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Best, Jeff
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In all week, except tomorrow, when I'll be in Pasadena with Steve Kean at a meeting of Republican Congressional folks to discuss CA's electricity mess.
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Linda: I will have the California update done for Steve today.
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Maureen, could I possibly get the fax # where Steve will be staying this evening in the event that I need to fax it to him directly?
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What time will he be leaving for LA?
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Thanks.
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Best, Jeff
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Well, this would seem to indicate one of two things: either Hertzberg's is now an absolute lost cause, or it's more urgent than ever to have Ken Lay talk to him.
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Given the situation, it would still seem prudent to have Ken Lay talk to the Speaker.
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Best, Jeff
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Carolyn, you're a star.
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Thanks for the input , Anil.
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For what it's worth, I'll take a final looksee this evening and tie up any loose ends (though I doubt that there will be any).
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I'll send around to all for one last peek in the morning, and I'll bring a copy to turn in. Sound reasonable?
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Let me know.
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Best, Jeff
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Thank you.
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I'll be picking Steve up at the hotel and 9:30 am tomorrow morning.
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And thank you very much for paging him for me.
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Best, Jeff
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Sorry, Mike.
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Just got this.
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Will try to turn it around pronto.
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Our guy John Neslage is trying to pull together exactly what you're requesting.
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He'll get it to you as soon as we've got it pulled together.
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Best, Jeff
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Thanks very much, Rosalee.
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Have a nice evening.
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Best, Jeff
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Man, you're quick.
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Thanks very much.
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This is really starting to get wierd.
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Makes Cuba look capitalist.
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Best, Jeff
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We'll need to brief Steve on the fed/state issues tied to the state buying the TX systems of PG&E and Edison prior to his meeting with the Congressional Republicans tomorrow.
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I'll be driving with Steve from LA to Pasadena (where the meeting is) tomorrow beginning at about 9:30 AM PST (the meeting's at 10:30 AM PST).
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Could we put together a call-in number at 9:45 or 10 AM PST so you could quickly/briefly brief Steve on the issues prior to the 10:30 AM meeting?
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Let me know if this works, or if there's a better way to get him up to speed on the issues before the meeting.
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Thanks very much for helping to pull this together on such short notice.
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Best, Jeff
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FYI.
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We should discuss on tomorrow's call.
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Best, Jeff
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Dudes: My other team has now finished the case that's due on Thursday (in another class), so I will spend this evening turning what's been passed around into memo format and distribute for review and comment by (what will likely be late) this evening.
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I'm travelling tomorrow--back late afternoon--and can work on it more tomorrow night.
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Best Jeff
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Shmuel: Flattered that you would ask.
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I should be able to participate.
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Let's discuss further.
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Give me a call.
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415.782.7822.
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Best, Jeff
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Message Points Recent legislative proposals designed to have the state play a dominant rolin developing, owning and operating power plants in California (SB6X--Burtoand buy PG&E and Edison's electric transmission assets (SB33X--Burton) aretaking California in the wrong direction and won't solve the State's electricity crisis. Two new bills are equally disturbing: AB60X (Hertzerg) would make plant certification contigent upon the developer agreeing to sell the power to thstate at "just and reasonable, cost based rates." SB39X (Spier) would makepower plant owners public utilities The proposals represent a political solution, not a commercial, financial,economic or technical solution. As a political solution, these bills will not increase supply, decrease demand, or get the utilities back on their financial feet. In fact, it's worse than that. These bills will exacerbate California's problems: The transaction contemplated in SB33X is extremely complex, requiring approval by state and federal authorities, bondholders, creditors and others. California will be forced to spend an enormous amount of time andresources trying to achieve the deal, with no certainty of success, particularly in view of PG&E's public opposition. In the meantime, summerapproaches, and the gap between supply and demand remains staggering. Thiscomplex, costly and litigious alternative will not lessen the serious threaof blackouts that California faces this summer. SB6X would have the state finance, develop, own and/or operate power plantsin the state. ? Unfortunately, the proposal being offered will not solve the problem; rather, it,s a significant step backward that will make matters worse inCalifornia. ? The reason? Rather than remove California,s roadblocks to increasedgeneration and transmission investment, this proposal requires California tuse taxpayer dollars to get into the business of financing, owning and operating power plants and transmission. ? The best solution ) recognized across the country and around the world ) is for the state to allow private companies to site new generation immediately?
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Once built, California could easily enter into contracts with private power plant developers and avoid using taxpayers, dollars.
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?
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Given government,s other failed experiments in other large scale participation into public power, like TVA, BPA, NYPA, it is highly unlikelythat a California state agency will succeed in doing something that privatecapital is better equipped and willing to do.
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?
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In the short, the proposal is neither in the public interest nor rational?
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Issuing debt to build power plants and take over transmission systems costs consumers money and takes money away from investments in schools and otherimportant priorities.
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?
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We would be willing to work with the Legislature to help craft a bill thagets more supply in California quickly, efficiently, and in an environmentally sound manner, but this draft achieves only one goal: creating more bureaucracy.
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Three articles that folks might find of particular interest written in the past couple of days.
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Best, Jeff
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Fellows: OK, here's the beginning of the memo.
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I'm still working on it, but work cratered on me and I have to switch back to that now.
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I'll have a draft finished by tomorrow night and I'll redistribute.
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Couple things.
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Check the DuPont.
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Asset turn needed to be changed, because the pro form calcs hadn't taken the cash out of the assets.
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That bumps the ROE up some.
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See my attached file, I decompose ROE using an alternative method (Mark, the one Tasker used in class) just to do a check, and the numbers turn out the same.
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I also ran some turnover ratios for AHP and Warner (understanding the limitations of one year's numbers.) Questions: Don't we have to assume that covenants will force AHP to dump its divident payout?
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Folks likely to get unhappy about that?
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Should we care, or should we just expect a rotation out of the stock by dividend-loving investors and rotation in by capital-gains loving investors?
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Could we persuade the new management to lever up with an argument that with all that cash on the books, AHP is ripe for takeover?
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Anyway just some thoughts.
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I'll finish it up tomorrow and re-distribute.
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Herr Jackson: I haven't had a chance to review your comments, but I'll incorporate those in tomorrow as well.
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Best, Jeff
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ah jeez, nobody tell timi and rory....
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Sue: Could you use your contacts with Edelman to get on the phone with Scott, Mark and Karen to jump start this thing?
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Best, Jeff
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Any intelligence from "closed door" meeting?
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nice smushing.
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OK, last call for comments.
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Need them by noon.
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I'll bring copies to class for everyone, including Ms Tasker.
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Best, Jeff
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Hey folks.
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Mr. Jackson makes some very good points, which I'd like to include.
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However, before I work them in, wanns make sure that everyone agrees with his comments, since including some of his will require some modifications to the direction that the memo takes.
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We could discuss in a brief conference call if folks wish.
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Also, please review what I've done--not major edits, but edits (with some questions and additions) nonetheless.
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Best, Jeff
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Sorry, to fill your in-boxes, but wanted to make sure that you folks have the comments that are getting filed.
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Best, Jeff
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Dude.
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You rock.
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A hearty, hearty congratulations.
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Wish you all the best and great success in your new role.
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