This e-mail from the ISO indicates our counterparty going forward is either 
them or DWR? From a company stand point where do we stand on this issue? EES 
has been forced to either buy or sell hourly to the ISO to balance schedules. 
Now there is the risk that DWR may be our counterparty.

Jubran
---------------------- Forwarded by Jubran Whalan/HOU/EES on 04/16/2001 08:18 
AM ---------------------------
   
	Enron Energy Services
	
	From:  Neil Bresnan                           04/16/2001 07:43 AM
	

To: Daniel Kang/HOU/EES@EES, Jubran Whalan/HOU/EES@EES
cc:  
Subject: CAISO Notice: Market Notice re: Credit Issues

We need to get on this please talk to EPMI so we have a clear understanding 
of our joint policy with regards to sales into the ISO.

NFB 
---------------------- Forwarded by Neil Bresnan/HOU/EES on 04/16/2001 07:42 
AM ---------------------------


"Fuller, Don" <DFuller@caiso.com>@caiso.com> on 04/13/2001 06:21:48 PM
Sent by: "Happ, Susan" <SHapp@caiso.com>
To: ISO Market Participants 
<IMCEAEX-_O=CAISO_OU=CORPORATE_CN=DISTRIBUTION+20LISTS_CN=ISO+20MARKET+20PARTI
CIPANTS@caiso.com>
cc:  
Subject: CAISO Notice: Market Notice re: Credit Issues


Market Notice re Credit Issues

In response to the FERC order of April 6, 2001 re the issue of
creditworthiness, the California Department of Water Resources (DWR) has
authorized the ISO to make the following statement. To the extent (and only
to the extent) that a purchase is not otherwise paid by any party or payable
by another party meeting the credit standards set forth in the ISO Tariff
(another "Qualified Party"), DWR will assume financial responsibility for
all purchases by the ISO in its ancillary services and imbalance energy
markets based on bids or other offers determined to be reasonable. Such
determination of reasonableness will be made by DWR on a case by case basis
and communicated to the ISO.  All bids into the ancillary services and
imbalance energy markets will be deemed to be contingent on the acceptance
of financial responsibility by DWR, to the extent not paid or payable by
another Qualified Party.  Unless a supplier is otherwise notified, any bid
accepted by the ISO will be deemed to have the financial support of another
Qualified Party or DWR as specified in this notice.  In addition to the
foregoing, DWR will assume financial responsibility for all purchases
resulting from the issuance by the ISO of emergency dispatch instructions,
to the extent not paid or payable by another Qualified Party.  Payment for
such purchases shall be made according to the rate specified in the ISO
Tariff for emergency dispatch instructions.  The ISO and/or DWR reserve the
right to rescind or modify the foregoing arrangements at any time and for
any reason, including a successful rehearing or appeal from the April 6
order.

As the FERC determined in its February 14 order that DWR is a creditworthy
counterparty, the ISO believes that the foregoing arrangements meet the
requirements of FERC's April 6 Order. Accordingly, the ISO expects that
suppliers will honor their obligations under the ISO Tariff and related
agreements to respond to ISO dispatch instructions.

Don Fuller
Director, Client Relations
California ISO
Phone: 916-608-7055
E-Mail: dfuller@caiso.com