CDWR

Steve:

The CDWR idea has already been implemented. Today the ISO couldn't get supply
from the market and informed market participants that CDWR would sleeve deals
to the ISO. This occurred at a time when CA was in Stage 3 emergency (only
the second one ever) and anticipating rolling blackouts this evening. Enron
and other suppliers began to aggregate supply to sell to CDWR presumably to
go to the ISO. Belden was concerned that Gray Davis may just withhold
payment through CDWR when settlements are due. This concern prompted us to
require paper confirms for hourly deals and a discussion between Christian
Yoder and Steve Hall (Stoel Rives) with the assistant director at CDWR to
make sure CDWR management was on board - which they confirmed verbally.
Regardless of all of this we still have some paranoia about getting paid. Is
Gray Davis willing to confirm that no payment issue through CDWR will occur?
We are currently continuing to aggregate supply through the day but are
hesitant to increase quantities without such assurance. Other suppliers
appeared hesitant as well as they wouldn't sleeve the deals to CDWR.