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----- Forwarded by Jeff Dasovich/NA/Enron on 01/25/2001 03:17 PM -----
MBD <MDay@GMSSR.com< 01/25/2001 12:41 PM To: "'James.D.Steffes@enron.com'" <James.D.Steffes@enron.com<, MBD <MDay@GMSSR.com<, Jeff.Dasovich@enron.com, Travis.McCullough@enron.com cc: Subject: RE: PGE -- Securing gas suppliers issue Hot Flash: The ALJ in the case (Tim Kenney) just advised me that he is so busy that he will not even read any responses to the PG&E petition for issuing a security interest in accounts receiveables. Don't ask if this is due process--it's not. The commission is clearly going to grant this authority at the emergency meeting tomorrow at 1:30. In voice mails from Travis, he recommended voicing some concerns so that we can raise the issue later if we feel Enron's interests have been prejudiced by how PG&E implements this. I also received the indication that EES and ENA were very concerned about filing anything negative that could upset the present arrangments with PG&E on DASR matters. I recommend not filing. I do not believe we need to express any concerns to raise them later. We are not in a formal waiver situation, and the commission is acting before any reasonable responses were possible. Let me know by VOICE MAIL what you want to do. If you want something filed, please also advise my associate, Jeanne Bennett who will be monitoring this issue in the office today while I am in Sacramento. Her direct line is 415-765-8449. Thanks, Mike Day -----Original Message----- From: James.D.Steffes@enron.com [mailto:James.D.Steffes@enron.com] Sent: Wednesday, January 24, 2001 5:26 PM To: mday@gmssr.com; Jeff.Dasovich@enron.com; Travis.McCullough@enron.com Subject: PGE -- Securing gas suppliers issue To Be discussed on 10:30am call tomorrow. Jim ----- Forwarded by James D Steffes/NA/Enron on 01/24/2001 07:24 PM ----- Travis McCullough@EC To: James D Steffes/NA/Enron@Enron T cc: Elizabeth Sager/HOU/ECT@ECT, Jeffrey T Hodge/HOU/ECT@ECT, Richard B Sanders/HOU/ECT@ECT 01/24/2001 Subject: PGE -- Securing gas suppliers issue 03:43 PM Jim -- the following are our concerns about PG&E's proposal/possible points to make in a response: 1. Enron would be one of the largest unsecured creditors in the event of a PG&E bankruptcy; our claim may become even larger depending on the extent to which we acquire additional claims against the utilities through the PX or ISO. We are therefore interested in any action that would reduce the pool of assets available to unsecured creditors. 2. This proposal may be to our benefit, or to our detriment. There is not a great deal of detail in the proposal currently on the table, and Enron needs additional information in order to evaluate the proposal. Certainly, we need to evaluate this in light of other developments. 3. The proposal contemplates pledging "existing and future" receivables to secure obligations owed to gas suppliers; PGE shows approx. $1.3 billion in A/R as of 9/30; will that (or an amount of like magnitude) be pledged as security under this plan? Granting gas suppliers security may be fine with us, but we don't have a great interest in OVER-collateralizing their positions. More current information on the current A/R balances and the extent to which obligations to suppliers will be secured will be helpful. 4. Do they intend to extend this security to ALL gas suppliers, or only those that are refusing to supply PGE under current circumstances? 5. Do they intend to secure obligations on a going-forward basis only, or will they also secure their obligations with respect to payables that have already accrued? 6. PG&E is scheduled to make a couple of large payments to ENE tomorrow; what is PG&E's ability to make those payments for gas already delivered? 7. Given the extension of the DOE order, it seems that consideration of this petition could be delayed for a few days to allow interested parties sufficient time to evaluate its implications. Give me a call with any questions. In light of the DOE extension of the emergency gas supply order, there should now be adequate time for PG&E to respond to these points and clarify their proposal. Travis McCullough Enron North America Corp. 1400 Smith Street EB 3817 Houston Texas 77002 Phone: (713) 853-1575 Fax: (713) 646-3490
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