enough of these circular e-mails reinventing the wheel (or circle).  We are 
getting nowhere fast.  The 5 of us need to talk.  Please set something up.




Roger Yang
08/29/2000 04:01 PM
To: Harry Kingerski/HOU/EES@EES
cc: Scott Stoness/HOU/EES@EES, Rick Bachmeier/HOU/EES@EES, Jeff 
Rudolph/HOU/EES@EES 
Subject: Re: Top 30 EESI Positions  

If you are more comfortable with your plan, this will work for us.  Our 
objective is the objective, not necessarily the path taken.  I think there is 
more than one way to draw a circle, and your proposal looks equally as good.

We will perform step 1.  We hope to have something to you in 3 to 4 weeks.  
In the meantime, we will provide you a list of the right URM personnel 
associated with each position.

With respect to step 2, we will assume that the top 30 is reported accurately 
with respect to the risk we have assumed and we will manage the portfolio 
versus any particular deal.  Given all of our responsibilities, we will most 
likely have difficulty analyzing the specific transactions associated with 
the position, but we will do what we can if you think this is a useful 
exercise.    

Government Affairs can start thinking about step 3 in parallel or wait to get 
the results from step 1, either is fine.

We will wait to do step 4 after steps 1 and  2 are finished.  If you choose 
to start step 3, you may also want to filter out any plans that are 
improbable or impossible.

We will gladly accept the offer for GA to perform step 5.

Step 6 is the objective.


Roger





Harry Kingerski
08/28/2000 09:59 AM
To: Roger Yang/SFO/EES@EES
cc: Scott Stoness/HOU/EES@EES, Rick Bachmeier/HOU/EES@EES, Jeff 
Rudolph/HOU/EES@EES 
Subject: Re: Top 30 EESI Positions  

(The e-mail you sent was encoded to prevent forwarding, copying or any other 
form of duplication, so my response needs to be by reference to it..)

You asked if GA can provide a list of regulatory and statutory activities 
that may impact our position on your top 30 utilities.  That's not the way we 
need to proceed.

Instead, what I'd like to do (and what I think Scott also agrees with) is 
have the right people from the desk and the right people from GA jointly 
develop what the regulatory hedge strategy should be for each of the major 
utility positions.   In each case, the process should be something like - 

1) re-review the curve, identify major uncertainties and major certainties,
2) re-review the position, identify what the major deals are that constitute 
the position, and any nuances about the deal that would be beneficial to know 
about , like term, type of pricing, etc.,
3) brainstorm the things that could be done, legislatively, regulatorily, or 
other, to protect or improve the position,
4) brainstorm how the things identified in #3 could best be done, what 
resources would be required, and whether the chances for success warrant the 
expenditure and effort
5) have GA take the lead in writing up a regulatory strategy, complete with 
milestones and timelines for when we should expect to see things happen, and 
what the off-ramps to the strategy will be, perhaps including the point at 
which the curve would be changed
6) have GA and the desk interactively communicate on the success of the 
strategy.

So far, we are at about :
stage 2 for Com Ed, Duke, SPS, Ohio Power, and Illinois Power
stage 4 for PG&E, 
stage 3 for HL&P,
and ready to get started for the rest.

The integration of people so far is 
Com Ed, IP  (Sue L, Roy Boston, Ajit Gill)
Ohio Power (Janine, Burranit?)
PG&E  (Roger, Mona )
HL&P  (Jeff, Pat Keene, Robin Kittel)

So, my recommendation for next steps is to drive these existing efforts 
through to stage 6, and get the rest of the utilities started by naming the 
right personnel.  Thoughts?