Greg

How about you being the Portland General risk manager.  My plate is full.

Lavo

 -----Original Message-----
From: 	Gorny, Vladimir  
Sent:	Friday, February 16, 2001 3:05 PM
To:	Lavorato, John
Subject:	PGE

FYI
---------------------- Forwarded by Vladimir Gorny/HOU/ECT on 02/16/2001 03:03 PM ---------------------------
   
 	  From:  Vladimir Gorny                           02/12/2001 05:12 PM	
		


To:	Ted Murphy/LON/ECT@ECT, William S Bradford/HOU/ECT@ECT
cc:	 
Subject:	PGE

Enron has negotiated a sale of PGE to Sierra Pacific Resources for $2.07 B
that has to take place by May 5th, 2001.

Sierra Pacific owns and operates power and gas utilities and pipelines in
the Western United States. Sierra Pacific (SPR) has a market cap of $0.92
B, trading at $11.85, down about 40% off the high of $19.44 in September of
2000. Sierra Pacific has earnings-per-share of <$0.85> and pays dividends
of $1.00 per share. Sierra owns generation assets and serves load in
Oregon and Nevada. Additionally, the Company serves a small load in Reno,
CA (~40,000 customers), which makes it subject to the regulations coming
out of CA crisis.

In order to pay Enron for PGE, the company has to sell its existing
generation assets, subject to regulatory approval from the respective
state PUCs. Given Sierra's financial situation and CA regulation
precluding load-serving entities from selling their generation assets, there
is a possibility that the transaction will not take place by 5/5/01.

Enron Development Group is the most optimistic in thinking that the sale
might still happen by 5/5/01. Enron Gov. Affairs experts expect the
transaction to be postponed by 6-12 months. PGE CFO and Head of Marketing
speculate that the sale may not happen for a long time or ever.

In the meantime, CA crisis has generally slowed down the deregulation
process in the state of Oregon. The earlier expectation that certain PGE
customers may be able to shop for alternate suppliers of electricity,
effective 10/1//01 is in question. This uncertainty makes it difficult to
estimate PGE's load going forward.

As of 2/9/01, PGE positions and risk (including generation capacity, load
and marketing positions) are as follows:

Power	VaR of $19.3 MM	2001:	Long 1,934,031 Mwhs
				2002:	Short 540,122 Mwhs
Gas	VaR of $0.8 MM	2001:	Short 1.4 Bcf
				2002:	Short 7.4 Bcf
Total VaR of $19.2 MM.

Next Steps

- continue to assess the possibility of transaction falling through or the
potential transaction date
- communicate to Enron Treasury the possibility of not collecting the
proceeds on sale this year
- monitor PGE positions weekly (VaR and positions)
- periodically assess the definitions of PGE load and generation
availability
- any other thoughts

Vlady.




<Embedded Picture (Device Independent Bitmap)>