The purpose of this e-mail is to discuss the regulatory strategy in 
California.  As we have discussed, I believe the regulatory strategy can be 
summarized as follows:

Support the TURN proposal in order to maintain leverage against PG&E and 
SCE.  We will have to do this strategically to avoid negative consequences.
Provide comments on mitigation measures at the CPUC's disposal to mitigate 
PG&E's and SCE's undercollections on December 31, 2001 in order to make the 
CPUC comfortable with their decisions.
Work with PG&E and SCE on developing a post-freeze solution at the 
legislature to recover undercollections over a 5 year period in order to 
facilitate an acceptable solution.
Expose the inequities of the rate caps implemented in SDG&E's service 
territory for small customers in order to avoid a similar transition 
mechanism in PG&E's and SCE's service territories that might facilitate an 
end to the rate freeze for all customers prior to December 31, 2001.
Watch and prevent adverse changes to how the PX credit is calculated.


Roger