CONTACTS 
0201 - PG&E Transm Contracts              415 973 3872 fax 972 0871
020101 - Ms. Pam Taheri,
020102 - Contract Manager, Rm 2334 Mail Code B23A =415 973 1660
020103 - Transmission Contracts =415 972 0871 (fax)
0202 - PG&E Law Department                415 973 nnnn fax or 800...
020201 - Mr. Glenn West Jr., Esq.;  =415 973 2776
0203 - PG&E Trans Sys Engineering         415 973 3877 fax 9209
020301 - Mr. Randy Hopkins, E.E.; Engineer; Rm 580, Mail Code F5C =415 973 6757
0204 - The Welch Company                  415 781 5700
020401 - Mr. Rod Welch
0205 - PG&E Proj Mngmnt Transm Sys        415 973 6778 fax 8426
020501 - Mr. Michael R. Emery
020502 - Project Manager, Room 1175B-V11C =415 973 4322 pager 807 3283
020503 - Project Management Group

SUBJECTS
Gold Hill Horseshoe Transmission Upgrad
Contract, SMUD, PG&E draft
Report on Meetings/Understandings
PG&E draft
Conceptual Framework, Final

0807 -    ..
0808 - Summary/Objective
0809 -
080901 - Follow up ref SDS 4 0000.
080902 -
080903 - Contract development team reviewed prior understandings, reviewed and
080904 - edited conceptual contract language, developed negotiation strategy
080905 - for tomorrow. Arranged travel to meeting.
080906 -
080907 - In afternoon, received conceptual framework applying edits this
080908 - morning.  Called and discussed further edits with Glenn, and later in
080909 - conference call with Glenn and Pam. Reported these events to Mike
080910 - during lunch, and submitted this record to Mike for information.
080911 -
080912 - About 1730, received final draft of conceptual agreement, ref OF 5
080913 - 0001, transmitted via ref DRT 3 0001, which was also submitted to SMUD
080914 - in preparation for meeting tomorrow.
080915 -
080916 -
0810 -
0811 -
0812 - Review Notes of 941108 Meeting
0813 -
081301 - I took a copy of the notes from yesterday, ref SDS 4 0001 submitted
081302 - via ref DIP 1 0001.  None of the attendees had received them via EM.
081303 - Pam printed copies for everyone and we reviewed the notes as a
081304 - baseline to do the work today.  Minor edits, except item under:
081305 -
081306 -
081307 -    Negotiating Leverage
081308 -
081309 -    Decided to change the explanation of item #3, ref SDS 4 0788, which
081310 -    previously stated:
081311 -           ..
081312 -       3.  Abandoning the relocation project by keeping the
081313 -           existing line and simply modifying it to support the
081314 -           additional capacity.  This would be a much cheaper solution,
081315 -           by as much as $2M and evidently is engineeringly sound with
081316 -           respect to community concerns about environment, EMF, etc.,
081317 -           however this may be a harder sell to community activists.
081318 -
081319 -       ...and instead simply say:
081320 -
081321 -       3.  Superbundling as possible option.
081322 -
081323 -    There was a concern that PG&E's awareness of a less expensive
081324 -    altenative that might be objectionable by some community elements
081325 -    would be grounds for unfavorable charges, publicity, etc.  The
