---------------------- Forwarded by Phillip K Allen/HOU/ECT on 01/26/2001 
09:41 AM ---------------------------
   
	
	
	From:  Chris H Foster                           01/26/2001 05:50 AM
	

To: Phillip K Allen/HOU/ECT@ECT
cc: Vladimir Gorny/HOU/ECT@ECT 
Subject: Status of QF negotiations on QFs & Legislative Update

Phillip:

It looks like a deal with the non gas fired QFs is iminent.  One for the gas 
generators is still quite a ways off.  

The non gas fired QFs will be getting a fixed price for 5 years and reverting 
back to their contracts thereafter.  They also will give back 

I would expect that the gas deal using an implied gas price times a heat rate 
would be very very difficult to close.  Don't expect hedgers to come any time 
soon.

I will keep you abreast of developments.

C
---------------------- Forwarded by Chris H Foster/HOU/ECT on 01/26/2001 
05:42 AM ---------------------------


Susan J Mara@ENRON
01/25/2001 06:02 PM
To: Michael Tribolet/Corp/Enron@Enron, Christopher F Calger/PDX/ECT@ECT, 
Phillip K Allen/HOU/ECT@ECT, Alan Comnes/PDX/ECT@ECT, Jeff 
Dasovich/NA/Enron@Enron, Michael Etringer/HOU/ECT@ECT, James D 
Steffes/NA/Enron@Enron, Sandra McCubbin/NA/Enron@Enron, Paul 
Kaufman/PDX/ECT@ECT, Chris H Foster/HOU/ECT@ECT
cc:  
Subject: Status of QF negotiations on QFs & Legislative Update

This from a conference call with IEP tonight at 5 pm:

RE;  Non-Gas-fired QFs -- The last e-mail I sent includes the latest version 
of the IEP proposal.  Negotiations with SCE on this proposal are essentially 
complete.  PG&E is OK with the docs.  All QFs but Calpine have agreed with 
the IEP proposal -- Under the proposal, PG&E would "retain" $106 million (of 
what, I'm not sure -- I think they mean a refund to PG&E from QFs who 
switched to PX pricing). The money would come from changing the basis for the 
QF payments from the PX price to the SRAC price, starting back in December 
(and maybe earlier).

PG&E will not commit to a payment schedule and will not commit to take the 
Force Majeure notices off the table. QFs are asking IEP to attempt to get 
some assurances of payment. 

SCE has defaulted with its QFs; PG&E has not yet -- but big payments are due 
on 2/2/01.

For gas-fired QFs -- Heat rate of 10.2 included in formula for PG&E's 
purchases from such QFs. Two people are negotiating the these agreements 
(Elcantar and Bloom), but they are going very slowly. Not clear this can be 
resolved. Batten and Keeley are refereeing this.  No discussions on this 
occurred today.

Status of legislation -- Keeley left town for the night, so not much will 
happen on the QFs.Assembly and Senate realize they have to work together.  
Plan to meld together AB 1 with Hertzberg's new bill .  Hydro as security is 
dead. Republicans were very much opposed to it.