CDWR Response

FYI, Ken we may want you to speak to Peevey and Freeman. I believe that
discussion should frame the proposal and attempt to set up a meeting with his
staff and advisors to answer questions about credit and documentation. In
the propsal, we have tried to frame the potential credit and legal holes in
their RFP with our suggested language or documents. It would be helpful for
the commercial team in ENA/EES to meet with these gentlemen and their
advisors to describe the proposal and perhaps move towards negotiating a
transaction.

The proposal includes:
a) traded power products of various sizes and terms;
b) unit contigent tolls from Pastoria (750MW) and Las Vegas Cogen (222MW)
for term;
c) natural gas packages for size for one through five year terms to provide
gas hedges for their QF portfolio or other contracted merchant toll contracts;
and d) an preliminary proposal on DSM from EES.

I will forward an executive summary from Chris Calger with more detail.

Regards
Delainey
---------------------- Forwarded by David W Delainey/HOU/ECT on 02/06/2001
06:56 PM ---------------------------

Dale Rasmussen
02/06/2001 05:51 PM
To: David W Delainey/HOU/ECT@ECT, Steven J Kean/NA/Enron@Enron, Mark E
Haedicke/HOU/ECT@ECT, Jeff Dasovich/NA/Enron@Enron, John J
Lavorato/Corp/Enron, David Parquet/SF/ECT@ECT, Christopher F
Calger/PDX/ECT@ECT
cc:
Subject: CDWR Response

The final copy of the Response to RFB (California Department of Water
Resources) is attached. We are sending the document by fax and overnight
delivery shortly.

The missing Exhibits are in hard-copy form and will be included in the
overnight delivery package.