081326 -    revised language intends to show this was considered, without
081327 -    setting out the specifics of possible savings, community impact
081328 -    and reaction.
081329 -
081330 -    Randy said the savings would be closer to $1.2M than to $2M, since
081331 -    that is the cost of the relocation portion of the project.
081332 -
081333 -
081334 - Received at the meeting this morning a new version of the proposed
081335 - agreement dated 941103, for markup, ref OF 2 line 30.
081336 -
081337 -    This seems to be a replicate of the version received at the
081338 -    progress meeting, ref OF 1 line 30, except it omits the language
081339 -    being replaced.
081340 -
081341 -
081342 -
081343 -
081344 - Action Plan
081345 -
081346 - Pam will prepare an agenda and submit this afternoon (received
081347 - below).
081348 -
081349 -
081350 - Glenn will incorporate the ideas presented this morning (shown below)
081351 - in the conceptual framework, and submit this afternoon.
081352 -
081353 - Pam will submit this new draft to SMUD to prepare for the meeting
081354 - tomorrow.
081355 -
081356 -     This was accomplished at end of day, per ref DRT 3 0001.
081357 -
081358 - Strategy will be for Pam to ask if there are any major disagreements
081359 - with the current draft, and if not, then to proceed to go through the
081360 - draft to agree on all specific language, so it can be signed.
081361 -
081362 -     This is reflected in the agenda received later in afternoon and
081363 -     discussed below.
081364 -
081365 -
081366 - I will take notebook computer so if parties are close on language, we
081367 - can prepare final language together and initial a final draft to show
081368 - concurrance.
081369 -
081370 -     The draft received from Pam and which she submitted to SMUD, is
081371 -     prepared in Word, which is now installed on CPU #7, per
081372 -     ref SDS 3 0000.
081373 -
081374 -
0814 -
0815 -
0816 - 1533 Received Revised Agreement from Glenn, 941109
0817 -
081701 - The discussion below explains concerns in the 941103 document which
081702 - are intended to be incorporated into the 941109 version prepared and
081703 - issued by Glenn today.
081704 -
081705 - Included are analysis of Glenn's new draft received this afternoon,
081706 - ref OF 3 line 9, via his EM ref DRT 2 line 17.
081707 -
081708 -    Received ref DRT 2 line 30
081709 -
081710 -    Glenn says his new draft applies the ideas discussed this
081711 -    morning.  He sets out sub-para for para 1 to make it easier it
081712 -    easier to follow.
081713 -
081714 -
0818 -
0819 -
0820 - 1645 conference call with Glenn and Pam
0821 -
082101 - We reviewed the entire document.  Pam will incorporate revision Glenn
082102 - and I discussed on para 1a.  She will also add a sentence to para 4,
082103 - as explained below.
082104 -
082105 -
082106 -    Received ref DRT 3 line 10
082107 -
082108 -    This was received from Pam about 1730.  It transmits the final
082109 -    edits ref OF 5 line 14, that were submitted to SMUD for meeting
082110 -    tomorrow.
082111 -
082112 -
082113 -
082114 -
082115 -
0822 -

