THE FRIDAY BURRITO 

He who laughs last thinks slowest. 

Which part of the energy crisis did you enjoy this week? Unlike default 
electric service, when it comes to California disasters, you have a wide 
range of choices among competing options.? For example, there was the 
Governor, our Governor preaching the gospel among the Democratic Governors in 
Washington, D.C., and the financial analysts in New York City.? In 
Sacramento, there was Senate Energy Committee hearings.? And from the poison 
tipped pens of the Department of Market Analysis at the ISO there was a 
report that I can assure you will stir the pot.? Which event was your 
favorite? 

This was a Holy Week, of sorts, for Catholics.? Tuesday was Fat Tuesday, and 
Wednesday was Ash Wednesday.? I saw a married couple in Starbucks on 
Wednesday night that had ashen smudges on their forehead.? At a distance I 
wasn't sure about the marking.? At first I only saw the woman waiting for her 
coffee order.?? I assumed she was marked as an Untouchable, you know, the 
Indian type, although she looked more Eastern European than Indian.? You 
never know.? I couldn't figure out how her marking was so indistinct because 
the Untouchable tattoo is a very bright color.? It wasn't until I saw her 
husband, also marked on his forehead in the same way, that I realized the 
meaning of the symbol, the day and its significance.? When I lived in 
Chicago, a long time ago, and worked downtown in the Loop, I would see three 
out of four adults either at work or on the street with the Ash Wednesday 
indicia on their forehead.? I haven't seen the same interest in religious 
practice for all the 23 years I have lived in California. Amazing the things 
one can learn while sipping a Grande Non-fat Chai Tea at Starbucks.? Do you 
think there could be one day a year where people would wear the following 
insignia on their forehaead? 

[IMAGE]

I don't often go to Starbucks at night.? A caffeine beverage keeps me awake.? 
However, when my son is at his ice-hockey practice in Belmont, visiting the 
local coffeehouse in order to kill time is just too tempting.? I watch 
people, sip coffee, and hunt for a used newspaper to read.? For some reason 
last Wednesday evening, I checked my voice mail, just in case someone left me 
a message about a mistake in my favor on my bank account.? Instead, a 
reporter from the Orange County Register called me at 7:30 p.m., and asked me 
to return his call.? Having nothing better to do than watch people take 
communion at the coffee bar and contemplate how Untouchable tattoos can turn 
gray, I called the reporter.? He answered the phone.? He wanted to know my 
(meaning your) reaction to the ISO's study to be filed at FERC explaining how 
generators have overcharged the ISO relative to their likely operating costs 
for real time energy? The amounts of the overcharges for December and January 
are alleged in the study to be hundreds of millions of dollars.? As always, I 
was equipped with sufficient ignorance to provide a meaningful quote.? I 
said, "Huh?" 

He went on.? Did I think the study was politically motivated by the Governor 
Davis' hand-picked ISO Governing Board?? This time I nailed the answer.? I 
said, "What?"? Actually, I backed away from entangling myself in the finger 
pointing game.? It was tempting to indulge, I might add, but I didn't do it.? 
I said, "No, the politics wouldn't change this outcome.? The ISO has a right 
to ask for an audit of the bids, and they did.? Simple."? Maybe I'm right, or 
maybe I'm wrong.? Who knows? 

Last week, I received an e-mail from ISO Governing Board member Michael Peter 
Florio, a cat I long ago nicknamed Old Deuteronomy, for reasons I can no 
longer remember.? Deut responded to a comment I made to him that Mr. Florio 
is the most senior and knowledgeable member of the ISO Governing Board.? That 
isn't surprising, I told Deut, but it does speak volumes about the current 
Board's composition.? Deut wrote back, "That's comforting, I think.? I tried 
to make the point after Kent Palmerton [Williams Energy] spoke at the last 
public comment period that I want to hear what people think about issues 
coming up at the ISO, even if requires use of personal e-mail to bypass the 
ISO.? Despite all the anguished rhetoric, we all have to live together, work 
together, and understand each other going forward."? Deut asked me to put 
that in the Burrito, so I did. 

But as Governor's go, it gives me a heartache to listen to our State 
Governor.? This man is a one-act disaster.? I suppose we Californian's get 
what we deserve.? The Gov's comment this week to a group in Washington D.C. 
floored me.? He said, and I am not making this up, that California is on the 
backside of the electricity crisis problem.? I thought that comment deserved 
some special attention. When a San Francisco Chronicle reporter asked for my 
opinion, I couldn't shut up. I exclaimed, "Backside of the problem?? No. I 
think we are on the dark side of the moon.? If we don't turn this thing 
around, there won't be any light."? Huff, and puff. 

