Subject: FW: Draft Responses to Chairman Hoecker's Questions
From: [email-masked]
To: [email-masked], [email-masked]
Cc: [email-masked]
Date: Thu, 30 Nov 2000 12:27:00 -0800 (PST)

FYI.
Here is the last draft of the responses to FERC's questions.  It is still
missing a section in response to Question 2 that Mary is drafting.  I
believe that Ron has minimized the concerns that I had from the prior draft.
He is also swinging for a preemption home run ball in the San Diego
litigation.  In response to Question No. 4, he is asking FERC to
specifically to find that it is preempting investigations of last summers
market, find that the rates charged were just and reasonable and determine
that sellers are immune from refund under any possible legal theory.
Anything less will chill the market for further investment and exacerbate
the problem.  There is some risk if we ask for this finding and do not get
it, that fact will diminish arguments we might have in state or federal
court that there has been preemption.  As a practical matter, however, our
preliminary research has shown that without a very specific intent to
preempt anti-trust laws, for example, the preemption argument may be
difficult to make anyway.  Ron and Mary clearly believe this is the one
chance we have to get FERC to make a finding.  If FERC does make the
finding, it will undoubtedly be appealed.  I do not know how to assess the
likelihood that FERC will make the requested finding, and if they do whether
it will be upheld on appeal so it is difficult for me to do a risk benefit
analysis.

 If we are going to go this route, I would take out the conditional
phrase on page 7 in the word version that reads:  "if they were not in
violation of market rules established under the ISO's and PX's tariffs."

 Talk to you tomorrow.

Thanks
Gary

-----Original Message-----
From: Nancy Pickover [mailto:[email-masked]]
Sent: Thursday, November 30, 2000 4:26 PM
To: Jeffrey Watkiss; [email-masked]; [email-masked];
[email-masked]; [email-masked]; [email-masked];
[email-masked]
Subject: Draft Responses to Chairman Hoecker's Questions

As you will see, the attached draft incorporates Sue's and Mary's drafts as
well as additional text from me.  The comments filed on Nov. 22 are
literally one foot high. If the Commission is serious about getting an order
out by mid-December, it is thus highly unlikely that it will carefully
review any of the Comments other than the major players (CPUC, Gov. Davis,
the UDCs).  I do believe, however, that Chairman Hoecker, the Commissioners
and the high level Staffers will be more likely to review the responses to
Hoecker's questions.  Thus, if we are to have any realistic hope that they
will focus on our arguments, I thought it advisable to use these responses
as an advocacy piece rather than a mere discovery response.  Hence, I
suggest a lengthy rather than minimalist response.

I thought that Gary's concern in an earlier email about Alan's rebuttal to
the J&K piece was well taken.  I have thus taken out all references to a
need to do more analysis on the market abuse issue, and recast his write-up
as simply a rebuttal of the J&K Study.

Finally, the draft (which I have included in Word and WP formats/ the WP
format may paginate more accurately) is no doubt in need of wordsmithing;
any suggestions would be well appreciated.

I would like to file this tomorrow, so please call or email me as early in
the morning as possible.  (I am not sending this email from my computer, so
please create a new email to me when you respond rather than simply hit the
"reply" button to this email.)  Talk to you tomorrow (Friday).

Ron

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