pros and cons

Here is the list of pros and cons for Scott Stoness filing testimony in the
CPUC rate design case (testimony due tomorrow, hearing set to begin next
Monday). We have a call into Mike Smith to get legal's view.

Pros of filing testimony:

Getting out on the table a demand reduction program and a market-based
pricing mechanism

Favorable "strawman" proposal can move direction of CPUC decision in our favor

Insurance policy in case no one files a proposal we like

Can be withdrawn before hearing if we have other proposals we can support

Could give us leverage to participate in settlement negotiations

Easier to make case through direct testimony than on cross exam.

Cons of filing testimony:

We get in a position of having to defend our position and loose ability to
throw support behind other positive proposals (alone or in combination)

We open ourselves to cross examlination and discovery (Scott Stoness will be
supporting witness and could have information we would not want revealed).

Enron is not very popular these days and filing/testimony could fuel more
negative press

Additional Enron resources will be used (Scott's time, Tamara's time)

Market dysfunction may help ENA's position

Scott Stoness estimates that there is a $50 million risk if dollars are not
apportioned properly to each rate class, but this is an issue that a number
of parties will likely be addressing in their testimony. He estimates that
there is an additional $50 million at risk if CPUC's seasonal rate design is
adopted as opposed to his two-part real time pricing proposal. $100 million
potential loss if Lynch proposal does not solve the problem for the winter of
2001-2002 and anothe rate increase is needed in November.