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Enron Mail |
Cc: robert.c.williams@enron.com, richard.b.sanders@enron.com, msmith1@enron.com,
dbenevid@enron.com, gphillip@enron.com, mday@gmssr.com Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit Bcc: robert.c.williams@enron.com, richard.b.sanders@enron.com, msmith1@enron.com, dbenevid@enron.com, gphillip@enron.com, mday@gmssr.com X-From: Richard B Sanders X-To: JBennett <JBennett@GMSSR.com<@ENRON X-cc: "Robert Williams (E-mail)" <Robert.C.Williams@enron.com<, "Richard Sanders (E-mail)" <richard.b.sanders@enron.com<, "Mike Smith (E-mail)" <msmith1@enron.com<, "Dennis Benevides (E-mail)" <dbenevid@enron.com<, "George Phillips (E-mail)" <gphillip@enron.com<, MDay <MDay@GMSSR.com< X-bcc: X-Folder: \Richard_Sanders_Oct2001\Notes Folders\All documents X-Origin: Sanders-R X-FileName: rsanders.nsf JBennett <JBennett@GMSSR.com< 05/18/2001 01:25 PM To: "Robert Williams (E-mail)" <Robert.C.Williams@enron.com<, "Richard Sanders (E-mail)" <richard.b.sanders@enron.com<, "Mike Smith (E-mail)" <msmith1@enron.com<, "Dennis Benevides (E-mail)" <dbenevid@enron.com<, "George Phillips (E-mail)" <gphillip@enron.com< cc: MDay <MDay@GMSSR.com< Subject: SCE Counter Claim -- Underreporting of Volumes -- Confidential -- Attorney Work Product After speaking with George Phillips yesterday about SCE's counterclaim against EES and EEMC regarding underreporting of usage to the ISO, I think there may be some internal confusion (of which I may have contributed to) about the nature of SCE's counterclaim. As I understand, from my review of certain documents received from SCE in response to our data requests, review of an "Executive Summary" prepared by George Phillips on the issue, and from my conversation with him yesterday, EES and EEMC, as a result of some problems with their settlement system, did indeed underreport customers' usage to the ISO during the time period claimed by SCE. This has, I believe, resulted in two separate (although interrelated) points of contention with SCE -- of which only one is the subject matter of its counterclaim. First, the underreporting resulted in Unaccounted For Energy (UFE) charges to the market. In correspondence sent by SCE to EEMC and EES during the last quarter of 2001, it appears that SCE was calculating the "cost to the market" from the EES/EEMC underreporting by applying the hourly day ahead market clearing price to the individual hourly variances. This cost to the market is overestimated, however, as SCE failed to take into account the fact that the ISO nets underreported amounts against overreported accounts to get a net amount of underreporting. This underreported amount is then allocated to all providers of physical load within a service territory through the assessment of UFE charges. Thus whatever the ultimate cost was determined to be, SCE would not be allocated the entire amount. Second, the underreporting of usage to the ISO results, according to SCE, in SCE paying EES and EEMC a PX credit for energy they never purchased. This claim is separate and apart from what SCE claims EES/EEMC cost the market in the way of UFE charges. What SCE is saying is that it believes that EES and EEMC only purchased on behalf of their customers the amount of energy which they reported to the ISO. EES' and EEMC's customers actually used more than the amount which EES and EEMC reported. SCE calculated the PX credit based on the amount used, not reported. It is SCE's claim that EES and EEMC are not entitled to a PX credit on the delta as the market, not EES and EEMC, purchased those volumes. It is only the second point of contention which is the subject matter of SCE's counterclaim. SCE is alleging that it should not have to pay a PX credit to EES and EEMC for volumes that EES and EEMC did not purchase. SCE is claiming that we only purchased the amount we reported to the ISO. While SCE may believe that it should not have to pay any UFE charges as the result of EES/EEMC underreporting, the UFE charges are not the basis of its counterclaim. Based on the above analysis, I think that the most critical piece of information to refute the counterclaim is that, despite the underreporting of volumes to the ISO, EES and EEMC actually purchased on behalf of their DA customers those customers' full usage. Can we make such claim? and do we have data to back it up? Jeanne Bennett
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