CA Refund Case Information; PRIVILEGED & CONFIDENTIAL ,
 Steve,  

Jim Steffes called me to inquire as to the information you are interested in, regarding the California refund case, and I passed the following along to him by phone:


Status of the refund claim:  

The CAISO refund claims made in CAISO letters to Congress, and the final claim at the FERC-ordered settlement conference, were approximately $38 MM.  The initial claim in the California Refund case before Judge Birchman was very similar, although the most recent CAISO claim is that they owe us $1MM!  A review of their claim revealed errors.  I asked Charles River Associates to re-run the numbers correcting only the errors and they came up with a $57MM figure.  Please note that this number resulted from an internal exercise and is not a claim by the ISO.  However, I consider this the maximum exposure from what is known at this time.  I expect that CAISO will revise its claim against us around December 7, and I will communicate the new claim as soon as I receive it.


Points summarizing the proceeding:

The California refund proceeding at FERC, unlike the Pacific Northwest proceeding, contemplates that refunds will be paid and orders the Judge to determine the amount of the refunds.
Issues to be decided by the Judge include (1) the amounts of the mitigated market claiming price (2) the amounts owed by each seller and (3) the amount that a seller may offset against its refund obligation.
This proceeding has been delayed due to errors and omissions in the California ISO's data.
Due to deficiencies in the data, it is also difficult to assess potential exposure. The California ISO's claims have thus far been erroneous.
Hearings are scheduled to occur on December 17-21 and February 11-15. The Judge's ruling is expected on March 8, 2002. 

Timing of the FERC Order:
It is difficult to say how quickly the Commission may rule after receiving the Judge's certification of findings and record on March 8.  Arguably, they could act very quickly due to the limited scope of the proceeding and the fact that the Judge's findings will likely be limited to the three issues described above.

Let me know if you need any more information.  I will copy you on significant memos in the case.  Regards,  Ray
j..kean@enron.com