----- Forwarded by Jeff Dasovich/NA/Enron on 12/07/2000 12:38 PM -----

	Roger Yang@EES
	12/07/2000 12:36 PM
		 
		 To: Gordon Savage/HOU/EES@EES, Scott Stoness/HOU/EES@EES, James W 
Lewis/HOU/EES@EES, Dennis Benevides/HOU/EES@EES
		 cc: Mona Petrochko, Jeff Dasovich/NA/Enron@Enron, Susan J 
Mara/NA/Enron@ENRON, Sandra McCubbin/NA/Enron@Enron
		 Subject: TURN's Rate Stabilizaton Proposal

In a non-descriptive article in today's SF Chronicle, an article reports on 
some TURN plan to basically take the assets retained by the utilities and use 
the assets to deliver 5 cent energy to customers.  I imagine that TURN's plan 
only covers small customers because there is obviously not enough capacity 
for all customers.  Whereas, we have seen the utility's attempts to get the 
assets at below market prices in the past, it looks like TURN may be trying 
to maneuver to get the assets below market for its customers.  This leaves 
either the C&I or utility shareholders holding the bag for undercollections.  
I am sure that this is just some posturing, but CLECA/CMTA needs to be on top 
of this issue so that they don't get stuck.  It would be a double whammy for 
CLECA/CMTA customers, because not only would they see the higher market 
prices, but would have to bear a burden of undercollections that are not 
offset by an appropriate valuation of retained assets.

We will need Government Affairs to stay on top of this issue for us.

Roger