---------------------- Forwarded by Phillip K Allen/HOU/ECT on 01/16/2001 07:25 AM --------------------------- From: James D Steffes@ENRON on 01/15/2001 11:36 AM CST To: Steven J Kean/NA/Enron@Enron, Richard Shapiro/NA/Enron@Enron, Sandra McCubbin/NA/Enron@Enron, Jeff Dasovich/NA/Enron@Enron, Michael Tribolet/Corp/Enron@Enron, Vicki Sharp/HOU/EES@EES, Christian Yoder/HOU/ECT@ECT, pgboylston@stoel, Travis McCullough/HOU/ECT@ECT, Don Black/HOU/EES@EES, Tim Belden/HOU/ECT@ECT, Phillip K Allen/HOU/ECT@ECT, Wanda Curry/HOU/EES@EES, Scott Stoness/HOU/EES@EES, mday@gmssr.com, Susan J Mara/NA/Enron@ENRON, robert.c.williams@enron.com, William S Bradford/HOU/ECT@ECT, Paul Kaufman/PDX/ECT@ECT, Alan Comnes/PDX/ECT@ECT, Mary Hain/HOU/ECT@ECT, Joe Hartsoe/Corp/Enron@ENRON cc: Subject: California Action Update 1-14-00 Enron has agreed that the key issue is to focus on solving the S-T buying needs. Attached is a spreadsheet that outlines the $ magnitude of the next few months. TALKING POINTS: Lot's of questions about DWR becoming the vehicle for S-T buying and there is a significant legal risk for it becoming the vehicle. WE DO NEED SOMETHING TO BRIDGE BEFORE WE PUT IN L-T CONTRACTS. Huge and growing shortfall ($3.2B through March 31, 2001) The SOONER YOU CAN PUT IN L-T CONTRACTS STOP THE BLEEDING. Bankruptcy takes all authority out of the Legislature's hands. ACTION ITEMS: 1. Energy Sales Participation Agreement During Bankruptcy Michael Tribolet will be contacting John Klauberg to discuss how to organize a Participation Agreement to sell to UDCs in Bankruptcy while securing Super Priority. 2. Legislative Language for CDWR (?) Buying Short-Term Sandi McCubbin / Jeff Dasovich will lead team to offer new language to meet S-T requirements of UDCs. Key is to talk with State of California Treasurer to see if the $ can be found or provided to private firms. ($3.5B by end of April). Pat Boylston will develop "public benefit" language for options working with Mike Day. He can be reached at 503-294-9116 or pgboylston@stoel.com. 3. Get Team to Sacramento Get with Hertzberg to discuss the options (Bev Hansen). Explain the magnitude of the problem. Get Mike Day to help draft language. 4. See if UDCs have any Thoughts Steve Kean will communicate with UDCs to see if they have any solutions or thougths. Probably of limited value. 5. Update List Any new information on this should be communicated to the following people as soon as possible. These people should update their respective business units. ENA Legal - Christian Yoder / Travis McCullough Credit - Michael Tribolet EES - Vicki Sharp / Don Black ENA - Tim Belden / Philip Allen Govt Affairs - Steve Kean / Richard Shapiro