Public Utility District No. 1 of Clark County, Washington

Jay,

To reconfirm my conversation yesterday with Reid Grossman, a consultant hired
by the referenced counterparty to negotiate their trading documents with us:

1. PUD #1 would also like to get gas and power trading agreements in place
with us. Per my conversation with Dave Fuller yesterday, the physical
trading agreements are of a higher priority than the financial trading
agreement.
2. They would like to get a draft of a collateral annex from us. Their
suggested trading threshold for themselves was in the $3.5-5mm range.
3. They would already be in default of the MAC's you sent me in the credit
worksheet dated 1/25/01. We need to revisit the MACs.
4. They think a 3rd party debt threshold of $1mm is too low for them, they
suggested a threshold of $10mm.
5. The agreement provides for annual and quarterly financial statements. I
don't think they have quarterly. You need talk to them about what they
can/will provide.

If you would like to talk to Reid directly, his ph no. is 509/252-5096.

By the way, Reid is an old buddy of Bill Bradford from Reid's Avista/PG&E
days, and Reid sends his regards to Bill. If you see Bill pass this message
on...