SUBJECTS
Gold Hill Horseshoe Transmission Upgrad
Contract, SMUD, PG&E draft
R/W Access

1006 -
100601 - Pam said SMUD objects to "undivided" in para 1 line 1, so Glenn
100602 - agreed to use the language proposed by SMUD in the 9412026 version.
100603 -
100604 -    This is applied in the new draft, at ref OF 3 line 21.
100605 -
100606 -
100607 - Randy asked about the advantage of specifying that PG&E is receiving
100608 - 57' of adjacent right-of-way, rather than the current language of
100609 - "...sufficient westerly portion of its 200 foot wide..."
100610 -
100611 -    Rod asked about providing adequate access to construct and service
100612 -    PG&E's work that may occur within the right-of-way.
100613 -
100614 -    Glenn indicated that right-of-way law grants an assignee a
100615 -    concomittant right of adequate access for the intended use.
100616 -
100617 -    Randy said there are so many cross streets through the proposed
100618 -    corridor that construction and maintenance access should not be a
100619 -    problem.
100620 -
100621 -    Glenn will give this further thought.
100622 -
100623 -        He wound up covering both points at ref OF 3 line 21.
100624 -
100625 - Randy suggested broadening the language so as not to restrict PG&E in
100626 - the event at some future time a need may arise to install a fiber
100627 - optic cable.  Glenn will remove the word "transmission" from "...new
100628 - transmission pole line...," on line 4.  He will work this language
100629 - further to achieve Randy's objective.
100630 -
100631 -    This position is mentioned in Glenn's transmittal at ref DRT 2 line
100632 -    33, but it is not clear to me that this position is in the actual
100633 -    agreement.  Possibly the understanding is implicit???
100634 -
100635 -       Called Glenn. He feels the language needs to be more clear on
100636 -       this.  We considered whether para 1d covers this adequately.
100637 -
100638 -       Upon reflection, Glenn feels para 1a should state more directly
100639 -       PG&E's intent to acquire the full rights in SMUD's right-of-way
100640 -       agreement, as called out by Randy.  He will re-draft the thing
100641 -       to reflect Randy's point.
100642 -
100643 -    Later in the afternoon, about 1645, had conference call with Glenn
100644 -    and Pam.  He read revised language that covers this point. He said
100645 -    this new language was prepared as a revised para, to Pam via EM.
100646 -    Pam said she will incorporate it and send me the corrected file.
100647 -
100648 -    The revised file was received from Pam about 1723 which was
100649 -    transmitted via her EM ref DRT 3 line 30.
100650 -
100651 -
100652 - Randy suggested striking "immediate" on line 6 in "immediate use
100653 - as..." so if for some reason PG&E is delayed in constructing its
100654 - work, this will not be grounds for reaction by SMUD.
100655 -
100656 - Rod suggested striking "future" on line 7 from "...for SMUD's future
100657 - use...," and cite para 3 to expressly define SMUD's use, instead of
100658 - stating "...use as described below, so the contract language will be
100659 - compatible with a possible need for SMUD to use the last 3 spans of
100660 - the right of way, per discussion yesterday, ref SDS 4 line 193.
100661 -
100662 - Glenn will cross reference the document to specific paragraphs in
100663 - place of general terms like "..."described below."
100664 -
100665 -    Glenn's language in para 1a, b, c and d, seem to cover these
100666 -    points, ref OF 3 line 21.
100667 -
100668 -
100669 - Pam explained SMUD's concern about determining the price of the line
100670 - in the event PG&E abandons the line and SMUD elects to purchase it
100671 - for its own use.  He will provide language that permits SMUD to
100672 - acquire the line for the cost of salvage and demolition, or some
100673 - other terms less onerous than the current language that calls for
100674 - "...replacement cost less depreciation..." since if PG&E is
100675 - abandoning the line, it would seem to have no basis to charge for
100676 - "replac[ing]" it.
100677 -
100678 -    It is not clear how the above intent is accomplished by Glenn's
100679 -    new language.  He says at ref OF 3 line 32:
100680 -
100681 -       (b)  In the event PG&E desires in the future to abandon the
100682 -       pole line, SMUD shall have the right to purchase it from PG&E
100683 -       at the then replacement cost new less depreciation of the line.
100684 -
100685 -    ...this seems like the same language.
100686 -
100687 -
100688 -    Glenn left the current language so we have a bargaining chip.
100689 -
100690 -
100691 -
100692 -
1007 -

SUBJECTS
Gold Hill Horseshoe Transmission Upgrad
Contract, SMUD, PG&E draft
Tubular Steel Line 2 Circuits

1206 -
120601 - Glenn will add language that PG&E will comply with applicable
120602 - regulations, including CPUC General Order 95.
120603 -
120604 -    This point is accomplished at ref OF 3 line 51.
120605 -
120606 -
120607 -
1207 -

SUBJECTS
Gold Hill Horseshoe Transmission Upgrad
Contract, SMUD, PG&E draft
SMUD Rights to one Transmission Circuit

