This reports on our meet and confer session with the AG's office today
regarding the subpoenas served upon Enron Energy Services. Mike Kirby and I
spoke with Deputy AGs Margaret Wrighter and Paul Stein for approximately two
hours. These are the essential points we covered:
* Non-waiver of objections: They agreed that EES did not waive any
objections by attempting to negotiate compliance with the subpoena. They
will agree that any interim production of documents would not waive any of
EES's objections to the subpoena, except as to those documents actually
produced.
* Territoriality: We told them that EES would not produce documents
that resided outside the state. Much of the conference was devoted to their
disagreement with this position. Wrighter suggested that the AG may seek
prompt court relief on this issue or, in the alternative, file a lawsuit to
make EES a party in this litigation, then reach out of state documents
through ordinary discovery. We are at an impasse on this issue.
* Confidentiality: The AG proposes a confidentiality order identical
to the order in place between Reliant and Dynegy in their litigation with
the AG in Los Angeles. This order limits access to confidential documents
to less than 20 persons, but provides that persons outside the AG's office
at the PUC and other California governmental agencies may review produced
documents. The court in LA has recently ruled that the confidentiality in
place with Reliant and Dynegy and Mirant may be amended to permit the
offices of the Attorneys General of Oregon and Washington to review produced
documents, subject to the confidentiality provisions of the agreement.
Reliant and Dynergy are challenging this provision of the order in the
appellate courts, but have not obtained an order staying their production
under this order. The AG says they will not sign a different
confidentiality order with us. We did not agree to these provisions. We
are to give the AG a redlined confidentiality order on Monday that we would
accept in return for producing documents within California.
* Production of electronic documents: They insist that all documents
kept in electronic form be produced in electronic form. We discussed the
difficulties and burdens of doing this. They say they will insist upon this
requirement. We will consider compliance for electronic documents within
the state if it is not burdensome to do so.
* Confidentiality of customer contracts: They will agree to narrow
production to commercial customers. We explained that our commercial
contracts have confidentiality provisions with our customers. We told them
most have approximately a ten day notice period which we will honor. They
asked for an example of this provision, which I said we would provide. They
took the position that we should have been given notice to our customers
weeks ago and demanded production. We told them we would not do so until,
at the earliest, July 30, after we had given appropriate notice. They asked
that we begin to produce some documents before then.
* Interim production: We told them that, subject to an acceptable
confidentiality order, we were prepared to produce documents which were
reasonably requested by their subpoena that reside within California
beginning July 30, on the condition that it would not operate as a waiver
of any of our objections in later litigation. They said they would think
about this offer and call us back. Wrighter called back this afternoon,
saying that they wish us to continue with the plans to make an interim
production. She did not promise not to file a lawsuit in the interim.
Accordingly, we intend to prepare an acceptable confidentiality
agreement sufficient to protect the production of EES's California
documents, then send it to the AG with a letter that set forth the terms of
any interim production under that agreement. If they do not agree to the
confidentiality agreement, or the terms of the interim production, we will
not produce any documents. We will send this letter to the AG early next
week after we have distributed a copy for your review.

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