Barry, et al:

FYI.  Some initial info I got from our outside council regarding utility 
authority to engage in financial risk management tools.  More info to follow 
as we get it.  If you have quesitons, comments, or suggestions for additional 
research needed, just holler. Please forward to others who might need it.

Best,
Jeff

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Electric:  SCE, PG&E and SDG&E are all authorized to enter into bilateral
forward transactions with non-ISO or PX parties.  D.00-08-023 and
D.00-09-075.  These transactions are limited to contracts which must expire
on or before 12-31-05.  Initial contracts are subject to a blanket
reasonableness test (if less than 5% above cost of non-forward cost of
portfolio=deemed reasonable)  but contracts after 12-31-02 will be subject
to a CPUC preapproval process.

Gas:   PG&E authorized to use gas hedges for all purposes (D.98-12-082) but
limited to contracts expiring on or beforce 12-31-02 and limited to $200
million in cost or 800 MMcfd in volume.  We are looking for a similar
resolution or decision for Sempra.  Haven't found it yet, but we believe
they have been given similar authority.