Further comment Re: Legal Issues to be Presented at CPUC Emergency ,
 To my understanding, the utilities will get an unexpected windfall for their 
nuclear units in 2001.  AB1890 specifies that they would receive 50% of the 
benefits of the unit after the rate freeze.

Roger.  Can you confirm the numbers and the reference to AB 1890.

"Enron further notes that AB1890 specifies that the utilities would receive 
50% of the benefits of the nuclear units after the rate freeze.  Assuming 
that the nuclear units make up 4,000 MW and profit is $200/MWh, the utilities 
will receive a $3.5b windfall out of this situation.  I think we should make 
the point that it is inappropriate for utilities to make windfalls as a 
result of their bad decisions (selling off more thermal then they were 
required to and not hedging)."

I think we should insert these sentences after the "Enron notes that; ....." 
that I put in my comments to you yesterday in blue under important principles.



Scott




MBD <MDay@GMSSR.com> on 12/27/2000 01:24:29 AM
To: Jeff.Dasovich@enron.com, Alan.Comnes@enron.com, dbenevid@enron.com, 
eletke@enron.com, George.McClellan@enron.com, Harry.Kingerski@enron.com, 
James.D.Steffes@enron.com, jrudolp@enron.com, Joe.Hartsoe@enron.com, 
Kevin.McGowan@enron.com, Lisa.Yoho@enron.com, Lysa.Akin@enron.com, 
Mary.Hain@enron.com, Paul.Kaufman@enron.com, Richard.Shapiro@enron.com, 
ryang@enron.com, Sandra.McCubbin@enron.com, Sarah.Novosel@enron.com, 
sstoness@enron.com, skean@enron.com, Stuart.Staley@enron.com, 
Susan.J.Mara@enron.com, vsharp@enron.com, wcurry@enron.com, MBD 
<MDay@GMSSR.com>, Robert.C.Williams@enron.com, msmith1@enron.com
cc:  
Subject: Legal Issues to be Presented at CPUC Emergency Hearings


Enclosed is a draft presentation of legal issues to be presented at the CPUC
emergency hearings in conjunction with regulatory and economic arguments set
forth in the draft comments previously distributed by Jeff Dasovich.  Jeff
and I will work to merge the legal issues into the full presentation,
subject to the duscussion on the conference call tomorrow morning.  This
presentation has been prepared in anticipation of the fact that we will
likely be limited to a very short verbal presentation tomorrow.  A more
extensive legal analysis of all these points is being prepared to accompany
any briefs or written comments which we are permitted to file later.  Please
e-mail comments using the reply function to MBD at this address before the
conference call if at all possible.  Thank you.  Mike Day


 <<X19418.DOC>>

 - X19418.DOC
jeff.dasovich@enron.com