Roger, 
Thanks for the input.  It does need some refinement.  For that matter, do you 
consider the definition of "CTC charges" adequate?  Andy Wu is going to be in 
San Francisco on Thursday, and has agreed to discuss the language with Susan, 
Jeff and/or Mona in Gov't Affairs.

Ed





Roger Yang
10/24/2000 01:19 PM
To: Edwin Essandoh/HOU/EES@EES
cc: Susan J Mara/SFO/EES@EES, Jeff Dasovich/NA/Enron@Enron, Mona Petrochko 
Subject: Re: Contract for Gart Sports  

Attached is a version of AB1890.  I refer you to pages 31 through 36 which 
discusses Sections 367 through 368.

Residual CTCs may have two connotations.  The first connotation is the type 
of CTC recovery during the rate freeze period.  For example, the California 
IOUs bill customers based on frozen rates.  From those frozen rates, delivery 
and procurement costs are subtracted.  What is left over residually is the 
recovery of CTCs.  The interpretation that you are implementing is the CTCs 
that are recovered after the frozen rate period.  Due to these two possible 
interpretations, I believe that either the term "residual CTCs" needs to be 
defined or a better definition of the "Pre-Rolloff Period" and "Post-Rolloff 
Period."

After reading the cites that I referred to above, if you believe the 
definition incorporates the guidelines implemented through Sections 367 and 
368, then I will be comfortable with the current language.  My concern was 
that the CPUC may adopt changes to the recovery plan per Section 368 that 
would disadvantage ESPs and DA customers, and only benefit and protect 
Standard Offer customers.  Pursuant to Section 368, the IOUs implemented cost 
recovery plans to recover costs that meet the criteria in Section 367.  I am 
worried that customers may be confused by plans that may be implemented in a 
the Post-Rolloff periods that may look like the original cost recovery plans 
(i.e. SDG&E's rate cap).

You can contact Susan Mara, Jeff Dasovich, or Mona Petrochko in Government 
Affairs for better clarification if needed.





Edwin Essandoh
10/24/2000 09:21 AM
To: Tim Carter/HOU/EES@EES
cc: Roger Yang/SFO/EES@EES 
Subject: Re: Contract for Gart Sports  

The reference to "but not including any extension pursuant to Section 
3(g)(ii)" should have been deleted from the contract.   It was in a previous 
contract which provided for an extension period, but is not applicable here.  

Tim:  We could forward corrected page to customer, but I agree that it may 
not be necessary as it does not add anything but may unnecessarily alarm 
Customer.

Roger:   Can you suggest a definition you'd be comfortable with, which 
references the code section  - I have not seen the code, but your point is 
valid (although I was under the impression "residual CTC's" is understood in 
the industry, and the second issue (as raisesd by Tim previously) would be to 
maek sure an amendment to AB 1890 does not extend the Pre-Rolloff Period.


My initial suggestion would be along the lines of:

    &Pre-Rolloff Period8 shall mean, with respect to each Facility, the 
period of time commencing with the 
    Effective Date and ending on the last day the UDC for such Facility is 
authorized to collect CTCs (other than residual CTCs 
    it remains authorized to collect after said date) in its service 
territory under AB1890 (as in effect on the Effective Date), but in      any 
event not later than March 2002.

Ed
    










	Enron Energy Services
	
	From:  Tim Carter                           10/24/2000 10:15 AM
	Phone No: tel:  713-853-5496
  fax:  713-646-3284
  pgr:  888-620-2350
	



To: Edwin Essandoh/HOU/EES@EES
cc:  
Subject: Contract for Gart Sports

Ed, please see comments below regarding the Gart Sports contract.  How should 
we handle?
---------------------- Forwarded by Tim Carter/HOU/EES on 10/24/2000 10:15 AM 
---------------------------


Roger Yang
10/23/2000 04:19 PM
To: Tim Carter/HOU/EES@EES
cc: Scott Stoness/HOU/EES@EES 
Subject: Re: DASH for Gart Sports  

Tim,

Thanks for forwarding me the contract.  In Section 3(a), there is a 
definition for "Post-Rolloff Period" which states, "shall mean, with respect 
to each Facility, the period of time commencing with the day after the last 
day of the Pre-Rolloff Period.....but not including any extension period 
pursuant to Section 3(g)(ii).  The problem is that I cannot find Section 
3(g)(i) in the contract.

Further, the definition of "Pre-Rolloff Period" which states, "...ending on 
the last day the UDC for such Facility is authorized to collect CTCs (but 
excluding residual CTCs) in its service territory under AB1890," is 
ambiguous.  There are two possible solutions.  One possible solution is to 
define the term "residual CTCs".  Another solution is to redraft the language 
to be more specific referencing the PU Codes Section 367 and 368 enacted by 
AB1890.

Roger





	Enron Energy Services
	
	From:  Tim Carter                           10/19/2000 02:21 PM
	Phone No: tel:  713-853-5496
  fax:  713-646-3284
  pgr:  888-620-2350
	



To: Roger Yang/SFO/EES@EES
cc: Scott Stoness/HOU/EES@EES 
Subject: Re: DASH for Gart Sports  

You are correct regarding the impact to the mark if the transition period 
ends differently than we expect.

The contract specifies that the transition period ends in accordance with 
AB1890, as noted in the attatched Gart contract.  We have, however, 
instructed the attorney to change the contract template to also specify that 
under no circumstances is the transition period to be later than 3/2002.  I 
have not received a version of that contract.





Roger Yang
10/19/2000 04:10 PM
To: Tim Carter/HOU/EES@EES
cc: Scott Stoness/HOU/EES@EES 
Subject: Re: DASH for Gart Sports  

I like this deal structure because it provides a hedge for our current book 
in California.  Correct me if I am wrong, but if the end of the transition 
period ends earlier than priced, then our mark for this deal should increase 
because we are providing the discount off the frozen bundled price for a 
shorter period than expected.  Conversely, if the rate freeze ends later than 
how we priced it, then the mark for this deal will decrease because we will 
have provided a discount off of the frozen tariff for a period longer than we 
had priced.  This impact on the mark is converse to the current risk profile 
of our California portfolio.

My main concern is the contract language on how the transition period is 
defined.  It is important that this language is crafted to leave no loose 
ends.  Can you please send me a copy of the clauses that define the end of 
the transition period, which is a critical date because the delivery risks 
hinge on that definition.  I just want to do some preventative maintenance, 
such that we do not enter contract dispute over this issue in the future.  
However, we may proceed signing this contract if necessary.  I would just 
like to follow up on the issue for future deals if it is too late for this 
deal.  As a matter of fact, I would not even try to change the contract 
language on this deal because the customer may become overly concern.

I recommend that Scott signs the DASH for Gart Sports for now.

Roger





	Enron Energy Services
	
	From:  Tim Carter                           10/19/2000 08:16 AM
	Phone No: tel:  713-853-5496
  fax:  713-646-3284
  pgr:  888-620-2350
	



To: Roger Yang/SFO/EES@EES
cc:  
Subject: DASH for Gart Sports

Roger, I think Valerie tried to fax this to you.  Here's an electronic copy.  
Take a look, if you have any questions, please call me.

Thanks,
Tim