CONFIDENTIAL 

Later today we will receive the 2 plan proposals (one from the Grids and Entergy, etal. and one from Southern, Santee Cooper, GTC, etal).  Our response is due to the judge on Friday by 3:30.  We will have a meeting this week to discuss our response (our SE team -- (Joe, Luiz, and me) -- will prepare the response).

The judge has then scheduled the mediation "negotiations" for next Tues and Wed. in DC.  She is only allowing 3 parties from each sector to actually attend.  The power marketer sector reps are Enron, Williams and PSEG.  I will attend the negotiations for Enron.  The majority of IPP/trading entities chose to be in the IPP sector, which is represented by Calpine, Reliant and DENA.  Our views are very consistent in these two sectors.

The judge hopes to have a consensus reached during the negotiation phase*, but will make her own recommendation to FERC on what the SE RTO should look like absent a consensus.  She plans to report to the Commission the first week of Sept.



*No party is waiving any rights to protest her decision by participating in the negotiations, and clearly, those not attending retain their rights.  She simply wants to have a smaller group to facilitate the discussion next week.