Steve - regarding the possible delay of market opening in Nevada and impact 
on PGE sale -

Sierra has fuel cost passthrough in its restructuring settlement.  
If market opening is delayed, there may be an impact on the settlement. 
If the settlement falls through, Sierra may lose fuel cost passthrough.  
If Sierra loses fuel cost passthrough, they may lose financial stability.  
This would not play well in Oregon. 

See Paul's comments below for a more thorough description.
---------------------- Forwarded by Harry Kingerski/HOU/EES on 09/15/2000 
03:30 PM ---------------------------


Paul Kaufman@ECT
09/15/2000 01:10 PM
To: Harry Kingerski/HOU/EES@EES
cc:  
Subject: Nevada

Sorry for my confusion.  Here's the bottom-line.

Sierra and NPCo (collectively "Sierra") entered into a global settlement with 
other stakeholders in Nevada that among other things:  (a) set the open 
access dates for various customers (the earliest of which is 10/1/00 for 
NPCo's largest customers); and (b) allow Sierra and NPCo to seek monthly 
adjustments to their rates for fuel and purchased power expenses; and (c) 
made various payments to Sierra for implementing restructuring; and (d) 
provided NPCo with a "Base Tariff Energy Rate" increase of about 6.5%.
PUCN approval of the settlement was key to resolving the Oregon PUC's 
concerns with Sierra's financial stability.  
Nevada Governor Guinn and PUCN Chairman Soderberg met two days ago to discuss 
the settlements and open access dates.
 The day prior to this meeting the Democratic leadership of the legislature 
issued a joint statement condemning the settlements and restructuring.
If Governor Guinn acts on restructuring or the settlements he could unwind 
the settlements.  If the settlements are unwound, there would likely be 
collateral damage in Oregon.  We are expecting OPUC action no later than 
October 24.  There are also agenda meetings scheduled for September 29 and 
October 10.
In meetings with the PUCN Commissioners yesterday, there was little if any 
concern that the Governor will act.  However, there was substantial concern 
that the legislature will get in the way and that public pressure is 
mounting.  
I agree with this assessment.  It is unlikely that the Governor will act 
without agreement from those parties (i.e., the consumer advocate and the 
resort association) that negotiated the settlements.
Further, Sierra's right to seek monthly adjustments is statutory and 
(arguably) available to Sierra regardless of the rate freeze imposed by SB 
438 (enacted in 1999).
Nevada, however, is an odd place and odd things do happen.  Further, it is 
beyond question that the Nevada legislature will take action on restructuring 
next session.  
Note, further, that if the legislature does take action: (a) the Governor can 
veto; (b) such a veto will be very, very unpopular; (c) Governor Guinn does 
not want to be a one session Governor; and (d) the Democrats may take control 
of the legislature and state--given politics in general.