Bankruptcy or not to bankrupt, that is the question.? Here is my take on the 
issue, this week.? By next week I should have an entirely different answer.? 
If PG&E folds, that is accepts a deal with the State to sell its transmission 
assets, then it would appear as if the utilities are serious about remaining 
financial whole, and working out their payments with creditors.? Clearly, 
there is many a slip 'tween the cup and the lip.? Creditors could demand more 
than the utilities have received from the sale of the assets.? My crude 
analysis suggests that after the utilities pay off the bonds and obligations 
secured by the transmission assets, there might not be enough money to cover 
the outstanding balances with the unsecured creditors.? The remaining open 
question, then, is will the PUC allow as a cost the pass through of 
additional revenue requirements to fully cover the amounts owed?? It seems 
these days, the PUC can do, and does anything it wants, with or without legal 
procedure.? Of course, most of what they do make things worse, but, hey, that 
is why we have a PUC. I noticed that the PUC informed the world that any 
power purchases made by DWR will be deemed just and reasonable.? Now why 
couldn't they say the same thing to the utilities for their long-term power 
purchase deals? 

Let's put some hot coffee on the burner, and see what we can brew. 

Things in the People's Republic of California 
?@@@ Community Choice may be a Savior of Direct Access 
?@@@ And the Award for the Silliest Bill Goes to ABX1 70 
?@@@ Creditor's Committee for Power Marketers, Out of State Generators, and 
Public Power Entities 

Jobs and People 

Odds & Ends (_!_) 
================== 

Things in the People's Republic of California 
?@@@ Community Choice may be a Savior of Direct Access 

ABx1 1 suspended all new direct access customers in California until the DWR 
no longer purchases energy.? This will occur when our grandchildren graduate 
from college.? Although clean up legislation has been suggested to reverse 
this crippling effect of ABx1 1, I am not hopeful. Alas, our friend from 
Local Power, Paul Fenn located in Oakland has found, at long last, a sponsor 
for his proposed bill to allow communities to select energy providers other 
than the incumbent utilities.? Here are the details. 

Assemblywoman Carole Migden (D-San Francisco) announced her sponsorship of 
the California Community Choice bill (drafted by Local Power last year) on 
February 15. A hearing will be announced shortly and could be as early as 
next week. 

Local Power has also submitted an amendment to ABx1 48 to facilitate 
"distributed generation" in urban areas, such as solar, wind, small hydro, 
fuel cells, etc. This amendment will be heard at the same time. This bill 
would allow a city (for example) to assign power on a real time basis from a 
solar cell or other local generation at one location in a city to "load 
points" elsewhere in the city on the same distribution system.? The language 
would enable many forms of distributed generation to develop, but would be 
particularly valuable for Community Choice cities to jump-start large scale 
urban solar, wind, fuel cell, small hydro and other local power projects. 

Community Choice is the solution to California's failure to implement retail 
access in any meaningful way. Local governments are authorized to aggregate 
all market non-participants in their jurisdictions into city-negotiated 
contracts, much like cable television or garbage services have been 
negotiated for decades, but with an opt-out clause for consumers who are able 
to participate directly in the market. Groups of contiguous municipalities 
may join together, and county governments may coordinate consenting 
municipalities in regional power contracts. 

Things in the People's Republic of California 
?@@@ And the Award for the Silliest Bill Goes to ABX1 70 

Each week our State Legislators try to outdo each other.? I think they meet 
at a local watering hole in Sacramento, and dare each other to see who can 
come up with the most absurd emergency-session energy bill.? We have a new 
winner, Assembly Member La Suer, and it is called ABx1 70.? Here is what this 
odious piece of legislation is all about. 

ABX1 70 attempts to criminalize acts of unregulated generators if they 
perform maintenance at times other than the California Public Utilities 
Commission requires. Further, the commission is required to allow scheduled 
maintenance of only one generator at a time. 

I can hear you out-of-state Burrito readers howling with laughter, slapping 
your thighs, and shaking your heads.? "Hey Joe, listen to this.? A guy named 
La Sewer is forcing generators to be out on maintenance only one at a time."? 
I admit, there is a certain amount of disbelief that anyone who can read, 
write, and run for the California Assembly could actually craft this bill.? 
If you want to have some fun, then in the above paragraph, replace the word 
"maintenance" with the word "sex", and the word "generator" with "utility 
executive(s)".? We might call Milton-Bradley to see if they want a piece of 
the action on our new game.? We,ll call it Legendary. 

Shall we analyze the impacts?? Let's see, there are about 500 major 
generators in the state.? That means if you own one of those puppies, you can 
go down for maintenance once every ten years.? That works for me. 

It reminds me of a story about the communist government that once ruled the 
USSR.? A Russian asks a plumber when he can come to this house to fix a 
leak.? The plumber opens his appointment book, and says, "The soonest I can 
fit you in, Comrade, is in February, 2004."? "What day?" asks the Russian. 
The plumber rubs his chin and contemplates an answer, "February 8," he 
answers.? "Morning or afternoon," asks the Russian.? "Afternoon," answers the 
plumber.? "Good," says the Russian with a sigh of relief, "the electrician is 
coming in the morning." 

The bill, if enacted, will allow generators to be out for maintenance during 
the peak season, which is rapidly becoming all year long in California.? 
Well, I would like you people to do me a favor.? Let's play the same game 
that the Legislators like to play in Sacramento.? Think of the most 
outrageous legislation you can imagine, and write it down on a piece of 
paper.? Wait a few weeks, and I bet you will see legislation proposed in 
California that makes your suggestion look pale in comparison.? Stick around 
here long enough, and either you are nuts, or you will be. 

