RE: California Energy Resources Scheduling - February payment ,
 No problem, Steve is an attorney in Portland.

 -----Original Message-----
From: =09Clemons, Amy =20
Sent:=09Tuesday, July 24, 2001 3:47 PM
To:=09Stokley, Chris
Subject:=09RE: California Energy Resources Scheduling - February payment=20

Thanks for getting me this info.!  I will relay this to CERS and if I have =
troubles, I'll conference in Steve - is he an attorney here in Houston?

Thanks again for getting back to me so quickly  - Amy

 -----Original Message-----
From: =09Stokley, Chris =20
Sent:=09Tuesday, July 24, 2001 5:30 PM
To:=09Clemons, Amy
Cc:=09Thompson, Virginia; Purcell, Mike; O'Neil, Audrey
Subject:=09FW: California Energy Resources Scheduling - February payment=20

Amy,
=09This is Steve Hall's  response to the issue with CERS. If you need any h=
elp w/ this, he has volunteered to get on a conference call with CERS. Let =
me know if you need any further assistance on this item.


=09=09=09=09=09=09=09Chris

 -----Original Message-----
From: =09Hall, Steve C. =20
Sent:=09Tuesday, July 24, 2001 3:02 PM
To:=09Stokley, Chris
Cc:=09Yoder, Christian; Richter, Jeff; Boose, Justin
Subject:=09RE: California Energy Resources Scheduling - February payment=20

Chris,

The issue here is whether the CalPX or California Energy Resources Schedule=
r ("CERS") owes us $186,000 for the power we delivered to the CalPX from Fe=
bruary 1st through 6 under our block forward contracts.=09=09=09=09=09=09

The State of California, i.e., CERS, is responsible for payment of this pow=
er.  It is true that we scheduled the block forwards through the Cal PX on =
Feb. 1-6, and that we did not schedule this power through CERS until Februa=
ry 6 (delivery on the 7th).  But Governor Davis issued Emergency Orders D-2=
0-01 and D-21-01 on January 31st.  Under these Orders, the So. Cal. Edison =
and PG&E block forward contracts were "hereby commandeered by the State of =
California to be held subject to the control and coordination of the State =
of California."  The Orders were effective "immediately."  Because the Orde=
rs was effective on January 31st, the State had title to the contracts from=
 January 31st forward.  Section 8572 of the California Emergency Services A=
ct authorizes the Governor to commandeer private property, but requires the=
 State to pay the "reasonable value thereof."  Therefore, since the State o=
f California had legal title to the contracts and the power supplied under =
those contracts on February 1st, the State of California---through CERS---i=
s responsible for paying for power delivered on February 1st, and forward. =
=20

Responsibility for payment falls on the party with title to the power, not =
the party responsible for scheduling the power.  Just because the CalPX con=
tinued to schedule power for a few days while CERS got its act together doe=
s not mean that the PX was responsible for payment.  Once California took t=
itle to the power,---and all the benefits of having the power---it also ass=
umed responsibility for payment.=20

I would be happy to explain this to CERS, if you want.  Let me know.

Steve=20


 -----Original Message-----
From: =09Stokley, Chris =20
Sent:=09Tuesday, July 24, 2001 1:50 PM
To:=09Hall, Steve C.
Subject:=09RE: California Energy Resources Scheduling - February payment th=
ey dispute

Thank you

 -----Original Message-----
From: =09Hall, Steve C. =20
Sent:=09Tuesday, July 24, 2001 1:47 PM
To:=09Stokley, Chris
Subject:=09RE: California Energy Resources Scheduling - February payment th=
ey dispute

I'll take a look at this today, Chris.

 -----Original Message-----
From: =09Stokley, Chris =20
Sent:=09Tuesday, July 24, 2001 1:33 PM
To:=09Hall, Steve C.
Subject:=09FW: California Energy Resources Scheduling - February payment th=
ey dispute
Importance:=09High

Steve,
=09Take a look at the e-mail and give me you insight. We talked about this =
a few months ago and never came to a solid conclusion. I just want to try a=
nd put it to bed. Thanks for your help on this matter and I hope all is goi=
ng well for you.

=09=09=09=09=09=09=09Chris

 -----Original Message-----
From: =09Clemons, Amy =20
Sent:=09Tuesday, July 24, 2001 1:24 PM
To:=09Stokley, Chris
Cc:=09Ratnala, Melissa K.
Subject:=09California Energy Resources Scheduling - February payment they d=
ispute
Importance:=09High

Hi Chris,=09
=09
=09I wanted to check on California Energy Resouces Scheduling - the piece t=
hey disputed paying us in February.  Virginia had in DMS that you are handl=
ing this now. So, to refresh your memory, they did not pay us $186,000 in F=
ebruary - broken down as follows:

Deal #533136.1  2/1/01  800 mws on peak @ $46.50/mw =3D $37,200
Deal #533136.1  2/2/01  800 mws on peak @ $46.50/mw =3D $37,200
Deal #533136.1  2/3/01  800 mws on peak @ $46.50/mw =3D $37,200
Deal #533136.1  2/5/01  800 mws on peak @ $46.50/mw =3D $37,200
Deal #533136.1  2/6/01  800 mws on peak @ $46.50/mw =3D $37,200

They said CDWR did not pick a block forward from the PX until 2/7/01.  So t=
hey are saying these weren't theirs until the 7th.

Thus my accounts receiveable shows that we have been shorted $186,000.  I n=
eed to know if I can collect this from them or if we will change the deals =
so that they will not be charged for the above days they are disputing.  I =
really need to get this fixed as soon as possible - since this shows possib=
le exposure to us if we can't collect or DPR to the West if we have to remo=
ve these deals for the above days.

Let me know if you have any questions and let me know what info. you have.

Thanks!
Amy
amy.clemons@enron.com