CONFIDENTIAL

Sue,

I talked to Tim Belden briefly about this filing. He thinks it is a bit of a
losing battle but is supportive or a coalition (e.g., WPTF or IEP) protest.

Other comments from him were:

(As you noted) the ISO should require PG&E and SCE to file letters of credit,
rather than state that they did not come forward.

The DWR should not be setting the terms of what it will take to provide
credit; the ISO (and FERC) shoudl be.\

If DWR is given access to nonpublic data and real time trading information.
other creditworthy parties that are net short should also be afforded similar
access.

Hope this helps.

Alan

-----Original Message-----
From: Mara, Susan
Sent: Monday, May 14, 2001 3:00 PM
To: rcarroll@bracepatt.com; Sanders, Richard; Christian Yoder/HOU/ECT@ECT;
gfergus@brobeck.com; Steffes, James; jklauber@llgm.com; Dasovich, Jeff; Hall,
Steve C.; Tribolet, Michael; Belden, Tim; Ngo, Tracy; Nicolay, Christi
Cc: Alvarez, Ray; Comnes, Alan
Subject: ISO Compliance Filing on Credit May Need Protest

On May 11, the CA ISO made a "compliance filing" for the April 6 order on
credit worthiness in the real-time market. Whereas the FERC order REQUIRED
the ISO to get creditworthy parties -- the ISO portrayed it as an obligation
of the buying party. Therefore, the ISO's letter says that the ONLY party to
come forward to provide credit support was DWR -- and because of DWR's
"fiduciary obligation to conserve the finite resources that have been placed
at its disposal", DWR REQUIRED access to the ISO's control room floor and
non-public data. This is outrageous and just shows that the ISO has, in
effect, become a state-run, vertically-integrated utility. Question -- do we
want to protest this? Or sit by and see what the generators do? If we want to
comment, it would be due June 1.

Sue Mara
Enron Corp.
Tel: (415) 782-7802
Fax:(415) 782-7854