Greetings:
n order to keep everyone in the loop, the folks on today's call wanted to 
send out a brief summary of the call for the benefit of those who couldn't 
make it.  Apologies for any omissions, inaccuracies, etc.  Others who were on 
the call please chime in if I've gotten anything wrong, or missed anything.

Best,
Jeff

SUMMARY
Enron, Duke, El Paso and Williams were on the call, as was Michael Hoffman of 
the Blackstone Group (the Governor's financial advisors).
On the subject of how the group would organize itself, it was agreed that the 
calls would be open to anyone who wanted to participate.
A smaller group consisting of Duke, El Paso, Enron, and Williams would take 
the lead on walking the halls of Sacramento, meeting with policy makers, and 
advocating whatever plan the group develops.
Folks agreed that achieving a comprehesive solution requires a tangible 
process; that is, the principals need to get in a room, face to face, for 
however long it takes to work out a resolution.
It was agreed that the process should start no later than the beginning of 
next week, and that it should take place in Sacramento.
It was decided that the Legislature and the Attorney General needed to be 
brought into the process as soon as possible, i.e., next week.
There was some discussion regarding the release today of "Plan B."  Plan B is 
a plan proposed by Democratic and Republican legislators as an alternative to 
the MOU that the Governor struck with Edison.  After that call I received a 
copy of "Plan B."  If you'd like a copy please send me your fax number.
Folks on the call agreed to have the next "supplier-only" call-in meeting on 
Friday.
Finally, Michael Hoffman said that they are hoping to have a "ratings agency 
level" presentation prepared by the end of the week.  The goal of the 
presentation is to reassure capital markets that the bonds the state seeks to 
issue are solidly backed by retail rates.

The Agenda for Tomorrow's Call with the Governor's Staff
Item #1:  The Credit Issue
Michael Hoffman said that the Governor's office wants to start tomorrow's 
meeting discussing the creditworthiness issue.  
Hoffman said that the Governor's folks are hoping to have completed by the 
start of tomorrow's meeting a draft of an agreement between the California 
PUC and CDWR.  The agreement is designed to ensure that DWR gets paid for 
power services delivered.  
If the draft is ready, they'd like to discuss on the call tomorrow.  

Item #2:  Identify the Components of a Comprehensive Solution.
It was agreed that our group should put on the table at tomorrow's meeting 
the universe of issues that need to be included in a comprehensive solution.
Enron was asked to take a first stab at what those components are.  The 
following is a brief outline, which is not intended to be definitive, but a 
starting point for discussion.
Utility creditworthiness
retail rates must reflect costs
Increase supply
streamline and otherwise reform the siting process
Decrease demand
establish real-time pricing
implement demand buy-down and other conservation programs
Create a real market
Remove the State from the power-buying business as soon as possible (e.g., 
once new rates are in place and utilities are returned to creditworthiness; 
approximately 3-6 months)
Return the procurement role to the utilities
Reinstate Direct Access immediately for all customers
Within 18-24 months, create a "core/noncore" market structure for 
electricity, similar to California's market structure for natural gas
Keep the industry in the hands of the private sector
Reject proposals calling on the State to take over transmission, generation, 
etc. 
Resolve outstanding legal claims, investigations, etc.
Resolution requires certainty and prompt payment (understanding that 
discounts on receivables is on the table for discussion)