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Subject: Conversation with Marc Hellman

I spoke at some legnth with Marc Hellman this morning.  He reported
appreciating the meeting but continuing to have concerns.  Generally, I heard
the following:

1.  Marc's not sure what Sierra's strategy is.  It seems unclear given all of
the uproar in Nevada.  Mostly, he isn't hearing that it is the same as what he
perceives PGE's strategy to be: focus on the local service territory, serve
customers well, and see where that takes you.  While I assured him that Sierra
was committed to a T&D business (witness the genreation sale), I think there
is more to do in this regard.

2.  Finance issues remain very high.  Staff is concerned Sierra is (or will
be) strapped for cash and will drain off $$ from PGE.  This was partly behind
his remark re service quality standards;  Those are not much better than the
paper they are written on unless the utility believes it is its business
interest to comply.  The fines alone won't do it.  Better minds on finance
than mine can probably figure out creative ways to get at this but it is
probably not enough to say that banks are willing to lend the $$.  

3.  I pushed again for a data request to Sierra for your side of the orders
etc. Staff has found that concern them.  Marc promised to act on this.  I took
a few minutes to tell him a bit about Alturas, mostly to say that he would
want PGE to be as aggressive if we were facing similar issues.  This will be a
critical response.

4.  At one point, he seemed to suggest that Sierra could make depositions of
the Nevada Staff happen.  I told him in no uncertain terms that that was up to
the Commission, not Sierra.  Nonetheless, it looks like these won't happen. 
If you all think that a deposition of the head Staff down there could HELP,
you probably need to pull whatever strings you can to make it happen.   
Meanwhile, we know that Staff's attorney (Paul Graham) has advised them they
cannot rely on annecdotes and must use orders if they don't have depositions.

4.  Marc indicated that, from a quick review of data request responses, he
didn't think Sierra was as on top of service quality as we were, particularly
not in the south, and didn't have as good a working relationship with the
Commission in this area.  Is this perception correct and, if not, what can we
pull out to show it is not?  Marc did recollect Malyn saying that the most
recent customer survey placed them very high and he was going to go look for
the response with that survey.

5.  Staff is willing to attempt to narrow the issues and not go for "big bang"
testimony in the first round (or at least Marc says to be) but efforts to
narrow issues will have to end the 1st or 2nd week of May so that they have
time to develop testimony.  In the meantime, he is checking for me whether
4/21 would work for a working/settlement session.  It would be the afternoon -
I was wrong about the 1149 workshop - that is in the morning.

6.  Marc remarked that it was too bad PGE was such a good utility.  I took the
opportunity to poke him a bit that it would be perverse indeed to allow a
"poor" utility to follow its shareholders wishes (i.e. approve PacifiCorp's
merger with Scottish) but deny a "good" utility that ability.  He seemed to
get the point.  I will work this with Bill as well.  

I'm scheduled with CUB today and will probe for their state of mind and will
also keep trying to get a hold of Ken Canon to see where he is.  Hopefully we
are on track for the plans we made for 4/21 and can make some progress then.