Thanks.  These are the portions of the deal that I've been highlighting as 
problematic for us with the settlement group for  the past few weeks.  The 
group knows that unless there's some compromise on these points in a way that 
directly addresses our concerns, we won't be signing anything.  After 
yesterday's call, at which Edison blew the meeting up, there's no deal in 
sight in the immediate term.



	Scott Stoness@EES
	12/19/2000 08:47 AM
		
		 To: Jeff Dasovich/Na/Enron@ENRON
		 cc: Roger Yang/SFO/EES@EES, Gordon Savage/HOU/EES@EES, Harry 
Kingerski/NA/Enron@Enron
		 Subject: Re: Revised CESG Outline

If this settlement discussion is close to possible we should immediately 
starting switching customers to standard offer.  Scott

Other comments: 

This would be the critical excerpts for us:

Upon termination by a customer of the utility commitment in favor of a direct 
access arrangement, a customer could not return to the utility portfolio, 
except on a spot-price basis, for a period of [one year]; accommodations 
would be made for customers abandoned by direct access providers with no 
market alternatives.

(2) Large customers would be required to commit to a minimum service term of 
[12-36 months]; discontinuing service prior to the end of the committed term 
to engage in a direct access transaction with another supplier would result 
in a true-up of the price paid by the customer and the actual portfolio price 
during the term.

These comments are applicable:
The first term would be okay if it does not change to limit us from switching 
back to utility because we have been off for one year.  The issues is whether 
the one year terms is notice or elapsed time.  This suggests time is of the 
essense in switching back to standard offer.
The 2nd term would be okay but 12 would be a lot better than 36.  And 24 is 
pretty good too. 36 is better than a kick in the head.

And a principle that, 
DA customers would have access to the existing generation, at cost, the same 
as all other industrials, should be added.

We should not sign off on this solution (if they are seeking it) unless we 
have the option to switch back to standard offer.




From: Jeff Dasovich@ENRON on 12/18/2000 11:52 AM
Sent by: Jeff Dasovich@ENRON
To: Scott Stoness/HOU/EES@EES, Roger Yang/SFO/EES@EES, Dennis 
Benevides/HOU/EES@EES, James D Steffes/NA/Enron@Enron, Harry 
Kingerski/NA/Enron@Enron, Susan J Mara/NA/Enron@ENRON
cc:  
Subject: Revised CESG Outline

FYI.  Please keep this internal and confidential.  Here's where the group I 
mentioned left off last Friday.  It will be useful for our discussion this 
afternoon.  You'll note from the comments that it's anything but a done 
deal.  I'll forward the SF press mentioned in the note.

Best,
Jeff 
----- Forwarded by Jeff Dasovich/NA/Enron on 12/18/2000 11:36 AM -----

	Evelyn Kahl Elsesser <eke@aelaw.com>
	12/17/2000 11:05 PM
		 
		 To: Keith McCrea <kmccrea@sablaw.com>, "Jeff Dasovich (E-mail)" 
<jdasovic@enron.com>, Ralph Cavanagh <RCavanagh@nrdc.org>, Bill Booth 
<wbooth@booth-law.com>, Ann Cohn <cohnap@sce.com>, Jan Smutny-Jones 
<smutny@iepa.com>, Delaney Hunter <dhunter@smithandkempton.com>, "Carolyn 
McIntyre (E-mail)" <cmcintyre@sempra.com>, "John Fielder (E-mail)" 
<fieldejr@sce.com>, "Tony Braun (E-mail)" <braun@cmua.org>, 
"jeflory@calpx.com" <jeflory@calpx.com>, Barbara Barkovich 
<brbarkovich@earthlink.net>, Dominic DiMare <dominic.dimare@calchamber.com>, 
Dan Richard <ddr0@pge.com>
		 cc: 
		 Subject: Revised CESG Outline

A revised CESG outline is attached, updated to reflect Friday's
discussion.  While we discussed much greater detail, I have continued to
try to keep the outline more general to avoid generating a treatise at
this point.  Particularly, we discussed much greater detail around the
rate stabilization plan than is reflected in the attached outline.

SCE has committed to providing some sort of percentage or tiered term
structure for forward contracting to complete that section of the
framework (section 2).  Obviously, PG&E's ideas in this area would also
be welcome.

In Section 4 (undercollections) I have thrown in the numbers provided to
the Chronicle for the Saturday morning article describing the extent to
which the utilities may have already committed to Governor Davis to
absorb undercollections.  (Which leads to the question for John and Dan,
again, whether we are wasting our time with this exercise given the
media coverage describing the state of the IOU deal.)

Delaney has committed to provide a call-in number for tomorrow's 3:30
conference call.  Thank you all again for your efforts.