The article deals with the Cal ISO credit risk and the effect on power 
prices.  This is on the Enron web site.  
Maybe we work this into the talking points response?


       Reliant Energy: Selling Pwr To Cal ISO Could Be Risky 
       Of DOW JONES NEWSWIRES 

       Dec. 11, 2000 
       Dow Jones Energy Service 
       (Copyright (c) 2000, Dow Jones & Company, Inc.) 

       (This article was originally published Friday) By Mark Golden 

       LAS VEGAS (Dow Jones)--BC Hydro's concerns about the California 
Independent System Operator's credit have spread quickly this week
       to other suppliers, forcing the grid operator to pay premium prices 
when it can't find electric supplies, Reliant Energy's (REI) vice president
       for western U.S. trading, Reggie Howard, said Friday. 

       Suppliers are concerned about the ISO's financial guarantees from the 
investor-owned utilities, for whom it buys: Edison International (EIX),
       PG&E Corp. (PCG) and Sempra Energy (SRE). 

       PowerEx, the power marketing unit of provincial utility BC Hydro, 
demanded letters of credit from the utilities for ISO purchases this week.
       Edison complied, while PG&E refused. Sempra said that the state of 
California should make the guarantee as part of a declared state of
       emergency. 

       Reliant is looking at the ISO credit issue, but so far has demanded no 
such letters of guarantee, Howard said. 

       Other risks in selling to the ISO include the possibility that state 
politicians will tell the ISO not to pay its bills. 

       "when you have state Sen. Steve Peace telling San Diego residents not 
to pay their electric bills two months ago, you worry about what
       might be said to the ISO. There are political risks," Howard said in 
an interview with Dow Jones Newswires. Peace, a democrat from the
       San Diego area, is chairman of the California Senate Budget Committee. 

       Suppliers also risk that prices on sales to the ISO could be reviewed 
by the Federal Energy Regulatory Commission anytime 24 months
       after the transaction occurs, under the proposed FERC order on 
California. Prices could be lowered retroactively, and refunds from the
       suppliers could be ordered. Sales to other western utilities face no 
such review. 

       Taken together, these risks have forced the ISO to pay a premium of at 
least 10% more than market prices, according to several traders
       attending the Day of the Trader industry conference in Las Vegas 
Thursday and Friday. 

       "It could be 5% or 20%. We have a number, but we won't disclose it 
because that's proprietary," Howard said. 

       Reliant, which has 3,800 megawatts of generators in California, has no 
plans to build any more plants in the state. The company is
       building a plant in Nevada, just east of the California border. The 
optimal location for any new plant, Howard said, is near California, but not
       inside the state. 

       Howard said that Reliant isn't looking for offers to sell its 
California plants, but if a good offer came up, they would consider it. 

       -By Mark Golden, Dow Jones Newswires; 201-938-4604; 
mark.golden@dowjones.com