Message-ID: <10584562.1075853433839.JavaMail.evans@thyme>
Date: Fri, 13 Apr 2001 03:04:00 -0700 (PDT)
From: tom.hoatson@enron.com
To: edward.sacks@enron.com, rhonda.denton@enron.com, elizabeth.sager@enron.com
Subject: PJM Chargeback Provisions
Cc: sarah.novosel@enron.com
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The chargeback provisions for PJM are contained in Paragraph 15.2 of the PJM 
Operating Agreement.  As it relates to PJM Members being chargeback for 
another Member's default the paragraph states in part

"...the PJM Board may assess against, and collect from, the Members not in 
default, in proportion to their Weighted Interest, an amount equal to the 
amount that the defaulting Member has failed to pay to the Office of the 
Interconnection, along with appropriate interest, but such assessment shall 
in no way relieve the defaulting Member of its obligations, and shall confer 
upon the Members Committee the right to recover the assessed from the 
defaulting Member."  (Note that upper case denotes defined terms in the 
Operating Agreement)

I will fax a copy of the section of the Operating Agreement pertaining to 
default to Ed Sacks and request that he forward a copy to Rhonda and 
Elizabeth if desired.  If you would like a copy of the entire Operating 
Agreement (all 160 pages) it can be found on the PJM website at www.pjm.com 
by clicking on "Manuals and Documents" on the Home page (left side), then 
under "PJM Agreements" clicking on "Operating Agreement, PJM Interconnection, 
L.L.C."  

Note that in light of the recent defaults in PJM, there is a subgroup in PJM 
reviewing the existing credit policy in PJM and will recommend changes to the 
policy if required.  I will forward you information from this group as it is 
available and ask that you review it and comment.