-----Original Message-----
From:  Tribolet, Michael  
Sent: Saturday, April 28, 2001 1:23 PM
To: 'jwilson@saybrook.net'
Subject: Comments on MOU/SCE memo of April 20, 2001


As we discussed, here are my comments/questions on the presentation. 

1. On page 17, in 2003-4, the DWR purchases $4.7B in power.  The MOU states 
that SCE would be obligated for purchased power beginning in 2003.

2. On page 17, the debt service figure did not tie to the footnotes.   Using 
both the $2.7B and $1.5B DWR note issuances, the annual debt service is 
approximately $430 mln per year on a mortgage type amortization and about 
$500 million per year on a straight-line amortization.  The table indicates 
approximately $750 mln per year in debt service.   Was the $3B SCE issue's 
debt service accidentally captured in these figures? 

3. The SCE day one pre-tax sources appear to be :     

 Bond issuance by SCE    $3,000   mln
 Payment by parent          $   400   mln (at least)
 Sale of transmission        $2,760   mln
 Total SCE inflows            $6,160   mln

 What is needed is the model that shows that the original 4.9 cents covers 
cost of service and QF's, plus debt service,  after these inflows reduce the 
current debt and past due vendors amounts.  We have no way to test the 
sufficiency of these amount versus a pro-forma debt structure.

4. The MOU states that SCE shall securitize its full net undercollected 
amount (approx. $3.5 billion), yet the presentation shows a $3B financing.  
What is the difference? 

5. We need the economic assumptions on the DWR power purchases (volume, 
tenor, cost, etc.)

6. Is the total consumption figure listed prior to the 3% buydown or after 
giving effect for it (pages 27 to 29)?  

7. The transmission sale to the State of California's SPV does not appear to 
finance itself at the current rates of return.  If the current pretax, pre 
interest return is approximately 13%, the return after giving effect for the 
2.3x purchase price is only about 5.5%.  This does not appear to be 
sufficient to service the associated debt.



Regards,



Michael A. Tribolet