FYI.  As you know, we're attempting to find a solution to the "reasonable 
review" morrass that's impeding utility forward contracting.  For that 
effort, we've worked with the Portland desk to pull together some educational 
materials to use with a subset of California stakeholders that's trying to 
devise a solution to California's melt down.

The attached graphs show 3 scenarios for the state as a whole.  
1) "do nothing"  
2) for 60% of IOU short position, split the amount 50-50 and 1cover half the 
amount with 10-year  fixed priced power and the other half with 5-year fixed 
priced power.
3) create a portfolio with a) 25% of short position covered by 10-year fixed 
priced power, b) 20% of short position covered by 5-year fixed price power, 
c) 15% covered by 1-year fixed price power, d) 20% covered by May-Sept 
fixed-price power, and e) 15% from the PX.  

The term of each scenario is 5 years.

Because each is priced off our our curves, the average price is roughly 
equivalent for each of the three portfolios.  However, the graph shows (as 
one would expect) that exposure to price volatility is significantly higher 
under scenario 1 compared to 2 and 3.

The goal is to use the illustrative scenarios to persuade the industry that 
in the short run (i.e., immediately) the utilities should be permitted to buy 
a modest amount of power under 5 and 10 terms, and those purchases (if 
undertaken using a "DealBench-like" tool) ought to be "per se" reasonable.

If anyone has questions about it, or would like to discuss further, give a 
call at 415.782.7822.

Best,
Jeff
----- Forwarded by Jeff Dasovich/NA/Enron on 12/12/2000 12:54 PM -----

	Stephen Swain@ECT
	12/12/2000 12:38 PM
		 
		 To: Jeff Dasovich/NA/Enron@Enron
		 cc: 
		 Subject: Portfolio file for distribution