FYI.  Today's update.

---------------------- Forwarded by James D Steffes/NA/Enron on 04/09/2001 
05:55 PM ---------------------------
From: Michael Tribolet/ENRON@enronXgate on 04/09/2001 05:25 PM
To: Vicki Sharp/HOU/EES@EES, Mike D Smith/HOU/EES@EES, Travis 
McCullough/HOU/ECT@ECT, Elizabeth Sager/HOU/ECT@ECT, Richard B 
Sanders/HOU/ECT@ECT, James D Steffes/NA/Enron@Enron, Richard 
Shapiro/NA/Enron@Enron, Greg Whalley/HOU/ECT@ECT, John J 
Lavorato/ENRON@enronXgate, Susan J Mara/NA/Enron@ENRON, Jeff 
Dasovich/NA/Enron@Enron
cc:  

Subject: FW: PGE Bankruptcy motions


fyi
 -----Original Message-----
From:  "JOHN G KLAUBERG" <JKLAUBER@LLGM.COM>@ENRON 
[mailto:IMCEANOTES-+22JOHN+20G+20KLAUBERG+22+20+3CJKLAUBER+40LLGM+2ECOM+3E+40E
NRON@ENRON.com] 
Sent: Monday, April 09, 2001 5:01 PM
To: Tribolet, Michael
Cc: CARL A. EKLUND; JAMES L. HUEMOELLER
Subject: Fwd: PGE

Michael:  as you know, one of my SF bankruptcy partners, Ben Young, attended 
the PG&E hearing today.  Here is a quick synopsis.  Could you please 
distribute as appropriate.  John

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Date: Mon, 09 Apr 2001 15:46:25 -0400
From: "BENNETT G. YOUNG" <BYOUNG@LLGM.COM>
To: ceklund@llgm.com, "JOHN G KLAUBERG" <JKLAUBER@LLGM.COM>, "JAMES L. 
HUEMOELLER" <JLHUEMOE@LLGM.COM>
Subject: PGE
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I attended the hearings on PGE's two cash collateral motions today.  Both 
were granted on an interim basis.  The court set a final hearing for May 9 at 
9:30 am.  PGE is to file its pleadings by April 20 and any opposition is due 
by May 4.

The bondholder cash collateral motion was heard first.  There was no 
opposition and the bond trustee (Bank of New York) consented to the relief.  
BONY and PGE are working on a final cash collateral stipulation.

Next was the gas supplier motion.  PGE mentioned in its presentation that the 
basis of the pre-petition agreement was the waiver of termination rights in 
the event of bankruptcy by the suppliers in return for a security interest in 
the receivables.  Jim Lopes, PGE's lawyer, mentioned that he had learned a 
great deal about Bankruptcy Code section 556 in the last few months.  Judge 
Montali nodded his head at that comment.  Montali also asked whether PGE 
conceded that 556 applied.  Lopes answered that he did not concede that it 
applied, but he was "very concerned."

I asked whether the post-petition security interest was available to 
suppliers that were not parties to the pre-petition agreements.  The Court 
said that was up to PGE; Lopes said they were willing to talk about it, but 
they did not want to grant liens to all of their creditors and hoped 
creditors would rely on their administrative claims, which PGE believes will 
be paid in the ordinary course.  Procedurally, the Court said it would not 
authorize any new security interests on the basis of the interim order 
resulting from today's hearing.  Instead, that would have to be the subject 
of a separate motion with notice, and perhaps coujld be taken up at the final 
hearing.
P
 GE also indicated that it is filing today a lawsuit against the CPUC seeking 
a TRO regarding a deadline of April 11 for the filing of certain advice 
letters.  A hearing is tentatively scheduled on the TRO for 3 pm tomorrow, 
April 10.

There was also discussion of various administrative matters, like scheduling 
hearings, entering a case management order, etc.

A representative of a consumer group, the Coalition for Public Power, read a 
statement asking Judge Montali to rollback rates and to force PGE's parent to 
pay the utility's debts.  The Judge let them speak, but made it clear that it 
was not an action item, and seemed generally to ignore them.

The courtroom was packed with attorneys, journalists and members of the 
public.  After the hearing, the reporters all descended upon the attorneys 
for PGE and the CPUC.  The courtroom is in an office building in SF's 
financial district; there were probably ten TV cameras set up on the sidewalk 
as well as several protesters carrying signs.

Please call me if you have any questions.


Bennett G. Young
One Embarcadero Center, Suite 400
San Francisco, California 94111
(415) 951-1167
byoung@llgm.com