-----Original Message-----
From:  Schneider, Chip  
Sent: Tuesday, May 29, 2001 7:49 AM
To: Shapiro, Richard; Tribolet, Michael; Steffes, James
Subject: FW: EIX, PCG: Federal Debate on Western Power Crisis Continues


FYI.
 -----Original Message-----
From:  Paul Patterson <Paul_Patterson@xmr3.com>@ENRON 
[mailto:IMCEANOTES-Paul+20Patterson+20+3CPaul+5FPatterson+40xmr3+2Ecom+3E+40EN
RON@ENRON.com] 
Sent: Tuesday, May 29, 2001 7:47 AM
To: Schneider, Chip
Subject: EIX, PCG: Federal Debate on Western Power Crisis Continues

Credit Suisse First Boston
Paul Patterson
Good morning,
to debate amendments to HR 1647, a California emergency relief bill. At the 
core of the debate is a proposal to require western generators to commit 80% 
of their output to long-term bilateral contracts.
? Apparently, talks stalled because of conflicting information related to the 
amount of power already under contract. In addition there appears to be 
questions over the 80% benchmark and the length of the contracts.
? The current willingness of House Republicans to consider a compromise 
amendment is apparently linked to the impending power shift in the Senate to 
the Democratic caucus. The House Committee Chair, Rep. Tauzin, hopes to bring 
the bill to a vote soon after June 11.
? Separately, some key California Assembly Democrats are proposing another 
plan to rescue Edison and PG&E. Under the plan, the state,s largest 
commercial ratepayers would assume responsibility for most of the state,s net 
short power position as well as repayment of the utilities, undercollection. 
The level of support for the proposal is still unclear.
? We believe that the next few weeks will be critical in determining whether 
California can reach a political solution to avert another utility 
bankruptcy. At present, a single viable solution has not yet appeared.  
Consequently, we recommend that only investors with high risk tolerance 
should consider investing in the California utilities.

Please call us with any questions.
Regards,
Paul Patterson, 212-325-5876
Neil Stein, 212-325-4217
Wen-Wen Chen, 212-538-0223

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 - ppp052901.pdf