----- Forwarded by Jeff Dasovich/NA/Enron on 01/20/2001 11:01 PM -----

	"Julee Malinowski-Ball" <jmball@ns.net>
	01/19/2001 07:13 PM
	Please respond to "Julee Malinowski-Ball"
		 
		 To: "Jan Smutny Jones" <smutny@iepa.com>, "Steven Kelley" <steven@iepa.com>, 
"Katie Kaplan" <kaplan@iepa.com>
		 cc: "William Hall" <wfhall2@duke-energy.com>, "Tony Wetzel" 
<twetzel@thermoecotek.com>, "Sue Mara" <smara@enron.com>, "Steven Kelley" 
<steven@iepa.com>, "Steve Ponder" <steve_ponder@fpl.com>, "Stephanie Newell" 
<stephanie-newell@reliantenergy.com>, "Roger Pelote" 
<roger.pelote@williams.com>, "Robert Lamkin" <rllamkin@seiworldwide.com>, 
"Richard Hyde" <rwhyde@duke-energy.com>, "Paula Soos" 
<paula_soos@ogden-energy.com>, "Nam Nguyen" <nam.nguyen@powersrc.com>, "Marty 
McFadden" <marty_mcfadden@ogden-energy.com>, "Lynn Lednicky" 
<lale@dynegy.com>, "kent Palmerton" <kent.palmerton@williams.com>, "Ken 
Hoffman" <khoffman@caithnessenergy.com>, "Kassandra Gough" 
<kgough@calpine.com>, "Jonathan Weisgall" <jweisgall@aol.com>, "John Stout" 
<john_h_stout@reliantenergy.com>, "Joe Ronan" <joer@calpine.com>, "Joe Greco" 
<joe.greco@uaecorp.com>, "Jim Willey" <elliottsa@earthlink.net>, "Jeff 
Dasovich" <Jeff.Dasovich@enron.com>, "Jack Pigott" <jackp@calpine.com>, "Hap 
Boyd" <rboyd@enron.com>, "Greg Blue" <gtbl@dynegy.com>, "Frank DeRosa" 
<fderosa@sanfrancisco.usgen.com>, "Ed Tomeo" <ed.tomeo@uaecorp.com>, "Duane 
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Kebler" <curtis_l_kebler@reliantenergy.com>, "Carolyn Baker" 
<cabaker@duke-energy.com>, "Bob Escalante" <rescalante@riobravo-gm.com>, "Bob 
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Carlson" <william_carlson@wastemanagement.com>, "Craig Chancellor" 
<craigc@calpine.com>, "Eric Eisenman" <eric.eisenman@gen.pge.com>, "Kate 
Castillo" <ccastillo@riobravo-gm.com>
		 Subject: Legislative status report week ending 1/19

Date: 1/19/01
To: Jan Smutny-Jones, Steven Kelley, Katie Kaplan
Cc: IEP Board of Directors
From: Julee Malinowski-Ball, Edson + Modisette
RE: Legislative status report week ending 1/19


RECENT EVENTS:

-- The first two special session bills were signed by the Governor this
week: AB 5x (Keeley), relating to reconstituting the ISO and PX governing
boards, and 6x (Pescetti/Dutra), relating to utility retention of assets.
Includes in AB 5x was language requiring the ISO to make a list of
California power plants that are out of service due to either a planned or
unplanned outage available on the Internet on a daily basis.

-- Governor Davis has announced some appointments to the new ISO Board.
They include: Michael Kahn from the EOB as chair, Maria Contreras-Sweet who
is the Secretary of Business Transportation and Housing, Carl Guardino from
the Silicon Valley Manufacturing Group, and Mike Florio from TURN.  The
fifth position still remains vacant.  It is unclear if FERC will even
approve this new makeup.

-- SB 7x (Burton) caught everyone,s attention this week as it was
introduced, maneuvered through the legislative process and also signed by
the Governor within a 24 hour period.  SB 7x clarifies the authority of the
Department of Water Resources on a temporary basis to purchase electricity
(in lieu of AB 1x).  It gives the agency a 12-day window to purchase
electricity and sell it at cost. The legislation specifies that no contract
may be entered into later than February 15, 2001 and it sunsets on that
date.

-- The next legislative step taken this week was to continue the progress
made in the Assembly last week on AB 1x (Keeley/Migden).  AB 1x authorizes
the Department of Water Resources to contract with any person or entity to
purchase electricity for up to 5.5. center per kWh.  The Senate Energy
Committee met Friday afternoon to debate the measure.  Committee members
themselves brought up a number of concerns, including those previously
articulated by IEP and some member companies.  Specifically, IEP opposes the
5.5 cap and language that implies entities that &furnish8 power would be
&public utilities.8  Both were highlighted in today,s hearing by the Chair
of the committee and the author as provisions that need to be addressed
before the bill moves forward.   The committee expects to be drafting
potential amendments over the weekend  and will resume deliberations on
Monday at a time to be announced.  I am faxing the amendments proposed and
submitted to the committee by Southern for your review which address these
issues and more.

-- Senator Burton also held a press conference this week to introduce SB 6x
which would create a state power authority that has the power to, among
other things, finance the construction of additional generating capacity and
provide financing for older plants to make necessary retrofits for
efficiency improvements.  Power generated from this financing will be sold
to the state at cost.  The press release is attached.

-- Still sitting on the back burner for the moment (which could change at
any moment) is any legislative play on long-term contracting and siting
changes.  IEP has provided comments on both issues and is participating in
any discussions on these issues as they arise.

-- Last but not least, the QF issues has reached the legislative arena this
week.  Asm. Keeley has been intent on getting all the parties together to
negotiate the SCE QF contracts.  Negotiations will continue through the
weekend.


UPCOMING EVENTS:

--  There will be a Senate Energy Committee hearing on Monday to continue
deliberations on AB 1x (Keeley).  So far, I have no other scheduled meetings
or hearings for next week.  Stay Tuned.

--end--

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