Steve:

I spoke with Sam Behrends, Adam Wenner (FERC attorneys) and Joanne Rutkowski 
(SEC attorney) about your question on a third quarter close.   On the FERC 
side, protests to the merger application are due on May 3.  We are expecting 
protests, but until we see the extent of the opposition, its hard to estimate 
the likelihood of a July order.  However, we all agree that based on the 
facts of the merger and the types of protests we expect to see, a July order 
is within the realm of possibility.  FERC just issued an order approving the 
PECO/ComEd merger earlier this week.  The order was issued 142 days after the 
merger application was filed.  If FERC does not find the opposition to the 
PGE/Sierra merger overwhelming, it could issue an order before FERC goes on 
August recess (this would also allow FERC to meet its 150 day target for 
acting on merger petitions).  

Even if a FERC order is issued by the end of July, we will still need SEC 
approval.  (The SEC will not issue its order until FERC has approved the 
merger.)  Joanne Rutkowski thinks that although a September order from the 
SEC is possible, it is not likely, due mainly to the fact that several other 
big merger proceedings (NSP, AEP, Energy East, ComEd) are in the queue ahead 
of the PGE/Sierra merger awaiting SEC approval.  

With regard to the Hart-Scott-Rodino filing with DOJ, DOJ approval is 
normally not a problem, but attorneys with DOJ have expressed some concern 
that the merged Sierra/PGE company could have potential market power in 
transmission going into southern California.  DOJ has submitted a request for 
information to Sierra and PGE, and we are working on the response to that 
request now.  Our attorneys and Sierra's attorneys do not think at this point 
that obtaining DOJ approval of the merger will be a problem, but until we 
receive final DOJ sign-off on the merger, DOJ review will continue to be an 
open issue.  We should have a better idea of whether DOJ is going to raise 
any significant problems with the merger within the next couple of months.

I see that Paul sent you a separate email on the status of the state 
proceedings.

I hope this is helpful.  Please call me if you have any questions.


Sarah






Steven J Kean@EES
04/12/2000 08:02 PM
To: Paul Kaufman@ECT, Sarah Novosel/Corp/Enron@Enron, Richard 
Shapiro/HOU/EES@EES
cc:  

Subject: Granite Update

What are our chances of final approval at FERC at the JUly meeting.  Jeff 
still thinks this is a third quarter close.  Do we have any chance of making 
that happen?
---------------------- Forwarded by Steven J Kean/HOU/EES on 04/12/2000 06:59 
PM ---------------------------


Paul Kaufman@ECT
04/12/2000 09:02 AM
To: Mitchell Taylor/Corp/Enron@ENRON, awalia@ei.enron.com, Ann 
Ballard/Corp/Enron@ENRON, kfullenweider@velaw.com, Steven J Kean/HOU/EES@EES, 
Richard Shapiro/HOU/EES@EES
cc: Sarah Novosel/Corp/Enron@Enron 
Subject: Granite Update

Attached is the April 12 update.  Also attached is an electronic copy of a 
prior update faxed last week.