Quick update to Jim's note:

Still appears that the Assembly only has enough left in it tonite to deal 
with the budget and then recess; and it is still unclear if they'll get 
enough Republicans to go along tonite, or be forced to come back tomorrow to 
try again.
If the Legislature does get the budget done and recesses without addressing 
the energy issues, then decision-making on some key issues---Direct Access in 
particular---will fall back in the PUC's lap. (The Legislature is scheduled 
to be out until August 20th.)
The PUC has scheduled a vote on whether to suspend DA, the rate agreement 
with DWR, DWR's rev. req. and other issues on August 23rd.
PUC President Loretta Lynch has said that she wants to issue a proposed 
decision on these issues sometime between now and the first week of August.
As Jim points out, we continue to try to hammer out favorable outcomes for 
Direct Access and cost allocation in both forums----the Legislature and the 
PUC.

Best,
Jeff
----- Forwarded by Jeff Dasovich/NA/Enron on 07/23/2001 07:31 PM -----

	James D Steffes/ENRON@enronXgate
	07/23/2001 02:15 PM
		 
		 To: David W Delainey/HOU/EES@EES, Janet R Dietrich/HOU/EES@EES, Marty 
Sunde/HOU/EES@EES, Dan Leff/HOU/EES@EES, Vicki Sharp/HOU/EES@EES, Jeremy 
Blachman/HOU/EES@EES, Scott Gahn/HOU/EES@EES, Evan Hughes/HOU/EES@EES, Tim 
Belden/ENRON@enronXgate, Jeff Richter/ENRON@enronXgate, Stephen 
Swain/ENRON@enronXgate, Jeff Dasovich/NA/Enron@Enron
		 cc: 
		 Subject: California Update - 7.23.01

The attached note is from Enron's hired lobbyist in Sacramento.  Looks like 
the only thing that is going to happen will be a Budget without anything on 
energy restructuring (could continue to change).

There will be some additional negotiating on SBX2 78 over the recess.  Enron 
is looking for a way into those discussions (Jeff Dasovich).  We will try to 
push good language on DA dates and assignment of Utility and CDWR costs.

On another note, CDWR has announced its revenue requirements going forward. 
The numbers are significantly less than had previously been expected (due to 
lower costs for spot market purchases).  The end result, if their figures are 
correct, is that the March 27 3c/kwh increase would be sufficient going 
forward (we are trying to validate).  The key is that now the Retained 
Generation proceedings will determine if any more $ is needed from retail 
customers.

Thanks,

Jim

 -----Original Message-----
From:  "Scott Govenar" <sgovenar@govadv.com>@ENRON 
[mailto:IMCEANOTES-+22Scott+20Govenar+22+20+3Csgovenar+40govadv+2Ecom+3E+40ENR
ON@ENRON.com] 
Sent: Monday, July 23, 2001 1:55 PM
To: Sharma, Ban; Leboe, David; Eric Letke; Thome, Jennifer; Ken Smith; Bev 
Hansen; Hedy Govenar; Buster, Miyung; Guerrero, Janel; Robert Frank; Mike 
Day; Lawner, Leslie; Kingerski, Harry; Karen Denne; Kean, Steven J.; Alan 
Comnes; Susan J Mara; Kaufman, Paul; Jeff Dasovich; Steffes, James D.; Rick 
Shapiro
Subject: MOU UPDATE

For those of you who don't already know, the Senate passed its version of
the SCE MOU, SBX2 78 (Polanco/Sher) which requires users over 500 kw to foot
the bill for SCE's entire undercollection and it eliminates DA completely.
This largely represents TURN's proposal.  The Senate also passed a budget
and has since adjourned until August 20.

The Assembly had been considering two MOUs, ABX 82 (Keeley) and ABX 50
(Wright).  Both bills had difficulty attracting a majority of votes given
their different approaches to dealing with SCE.  ABX 82 for example, had
large users picking up most of the tab for SCE's undercollection whereas ABX
50 split those charges among all users.  Both bills provided for some type
of direct access and ABX 82 also provided for a purchase of the transmission
system.  In light of the difficulty in passing either bill, it appears as if
the Assembly will shelve both proposals today in order to amend SBX 78 over
the summer break.  An internal legislative working group may be formed to
draft amendments but this has not been confirmed.  Large users have begun
drafting extensive amendments recognizing that in its current form SBX 78
has very little to offer.

The Assembly will try to pass the final portion of the budget today and
recess until August 20.