Doesn't this constitute a change in Edison's position, i.e., I thought they'd indicated that everyone would be paid by end of Q1'03.  Now it appears they're saying that suppliers will get paid by year-end '03.  Am I missing something?  Thanks for the info.

Best,
Jeff

-----Original Message-----
From: Tribolet, Michael 
Sent: Monday, October 15, 2001 11:27 AM
To: Schneider, Chip; Mellencamp, Lisa; Curry, Wanda; Dasovich, Jeff;
Bradford, William S.
Subject: FW: ML Power Group-EIX-Update Following Meeting With Management




-----Original Message-----
From: Hunter Horgan [mailto:HHorgan@Amaranthllc.com]
Sent: Monday, October 15, 2001 11:25 AM
To: Tribolet, Michael
Subject: FW: ML Power Group-EIX-Update Following Meeting With Management




-----Original Message-----
From: ML Power Group [mailto:Maria_Melone@ml.com]
Sent: Monday, October 15, 2001 12:24 PM
To: hhorgan@paloma.com
Subject: ML Power Group-EIX-Update Following Meeting With Management


* We met with Edison management on Friday (10/12) to discuss the recently
announced settlement agreement between the company and the CPUC.  The
agreement, which was approved by Judge Lew on 10/5, provides a framework for
Edison to repay creditors on a Q1 2002 time frame and, ultimately, to resume
power procurement responsibilities.
* Edison?s current estimate is that past power procurement debts will be
recovered by year-end 2003.  Discussions are ongoing with banks regarding a
bridge loan, which is key in terms of getting creditors paid on time.
* Negotiations with the renewable QF generators continue with both sides
apparently seeking a fixed-price contract.  The main issue is likely to be
timing of the switch to a new pricing formula, particularly as there will
likely be a substantial increase over current payments indexed to gas
prices.
* Regarding other generator creditors, Edison will be pursuing a negotiated
settlement.  One key date in this process is March 31, 2002, after which
Edison is committed to join the state and the CPUC in pursuing legal action
to recover alleged generator overcharges.
* One option is a so-called ?grand agreement? under which Edison would agree
on the starting amount owed to each generator.  This would potentially
release Edison to negotiate with the individual generators directly, as
opposed to through the PX/ISO.
* Edison expects to provide more detail of its earnings outlook within a few
weeks ? but probably not in time for the Q3 results release though.
* Several key accounting issues need to be resolved first, notably whether
or not the PROACT (Procurement Related Obligations Account) will be set up
as a regulatory asset.  Another key issue outstanding is the utility
retained generation (URG) rate proceeding currently under way at the CPUC.
* Given the above uncertainties, it is still difficult to be precise about
the earnings impact of the Edison settlement.  For the time being we are
sticking with our 2002E of $1.60, comprising $1.40 from the utility and
$0.20 for the non-regulated businesses and parent.  There is potential
upside to our numbers, particularly if previous tax sharing arrangements are
restored under the terms of the settlement agreement.
* Edison is trading at 9.6x our 2002E, only modestly below the group average
multiple.  We see only modest upside from here at this stage, although
clarity on the non-regulated outlook is a potential positive catalyst.