Possibility of Bankruptcy Now Looms Very Large

---------------------- Forwarded by Mollie Gustafson/PDX/ECT on 01/04/2001
08:22 AM ---------------------------

Christopher F Calger
01/04/2001 08:13 AM
To: Mollie Gustafson/PDX/ECT@ECT
cc:
Subject: Possibility of Bankruptcy Now Looms Very Large

pls forward to my group
---------------------- Forwarded by Christopher F Calger/PDX/ECT on
01/04/2001 08:16 AM ---------------------------

Enron North America Corp.

From: Chip Schneider @ ENRON 01/04/2001 06:17 AM

To: Rick Buy/HOU/ECT@ECT, David Gorte/HOU/ECT@ECT, William S
Bradford/HOU/ECT@ECT, Christopher F Calger/PDX/ECT@ECT, Terry W
Donovan/HOU/ECT@ECT, George Schaefer/NA/Enron@Enron, W David Duran/HOU/ECT@ECT
cc:
Subject: Possibility of Bankruptcy Now Looms Very Large

---------------------- Forwarded by Chip Schneider/NA/Enron on 01/04/2001
08:07 AM ---------------------------

Credit Suisse First Boston <R-2-62573-249146-2-405-US2-1C6AE17F@xmr3.com< on
01/04/2001 07:29:07 AM
To: chip.schneider@enron.com
cc:

Subject: Possibility of Bankruptcy Now Looms Very Large

Credit Suisse First Boston
Paul Patterson
Good morning,
We have a note out on the proposed decision on PG&E Corp. and Edison
International.

? On January 3, the ALJ issued a proposed decision on the purchased power
undercollection emergency at PG&E Corp. and Edison International. A final
decision will be issued on January 4.

? The proposal contains interim rate increases of 7%-15% for different
customer classes. The surcharges would be subject to refunds and
substantially lower than the 26% and 30% increases requested by PG&E Corp.
and Edison International, respectively.

? The proposed rate increases would be effective for 90 days. During this
time the CPUC would consider a more comprehensive audit of the utilities'
financial condition.

? Significantly, the proposal rejects the utilities' request to end the rate
freeze. The order would also order the utilities to credit TCBA
overcollection to the TRA undercollection balance.

? Clearly, the risk of insolvency is much higher now. If passed, the order
will fall far short of resolving the financial crisis facing PG&E Corp. and
Edison International. Even if the utilities avoid bankruptcy, we now
anticipate, more than ever, a tremendous amount of uncertainty concerning the
economic value of these stocks.

Please call us with any questions you may have.
Regards,
Paul Patterson, 212-325-5876
Andy Levi, 212-325-0893
Neil Stein, 212-325-4217
Wen-Wen Chen, 212-538-0223
Emily LaoChua, 212-325-1982
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- powerpolitics010301.pdf