ABX1 1 - Hearing

----- Forwarded by Jeff Dasovich/NA/Enron on 01/23/2001 10:48 AM -----

Scott Govenar <sgovenar@govadv.com<
01/22/2001 04:19 PM

To: Hedy Govenar <hgovenar@govadv.com<, Mike Day <MDay@GMSSR.com<, Bev
Hansen <bhansen@lhom.com<, Jeff Dasovich <jdasovic@enron.com<, Susan J Mara
<smara@enron.com<, Joseph Alamo <JAlamo@enron.com<, Paul Kaufman
<paul.kaufman@enron.com<, David Parquet <David.Parquet@enron.com<, Marcie
Milner <mmilner@enron.com<, Tim Belden <Tim.Belden@enron.com<, Rick Shapiro
<rshapiro@enron.com<, Jim Steffes <james.d.steffes@enron.com<, Alan Comnes
<acomnes@enron.com<, Chris Calger <ccalger@enron.com<, Mary Hain
<mary.hain@enron.com<
cc:
Subject: ABX1 1 - Hearing

The Senate Energy Committee met today to discuss ABX1 1. They are not
scheduled to meet tomorrow but that is subject to change.

Senator Bowen does not intend to move the bill until the committee is
able to review the short term bids mandated in SBX1 7 this Wednesday.
Several Senators suggested that today's hearing may be moot until they
are able to get a better idea of the costs associated with a long term
contract.

Page 4, lines 20-21 - Will add language to enable the state to obtain
security interest in IOU assets.

Page 5, lines 35-40 - Legislative Counsel will review indemnification
language to determine if it is necessary in legislation, or, if can be
utilized in contracts.

Page 5, line 32, strike "or" and insert "and"

Sunset remains an issue with Republicans who are urging a sunset of the
bill's provisions instead of a sunset review.

With respect to the section of the analysis entitled "Issues Not
Addressed in Mock-Up"

1) Will not discuss bidding procedures at this time
2) Will not discuss bid evaluation process at this time
3) Will continue to discuss the sunset review provisions
4) Will not require DWR to sell excess power back to hour-ahead market
5) The financing mechanism does provide adequate assurance of repayment
6) Will not discuss additional stranded costs at this time
7) Will not discuss state contracting provisions at this time

PG&E suggested that it would make more sense for the DWR to sell power
directly to consumers. They also want the state to assume QF contracts
(Bowen said this was a non-starter)

SCE suggested that DWR be responsible for ancillary services. They also
suggested that DWR should, at their discretion, be able to assume
certain existing contracts.

Dynegy, in addition to the comments raised in the analysis, needs a
guarantee regarding the state's full faith of credit. They also
requested a waiver of sovereign immunity.

The only new opposition came from Women's Energy Matters who collected
10,000 signatures, all of whom refuse to pay the CPUC mandated 9%
increase. They see no guarantee that the state will recoup its money in
the bill and advocate for condemnation of everything.

Scott