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Enron Mail |
Mike Swerzbin told me Friday that he does not want us to pursue any action on
this which would involve tearing up the option trades. He did what Richard and I advised him to do, he confronted Puget about it, and is apparently satisfied from that conversation that their intentions were not as foul as we first suspected and seems willing to let the matter rest. Steve Hall's call to the Puget attorney's, referred to below, was quite helpful in defusing the situation, although it really puzzles me why anybody would take the time to make a filing at FERC, (for price caps in the NW) just to show that another filing was ludicrous (price caps in California). Seems like bad regulatory faith or something. ----cgy ---------------------- Forwarded by Christian Yoder/HOU/ECT on 11/07/2000 08:08 AM --------------------------- Steve C Hall 11/06/2000 04:55 PM To: Christian Yoder/HOU/ECT@ECT cc: Subject: Re: Puget Sound requests NW price caps Christian, As I relayed to you and Tim Belden last week, Puget's counsel (Steve Marshall) assured me that Puget does not want price caps, and feels that the only thing worse than a price cap is a price cap in one market, but not in the adjacent market. The intent of Puget's complaint was to point out to FERC the fallacy of adopting a price cap in California. That's their story, anyway. Steve Marshall assured me that Puget's traders were unaware of its lawyers' intent to file a complaint seeking price caps. I personally have no reason to disbelieve Marshall, who I know through my practice before BPA, and would doubt that he would risk his partnership at Perkins Coie and position as general counsel for Puget on a risky, tenuous scheme like this. Nevertheless, assuming that Puget does not withdraw its complaint, Enron should note in its protest to Puget's complaint that ,if Puget's price cap is implemented, Puget would benefit under contracts signed a few days before it filed its complaint. According to Chris Foster, the traders are not interested in unwinding these deals unless the NW price caps are actually implemented. Steve Christian Yoder 11/06/2000 08:03 AM To: Steve C Hall/PDX/ECT@ECT cc: Subject: Re: Puget Sound requests NW price caps ---------------------- Forwarded by Christian Yoder/HOU/ECT on 11/06/2000 07:52 AM --------------------------- From: Mark E Haedicke on 11/03/2000 05:26 PM CST To: Christian Yoder/HOU/ECT@ECT cc: Richard B Sanders/HOU/ECT@ECT Subject: Re: Puget Sound requests NW price caps I think this is a detrimental reliance case or fraud. I want to be aggressive on this. Richard, please let me know what theory is best. Do we have counsel for Washington? Mark Christian Yoder 10/27/2000 12:15 PM To: Elizabeth Sager/HOU/ECT@ECT, Mark Taylor/HOU/ECT@ECT, Richard B Sanders/HOU/ECT@ECT, Mark E Haedicke/HOU/ECT@ECT cc: Subject: Puget Sound requests NW price caps In the days immediately before the application for a price cap, Puget came to us and asked us to enter into several put options. We did so. I am advised by the traders that if this price cap were to actually be in effect, our put option transactions would not make sense for us economically and we would never have entered into them had we known of their intention to make this filing. I am under some pressure to explain two things: (i) whether the fact that they knew they were going to file for the cap when they did the options is some kind of fraud, and (ii) whether the WSPP Agreement or our ISDA swap agreements have any clauses in them to address this kind of thing,ie. is this some kind of "illegality" issue? I am working on the second issue and have discussed it with Mark Taylor, but on the first issue, I need advice from Richard and anyone else who can help.----cgy ---------------------- Forwarded by Christian Yoder/HOU/ECT on 10/27/2000 09:59 AM --------------------------- Mary Hain 10/27/2000 09:50 AM To: James D Steffes/NA/Enron@Enron, Marcie Milner, Joe Hartsoe@Enron, Sarah Novosel/Corp/Enron@ENRON, Richard Sanders, Christian Yoder/HOU/ECT@ECT, Portland West Desk cc: Subject: Puget Sound requests NW price caps Puget Sound has filed a complaint against all jurisdictional sellers of wholesale energy and/or capacity in the Pacific Northwest, including parties to WSPP agreement. Puget Sound requests FERC to impose price cap on wholesale sales of energy and capacity in the Pacific Northwest equal to the lowest price cap "established, ordered, or permitted by the Commission for wholesale purchases by the Cal ISO or Cal PX . . . ." Puget requests an effective date of December 25,2000.
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