Subject: PGE -- Securing gas suppliers issue
From: [email-masked]
To: [email-masked]
Cc: [email-masked], [email-masked], [email-masked]
Date: Wed, 24 Jan 2001 07:43:00 -0800 (PST)

Jim -- the following are our concerns about PG&E's proposal/possible points 
to make in a response:

1. Enron would be one of the largest unsecured creditors in the event of a 
PG&E bankruptcy; our claim may become even larger  depending on the extent to 
which we acquire additional claims against the utilities through the PX or 
ISO.  We are therefore interested in any action that would reduce the pool of 
assets available to unsecured creditors.  
2. This proposal may be to our benefit, or to our detriment.  There is not a 
great deal of detail in the proposal currently on the table, and Enron needs 
additional information in order to evaluate the proposal.   Certainly, we 
need to evaluate this in light of other developments.  

3. The proposal contemplates pledging "existing and future" receivables to 
secure obligations owed to gas suppliers; PGE shows approx. $1.3 billion in 
A/R as of 9/30; will that (or an amount of like magnitude) be pledged as 
security under this plan?  Granting gas suppliers security may be fine with 
us, but we don't have a great interest in OVER-collateralizing their 
positions.  More current information on the current A/R balances and the 
extent to which obligations to suppliers will be secured will be helpful.

4. Do they intend to extend this security to ALL gas suppliers, or only those 
that are refusing to supply PGE under current circumstances?

5. Do they intend to secure obligations on a going-forward basis only, or 
will they also secure their obligations with respect to payables that have 
already accrued?

6. PG&E is scheduled to make a couple of large payments to ENE tomorrow; what 
is PG&E's ability to make those payments for gas already delivered?

7. Given the extension of the DOE order, it seems that consideration of this 
petition could be delayed for a few days to allow interested parties 
sufficient time to evaluate its implications.

Give me a call with any questions.

In light of the DOE extension of the emergency gas supply order, there should 
now be adequate time for PG&E  to respond to these points and clarify their 
proposal.

Travis McCullough
Enron North America Corp.
1400 Smith Street EB 3817
Houston Texas 77002
Phone:  (713) 853-1575
Fax: (713) 646-3490