com'; Steffes, James; Dasovich, Jeff; 'jklauber@llgm.com'
Cc: Sunde, Marty; Cooley, Jan; Sharp, Vicki
Subject: Surcharges

Jan will be setting up a call today to discuss EES' ability to pass the "3 
cent surcharge" through under its contracts.  Marty would like our advice on 
this today, so I hope you are available.  Thanks.  

P.S.  Vicki and Marty, please let Jan know if you wish to be included in the 
call or just want the result.