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 Building & Land Svcs.         415 973 8273 fax or 800...
020301 - Mr. Buck Jones;  =415 973 5874; Land Department
0204 - PG&E Trans Sys Engineering         415 973 3877 fax 9209
020401 - Mr. Randy Hopkins, E.E.; Engineer; Rm 580, Mail Code F5C =415 973 6757
0205 - PG&E Building & Land Svcs.         415 973 8273 fax or 800...
020501 - Mr. Robert Masuoka, P.L.S.
020502 - Senior Land Project Analyst Room 2027, Mail Code H21A =415 973 8273
020503 - Land Department

SUBJECTS
Conceptual Agreement with SMUD
Sierra
Interim Payment Agreements

0605 -    ..
0606 - Summary/Objective
0607 -
060701 - Follow up calls at ref SDS 4 line 243.  Received call from Randy and
060702 - EM from Glenn.  They seem to agree that the need to obtain GO 131-D
060703 - exemption and to request early payment authority from Sierra has not
060704 - been adequatley established.
060705 -
060706 - Sent Buck memo confirming meeting tomorrow at Randy's office.
060707 -
060708 -
0608 -
0609 -
0610 - Discussion
0611 -
061101 - Need to develop schedule and budget scenarios.
061102 -
061103 -    Randy can meet tomorrow to discuss the advantages of GO 131-D
061104 -    exemption.  He seems to feel there is no advantage to Sierra,
061105 -    contrary to analysis at ref SDS 1 line 287, and so there is no
061106 -    point in PG&E seeking an interim agreement on payment for that
061107 -    reason, as raised by Buck's EM discussed at ref SDS 4 line 282.  I
061108 -    have not seen Buck's analysis on this point.
061109 -
061110 -    He is available to meet tomorrow at his office at 1000 to discuss
061111 -    the schedule and budget matters.
061112 -
061113 -
061114 - I need to print a schedule to support that meeting.
061115 -
061116 -     [Scheduled this for 941121.]
061117 -
061118 -
061119 -
0612 -
0613 -
0614 - 1010 called Pam
0615 -
061501 - Left message for Pam of Randy's view, follow up the discussion with
061502 - Pam yesterday at ref SDS 4 line 187.  Requested she send me Buck's EM,
061503 - per our discusison at ref SDS 4 line 299.  Advised of meeting set for
061504 - tomorrow at 1000 at Randy's office.
061505 -
061506 -
061507 -
0616 -
0617 -
0618 - 1054 Pam called back
0619 -
061901 - She would prefer to avoid submitting request for interim payment. She
061902 - expects to complete the contracts within about 90 days, i.e., to the
061903 - end of Feburary.
061904 -
061905 - She has sent Buck's EM, ref DRT 1 line 20, per our discussion yester-
061906 - day at ref SDS 4 line 187, and ref SDS 4 line 303.
061907 -
061908 -
061909 -
0620 -
0621 -
0622 - 1014 called Buck
0623 -
062301 - Left message of tentative meeting with Buck at Randy for tomorrow.
062302 -
062303 -
062304 -
062305 -
0624 -
0625 -
0626 - 1020 Buck called back
0627 -
062701 - [Sent him confirming EM to join us tomorrow.]
062702 -
062703 -
0628 -
0629 -
0630 - 1022 called Bob Masuoka
0631 -
063101 - Left message requesting status of GO 131-D.
063102 -
063103 -
0632 -
0633 -
0634 - 1543 received comment from Glenn
0635 -
063501 - Received ref DRT 2 line 15 from Glenn explaining discussions he had
063502 - with Pam after our discussion this morning.
063503 -
063504 - Glenn cites a lack of a clear need in the record to expedite comple-
063505 - tion of the work, ref DRT 2 line 22.  He offers to obtain assistance
063506 - from Chuck Lewis on interpreting the requirements of GO 131-D, ref
063507 - DRT 2 line 24.
063508 -
063509 - I have now read Buck's EM received from Pam, per above, which seems
063510 - to have precitated the current inquiry.
063511 -
063512 -
063513 -
0636 -
0637 -
0638 - Analysis Buck's EM
0639 -
063901 - Buck's EM ref DRT 1 line 15 of 941115 (discussed with Pam yesterday at
063902 - ref SDS 4 line 303, asks Bill DeHart for assistance in implementing
063903 - the project schedule dated 940920.
063904 -
063905 - The 940920 schedule is predicated on essentially bifurcating the
063906 - project in order to qualify for GO 131-D exemption, as explained by
063907 - Buck Jones in the progress meeting on 941102, ref SDS 1 line 238.
063908 - Actually, the bifurcation seems equally founded on the natural
063909 - distinction between the scope and location of the work, i.e., one
063910 - part is in the North, the other is in the South, and the North
063911 - portion involves only re-conductoring, while the South portion
063912 - requires building a new line, transferring use from an existing line
063913 - to the new line, and then removing the existing line.
063914 -
063915 -        Does PG&E track its costs incurred in order to satisfy public
063916 -        relations objectives?
