FYI.

Jim

----- Forwarded by James D Steffes/NA/Enron on 03/14/2001 09:01 AM -----

	Chip Schneider/ENRON@enronXgate
	03/14/2001 08:42 AM
		 
		 To: Rick Buy/ENRON@enronXgate, David Gorte/ENRON@enronXgate, William S 
Bradford/ENRON@enronXgate, Christopher F Calger/PDX/ECT@ECT, W David 
Duran/HOU/ECT@ECT, Terry W Donovan/HOU/ECT@ECT, George 
Schaefer/HPL/Enron@Enron, Greg Blair/Corp/Enron@Enron, James D 
Steffes/NA/Enron@Enron, Alan Comnes/PDX/ECT@ECT
		 cc: 
		 Subject: FW: EIX, PCG: Edison Fights Lien Request; Conservation Measures 
Introduced


The tail is beginning to wag the dog.  Although the QFs represent only about 
3000MW of capacity, the gas (and then coal) QFs have the least ability to 
withstand a further delay in payment, given their relative lack of liquidity 
and high level of fixed obligations (O&M, debt) and unreimbursed fuel 
expenses.  The legislature needs to move quickly to stem the tide.

 -----Original Message-----
From:  Paul Patterson <Paul_Patterson@xmr3.com>@ENRON 
[mailto:IMCEANOTES-Paul+20Patterson+20+3CPaul+5FPatterson+40xmr3+2Ecom+3E+40EN
RON@ENRON.com] 
Sent: Wednesday, March 14, 2001 6:37 AM
To: Schneider, Chip
Subject: EIX, PCG: Edison Fights Lien Request; Conservation Measures 
Introduced

Credit Suisse First Boston
Paul Patterson
Good morning,
-Yesterday, Edison International indicated that Caithness, a QF, is seeking a 
lien on an Edison asset that would give it a secured claim in the event of 
bankruptcy. Edison stated that it would fight any U.S. court decision in 
favor of Caithness, which could come as early as tomorrow.
-Because of their dire financial situation, we believe that QFs like 
Caithness pose the greatest risk of filing an involuntary bankruptcy petition 
against PG&E and Edison International.
-Last week, state legislators modified SB47X, the draft bill to lower QF 
prices, in an effort to speed its passage. Reportedly, legislators are trying 
to lower average QF prices to $0.079 per kWh. The CPUC is unlikely to decide 
on revenue allocation until the bill is passed.
-This week, California moved forward with demand- and supply-side programs, 
including the governor,s plan to give a 20% rebate to customers that reduce 
power consumption by 20%. Also, three Western governors made another request 
to FERC to cap wholesale prices.
-Although Governor Davis and the utilities continue to negotiate a utility 
recovery plan, it is unclear if the state legislature will pass such a plan. 
Therefore, we suggest that investors avoid EIX ($14.88, Hold) and PCG 
($14.24, Hold), unless they have a high tolerance for risk and volatility.

Please call us with any questions you may have.
Regards,
Paul Patterson, 212-325-5876
Neil Stein, 212-325-4217
Wen-Wen Chen, 212-538-0223
Emily Lao Chua, 212-325-1982

If you would prefer not to receive further messages from this sender, please 
click on the following link and confirm your request:
Mailto:K-2-62573-617300-2-151-US2-AB27313B@xmr3.com
You will receive one additional e-mail message confirming your removal.


 - ppp031401.pdf