PG&E's Roll-Off Strategy Outlined in 8K Filing ,
 PG&E pretty much lays it on the line.  We have already talked to customer 
groups.  This could be a great opportunity for us to get some real changes in 
the market

"Mr. Glynn noted that before the high wholesale power prices began to be
experienced in June 2000, revenues from frozen rates were sufficient to
recover transition costs because revenues at frozen rates exceeded costs,
including wholesale power purchase costs.  Reacting to some media
commentary that the Utility could waive the recovery of a material amount
of transition costs, with an associated material write-off of the foregone
transition costs, such that transition costs would have been recovered as
of a date when there were no deferred wholesale power purchase costs, Mr.
Glynn indicated that was one of several possible approaches for the Utility
to assess.  Mr. Glynn indicated that, if the value of the Utility's
hydroelectric generating assets, as reflected in the settlement agreement
filed by the Utility and other parties on August 9, 2000, were to be
credited to the transition costs, then such costs would have been fully
recovered during August 2000.  Mr. Glynn based his statement on the
following facts:  Without considering the value of the Utility's
hydroelectric assets, at August 31, 2000, the Utility's estimated remaining
uncollected transition costs that must be collected during the transition
period were approximately $1.6 billion.  As previously disclosed, the
settlement agreement filed by the Utility and others on August 9, 2000,
regarding the valuation and disposition of the Utility's hydroelectric
assets, specifies that the value of those assets for purpose of transition
cost calculation is $2.8 billion, which would be reduced by its book value
of approximately $700 million.  Testimony taken to date in the CPUC
proceeding where valuation is to be established put the range of market
values from $2.4 billion to in excess of $3 billion under operating and
market conditions prior to June 2000.  Under the electric industry
restructuring law, when the Utility completes recovery of its uneconomic
utility generation-related assets and obligations it will satisfy the
conditions that permit the CPUC to determine that the rate freeze and
transition period are over."

8K attached
dennis.benevides@enron.com, tim.belden@enron.com, roger.yang@enron.com, 