-----Original Message-----
From: 	Courtney Cleman <Courtney.Cleman@morganstanley.com>@ENRON  
Sent:	Thursday, October 25, 2001 6:44 AM
To:	kkonolig@ms.com
Subject:	Enron & FERC-Market Impact Overdone/Kit Konolige/MS Electric Utilities  Research

Morgan Stanley Electric Power Research

Kit Konolige  (212) 761-6237
David Reynolds  (212) 761-6078
Carrie Stevens  (212) 761-6183
Chris Bezler  (212) 761-4487

Enron & FERC - Market Impact Overdone

* Enron credit position not a concern, in our view
Other energy merchants have credit mitigation & master netting
agreements. In any event, there is no evidence that ENE's credit
position is in serious jeopardy.
* Is Enron the market proxy?
We don't think so. ENE uses exotic off-balance sheet financial
engineering that we do not believe is prevalent in the group.
* FERC kicks out Pacificorp contract - denying CPUC complaint for now
We don't think this should have been at FERC to begin with.
Any further review would come under CA refund proceedings.
* Implicit conclusion is that FERC does not want to review bilateral
deals
FERC's long-running stance is that bilateral contracts are not up
for review or refunds. Recent Pacific Northwest ALJ ruling
supports view that bilateral deals are off-limits.
 - 115885.pdf 
 - Courtney.Cleman.vcf