Chris

Presto got some info the Calpine got a great price on their power sale to California.  Are we negotiating with California and will they agree to credit terms that we like.  It seems like we are going to sell to someone who is going to sell the California.  If this is true we should evaluate the margin vs the credit and legal risks.

Lavo

 -----Original Message-----
From: 	Calger, Christopher  
Sent:	Friday, February 09, 2001 9:38 AM
To:	Lavorato, John
Subject:	RE: CDWR Update

CDWR is not positioning itself to buy new power assets.  Whether or not they buy the output from Pastoria, the plan would be for us to sell the project this year.  Calpine is the high bid and they are open to the project having a California toll on it.   We believe that the proposed pricing of the power sale to CDWR would be attractive to other power plant buyers as well as Calpine. Our current obstacle relates to water - Azurix breached their water deal with the project so we are "fixing" it by dealing directly with a backup water supplier.  


From:	John J Lavorato/ENRON@enronXgate on 02/09/2001 07:40 AM CST
To:	Christopher F Calger/PDX/ECT@ECT
cc:	 
Subject:	RE: CDWR Update

Can we sell them Pastoria or do we have to sell them the power from us.

 -----Original Message-----
From: 	Calger, Christopher  
Sent:	Thursday, February 08, 2001 11:24 AM
To:	Delainey, David; Kean, Steven; Lavorato, John; Dasovich, Jeff
Subject:	CDWR Update

Gentlemen:

I have spoken with CDWR several times since we submitted our proposal.  They are immediately interested in a 5 year power sale and then want to discuss Pastoria.  I updated a price for Freeman for 200MW Peak SP-15 5 Year ($124/MWh).  I also spoke with their lawyers a couple of times to start trading comments.  I volunteered to send a team to LA today or tomorrow, but so far they prefer to discuss by phone.   Their lawyers acknowledge that the primary issue for suppliers is credit.  They are working on an agreement with CPUC that would ensure that CDWR would have an adequate revenue stream to support the contracts.  Their intent is to make the supply contracts have priority over the bonds.  Until that happens, we maintain that we require a cash prepayment or letter of credit to support any deal.  I expect to hear from them again later today.  I will keep you posted.

Regards,

Chris