Re: Peace Press Conference Notes

Steve Peace is watching his political career vanish before his very=20
eyes---couldn't happen to a nicer guy. Rightly or wrongly, he's determined=
=20
that this tack is his last and best option to salvage something. Whether=
=20
anyone joins his parade is a whole other question. Nevertheless, we should=
=20
expect him to continue.

=09Susan J Mara
=0911/21/2000 09:46 AM
=09=09=20
=09=09 To: James D Steffes/NA/Enron@Enron, Paul Kaufman/PDX/ECT@ECT, Richar=
d=20
Shapiro/NA/Enron@Enron, Jeff Dasovich/NA/Enron@Enron, Mona L=20
Petrochko/NA/Enron@Enron, Mary Hain/HOU/ECT@ECT, Joe=20
Hartsoe/Corp/Enron@ENRON, Sarah Novosel/Corp/Enron@ENRON, Sandra=20
McCubbin/NA/Enron@Enron, rcarroll@bracepatt.com
=09=09 cc:=20
=09=09 Subject: Peace Press Conference Notes

This is pretty much an all-out attack against the positions that we and the=
=20
generators have taken. =20
----- Forwarded by Susan J Mara/NA/Enron on 11/21/2000 07:43 AM -----

=09"Julee Malinowski-Ball" <jmball@ns.net<
=0911/20/2000 01:38 PM
=09Please respond to "Julee Malinowski-Ball"
=09=09=20
=09=09 To: "William Hall" <wfhall2@duke-energy.com<, "Trond Aschehoug"=20
<taschehoug@thermoecotek.com<, "Tony Wetzel" <twetzel@thermoecotek.com<,=20
"Tandy McMannes" <mcmannes@aol.com<, "Sue Mara" <smara@enron.com<, "Steven=
=20
Kelley" <steven@iepa.com<, "Steve Ponder" <steve_ponder@fpl.com<, "Roger=20
Pelote" <roger.pelote@williams.com<, "Robert Lamkin"=20
<rllamkin@seiworldwide.com<, "Paula Soos" <paula_soos@ogden-energy.com<,=20
"Marty McFadden" <marty_mcfadden@ogden-energy.com<, "Lynn Lednicky"=20
<lale@dynegy.com<, "Kent Fickett" <kfickett@usgen.com<, "Ken Hoffman"=20
<khoffman@caithnessenergy.com<, "Jonathan Weisgall" <jweisgall@aol.com<,=20
"John Stout" <john_h_stout@reliantenergy.com<, "Joe Ronan"=20
<joer@calpine.com<, "Joe Greco" <joe.greco@uaecorp.com<, "Jim Willey"=20
<elliottsa@earthlink.net<, "Jack Pigott" <jackp@calpine.com<, <iep@iepa.com=
<,=20
"Hap Boyd" <rboyd@enron.com<, "Greg Blue" <gtbl@dynegy.com<, "Frank DeRosa"=
=20
<fderosa@sanfrancisco.usgen.com<, "Ed Tomeo" <ed.tomeo@uaecorp.com<, "Duane=
=20
Nelson" <dnelsen@msn.com<, "Dean Gosselin" <dean_gosselin@fpl.com<, "David=
=20
Parquet" <dparque@ect.enron.com<, "David Keane" <dnke@dynegy.com<, "Curtis=
=20
Kebler" <curtis_l_kebler@reliantenergy.com<, "Carolyn Baker"=20
<cabaker@duke-energy.com<, "Bob Escalante" <rescalante@riobravo-gm.com<, "B=
ob=20
Ellery" <bellery@spi-ind.com<, "Bill Woods" <billw@calpine.com<, "Bill=20
Carlson" <william_carlson@wastemanagement.com<, "Stephanie Newell"=20
<stephanie-newell@reliantenergy.com<, "Richard Hyde"=20
<rwhyde@duke-energy.com<, "Kassandra Gough" <kgough@calpine.com<
=09=09 cc: "Susan McCabe" <sfmccabe@mindspring.com<, "Scott Govenar"=20
<sgovenar@govadv.com<, "Ron Tom" <thackbarth@govadv.com<, "Robert Ross"=20
<robbiz@cwo.com<, "Phil Isenberg" <Isenberg@HMOT.com<, "Mike Monagan"=20
<mrmonagan@aol.com<, "Maureen OHaren" <Oharen@HMOT.com<, "Marie Moretti"=20
<marie_moretti@msn.com<, "Kassandra Gough" <kgough@calpine.com<, "Hedy=20
Govenar" <hgovenar@acom2.com<, "Delany Hunter" <dhunter@smithandkempton.com=
<,=20
"Bev Hansen" <bhansen@lhom.com<, "Anne Kelly" <kelly@hnks.com<, "Jenn=20
Paulsen" <paulsen@hmot.com<, "Jamie Parker" <jparker@hmot.com<
=09=09 Subject: Peace Press Conference Notes

Senator Steve Peace held a press conference today to discuss, as chair of
the Senate Budget Committee, the Senate Budget proposal with contain $2
billion for a special reserve for energy initiatives.

He stated that he is not proposing any uses for this money, that it is
designed to =01&preserve the options for the Governor=018 and other policy =
makers
in dealing with California=01,s energy woes. However, he proceeded to outl=
ine
some possible options, including the state taking over the transmission
system, condemning power plants and the state running them, condemning just
the output of the states power plants, or having the state build power
plants. Again, he is not proposing these, they are just options for the
Governor.

Other comments of interest:

- Generators are only willing to build power plants if they can get 14 cent=
s
kw/hr. If that=01,s the case, the state can build them for cheaper.

- He noted that today the CEC will release some data that calls into
questions there is a supply problem. Independent energy producers have
=01&fabricated the supply problem.=018

- Criticized generators for pushing for retail solutions, saying that
=01&nothing would be more disastrous than opening the retail market before =
the
wholesale market is controlled.=018

- =01&Generators are extorting the law=018 and =01&running roughshod over C=
alifornia=01,
s environmental law=018 in a =01&well-orchestrated political agenda.=018

- Generators are in a =01&full-scale attack on the balance sheets=018 of th=
e
investor-owned utilities.

- He also said that the IOUs have indicated that they would be willing to
get back into the generation business if the state finances it.

- Generators are asking FERC to keep prices artificially high.

- He still insists that rates are outright market manipulation, and that
generators were holding back thousands of megawatts of power this summer.
Cites today=01,s higher prices as an example.

Please contact me or our office if you would like a copy of the press
release or the other supporting materials, including his letter to Lynch
that urges the CPUC to deny the IOUs cost pass-through request, and asks th=
e
CPUC to order the IOUs =01&to exhaust their legal remedies to obtain refund=
s
from all parties who were the beneficiaries of the proceeds of the unlawful
wholesale charges the IOUs incurred.=018

--end--

Julee Malinowski-Ball
Associate
Edson+Modisette
916-552-7070
Fax- 552-7075
jmball@ns.net