Advancing Electric Competition in the Wake of California

1. Advancing Electric Competition in the Wake of California Enron’s Campaign to Affect Policy and Public Opinion February 5, 2001

2. Team Enron

3. The Challenge • Isolate California and communicate a market-based message • Retain a market-based electricity structure in California • Minimize California impact and Governor Davis’ message across the west • Facilitate federal action: FERC and Congress • Identify and manage potential energy crisis in other states • New York • Florida • Others? • Refine and increase public affairs effort among • policy makers • the media • opinion makers

4. Major Themes • Open Access: Finish the job of creating competitive wholesale electricity markets across the U.S. • Ease the process for siting and interconnection of new generation • Price caps don’t work • Encourage risk management/hedging strategies for consumers and utilities • Promote customer choice • Financial stability of California utilities is imperative • Enron as a model and solution to the energy crisis

5. Isolate California Objectives • Assure financial stability of utilities • Retain direct access • Encourage market-oriented demand-side management response • Reform siting/permitting laws and regulations • Preserve wholesale market and necessary institutions (Cal ISO) Resources • Team Enron • California lobbyists: Hedy Govenar and Bev Hansen • Enlist other allies and external resources Framework for Meeting Objectives • Office of the Governor -- develop more support for market-oriented solutions • CA Legislature -- continue to educate and build support network as additional legislation moves • Regulatory -- minimize involvement in the process

6. Western Region Objectives • Promote major themes • Open Access • Price caps don’t work • Ease process for siting and interconnection of new generation • Customer choice • Enron as a model and solution to the energy crisis • Educate Policy Makers Resources • Team Enron • Existing western lobbyists • Other resources? Framework for Meeting Objectives • Media/public affairs effort • Solicit third-party advocates

7. Washington, DC Objectives • Increase Congressional activity to propel FERC into acting on open access issues • Ensure Congressional action is positive and/or neutral • Manage impact of outside influences on FERC • Administration, Congress, Think-Tanks, Academia, Press • Educate policy makers • Executive and Legislative • Educate the press Resources • Team Enron • Quinn Gillespie and other lobbyists • Solicit support from other strategic partners Framework for Meeting Objectives • Take inventory of previous Congressional outreach

8. Washington, DC (cont.) Framework for Meeting Objectives (cont.) • grow base target list • neutralize foes • increase visibility among allies • Tier 1 meetings • Congress: House Leadership • Speaker Deny Hastert (R) • Majority Leader Dick Armey (R) • Majority Whip Don Nickles (R) • Minority Leader Tom Daschle (D) • Chairman Billy Tauzin (R) • Chairman Frank Murkowski (R) • Senator Larry Craig (R)

9. Washington, DC (cont.) • Tier 1 meetings (continued) • White House staff • John Bridgeland, Director White House Policy Council • Joel Kaplan, Special Assistant to the President and Assistant to the Deputy Chief of Staff for Policy • Andrew Lundquist, Director of National Energy Policy Development Group • Department of Energy • Secretary Spencer Abraham • Department of Commerce • Secretary Don Evans • Department of Treasury • Secretary Paul O’Neil • FERC • Commissioner Curt Hebert

10. Washington, DC (cont.) • Tier 2 Meetings Senate Influencers/LeadersHouse Influencers/Leaders • Senator John McCain (R) Rep. Joe Barton (R) • Senator Jon Kyl (R) Rep. Michael Bilirakis (R) • Senator Gordon Smith (R) Rep. Cliff Stearns (R) • Senator Conrad Burns (R) Rep. Jim Greenwood (R) • Senator Ron Wyden (D) Rep. Chris Cox (R) • Senator Patty Murray (D) Rep. Richard Burr (R) • Senator Diane Feinstein (D) Rep. Ed Whitfield (R) • Senator Maria Cantwell (D) Rep. Roy Blunt • Senator Byron Dorgan (D) Rep. Dick Gephardt (D) • Senator Chuck Hagel (R) Rep. John Dingell (D) • Senator Mary Landrieu (D) Rep. Rick Boucher (D) • Senator Jeff Bingaman (D) Rep. Ed Markey (D) • Senator Charles Schumer (D)

11. Washington, DC (cont.) Framework for Meeting Objectives • Media outreach - earned and paid • “Think-tank” outreach • “Influencers” outreach (grasstops)

12. New York and Other States Objective • Promote major themes • Educate policy makers • Educate ENA and EES customers • Anticipate crisis before they occur and induce positive policy response Resources • Team Enron • ENA and EES • New York lobbyists Framework for Meeting Objectives • Editorial board meetings • Letters with major themes to policy makers • Coordination with ENA and EES power trading desks • Integrate major themes into weekly newsletter sent to ENA and EES customers • Participate in conference calls with ENA and EES regarding northeast region

13. Media Plan • Quinn Gillespie & Associates LLC • Government and public-affairs focused effort • Opinion research and polling • Strategy and development of themes • Identify where deregulation was done correctly • Enron as a model and solution to the energy crisis • Managing information flow • Consumer education efforts • town hall meetings with CA delegation allies • Earned media campaign (national) • Paid media campaign (national) • Internet communication effort • Assistance with coalition building and member recruitment • Coalition management • Development of materials • turnkey kit for 3rd-party advocates

14. Media (cont.) • Earned media • Reporters who cover energy issues • Trade publications • Beat reporters in Washington, DC • Bureau of National Affairs • Congressional Quarterly • National Journal • Editorial boards • Key columnists • Media in battleground states • Television outlets

15. Media (cont.) • Paid Media • Redefining the deregulation issues through a paid media campaign • Inside-the-beltway publications such as Congress Daily, CQ Monitor and periodicals such as Roll Call, The Hill, The Weekly Standard and The New Republic are cost-effective venues for target audience. • Advertising effort that reaches legislators, regulators, congressional staff and the media

16. Media (cont.) • Execution of public affairs effort • Working press shop • Quinn Gillespie • Enron Public Affairs • Speaking engagements • Editorial board meetings • Op-eds • Cultivating columnists • Events

17. Target Audiences

18. Identification and Management of Evolving Issues • EES commercial exposure in California • Enron as “government-in-residence” in Washington, DC • Corporate profiteering issues • Potential relaxing of environmental laws and regulations blamed on Bush Administration • Summer electricity prices

19. Timeframe • Stabilizing California -- immediately • Education of policy makers in the west and in and New York -- February/March/April • New York meeting of market-participants committee tentatively set for February 13th regarding coordinated/common message throughout the northeast • FERC and Congressional action by October • Media schedule to be rolled out February 12

20. Conclusion Implementing a focused campaign to stabilize the fallout from California, to promote competitive markets and improve public perceptions