Message-ID: <19736954.1075840208216.JavaMail.evans@thyme> Date: Sun, 10 Sep 2000 23:23:00 -0700 (PDT) From: rosalee.fleming@enron.com To: cynthia.sandherr@enron.com Subject: Re: New PUHCA Exemption Legislative Language Cc: steven.kean@enron.com, richard.shapiro@enron.com, james.steffes@enron.com, joe.hillings@enron.com, tom.briggs@enron.com, joe.hartsoe@enron.com, sarah.novosel@enron.com, dwatkiss@bracepatt.com, awenner@velaw.com Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit Bcc: steven.kean@enron.com, richard.shapiro@enron.com, james.steffes@enron.com, joe.hillings@enron.com, tom.briggs@enron.com, joe.hartsoe@enron.com, sarah.novosel@enron.com, dwatkiss@bracepatt.com, awenner@velaw.com X-From: Rosalee Fleming X-To: Cynthia Sandherr X-cc: Steven J Kean, Richard Shapiro, James D Steffes, Joe Hillings, Tom Briggs, Joe Hartsoe, Sarah Novosel, dwatkiss@bracepatt.com, awenner@velaw.com X-bcc: X-Folder: \Kenneth_Lay_Dec2000\Notes Folders\All documents X-Origin: LAY-K X-FileName: klay.nsf Cynthia, Ken said to tell you that he told David Sokol we would probably oppose it. Rosie Cynthia Sandherr 09/08/2000 04:49 PM To: Kenneth Lay/Corp/Enron@ENRON, Steven J Kean/NA/Enron@Enron, Richard Shapiro/HOU/EES@EES, James D Steffes/HOU/EES@EES, Joe Hillings/Corp/Enron@ENRON, Tom Briggs/NA/Enron@Enron, Joe Hartsoe/Corp/Enron@ENRON, Sarah Novosel/Corp/Enron@ENRON, dwatkiss@bracepatt.com, awenner@velaw.com cc: Subject: New PUHCA Exemption Legislative Language Yesterday, Ken Lay spoke with MidAmerican CEO David Sokol regarding the attached new legislative amendment to provide a limited PUHCA exemption for companies with a high level of financial stability as determined by independent market analysts (i.e. "A" rating for Holding Companies or investment grade rating for utility companies). This is not a permanent exemption as PUHCA would again apply should the company loose its high rating. MidAmerican's lobbyist reported this conversation to me along with Ken Lay's reported commitment that we would review it as soon as we could. Reportedly, Ken Lay was non-committal but not negatively disposed. The utility strategy is to have Senator Bob Kerrey (D-NE) offer this as an amendment to a "must pass" piece of legislation during the waning days of this Congressional session. This will be separate from the utilities' strategy to enact Private Use legislation (H.R. 4971, S. 2967 which includes tax language to exclude water and sewage connection fees from gross income as contributions to capital and language to increase the amount permitted to paid into nuclear decommissioning reserve funds primarily for Commonwealth Edison) and to enact stand-alone Reliability legislation (S. 2071 and H.R. 2944). Senator Kerrey has already spoken to Senator Gramm (R-TX) about this PUHCA amendment and Gramm was reportedly non-committal but not negatively disposed to the idea. I will follow-up with Gramm's staff next week after they've reviewed it and convey their views to you. According to MidAmerican, the concept to insure stockholder protection along with consumer protection was Senator Kerrey's idea. It is possible that Congressman Dingell (D-MI) and Congressman Markey (D-MA) would still actively oppose this limited exemption, especially given the fact that Congressman Dingell (who would Chair the Commerce Committee should the Democrats regain control of the House) has recently said that whether or not he is Commerce Committee Chairman next Congress, that comprehensive electricity restructuring legislation including PUHCA repeal is "at least three years away from happening." Steve and Rick, can we get a temperature gauge next week as to our position on this amendment? As a reminder, Enron's position here-to-date has been to oppose stand-alone PUHCA repeal as this is the one provision utilities like Southern Company really want. To date, this strategy has worked with the MidAmerican Utility Group willing to support our transmission open access provisions in turn for our PUHCA exemption support.