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FYI, I got a call from Chris Palmeri at Business Week about why Ken wasn't
going to LA. I said we can't trust them, their highest ranking legal official threatened to throw Ken in jail before he had even conducted an investigation, Dunn's committee voted to hold us in contempt for going to court to seek a neutral third-party ruling on our objections, and one of the committee members called him a fascist. Any questions??? The reporter called Dunn, and this is what he was told... -----Original Message----- From: chris_palmeri <chris_palmeri@businessweek.com<@ENRON Sent: Fri 7/27/2001 4:20 PM To: Denne, Karen Cc: Subject: Re: FW: Dow Jones Story w/ Overcharge Amounts just a couple of follow up things. i spoke to senator dunn, he said the hold up is that you want to the confidentially ordered by a court so that a judge could enforce it. dunn doesn't want to involve the courts in a legislative proceeding. is that what this all boils down to? also, dunn says that he couldn't throw ken in jail, because he hasn't personally been held in contempt and that there is no way he would depose him this soon. can you tell me what your lawyers exactly were afraid of? thanks. "Denne, Karen" wrote: < < -----Original Message----- < < From: Karen Denne < < Sent: Tuesday, July 10, 2001 5:15 PM < < To: Jeff Dasovich < < Cc: Karen Denne < < Subject: Dow Jones Story w/ Overcharge Amounts < < Importance: High < < < < Much Calif Power Price Gouging Beyond FERC's Reach -ISO < < By Jason Leopold < < Of DOW JONES NEWSWIRES < < < < 06/25/2001 < < Dow Jones Energy Service < < (Copyright © 2001, Dow Jones & Company, Inc.) < < < < LOS ANGELES -(Dow Jones)- Federal energy regulators only have the < < authority to order refunds for about a third of the $9 billion < < California Gov. Gray Davis claims energy companies have overcharged < < the state in the 12 months to May 2001, documents from the state's < < wholesale market operator show. < < Of the total, $2.9 billion came from the May-September period the < < Federal Energy Regulatory Commission has said it can't act on, and < < $2.8 billion from the October-May period is attributable to municipal < < utilities over which FERC lacks jurisdiction, according to documents < < from the California Independent System Operator. < < That leaves just $3.3 billion in alleged overcharges that FERC could < < potentially order refunded - far less than the $9 billion Davis seeks. < < < < Talks between generators and state officials to settle billions of < < dollars in unpaid bills and issues of overcharging began Monday. < < Curtis Wagner, the FERC administrative law judge presiding over the < < talks, has said California will likely see refunds from generators, < < but far less than the $9 billion Davis expects. < < Davis said Sunday California is going to Washington, D.C., "with one < < goal, and that is to bring back $9 billion." < < Nearly half that amount is attributable to municipal utilities, the < < ISO documents show. The ISO said the Los Angeles Department of Water < < and Power, for example, overcharged California $75 million between May < < and October. < < David Freeman, the governor's chief energy adviser and the former < < general manager of the LADWP, said the agency didn't overcharge the < < state, but conceded it profited by selling spare power to the ISO. < < Davis adviser Nancy McFadden said the state needs FERC to lay the < < groundwork for the state to seek refunds from public utilities by < < ordering refunds from corporate energy suppliers. < < But during a conference call Sunday with reporters, McFadden and Davis < < press secretary Steve Maviglio couldn't explain how the governor would < < go about getting refunds from companies whose wholesale power prices < < aren't regulated by FERC. < < Davis testified before the U.S. Congress last week that generators < < overcharged the state $9 billion and that FERC should order the < < refunds. < < State Sen. Jim Brulte, R-Rancho Cucamonga, has asked for an < < investigation into Davis's testimony, saying the figures were based on < < "shaky calculations." < < To come up with its conclusions, the ISO compared hourly market prices < < received by sellers to an estimate of market prices that could have < < been