ANALYSIS OF CALIFORNIA MISSTEPS

Just to make sure that everyone is on the same page, Ban Sharma is working
with Seabron Adamson and Sue Mara to complete the work below. If people need
any other information (or a specific presentation), please let Ban know.

Thanks,

Jim

---------------------- Forwarded by James D Steffes/NA/Enron on 06/18/2001
11:22 AM ---------------------------
From: Jeff Dasovich on 06/15/2001 09:09 AM
Sent by: Jeff Dasovich
To: James D Steffes/NA/Enron@Enron
cc: Ban Sharma/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Paul
Kaufman/Enron@EnronXGate, Richard Shapiro/NA/Enron@ENRON, "Seabron Adamson"
<seabron.adamson@frontier-economics.com<, Susan J Mara/NA/Enron@ENRON

Subject: Re: ANALYSIS OF CALIFORNIA

In particular, would be nice to know how much of the "wealth transfer" went
to the likes of LADWP, other CA munis, Calpine, and the federal government
(e.g., BPA, Salt River). Finally, how much did the utilities profit from the
high prices (i.e., from selling their excess gen into the PX)?

Best,
Jeff

James D Steffes
06/14/2001 09:50 AM

To: "Seabron Adamson" <seabron.adamson@frontier-economics.com<
cc: Susan J Mara/NA/Enron, Richard Shapiro/NA/Enron@Enron, Ban
Sharma/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Jeff Dasovich/NA/Enron@Enron,
Paul Kaufman/Enron@EnronXGate
Subject: ANALYSIS OF CALIFORNIA

Seabron -

Here is an outline of the work product we would like you to consider --

1. How much did the LACK OF POLITICAL LEADERSHIP / LUNACY cost California
consumers?
+ LUNACY = CPUC did not accept $60/Mwh last year
+ unwillingness to fix credit problems
+ Bad CDWR buying habits
+ other

2. Analyze key Cal ISO studies dealing with "overearning" and market abuse.
+ Methodological faults
+ Analyze Key Findings
+ Develop appropriate "Enron" responses

3. Develop framework to assist in responding to political "calls" for market
controls
+ Understand better who "won" from the WEALTH TRANSFER
+ How much was transferred to "Texas generators"?

4. Other fixes still needed
+ A/S markets in California
+ Governance issues
+ other?

I hope this helps frame the work.

Jim