All:

One thing to note is that while the DWR contracts are blended with the core, 
the non-core, if our curve come to be true, would enjoy the back end of the 
curve's lower price path.    

We calculated, based on the DWR's figures, the negative mark-to-maket at the 
various points in time:

6/02      $4.2B
12/02    $5.8B
6/03      $7.0B

While our curves differ, this gives an order of magnitute.


Michael



 -----Original Message-----
From:  Steffes, James  
Sent: Friday, May 11, 2001 6:45 AM
To: Dasovich, Jeff
Cc: Neustaedter, Robert; Brown, Kortney; Soo, Jeffrey A.; Tribolet, Michael; 
Black, Don; Lewis, James C.
Subject: Concept for core/noncore Analysis for California

Looks good with me. 

Jim




From: Jeff Dasovich on 05/10/2001 04:02 PM
Sent by: Jeff Dasovich
To: James D Steffes/NA/Enron@Enron, Robert 
Neustaedter/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Kortney 
Brown/Enron@EnronXGate, Jeffrey A Soo/Enron@EnronXGate, Michael 
Tribolet/ENRON@enronXgate
cc:  

Subject: Concept for core/noncore Analysis

OK, I apologize, I've been trying to lock myself to the computer and crunch 
some #'s, but can't seem to get control of my schedule.  Wanted to lay out 
the core/noncore model that's been pitched (and that CMA showed keen interest 
in this morning) to see if we're all on the same page; but perhaps this is 
the analysis that you're already working on:

Split takes place either 1.1.03 or 6.1.03.
Core and noncore are responsible for the "DWR past purchases" (spread over 15 
years).
Core will keep IOU gen, QFs and DWR contracts (which would eliminate the 
short for the core)
Noncore, in return for giving up the lucrative IOU gen, effectively accepts 
the short position (i.e., goes to market) AND does not get sacked with DWR's 
going forward costs (with "forward costs" defined as all power costs 
attributable to the "post-core/noncore" transition date.

Let me know if this tracks with where we're headed.  Thanks.

Best,
Jeff