expected under competitive market conditions. < < The ISO established a benchmark for what it determined was competitive < < - at times about $125 per megawatt-hour to $200/MWh, a fraction of < < actual prices in the market - based on the cost of natural gas and < < compliance with air-quality rules. < < The ISO, however, typically used the price of gas at California's < < northern border, according to the documents. Generators paid a higher < < price for the fuel in Southern California, raising the cost of making < < electricity. < < The ISO also used reports of earnings by the state's "Big Five" power < < suppliers during 2000 - earnings that for some quadrupled - to draw < < the conclusion that generators overcharged the state, according to the < < documents. < < The ISO attributed high power prices in part to the state's three < < largest utilities' failure to buy the power they needed in advance, < < leaving the grid operator to pick up the shortfall at the last minute, < < according to the documents. < < The ISO alleges the following companies overcharged the state by the < < listed amounts between May 2000 and February: < < American Electric Power Service Corp. (AEP): $22.9 million < < Arizona Public Service Co. (PNW): $24.6 million < < Aquila Power Corp. (ILA): $28 million < < Avista Energy Inc. (AVA): $48 million < < Automated Power Exchange: $16 million < < British Columbia Power Exchange Corp: $439 million < < Calpine Corp. (CPN): $236 million < < Constellation Power Source Inc. (CEG): $7.8 million < < Cargill-Alliant LLC: $1.4 million < < Citizens Power Sales: $557,000 < < Coral Power, LLC,. a unit of Shell Oil (RD): $27 million < < Duke Energy Corp. (DUK): $804 million < < Dynegy Inc. (DYN): $530 million < < Enron Corp. (ENE): $39 million < < El Paso Corp. (EPG): $29 million < < El Paso Power Electric Co. (EE): $24,475 < < Hafslund Energy Trading LLC: $712,528 < < Idaho Power (IDA): $28 million < < Koch Energy Trading: $2.5 million < < Los Angeles Department of Water and Power: $75 million < < MDSC: $24 million < < Mieco Inc.:$1.6 million < < Morgan Stanley Capital Group (MWD): $124,644 < < NewEnergy Inc.: $1.5 million < < Nevada Power Co. (SRP): $9.1 million < < PacifiCorp: $65 million < < PECO Energy Co. (EXC): $4.2 million < < Portland General Electric (ENE): $44 million < < Public Service Co. of Colorado: $14.1 million < < Public Service Co. of New Mexico (PNM): $15.5 million < < Puget Sound Energy: $24 million < < Reliant Energy Inc. (REI) $750 million < < Mirant Corp. (MIR), formerly Southern Co., $753 million < < *Sempra Energy Trading Corp. (SRE): $82 million (this number has been < < wiped out by the ISO) < < Sierra Pacific Power Co. (SRP): $23 million < < TEK: $11 million < < Tuscon Electric Power: $1.1 million < < UPA: $131,715 < < Winston and Strawn: $11,917 < < Williams Cos. (WMB) $860 million < < < < Total FERC jurisdictional sellers: $4.7 billion < < *Total without SETC/SDG&E: $4.6 billion < < < < Total FERC and Non-FERC sellers: $6.7 billion < < *Total without SETC/SDG&E: $6.6 billiion < < < < Total March-May overcharges: $2.3 billion < < < < -By Jason Leopold, Dow Jones Newswires; 323-658-3874; < < jason.leopold@dowjones.com < < < < < < Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. < < < < < < ********************************************************************** < This e-mail is the property of Enron Corp. and/or its relevant affiliate and may contain confidential and privileged material for the sole use of the intended recipient (s). Any review, use, distribution or disclosure by others is strictly prohibited. If you are not the intended recipient (or authorized to receive for the recipient), please contact the sender or reply to Enron Corp. at enron.messaging.administration@enron.com and delete all copies of the message. This e-mail (and any attachments hereto) are not intended to be an offer (or an acceptance) and do not create or evidence a binding and enforceable contract between Enron Corp. (or any of its affiliates) and the intended recipient or any other party, and may not be relied on by anyone as the basis of a contract by estoppel or otherwise. Thank you. < **********************************************************************
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