063917 -
063918 -     The discussion at the 941102 progress meeting indicated that
063919 -     while Buck's EM of 941115 seems founded on the Schedule ref DRT 1
063920 -     line 12, prepared by Bill DeHart, Buck is equally moved to avoid
063921 -     significant extra costs he expects will result absent obtaining
063922 -     GO 131-D exemption, ref SDS 1 line 238, plus the possible extra
063923 -     cost to address as yet unknown environmental objections, as
063924 -     explained at ref SDS 1 line 279.
063925 -
063926 -
063927 - Conflicting Objectives??
063928 -
063929 - This analysis seems to conflict with Pam's EM dated 941104, per ref
063930 - SDS 2 line 55, which reports Buck believed on 941104 that a GO 131-D
063931 - exemption cannot be achieved.  Actually, Buck's EM may not conflict
063932 - with his observation at the 941102 meeting.  At the meeting he merely
063933 - seems to have noted that contracts should be signed before seeking GO
063934 - 131-D exemption, ref SDS 1 line 243.  It can be argued that doing so
063935 - inherently precludes qualifying for GO 131-D exemption, since Pam
063936 - indicates it will take about another 4 months, and that would preclude
063937 - PG&E from completing by the GO 131-D exemption deadline.
063938 -
063939 -     Certainly Buck's 941104 position is consistent with Bill's
063940 -     understanding presented at the Progress Meeting on 941102 that the
063941 -     project cannot reasonably qualify for GO 131-D, because the work
063942 -     cannot be expedited sufficiently, per ref SDS 1 line 260.
063943 -
063944 -     Therefore, it appears the only impetus for Buck's 941115 EM, ref
063945 -     DRT 1 line 10, is to comply with the project schedule, which
063946 -     itself is an attempt to qualify for GO 131-D exemption.  That
063947 -     schedule was based on having contracts with SMUD and Sierra which
063948 -     have been delayed by SMUD, per Pam's comments at the Progress
063949 -     meeting on 941102, ref SDS 1 line 194, and further at ref SDS 3
063950 -     line 234.
063951 -
063952 -         [See though later analysis at ref SDS 6 line 82.]
063953 -
063954 -
063955 -
063956 - Grounds for Expedited Completion
063957 -
063958 - There seem to be only two grounds for PG&E to attempt completion of
063959 - the relocation portion of the work by 951231:
063960 -
063961 -     1.  To obtain an exemption from the requirements with GO 131-D,
063962 -         per ref SDS 1 line 245.
063963 -
063964 -     2.  Meet an "understood" commitment to officials of the City of
063965 -         Folsom, ref SDS 1 line 233.
063966 -
063967 -
063968 - The benefits of obtaining GO 131-D exemption are:
063969 -
063970 -     a.  Avoid the costs of notification and administration, which are
063971 -         estimated at from $50-$100K, estimated by Buck Jones at ref
063972 -         SDS 1 line 239.
063973 -
063974 -     b.  Avoid the costs of environmental remedial work which might be
063975 -         ordered in order to obtain a permit to construct, discussed
063976 -         at ref SDS 1 line 283.
063977 -
063978 -     c.  Avoid delayed completion arising from points a and b.
063979 -
063980 -
063981 - The costs of obtaining GO 131-D exemption need to be estimated by
063982 - engineering.
063983 -
063984 -      [This was done at ref SDS 5 line 117.]
063985 -
063986 -
063987 - We then need to prepare alternate scenarios showing the schedule and
063988 - budget for obtaining GO 131-D exemption, and for not obtaining an
063989 - exemption.
063990 -
063991 -     PG&E then needs to submit this information to Sierra so they can
063992 -     decide if they wish to make the effort to finish the relocation
063993 -     work prior to 960101 in order to obtain a GO 131-D exemption.
063994 -
063995 -     [Actually, later analysis seems to indicate it is unrealistic to
063996 -     qualify for GO 131-D, ref SDS 6 line 189.]
063997 -
063998 -
0640 -
0641 -
0642 - 1623 Glenn called
0643 -
064301 - He has talked to Chuck who has indicated that the relocation is
064302 - grandfathered provided it is completed by 951231.  The reconductoring
064303 - is grandfathered period.  PG&E is considering filing a motion to get
064304 - clarification on this point.
064305 -
064306 - The issue is why is it in PG&E's interest to expedite this project
064307 - at all?
064308 -
064309 - I asked about the downside of making a good faith effort to complete
064310 - the work prior to 951231, but failing to do so.  In other words, if an
064311 - exemption is granted based on a schedule that shows completion before
064312 - 951231, but PG&E is unable to do so for reasons beyond PG&E's control,
064313 - what is the downside?
064314 -
064315 - Glenn said that if CPUC has reason to belive after the fact that PG&E
064316 - obtained an exemption of GO 131-D without adequate support for expect-
064317 - ing that completion was intended and feasible by 951231, then it could
064318 - assess damages.  Additionally, PG&E's credibility would be damaged.
064319 - Neither outcome seems worth risking on a project which has so little
064320 - impact on the fortunes of PG&E.
064321 -
064322 -
064323 -