Subject: California Update 6/12/01
From: [email-masked]
To: [email-masked], [email-masked]
Cc: [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], james
Date: Tue, 12 Jun 2001 19:10:00 -0700 (PDT)

Confidential Information

?	One of our source has reported that Socal has started to "ring-fence some assets."  As reported earlier, this is a sign that they are starting to protect themselves in case of a bankruptcy.  PG&E started this activity a week prior to their announcement of involuntary bankruptcy.  As the MOU and other Plan Bs fall apart, the chances of a Socal bankruptcy increases.

The following information was provided by a source who meet with senior White House members earlier today:

Price Caps
?	The White House is taking an extremely tough line on price caps.  They are well aware of the Congressional pressure on price caps but are determined to resist.

California
?	They feel Davis made a serious blunder when he initiated a court case against price caps.  They commented, "he'll lose it, and he's made it the Court's doing, not the administrations."  The White House is not considering, at this time, any type of relief orders for the Northwest.  
?	They do believe the existing price mitigation plan is working, "to some extent."
?	The White House believes SoCal is very close to bankruptcy, it is just a matter of time.

FERC
?	The White House is not thinking of replacing Hebert as Chairman of FERC.  Their response was, "why would we?  Wood toes the same line so why bother changing."