EXHIBIT 99.2

              [CALIFORNIA INDEPENDENT SYSTEM OPERATOR LETTERHEAD]

                                October 22, 1997

Mr. H. Ronald Nash
Vice President
Perot Systems Corporation
Suite 1100
12377 Merit Drive
Dallas, Texas 75251

      Re: ISO Alliance and Perot Systems Corporation Conflicts of Interest

Dear Mr. Nash:

         This is to follow up on our telephone conversation of October 21, 1997
regarding reported solicitations by Perot Systems Corporation ("Perot Systems")
of parties expected to market energy in California.

         As we discussed, such solicitations are inconsistent with the ISO's
Alliance's and Perot Systems' conflict of interest obligations under the
Scheduling Applications, Scheduling Infrastructure and Business Systems Contract
between the ISO Alliance and the ISO Restructuring Trust dated as of March 14,
1997 (the "Contract") which you executed on behalf of the ISO Alliance and Perot
Systems.

         Specifically, it was reported to me the representatives of Perot
Systems contacted Gary Cotton of San Diego Gas & Electric (SDG&E), and perhaps
other potential market participants, and offered the services of Perot Systems
in helping SDG&E to exploit the new California energy market by exploiting
potential weaknesses and shortcomings in the ISO's system to their commercial
advantage.

         It was further reported that Perot Systems' representatives at these
solicitations included Ed Smith and Paul Gribik, both of whom have been
significantly involved in ISO Alliance's and Perot Systems' activities in
negotiating and performing the Contract, and that Perot Systems; involvement in
developing the ISOs system was cited as evidence of Perot Systems' knowledge of
the potential weaknesses and shortcomings in that system.

         Perot Systems' marketing of its inside knowledge of the ISO's system to
third parties so that they may economically exploit the new California energy
market, in addition to being a flagrant violation of basic norms of business
ethics and indicative of bad faith dealing, would seriously erode the integrity
of the new California energy market and materially compromise the work being
performed and the system being produced by the ISO Alliance and Perot Systems
for the ISO. Article 31 of the Contract expressly prohibits the ISO Alliance,
including Perot


                                      -2-                       October 22, 1997

Systems, ABB and Ernst & Young, from performing services for others which may
create a material conflict of interest with the ISO or in any way otherwise
materially compromise the work being performed by the ISO Alliance and Perot
Systems on behalf of the ISO.

         Perot Systems' behavior as described above is contrary to Perot
Systems' contractual obligations and is expressly prohibited under the Contract.
While reserving all rights and remedies available to the ISO, including but not
limited to those concerning breach and termination, under the Contract and
applicable law, the ISO will require that Perot Systems immediately:

         (i)      cease the solicitation and marketing as described above;

         (ii)     contact those parties previously solicited in this regard in
                  writing, retracting it's offer of such consulting services and
                  stating that such consulting services will not be offered by
                  Perot Systems or the ISO Alliance;

         (iii)    Provide the ISO with a list of names of the market
                  participants actually contacted by Perot Systems;

         (iv)     describe what specifically was being marketed by Perot Systems
                  and the basis for such solicitations with such itemization to
                  be renewed at the end of Stage I and Stage II of the Contract;

         (v)      certify that neither Perot Systems nor the ISO Alliance has
                  introduced any changes or modifications other than those
                  specified by a the ISO Contract, the Detailed Statement of
                  Work (DSOW), or documented change orders, with such
                  certificates to be renewed at the end of Stage I and State II
                  of the contract; and

         (vi)     pursuant to Article 31.7 of the Contract provide all accounts
                  and records relating to any program of solicitation activity
                  in this regard.

         Finally, as I emphasized in our telephone conversation, prompt
         cessation of the offending solicitation activities and prompt
         retraction of all express offers of such consulting services is
         essential to any ultimate resolution of this matter. I look forward to
         hearing your response and the status of any additional activities you
         may propose for Perot Systems and the ISO Alliance to remedy this
         situation.

                                          Sincerely,

                                          /s/ JEFFERY D. TRANEN

                                          Jeffrey D. Tranen
                                          President and Chief Executive Officer

cc:  Ake Almgren, President, ABB T&D Inc.
     William Hunter, Operations Partner, Ernst & Young