In support of (as per Gord/Jaime's CA Action Plan)
? Reducing the exposure of EES to the market opening in 2001 (see ISSUES 1 
and 2, below)
? Influencing the market structure of California to support sustainable EES 
profit-making opportunities (see ISSUE 3).

The following matrix is structured so as to show a link between these goals 
and the recommended regulatory action:

Note:  I think our focus on the current valuation processes is 
over-emphasized.  I think it doubtful that the contentious valuation process 
that is already underway in the regulatory arena will be circumvented or 
brought forward in time because of current cash-flow problems.  The 
valuations will likely continue along their current regulatory paths.  I 
would recommend developing other alternatives to the IOU,s cash-flow 
problem.  These should be developed in conjunction with a +transition to 
deregulation, plan that we can lobby witih.  (See the attached Word document 
for a fuller description).

ISSUES	TIME-FRAME	RISK	LIKELIHOOD	RECOMMENDED ACTION
1. Transition to De-Reg ends in 2001
D pay market prices	2001	VERY HIGH.	LOW	? Ensure snail-pace valuation continues.
2. Frozen rate levels do not cover incremental costs
D Rate Increase in 2001	2001	HIGH.	HIGH	? Develop alternatives that minimize impact 
to EES. 
				? Make sure that rate increase alternatives support path to sustainable 
de-reg (ISSUE #3)
3. Public and Legislature do not like current situation.
D CPUC makes rash decision in short-term	On-going	AFFECTS FUTURE OPPORTUNITIES	HIGH	? Show stakeholders 
that return to regulation is impossible to achieve in today,s marketplace. 
				? Bring transition plan to de-reg to stakeholders.
				? Ensure that benefit-sharing mechanisms are defined and implemented as part 
of transition.