RE:

Jeff:

Based on Bill Gang's conversation with the Air Force rep., I understand that
there may be interest in treating "commodity-related" services as an option
that can be included in the bid opportunity. At any rate, to make the
process of filing a request with the CPUC for guidance more appeakling and
sensible, we have to be sure that the transaction we ask the CPUC to review
is the type of transaction that the AF is actually considering for Edwards.
Toward the end of nailing down this important issue, I am attaching my first
draft of a "fact sheet" setting forth the particulars as they relate to
Edwards and the possible transaction under consideration.

Regards,
Jim Squeri

- X07437.DOC