If there is a deal shaping up, it's happening by and large through the 
auspices of IEP.  We've thus far decided to maintain an arm's length 
relationship with IEP, choosing not to get too close to the generators.  If 
we want to influence any deal they cut, we'll need to assess how closely 
aligned/associated with them we want to be.  Further we distance ourselves, 
less likely we'll be cut in.  

That said, Sue and I have been participating in IEP's (interminable) 
conference calls and actively weighing in to influence what they do.  There 
was considerable discussion on the last call about developing some sort of 
"price cap" proposal that could form the basis of a deal, but no discussion 
whatsoever regarding refunds of any kind.  There were differences of opinion 
about the benefits of doing a deal on a cap----Williams is dead set against 
it, Dynegy & Reliant seemed considerably more pliable.  

We reminded folks that there are many other things apart from caps that 
California could do to "fix" the problem (e.g., site plants, forward 
contracts, retail market, core/noncore split, etc.), which might obviate the 
need for caps altogether.  We also recognized the political nature of the 
situation and expressed a willingness to discuss a cap that might be 
acceptable, but pointed out our general concerns with caps.

That last meeting provided the impetus for the 28th press conference, at 
which (hopefully) a large number of stakeholders with urge the Governor and 
the PUC to get off the dime and do something concrete that can help---develop 
a rational policy for forward contracting by the IOUs and abandon the "PUC as 
counterparty" policy that currently exists.

Again, haven't heard a peep about any deal on refunds.  Will check around, 
though.

Best,
Jeff





	Richard Shapiro
	11/22/2000 07:46 AM
		
		 To: James D Steffes/NA/Enron@Enron
		 cc: Jeff Dasovich/NA/Enron@Enron, Paul Kaufman/PDX/ECT@ECT, David 
Parquet/SF/ECT@ECT, Susan J Mara/NA/Enron@ENRON, Sandra 
McCubbin/NA/Enron@Enron, Mona L Petrochko/NA/Enron@Enron
		 Subject: Re: Report of Editorial Board Meeting with the San Diego 
Union-Tribune

Don't know- Does anyone know?


From: James D Steffes on 11/22/2000 07:43 AM
To: Richard Shapiro/NA/Enron@Enron
cc:  

Subject: Re: Report of Editorial Board Meeting with the San Diego 
Union-Tribune  

Do you think that there is a deal in the works and we are "out in the rain"?  
I have to doubt that DENA or Southern are willing to give $ back to 
California.  Maybe Reliant would.

Jim





	Richard Shapiro
	11/22/2000 07:37 AM
		 
		 To: James D Steffes/NA/Enron@Enron
		 cc: 
		 Subject: Report of Editorial Board Meeting with the San Diego Union-Tribune

FYI
---------------------- Forwarded by Richard Shapiro/NA/Enron on 11/22/2000 
07:36 AM ---------------------------


"Lynne Church" <LCHURCH@epsa.org> on 11/21/2000 05:21:23 PM
To: <joer@calpine.com>, <jmdonnell@duke-energy.com>, 
<wfhall@duke-energy.com>, <KERA@dynegy.com>, <jhartso@enron.com>, 
<Richard.Shapiro@enron.com>, <smutny@iepa.com>, 
<craig.mataczynski@nrgenergy.com>, <Kent_Burton@Ogden-Energy.com>, 
<john_h_stout@reliantenergy.com>, <cslesser@seiworldwide.com>, 
<jtmiller@thermoecotek.com>, <Tim.Thuston@williams.com>, <gackerman@wptf.org>
cc: "Gene Peters" <GPETERS@epsa.org>, "Julie Simon" <JSIMON@epsa.org>, "Mark 
Stultz" <MSTULTZ@epsa.org> 

Subject: Report of Editorial Board Meeting with the San Diego Union-Tribune

IEP's public affairs consultant arranged an editorial board meeting for me 
while I was in town for the NARUC meeting.  Present were Don Sevrens, news 
editor/insight section; Bill Osborne, senior editor/opinion; Jim Gogek, 
editorial writer; Bernie Jones, editor, opinion pages; Craig Rose, the 
reporter who has written extensively on the topic, and a photographer.

My two primary messages were that (1) wholesale and retail competition is 
working elsewhere, particularly in Pennsylvania, and can eventually work in 
California if the rules are changed, and (2) California has a severe supply 
shortage and needs to focus on providing incentives for new generation and 
expediting the permitting process.  I was subtly trying to get across the 
message that leadership was needed to help Californians deal with the need to 
reconcile their environmental and land use goals with the need to bring their 
power supply and demand into balance.  I, of course, defended FERC's order on 
the causes of the price volatility in California this summer and their lack 
of any authority to order retroactive refunds.  I also pointed out that there 
were no findings of individual market abuse, so that refunds wouldn't be 
warranted even if there was legal authority.  I also pointed out the problems 
with price caps.

Other than Craig Rose, who disagreed with me any chance he got, the others 
asked good questions and seemed to be listening.  They made the point 
repeatedly that this matter is very political, suggesting that a political 
compromise with the generators/marketers is necessary.  One of them said he 
had heard there was a deal with the generators being negotiated and asked me 
my position.  I responded that I had no response.  Anything like that is the 
business of individual members.

They indicated that they expected to do a story for this coming Sunday's 
Insight Section.  Please give me any feedback you have.

cc:  Stu Ryan, AES by fax
       Jim Macias, Calpine, by fax