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Enron Mail |
Richard, my comments on the August 10 PX letter, having participated in th=
e August 13 and September 5 prehearing conferences: Cal PX has always asserted its neutrality in the prehearing conferences in = the CA proceeding. Although this assertion is only partially true, I think= we would be barking up the wrong tree if we were to pursue the PX, given S= teve's correct assessment that the PX is judgment proof.=20 My comments regarding the numbered paragraphs of the letter: 1.=09Regarding confidentiality, there is a protective order (as amended) in= place. Despite this, my educated guess is that the protective order could= very well be lifted given the rather political nature of the proceeding. = Judge Birchman alluded to this possibility just yesterday at the prehearing= conference. He has also previously expressed a belief that the conduct of= the proceeding could be hampered if each party's refund data is deemed to = be confidential. In short, I believe there will be less confidentiality ra= ther than more. 2.-3.=09The PX is severely resource constrained. Additionally the PX must = await the ISO data before it can start generating the data that the PX itse= lf needs to produce. As of yesterday, the PX did not have all the ISO data= , and the data they did receive from ISO was riddled with errors. This gav= e rise to the one month delay in the hearing schedule that the Judge ordere= d yesterday. As to the $150 breakpoint issue, I understand that it should = not be as difficult to calculate as the PX purports, but the PX truly is un= derstaffed and has virtually no funds. In any case, this probably is a moo= t issue since the Judge determined in the August 13 prehearing conference t= hat the $150 breakpoint issue is pending before the Commission, probably sh= ouldn't be dealt with in this proceeding and should be disposed of by stipu= lation. The parties are given about a week to agree on a draft stipulation= by the 12th on this and other "threshold" issues, failing which the Judge = will decide the stipulation issue after oral argument on the morning of 9/1= 7. Bottom line now on when the PX is to submit its data per the amended he= aring schedule- 10/19. 4.=09Refund implementation procedures have not received much consideration = as of yet. Of course, our position is that we net our purchases and sales;= not pay in and then expect to be allocated a refund. Interestingly, the l= etter at 4b. foretold the finding of the Judge in the August 13 conference = that refunds and offsets need to be fully a part of this proceeding and the= findings that he must certify to the Commission (as opposed to a matter to= be taken care of outside the hearing room by compliance filing). I am loo= king into the implications of allocating in accordance with a "share-fracti= on allocation method"=09 Ray -----Original Message----- From: =09Hall, Steve C. =20 Sent:=09Wednesday, September 05, 2001 8:36 PM To:=09Sanders, Richard B. Cc:=09Alvarez, Ray; Belden, Tim; 'gfergus@brobeck.com'; Steffes, James D.; = 'dwatkiss@bracepatt.com'; Blair, Kit Subject:=09Comments on CalPX letter to FERC, dated Aug. 10, 2001=20 Richard, Here are a few comments on the CalPX letter to FERC outlining the difficult= ies in calculating PX refunds. =20 1. The PX claims it is a "neutral party in this proceeding" and is only a = conduit for cash. True for PX business, not true for CAISO obligations. T= he CAISO holds SC's responsible for non-payment, not the SC's customers. T= he PX was the SC for most of the transactions going through the day-ahead a= nd hour-ahead market. Therefore, the PX is primarily liable. I'm not sure= how this helps us, though, since the PX has no money. =20 2. Page 3, SC Data. I was unaware that the CalPX acted as SC until Februa= ry 28th---one month after it closed the doors on January 31st. During this= time, the CAISO was probably in violation of its Tariff, which requires SC= s to be creditworthy. 3. Page 5. Commandeered contracts. What is the status of the PX's claim = against the State of California? The State owes the PX, as representative = for its Participants, the mark-to-market value of the contracts on January = 31st, less amounts paid by CDWR to suppliers. If the PX won't bring this c= laim, its bankruptcy trustee or the PX Participants should bring this claim= against the State of Califonria. 4. Pages 3 and 4. $150 Breakpoint. I asked Kit Blair in Volume Managemen= t to review this letter and he said that it was his view and the view of tw= o other folks in VM that the PX is vastly overstating the difficulty in cal= culating the $150 breakpoint. His view was that it should take hours or da= ys, but not weeks. However, I do not see how we get an advantage from acce= lerating the calculation of refunds. Finally, according to reports from Credit and VM, the remaining PX employee= s are not exactly the "A-team." I suggest we should ask FERC to require t= he PX to document its methodology for calculating refunds, so that we can r= eview for errors. Spot audits by independent auditors might be a good idea= , too. Steve
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