ISO Market Participants:

On March 8, we notified you that the ISO had received a direct payment of
about $171 million from PG&E ($177 million less GMC obligation) with
direction from PG&E that these funds were in payment for transactions on the
ISO Controlled Grid in December 2000, scheduled by the California Power
Exchange (PX) as PG&E's Scheduling Coordinator, and invoiced to PG&E by the
PX for remittance to the ISO. We notified you further that the ISO had
placed these funds into a segregated interest-bearing account pending
resolution of their distribution.

The PX has provided notice that it has filed suit in the Central District of
California against the California ISO and moved for a temporary restraining
order (TRO), requiring the ISO to transfer these funds to the CalPX. Copies
of the complaint and the TRO application are attached below. As represented
by the PX in its complaint and moving papers, the ISO does not intend to
oppose the PX's TRO application. To the best of the ISO's knowledge, a
hearing on the TRO application has not yet been set.

Byron B. Woertz, Jr.

Director, Client Relations

(916) 608-7066



 - calpx3.doc
 - calpx4.doc
 - calpx5.doc