1406 -
140601 - Pam suggesting adding at the beginning of para 3, that SMUD's rights
140602 - to lease at no cost the 2nd transmission circuit, is the considera-
140603 - tion SMUD is receiving in exchange for granting PG&E the use of the
140604 - SMUD's right of way.
140605 -
140606 - Rod suggesting revising the expression of SMUD's consideration, from
140607 - saying "PG&E will upon request by SMUD lease to SMUD a joint right
140608 - to occupy..." to
140609 -
140610 -    "In consideration for granting PG&E right-of-way defined in para
140611 -    1, SMUD may lease a joint right..."
140612 -
140613 - The objective is to remove any sense that SMUD's use is contemplated
140614 - by the parties to occur in the future and therefore is not applicable
140615 - to the immediate concern of accomodating SMUD's 3 span requirement,
140616 - per ref SDS 4 line 193.
140617 -
140618 -    This point is included in the new draft at ref OF 3 line 54.
140619 -
140620 -
140621 - Pam explained PG&E's grounds for refusing SMUD's request to acquire
140622 - 50% ownership of the line.  Glenn said that if this were done, a more
140623 - complicated form of agreement would be required.  Upon discussion, it
140624 - appeared that even under the lease, some effort is needed to define
140625 - SMUD's rights.
140626 -
140627 - The primary issue seems to be SMUD's unstated desire for greater
140628 - assurance of long term rights to carry out as yet undefined needs
140629 - that may emerge later.  In sum this means they feel that getting the
140630 - right to lease a 2nd circuit is insufficient consideration for use of
140631 - a 57' portion of their right of way.
140632 -
140633 - Randy advised the cost of constructing the line is about $1M, so SMUD
140634 - would have to put up $400 - $500K to obtain half interest.
140635 -
140636 - Glenn mentioned again legal considerations that augur against PG&E
140637 - granting SMUD its request for joint ownership.
140638 -
140639 -
140640 -
140641 -
1407 -
1408 -
1409 - 1455 called Glenn
1410 -
141001 - Suggested it might be helpful for him to set out in a draft analysis
141002 - the particular issues involved in joint ownership, so these matters
141003 - can be worked more efficiently.  My sense from the meetings is that
141004 - the correlation of these issues to other options is not fully
141005 - understood by the team.
141006 -
141007 -    [This turned out not to be necessary, because SMUD did not insist
141008 -    on joint ownership, per ref SDS 5 line 278.]
141009 -
141010 -
1411 -

SUBJECTS
Gold Hill Horseshoe Transmission Upgrad
Contract, SMUD, PG&E draft
PG&E's Rights on New Line

1606 -
160601 - Pam said in a conference call in the late afternoon with Glenn to
160602 - review the changes he made, that a SMUD rep recently said SMUD wants
160603 - reciprical rights to those in para 4 for PG&E to sell etc.  We agreed
160604 - this is acceptable.  Pam will add a sentence for this to para 4 of
160605 - the current draft.
160606 -
160607 -
160608 -
1607 -

SUBJECTS
Gold Hill Horseshoe Transmission Upgrad
Contract, SMUD, PG&E draft
SMUD Removes Idle Existing Line

1806 -
180601 - Rod suggested revising this language to avoid any interpretation that
180602 - SMUD's possible need to use the last 3 spans South of the UARP
180603 - junction, are not covered by the meaning of para 6, as discussed at
180604 - ref SDS 4 line 175.
180605 -
180606 -    This is included in the new langauge at ref OF 3 line 91.
180607 -
180608 -
180609 -
1807 -

SUBJECTS
Gold Hill Horseshoe Transmission Upgrad
Meetings, 941110 Sac, SMUD contract negotiations, Travel

1905 -
190501 - Randy and I will meet with Pam tomorow in her office at 1100.  She
190502 - has a car scheduled to drive to Sacramento.  Glenn will meet us at
190503 - SMUD's office.  We considered meeting in Cordellia to review further
190504 - ideas on proposed conceptual framework, but Glenn has another matter
190505 - in San Ramon that may preclude this, so he will meet us in Sacramento
190506 - and we will caucus prior to meeting with SMUD.
190507 -
190508 - They will drop me off at the Orinda BART station on the way back to
190509 - SF.
190510 -
190511 -
1906 -
1907 -

