Subject: governor announces qf agreement and schedule for final resolution
louise ,
california is proposing to buy qf energy / capacity for $ 79 for 5 years or $ 69 for ten years . we will re - run the economics of ace today .
chris
- - - - - - - - - - - - - - - - - - - - - - forwarded by christopher f calger / pdx / ect on 03 / 21 / 2001 10 : 03 am - - - - - - - - - - - - - - - - - - - - - - - - - - -
christopher f calger
03 / 21 / 2001 07 : 45 am
to :
cc :
subject : fw : eix , pcg : governor announces qf agreement and schedule for final resolution
guys ,
this looks real positive for a qf resolution . do we know the proposed pricing terms and the impact on the ace valuation ? any news from ahlstrom ?
chris
- - - - - - - - - - - - - - - - - - - - - - forwarded by christopher f calger / pdx / ect on 03 / 21 / 2001 07 : 44 am - - - - - - - - - - - - - - - - - - - - - - - - - - -
from : chip schneider / enron @ enronxgate on 03 / 21 / 2001 08 : 40 am cst
to : michael tribolet / enron @ enronxgate , william s bradford / enron @ enronxgate , james d steffes / na / enron @ enron , alan comnes / pdx / ect @ ect , christopher f calger / pdx / ect @ ect , w david duran / hou / ect @ ect
cc :
subject : fw : eix , pcg : governor announces qf agreement and schedule for final resolution
- - - - - original message - - - - -
from : paul patterson @ enron [ mailto : imceanotes - paul + 20 patterson + 20 + 3 cpaul + 5 fpatterson + 40 xmr 3 + 2 ecom + 3 e + 40 enron @ enron . com ]
sent : wednesday , march 21 , 2001 7 : 21 am
to : schneider , chip
subject : eix , pcg : governor announces qf agreement and schedule for final resolution
credit suisse first boston
paul patterson
good morning ,
here are the recent developments in the california power crisis :
- yesterday , governor davis gave a press conference to announce a qf agreement that would ensure future utility payments and possibly deter involuntary bankruptcy filings by certain qfs . a cpuc order on long - term qf contracts is expected next tuesday .
- corroborating the governor ' s announcement , edison international and pg & e corp each announced yesterday that it reached agreement with the qfs for payment of future deliveries .
- the governor laid out a schedule that targets a final resolution to the utilities ' final crisis by mid - april . on april 3 , the cpuc is expected to issue an order on dwr cost recovery . a final settlement for the utilities is anticipated 10 - 15 days afterwards .
- significantly , the governor expects that ( 1 ) the final settlement will occur within the existing rate structure , and ( 2 ) that the dwr will recover its costs with priority over the qfs and utilities .
- the achievement of a qf agreement may make potential bankruptcy appear more remote and therefore support the stocks in the near - term . however , we believe that substantially more effort will be required to resolve the utilities ' financial crisis . we recommend that investors avoid eix ( $ 12 . 04 , hold ) and pcg ( $ 11 . 40 , hold ) , unless they have a high tolerance for risk and volatility .
please call us with any questions you may have .
regards ,
paul patterson , 212 - 325 - 5876
neil stein , 212 - 325 - 4217
wen - wen chen , 212 - 538 - 0223
emily lao chua , 212 - 325 - 1982
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