Re: Business Review

Peggy, that all sounds very goo. I will attempt to get educated first and then we will set up a meeting. Thanks for being so cooperative.

From: PEGGY FOWLER/ENRON@enronxgate on 05/09/2001 11:18 AM
To: Stanley Horton/Corp/Enron@Enron
cc:

Subject: Re: Business Review

I agree that makes a lot of sense, that is certainly where we are spending our
time, and good management of that so far, is what is contributing to earnings
higher than expected....that and the crazy California markets. We're always
glad to have you visit, and could provide a detailed discussion if that's what
you would prefer. We are spending a great deal of time on this in the sales
presentations and have a number of overheads, and some written information
that we use in our position meetings that we could send to you to start with.
The rate case is in a very dynamic state, but we believe moving in right
direction. The power position is in constant review based on projected loads,
demand side management opportunities, and blocks of energy available at
reasonable prices in the future for our customers. We are still operating
under an obligation to serve, as we don't see that changing anytime in the
near future and those utilities in the west that have gotten in trouble are
those who haven't provided for customers. Commissions seem to be giving rate
increases for increasing prices if prudent management was attempted, but not
just for stopping based on possible belief of dereg. We have a sharing
mechanism right now that shares risks and rewards between customers and
shareholders. During this sales process we had spent a lot of time working
through with Sierra on this, and now with the new possible buyers. Most like
it when they finally understand. It is not regulation 101, it is very complex
and leading edge, but get the risks and rewards aligned much better for
shareholdes and customers. Doesn't fit Enron's view of dereg, but Oregon will
not get to Enron's view anytime soon, especially with California situation,
and it's not just Oregon regulators, it's Oregon customers including the
industrials that are reliability sensitive like high techs and health care.
Sorry for the long note....how about if I start by sending you some
information from presentations, and then we can look at schedules for when a
meeting might work. You might even want to come to one of the banker
presentations. Mark M and Mitch were both in Seattle yesterday, and could
share with you some of the discussion related to these subjects. Mitch thought
we might have another in a week or so.....

<<< Horton, Stanley 05/08/01 09:37AM <<<
After returning home and reviewing the material handed out at the PGE business
review, there are two areas that I think I need to understand better. The
first is PGE's energy positions going forward and the financial exposures to
changing prices. The second is the rate case. I would be happy to return to
Portland to get a more in depth review with a much smaller cast of players. I
am open to suggestions from you.

Given the status of the divestiture process, Jeff wants to make sure he (and
subsequently I) have a good handle on these two important issues.

Thanks!