Subject: PG&E and SCE Defaults
From: [email-masked]
To: [email-masked], [email-masked], [email-masked]
Cc: [email-masked]
Date: Mon, 22 Jan 2001 10:31:00 -0800 (PST)

Confidential - Attorney Work Product/Not Discoverable

A. PGE

I. Termination Rights Based on the Failure to Post Collateral

It is possible that we could terminate the following contracts based on PGE's 
or one of its subsidiaries's failure to post collateral as required by the 
underlying contracts":

1.  PG&E/ENA - Financial ISDA  - Enron exposure $23 million

2.  PGET Power/EPMI - Physical power - Enron exposure $215 million

3. PGE Canada/Enron Canada - Physical gas - Enron exposure $15 million

4.PGE Canada/ENA - Physical gas - Enron exposure $1 million

II. Termination Rights Based on PG&E's Failure to Pay Indebtedness

It is possible that we could terminate the following contracts based on 
PG&E's or one of its subsidiaries's default on indebtedness in excess of a 
threshold (either $100 million or $50 million):

1. PG&E/ENA - Financial ISDA - Enron Exposure $23 million

2. PG&E/EPMI Physical Power -Enron exposure ($90 million)

3.PGET Power/ENA - Physical Coal - Enron exposure $200,000

4.PGET Power/ENA - Financial GTC - Enron exposure ($6.2 million)

5.PGET Power/EPMI - Physical power - Enron exposure (out of the money, 
currently used to net other EEMC power master which is net in the money $215 
million - see contract 2 above)

6.PGE Canada/Enron Canada - Physical gas - Enron exposure $15 million

7.  PGE Canada/ENA -Physical Gas- Enron exposure $1 million

8. PGET Gas/Enron Canada - Enron Exposure ($2.3 million)

9.PGET Gas/ENA -Financial ISDA - Enron exposure $ 48 million

10. PGET Gas/ENA - Physical gas - Enron exposure ($25 million)

11. PGET Gas/EES - Physical gas - Enron exposure ($700,000)

Most of the above agreements are supported by a guaranty from PG&E's parent 
(PG&E Corporation) in the amount of $475,000,000.  We have not yet made 
demand on the parent but could do so after PGE or its other unregulated 
subsidiaries failed to pay amounts due.  

Exposures are approximate as of 1/19/01.  Before terminating, we would need 
to verify actual contract language.

B.  SCE Default

SCE is in default of a contract between SCE and EPMI relating to  a power 
sales position which is out of the money to EPMI approximately ($35 million) 
based upon SCE's failure to make payments on debt in excess of $100 million. 
Under contract we could suspend deliveries (limited period) and then 
terminate and accelerate amounts due.  Amounts payable could offset amounts 
owed by SCE to EPMI or its Affiliates including Enron Wind or Portland 
General.