SUBJECTS
Gold Hill Horseshoe Transmission Upgrad
Report on Meetings/Understandings
Project Manager, Bill DeHart, Mike Emery

2106 - 1202 Lunch with Mike
2107 -
210701 - I saw Mike Emery after this meeting.  We had lunch.  He had not
210702 - received my EM, ref DIP 1 line 27, so I submitted a printed version
210703 - for him.  We discussed the meeting yesterday and this morning.
210704 -
210705 - Mike tried to attend the meeting this morning, per my telecon.  He
210706 - was at Pam's office oa 0830, but there was no one there at that time.
210707 - I explained I did not show up until oa 0915, so I am not sure when
210708 - the others actually began work.
210709 -
210710 - I explained the meeting tomorrow at 1430 in Sacramento, and our
210711 - intent to leave from Pam's office at 1100.
210712 -
210713 -
210714 -
210715 -
2108 -
2109 -
2110 - 1705 submitted EM to Mike on this
2111 -
211101 - Actually printed ref DIT 1 line 30 for Mike to explain status.
211102 -
211103 -
211104 -
2112 -

SUBJECTS
Gold Hill Horseshoe Transmission Upgrad
Meetings, 941110 Sac, SMUD contract negotiations, Agenda
Controls, Schedule, Relocation SMUD right of Way

2306 - 1518 Received Agenda
2307 -
230701 - Received ref DRT 1 line 33.  It sets an objective of coming to
230702 - closure on the conceptual agreement per understandings at progress
230703 - meeting last week, ref SDS 1 line 80.
230704 -
230705 -
230706 -
230707 -
2308 -
2309 -
2310 - Analysis
2311 -
231101 - Sets date for proposed signing of conceptual framework on 941115, ref
231102 - DRT 1 line 36.
231103 -
231104 - Agenda item "A" calls for initial "discussion" and lists issue of
231105 - duration of agreement.  This seems to reflect Pam's intent to address
231106 - major differences before going through the specific language.
231107 -
231108 -
231109 -
231110 -
2312 -
2313 -
2314 - 1531 called Pam
2315 -
231501 - Left message that agenda seems fine.  Have small point if she has
231502 - time to discuss today, or we can cover it on way to meeting tomorrow.
231503 -
231504 -
231505 -
2316 -
2317 -
2318 - 1557 Pam called back
2319 -
231901 - I advised I agree with her proposed agenda, except I would not
231902 - volunteer a specific issue of general discussion, but rather would
231903 - simply ask if there are any major concerns to address before dealing
231904 - with the specific language.
231905 -
231906 -     Pam said that Glenn suggested omitting the second agenda item
231907 -     "Other Issues."  I agree this is redundant.
231908 -
231909 - She asked me to review the proposed agreement received from Glenn,
231910 - ref DRT 3 line 17, so we can discuss in about 30 minutes.  Then if it
231911 - looks okay, she will fax to SMUD counterparts this afternoon, so they
231912 - can review along with the agenda.  She will propose they fax us back
231913 - tomorrow by 1000 any comments that strike them, so we can consider on
231914 - the trip to Sacramento.
231915 -
231916 -
231917 -  ..
2320 -
2321 -
2322 - 1634 called Pam back
2323 -
232301 - Advised that I am taking my notebook, so we can make any revisions
232302 - on-site, and get agreement in real-time.
232303 -
232304 -     [This was done at ref SDS 5 8856, accomplished the objective.]
232305 -
232306 - Pam concurred.  She had intended to take a secretary and a PG&E
232307 - notebook computer for this purpose, but they do not have any
232308 - notebooks available, so this will work out well.
232309 -
232310 - I concurred with proposed final edits.
232311 -
232312 -
232313 -
232314 -
232315 -
232316 -
232317 -
232318 -