Subject: Cal PX situation
From: [email-masked]
To: [email-masked], [email-masked]
Cc: [email-masked], [email-masked], [email-masked]
Date: Wed, 17 Nov 1999 09:36:00 -0800 (PST)

CONFIDENTIAL
SUBJECT TO ATTORNEY CLIENT PRIVILEGE

Here is a line of argument which we might consider using to muzzle the PX.  

1. Section  19.3.1 of the Tariff  requires the PX to keep  sensitive 
information given to the PX by Participants Confidential.  

2. Section 19.3.3 says no PX Participant has the right to review any  .... 
information... that another PX Participant  has designated as confidential.  

3.  Section 19.3.4 says that if the PX thinks it has to disclose 
information,  it has to let the Participant that will be affected by the 
disclosure have time to challenge the alleged disclosure requirement.

4. PX Tariff Schedule 10  (Dealing with Sanctions)  says that the terms of 
Section 19 apply in Sanction situations.  

 5.  Schedule 10 is silent about whether or not the PX is required or 
permitted to broadcast Sanctions to the market.  

There may be a legal argument based on the Tariff  that the PX has to keep 
quiet about sanctions.  Are they required or permitted to broadcast to the 
whole world their  findings?   

Another line of reasoning based on the Tariff which might be worth exploring  
is as follows:   if this event had occurred now,  with the new sanction part 
of the  tariff in effect, the PX would have had to have conducted an 
investigation in accordance with Section 5.4 which requires the basis of a 
finding to be given and, if after this relatively  fair looking due process 
section was followed, we were found guilty,   we would have received a Level 
1 Sanction,  which is a Formal Warning which "shall take the form of a 
written letter identifying the PX Participant's infraction. "   and nothing 
more.  Therefore,  why is the PX seeking to solve a problem it had before the 
Tariff was brought up to date  on Sanctions with a  Kangaroo Court process  
that is more draconian than its newly approved FERC sanctions?   It is rather 
ironic that we have escaped sanctions because they were't organized to impose 
them when the actions in question occurred, but had the present Tariff been 
in effect then, we probably would not have been treated so shabbily.  Somehow 
this has to be able to be turned into a legal argument in our defence. ---cgy

These are preliminary thoughts which I think merit further pursuit.  
---cgy