Things in the People's Republic of California 
?@@@ Creditor's Committee for Power Marketers, Out of State Generators, and 
Public Power Entities 

Several good-news points to tell you regarding the formation of a creditor's 
committee for those among you who are feeling disenfranchised.? Worry not.? 
You are in good company. 

The WPTF Board this week provided guidelines for your favorite executive 
director to apply his organizational skills to facilitate the development of 
a creditor's committee. I have targeted WPTF members who either have 
expressed an interest in joining a committee, or those who might be among 
unsecured creditors that want to protect their ability to recover amounts 
owed to them by PG&E, and SCE, through the ISO and the PX.? Any creditor's 
committee so developed will be independent and unaffiliated with WPTF.? That 
is understandable and necessary so that WPTF's status as a tax-exempt trade 
association is not effected with credit issues of individual members. 

I have talked to many out-of-state generators, power marketers, and in-state 
public power agencies about the formation of a committee, and the interest is 
very high.? Here is why.? If SCE and PG&E both strike deals with the state to 
sell their transmission assets to raise some or all of the cash to pay back 
due amounts, there is an increasing likelihood that the debtors, the 
utilities, will try to stave off bankruptcy.? A creditor's committee is very 
valuable in that instance.? A committee of like-minded creditor's with 
similar objectives will give participants a window and a voice into the 
disbursement of payments the debtors will make to all creditors. 

Saybrook Capital will represent the interests of the committee once formed.? 
Saybrook will seek recognition of the committee from the debtors, and become 
a pipeline of information between the creditors and the debtors, and vice 
versa.? If there is any member among our group who I have not talked to, and 
thinks your interests would be aligned with the targeted participants, either 
give me a call or send me an e-mail.? I will be happy to provide you with the 
information you need to participate.? An organizational meeting of the 
committee is scheduled for the middle of next week.? If your company or 
organization is unable to join a creditor's committee now, but might be able 
to in the future, then there should be no problem.? Being involved with the 
committee at the front end provides participants with an opportunity to craft 
the objectives and goals of the group.? Participation at a later date should 
be open. For information about Saybrook Capital, please call Jonathon 
Rosenthal at 310-899-9200, Ext. 204. 

Jobs and People 

One of our Burrito readers took advantage of a job opportunity posted last 
week, and might land a job as a result.? Soon, the Burrito will operate a 
dating service for lonely power marketers and unloved merchant generators (no 
word replacement, please).? Until then, however, we'll stick with the job 
seekers looking for work.? Will regulate for food. 

Gene Waas was with the PX before they started letting go of staff.? Gene is 
an attorney who has worked with WPTF on many projects and initiatives. He is 
a wonderful person who has a lot of practical experience in both natural gas 
and electric power regulatory affairs.? Gene is currently living in the 
Pasadena area.? If you would like a copy of his resume, drop my a line.? I 
have an electronic copy. 

We have a job seeker that prefers to remain anonymous.? He currently works 
for an eastern electric utility, and he is looking for a change of venue, 
possibly California.? Should we warn him in advance what he might be getting 
into?? Here is the candidate's job search statement. 

As for what kind of position that I am looking for, that can be as diverse as 
my background.? Ideally, it would be position that allows me to combine my 
industry knowledge with my technical and communication.? The changing 
regulatory environment in California and the west sound like an extremely 
interesting opportunity.? Not only do I have experience dealing in the 
regulatory environment, but I also have experience negotiating with 
regulators and state officials. 

I feel that I am ideally suited for a position in: Asset development, 
Finance, System development, Regulatory negotiation and Workout. 

I have the candidate's electronic version of his resume for anyone who might 
want to consider it. 

Odds & Ends (_!_) 

My wife suggested the following piece that I thought was very clever.? 
Really.? I didn't need any additional persuasion. 

An Anagram, as you all know, is a word or phrase made by transposing or 
rearranging the letters of another word or phrase.? The following are 
exceptionally clever.? Someone out there either has far too much time to 
waste or is deadly at Scrabble. Wait till you see the last one! 

??????????? Dormitory 
??????????? When you rearrange the letters: 
??????????? Dirty Room 

??????????? Evangelist 
??????????? When you rearrange the letters: 
??????????? Evil's Agent 

??????????? Desperation 
??????????? When you rearrange the letters: 
??????????? A Rope Ends It 

??????????? The Morse Code 
??????????? When you rearrange the letters: 
??????????? Here Come Dots 

??????????? Slot Machines 
??????????? When you rearrange the letters: 
??????????? Cash Lost in 'em 

??????????? Mother-in-law 
??????????? When you rearrange the letters: 
??????????? Woman Hitler 

??????????? Snooze Alarms 
??????????? When you rearrange the letters: 
??????????? Alas! No More Z's 

??????????? And for the grand finale: 

??????????? PRESIDENT CLINTON OF THE USA 
??????????? It can be rearranged (with no letters left 
??????????? over, and using each letter only once) into: 
??????????? TO COPULATE HE FINDS INTERNS 
============================= 

Have a great weekend.? Keep those cards and anagrams coming. Legendary = Le 
End Gary 

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