Richard, I hope you are checking your emails.  Here is Howard's thinking.  Is your opposition based on the view that, at this time, no action should be taken against SCE or on the view that maybe action is ok, but it should be handled other than by Kaye, Scholer?

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From: "Howard J. Weg" <hweg@pgwlaw.com>
To: "'ROBERT NELSON'" <JRNELSON@LLGM.COM>
cc: richard.sanders@enron.com
Subject: RE: Arbitration
Date: Mon, 27 Aug 2001 10:47:15 -0700
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Bob, there is so much happening in Sacramento and Wash DC that impacts the
decision about Edison that I really need an opportunity to bring you and
Richard up to speed.  That cannot happen during a full Committee call.

There have been several separate conference calls organized by Reliant to
advocate the involuntary petition, which is, I think, fraught with legal,
economic and political peril (especially sanctions, damages, etc. because
the claims are subject to bona fide dispute by and large, as you know).
Most others (Dynergy, Duke etc) seem to agree with me on the involuntary.
The Cal legislature is pushing hard on a bill, now supported by Gov Davis
and Edison, that specifically refuses to fund repayment of the energy
seller's claims while paying the banks and QFs.  We need a measured and
prompt message to deliver to the Gov, Edison and Legisl before they pass a
bill that calls for financing other claims that may not happen (even at the
lower number without sellers' claims) if the consequences are that the cloud
of an involuntary or litigation or arbitration will scare the underwriters
of the bonds away in any event.

Of course, some could argue that the Gov, Legisl and Edison are doing this
on purpose to provoke the involuntary or litigation so that when Edison goes
into chapter 11 they can say the blood is on the gouging sellers' hands not
on theirs.  Or, that may be giving all those "D" students more credit than
they deserve.  I don't know.

Please forward this email on to Richard and others at Enron as appropriate.
Please also let me know when Richard is available for a separate discussion
on this and related matters.  I know he is busy on many other things.

-----Original Message-----
From: ROBERT NELSON [mailto:JRNELSON@LLGM.COM]
Sent: Monday, August 27, 2001 9:59 AM
To: hweg@pgwlaw.com
Subject: RE: Arbitration


I'm around but Richard is in South America.  He's going to try and hook into
the conference call on Thursday, however.  Richard seemed to have several
problems with the idea of making a demand at this time.  Like Reliant, he
wanted to be sure that he had carefully thought through all the possible
implications of making a demand as it would bear on the FERC proceedings,
actions by individual participants and possible bankruptcy.  He also wasn't
sure whether he supported current committee counsel leading the charge but
no firm thoughts on that point.  He also was not inclined to draw the line
in the sand until he saw what comes out of the legislature.  Richard seems
to have some overarching concerns about overlawyering which I suppose are
understandable given the number of counsel that just Enron is supporting.
We obviously need to consider how the committee discharges its fiduciary
duties in the most efficient and cost effective manner.  I Richard's point
is that there are a bunch of other lawyers who already are actively involved
in things, I guess we need to consider whether the committee can use them to
represent the collective interests of all participants.  Bob

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confidential and it may be protected by the attorney/client or other
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you are not an intended recipient, please delete this e-mail, including
attachments, and notify me by return mail, e-mail or at (insert your
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reproduction of this e-mail, including attachments, is prohibited and may be
unlawful.
J. Robert Nelson
725 Soth Figueroa St, Los Angeles, Ca. 90017-5436


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