Summary of what we discussed the other night:

Background:


power -- power prices have moved above $1000/mwh in the Northwest and are 
showing $600-700 for the first quarter of 01; forward prices in California 
have also moved well above the "soft cap" of $150.  Sellers are exporting 
power from California to the Northwest.

gas -- balance of the month gas in California was trading at $26-27 with Jan 
trading at $19, feb at $12-14 and Summer at $8.

The Cal gas and power utilities remain unhedged (price caps are in place for 
retail power and utilities continue to buy power from the ISO and PX while 
gas utilities, we believe, are primarily buying at spot prices even under 
their long term deals).  The power utilities will continue to book large 
deferrals and gas utilities will be passing costs through a month or two 
after incurring them. The impact of the gas price increases will begin 
showing up in Jan billings to consumers.

curtailment rules (gas):  More work to be done here, but it appears that gas 
utilities will curtail deliveries in the following order:  interruptible 
first (with some priority for cogens); firm service (with utilities 
alternating or rolling between generation load and nongeneration load); and 
core customers last.  Curtailment rules apparently allow the utilities to 
confiscate gas sold to direct access customers