F#oni   Jeff Duaarich on O3~21i2OOi 1043 AM CST
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To:     l~k. 0 SmIthIHOUI~S@ESS
cc      awuoqub,nhmanuul.eom. Dun LIfIHOU/EES@EES, Dennis B.nwrldsu*4OWEESOEES, Olson
	HudiesoVHOIflES@EES, Evmn HughMOUJEESOEES, Jolt Me.sbia~HOlJEES@EES.
	kb@qulnnhmenueLrent, Muity 5unde~H0tJi~5QEES. Peggy MUhonsYfHOUIEES@EES. Robt C
	W,IiwnslEnmnOEnronxG.t.. Torn Risy~.sIaen Rsglonflhe Benfimy CompenyS~st1ange, Vicid
	ShrV~l0WEES@EE~ Ri.*wd ShmI N$JEnron@Enron. aku.nsnron.com. .*nss D
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	DwvisfCorp~~,wongENI~ON. 8.iaan .1 Ma,uVNAIEmOnOS4RON


Sub4sct Comments on Dennis' Decimraticm In UC~CSU Li~ait


Ml~ Here are my cornmer~s. Apologies for the hot thst the? are quick and dirty.

     AU Enrons public statements that I hw#e read, InclJding, I thbilc, statements made to financial
     analysts, stats that our exposure in California as not "material." Denrils declaration says that the
     sItuation In Cal Worrala has been a 'Inanolal dieuat.r.' that Enron has lost over $300 mlJlIon,~ and that
     'Snron stands to loge millions more.TM Thu losses are ciescnbd as "hag.." Perhaps this Is
     Irdomietlon that has slice been communicated to the market, but rm not eware of It And If It hasrft,
     It oould represent a s~nlfloant conallict with previous statements. Seemeprudert to run this by IR snd
     perhaps others before reismaing.
     Regarding the statements about our hedging strategy. Itweuld seem prudent to n.m this through the
     organization for comment and dla~usslon prior to making pL~Uo
     Veuy minor technical polrt-l dorft think that AB 1890 ~ passed "unanlrnousty." I think that theTa
     was I nay vote
     The statement 1 made that "the utilities wars required to sell cit most of their generating oap.cltyY
     The utilities were only requ Wed to sell oW 112 of their IbssWWed plants (wtiich I think 1 the time may
     ha~ amounted to about .2-.25 of their total gun assets). Th~r chose vokintarity to ad ci the
     remainder ofthelrfosall-llred plants.
     It is stated that stranded costs are "Investments in Iriprudunt power generation facIlities." ihase
     Investments were in fact found in the past to be prudent by the PUC, Would therefore not seem
     accurate to call them h,~pwdert now.
     Is It now Mrtualy impossible to manage commodity rtsW In California? Just wendering Ijudge migIt
     view the statement as t~~erstabr~g Ihe situation someM~at
     Frame PR perspecflve~ rm wandering If we went to characterize re-sourcing UCICSU hi the Iblowlng
     masuw, "It was actudy a relatively easy decision to make." Makes Enron sound perhaps
     emneesively hard-nosed.


Best
Jeff


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