Credit assurances will need to be provided at the time the firm 
transportation documents are signed. The PA states that Kern will tender the  
transport agreement no later than 30 days prior to the date Kern files their 
FERC application.  Shippers will then have 15 days to sign the document . 
Kern will want to file this application ASAP - sometime in April.

I notice that the language below does not  address our need to have a call on 
the capacity if the sale falls through.  Due to the high level of exposure 
surrounding this capacity, I don't  think the language set forth below deals 
with all of the issues. 

I have a 9:30 meeting with Gerald to prepare the assignment documents - can 
we conference then?




Ron Coker
03/07/2001 07:17 PM
To: Stephanie Miller/Corp/Enron@ENRON, Barry Tycholiz/NA/Enron@ENRON, Gerald 
Nemec/HOU/ECT@ECT
cc: Karen E Jones/HOU/ECT@ECT, Andrew Kelemen/HOU/ECT@ECT 

Subject: Pastoria PSA

Here's the PSA language.  Sorry.


(a)   Buyer agrees to obtain the release of Seller under Seller's guarantee, 
dated [_____], in favor of Kern River Gas Transmission Company effective as 
of the Closing, and in furtherance thereof, agrees that Buyer shall either 
provide its own guarantee in favor of Kern River Gas Transmission Company or 
such other form of security as shall be acceptable to Kern River Gas 
Transmission Company in order to obtain such release.

----- Forwarded by Ron Coker/Corp/Enron on 03/07/2001 07:16 PM -----

	Ron Coker
	03/07/2001 07:16 PM
		 
		 To: Stephanie Miller/Corp/Enron@ENRON, Barry Tycholiz/NA/Enron@ENRON, Gerald 
Nemec/HOU/ECT@ECT
		 cc: Karen E Jones/HOU/ECT@ECT, Andrew Kelemen/HOU/ECT@ECT
		 Subject: Pastoria PSA

Below is the covenant we have in the PSA regarding release of the gas credit 
support.  When will a shipper be required to put up the credit support?  
Would anticipate we would have trouble obtaining a written release from Kern 
if Calpine agreed to provide the required support?  Would we receive a 
written release if Enron puts up a guarantee (which by definition covers the 
entire 15-year term) and Calpine puts up a three year evegreen LC?  Thanks.