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Enron Mail |
Thanks, I look forward to talking with you. I was listening to a piece on=
=20 NPR this morning about the CA situation and thinking of you. Good luck wit= h=20 all of the craziness. =09Jeff Dasovich =09Sent by: Jeff Dasovich =0901/07/2001 11:34 PM =09=09=20 =09=09 To: Sue Nord/NA/Enron@Enron =09=09 cc:=20 =09=09 Subject: CPUC affiliate entity jurisdiction FYI. More info to follow. I'll give you a ring (tomorrow). Best, Jeff ----- Forwarded by Jeff Dasovich/NA/Enron on 01/07/2001 11:32 PM ----- =09"Stephen P. Bowen" <stevebowen@earthlink.net< =0901/07/2001 09:46 PM =09Please respond to stevebowen =09=09=20 =09=09 To: Jeffrey Dasovich <jdasovic@enron.com<, "Dasovich, Jeff"=20 <Jeff.Dasovich@enron.com< =09=09 cc:=20 =09=09 Subject: CPUC affiliate entity jurisdiction PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION Jeff, Per your request, I am writing a brief note to follow up on our telephone conversation today. As we discussed, Enron plans to change the structure of Enron Telecommunications, Inc. from a regular C corporation to an LLC. As we discussed previously, this change in structure will require the approval of the California Public Utilities Commission, because it is a change of control under the definitions of the Public Utilities Code. You indicated that someone inside Enron was concerned that, during the course of the CPUC=01,s review of the request for transfer of control, the CPUC could get access to the books and tax returns of ETI=01,s parent EBS or other Enron entities, which Enron would find unattractive. You asked me to discuss whether this was possible. At a general level, the CPUC in the past has asserted jurisdiction over entities affiliated with entities regulated by the CPUC. Depending on the facts at hand, a variety of provisions in the PU Code grant this jurisdiction. However, the CPUC rarely uses its jurisdiction to look into the books and tax returns of an affiliate of a nondominant telecommunications carrier, unless the affiliate is the entity seeking to acquire control of the carrier. For nondominant telecommunications carriers, the Commission applies a fairly light regulatory touch, because such carriers have no market power. You should also be aware that there are other provisions in the PU Code that protect carrier's financial information from public disclosure. Thus, although it is possible that the Commission would seek to review the books and/or tax returns of EBS or another Enron entity in connection with the change to an LLC, it is unlikely. ETI is a nondominant carrier, and there is no real change in the ownership of ETI, because EBS will still be ETI=01,s owner (i.e., EBS will own an LLC, rather than a C corporation), nor is there any change in the management personnel of ETI. The one wild card is that Enron's name is quite well known to the Commission because of Enron's presence in the energy market. While this logically and legally should make no difference, it could conceivably trigger increased Commission scrutiny of the transfer of control. Please let me know if you need more information or want to discuss further. SPB
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