Seems to me we could put these under the category of potential losses.  After 
all, the Utilities are in violation of the PUC ruling re rebates and there 
certainly is a legitimate expectation that the Utilities will make good on 
debts---even if it is over time.  We could also limit all of this to UCal 
stuff, too.

>>> <Jeff.Dasovich@enron.com> 03/21/01 08:43AM >>>

Mike:  Here are my comments.  Apologies for the fact that they are quick
and dirty.

All Enron's public statements that I have read, including, I think,
statements made to financial analysts, state that our exposure in
California is not "material."  Dennis' declaration says that the
situation in California has been a "financial disaster," that "Enron has
lost over $300 million," and that "Enron stands to lose millions more."
The losses are described as "huge."  Perhaps this is information that
has since been communicated to the market, but I'm not aware of it.  And
if it hasn't, it could represent a significant conflict with previous
statements.  Seems prudent to run this by IR and perhaps others before
releasing.
Regarding the statements about our hedging strategy.  It would seem
prudent to run this through the organization for comment and discussion
prior to making public.
Very minor technical point--I don't think that AB 1890 was passed
"unanimously."  I think that there was 1 nay vote.
The statement is made that "the utilities were required to sell off most
of their generating capacity."  The utilities were only required to sell
off 1/2 of their fossil-fired plants (which I think at the time may have
amounted to about .2-.25 of their total gen assets).  They chose
voluntarily to sell of the remainder of their fossil-fired plants.
It is stated that stranded costs are "investments in imprudent power
generation facilities."  These investments were in fact found in the
past to be prudent by the PUC.  Would therefore not seem accurate to
call them imprudent now.
Is it now "virtually impossible to manage commodity risk" in California?
Just wondering if judge might view the statement as overstating the
situation somewhat.
From a PR perspective, I'm wondering if we want to characterize
re-sourcing UC/CSU in the following manner, "It was actually a
relatively easy decision to make."  Makes Enron sound perhaps
excessively hard-nosed.


Best,
Jeff