Louise,

California is proposing to buy QF energy/capacity for $79 for 5 years or $69 for ten years.  We will re-run the economics of Ace today.  

Chris
---------------------- Forwarded by Christopher F Calger/PDX/ECT on 03/21/2001 10:03 AM ---------------------------


Christopher F Calger
03/21/2001 07:45 AM
To:	
cc:	 
Subject:	FW: EIX, PCG: Governor Announces QF Agreement and Schedule for Final Resolution

Guys,

This looks real positive for a QF resolution.  Do we know the proposed pricing terms and the impact on the Ace valuation?  Any news from Ahlstrom? 

Chris
---------------------- Forwarded by Christopher F Calger/PDX/ECT on 03/21/2001 07:44 AM ---------------------------
From:	Chip Schneider/ENRON@enronXgate on 03/21/2001 08:40 AM CST
To:	Michael Tribolet/ENRON@enronXgate, William S Bradford/ENRON@enronXgate, James D Steffes/NA/Enron@Enron, Alan Comnes/PDX/ECT@ECT, Christopher F Calger/PDX/ECT@ECT, W David Duran/HOU/ECT@ECT
cc:	 
Subject:	FW: EIX, PCG: Governor Announces QF Agreement and Schedule for Final Resolution



 -----Original Message-----
From: 	Paul Patterson <Paul_Patterson@xmr3.com>@ENRON [mailto:IMCEANOTES-Paul+20Patterson+20+3CPaul+5FPatterson+40xmr3+2Ecom+3E+40ENRON@ENRON.com] 
Sent:	Wednesday, March 21, 2001 7:21 AM
To:	Schneider, Chip
Subject:	EIX, PCG: Governor Announces QF Agreement and Schedule for Final Resolution

Credit Suisse First Boston
Paul Patterson
Good morning,
Here are the recent developments in the California power crisis:
-Yesterday, Governor Davis gave a press conference to announce a QF agreement that would ensure future utility payments and possibly deter involuntary bankruptcy filings by certain QFs. A CPUC order on long-term QF contracts is expected next Tuesday.
-Corroborating the governor's announcement, Edison International and PG&E Corp each announced yesterday that it reached agreement with the QFs for payment of future deliveries.
-The governor laid out a schedule that targets a final resolution to the utilities' final crisis by mid-April. On April 3, the CPUC is expected to issue an order on DWR cost recovery. A final settlement for the utilities is anticipated 10-15 days afterwards.
-Significantly, the governor expects that (1) the final settlement will occur within the existing rate structure, and (2) that the DWR will recover its costs with priority over the QFs and utilities.
-The achievement of a QF agreement may make potential bankruptcy appear more remote and therefore support the stocks in the near-term. However, we believe that substantially more effort will be required to resolve the utilities' financial crisis. We recommend that investors avoid EIX ($12.04, Hold) and PCG ($11.40, Hold), unless they have a high tolerance for risk and volatility.

Please call us with any questions you may have.
Regards,
Paul Patterson, 212-325-5876
Neil Stein, 212-325-4217
Wen-Wen Chen, 212-538-0223
Emily Lao Chua, 212-325-1982

If you would prefer not to receive further messages from this sender, please click on the following link and confirm your request:
Mailto:K-1-62573-701678-2-151-US2-9B3CEF5B@xmr3.com
You will receive one additional e-mail message confirming your removal.


 - ppp032101.pdf