Progress

Working Group 1 (WG1) -- Forward Contracts
An interim report was prepared from the work done in the various subgroups 
(attached)
By tomorrow, will have the final ready for the "principals" meeting 
tentatively scheduled for Saturday.
Final will include draft RFP, very agressive schedule ending with contracts 
signed by 1/31/01, draft standard contract, utilities' unmet load projected 
for 15 years,  and description of four products: 24x7; 6x16; capacity with 
monthly take or pays; and swing capacity.
The group will likely recommend two simultaneous RFP processes: (1) Davis' 
proposal -- what term and volume will you give me for 5.5 cents; and (2) bids 
with their own pricing and terms to meet the utilities' needs. 

Working Group 2 (WG2) -- Utility Debt
Working on a forbearance agreement
No more information out of that group
Enron in attendence; Houston credit people on Friday.

QF Group
This group met for the first time Thursday evening.
Expected to try to negotiate less volatile (and lower) QF prices using 
long-term gas tolling agreements.

Status of Major Issues from Long-Term Contracts

MAJOR ISSUE FROM WEDNESDAY:  Utilities revealed late on Wednesday that they 
want the State to assume the role of their portfolio manager and claimed that 
this had been their idea all along.  In their view, the utilities provide a 
forecast and the State takes on the entire risk of meeting the unmet load of 
the utilities. Rest of attendees oppose this approach.  No progress made.
Kind of Auction or RFP -- Seems to be resolved as discussed above. 
Absence of Any State Officials -- Continues to concern participants.  
Everyone standing firm that no deal can be struck without State buy-in and 
relief from litigation and investigations.

Next Steps

WG1 reconvenes at 9am Friday to finish its report and work products.
Apparent joint meeting with WG2 at 10:00 am.
QF Group reconvenes at 2pm
Treasury and others will assess whether Saturday meeting with "principals" 
(CEOs, Governore) should take place. Tentatively planned for 3:30 pm.