Re: FERC REFUNDS ***** Restructuring Today, Monday January 8, 2001 ,
 FYI
---------------------- Forwarded by Mary Hain/HOU/ECT on 01/08/2001 02:03 PM 
---------------------------
   
	Enron Capital & Trade Resources Corp.
	
	From:  "Ronald Carroll" <rcarroll@bracepatt.com>                           
01/08/2001 12:24 PM
	

To: <Susan.J.Mara@enron.com>
cc: "Jeffrey Watkiss" <dwatkiss@bracepatt.com>, <gfergus@brobeck.com>, 
<Alan.Comnes@enron.com>, <Donna.Fulton@enron.com>, 
<James.D.Steffes@enron.com>, <Jeff.Dasovich@enron.com>, 
<Joe.Hartsoe@enron.com>, <Mary.Hain@enron.com>, 
<Richard.B.Sanders@enron.com>, <Sarah.Novosel@enron.com> 
Subject: Re: FERC REFUNDS ***** Restructuring Today, Monday January 8, 2001


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Sue,

I noticed Hoecker's statement too.  I do not, however, believe that he is 
breaking new legal ground here, although the reference to Section 309 is (I 
believe) the first time in these cases that FERC or any of the individual 
Commissioners cited specifically to this section of the FPA as possible 
authority for ordering retroactive refunds prior to the 10/2/00 "refund 
effective date."  (I have attached Hoecker's opinion; the reference to 
Section 309 is on page 11.)

Section 309 is the provision of the FPA that grants FERC authority to take 
action "necessary and proper" to carry out the other substantive provisions 
of the Act, such as ensuring "just and reasonable" rates under Section 206 of 
the Federal Power Act; however, the courts have interpreted Sec. 309 as not 
expanding FERC's substantive authority otherwise granted under other 
provisions of the Act; it only provides FERC with authority as necessary for 
it to fill in the "missing blanks" in the substantive provisions of the Act, 
such as Sec. 206.)

Several years ago, FERC ordered retroactive refunds in a Washington Water 
Power case where the utility had violated its tariff.  Here, Hoecker is 
simply suggesting that FERC could do the same if it turns out that any seller 
violated the ISO's or PX's tariff last summer by engaging in "collusion, 
predatory pricing, or unlawful manipulation of prices."  As long as EPMI 
followed  the ISO's and PX's market rules last summer, I see nothing in 
Hoecker's opinion that undermines our view that the filed rate doctrine 
prevents refunds of all amounts collected in accordance with the market rules 
prior to 10/2/00; i.e., in the absence of a violation of the tariff or FPA, 
nothing in Hoecker's opinion suggests that Sec. 309 modifies the prohibition 
of Sec. 206 against retroactive refunds prior to the refund effective date 
(10/2/00).

Ron

>>> <Susan.J.Mara@enron.com> 01/08/01 02:23PM >>>
Dan and/or Ron,

Hoecker is quoted here as saying (p.2) that FERC has all the authority it
needs to "disgorge" profits under Section 309 of the FPA.  What are your
thoughts?  Is this the first time that section has been mentioned?

Sue
----- Forwarded by Susan J Mara/NA/Enron on 01/08/2001 10:49 AM -----

                    US Publishing
                    <season@wizar        To:     "RT Reader" 
<season@wizard.net>
                    d.net>               cc:
                                         Subject:     Restructuring Today, 
Monday
                    01/08/2001           January 8, 2001
                    08:19 AM
                    Please
                    respond to
                    season






(see attached file:  rt010108.pdf)

Thank you,

Season Hawksley
US Publishing
1-800-486-8201
www.restructuringtoday.com
season@restructuringtoday.com

(See attached file: rt010108.pdf)

 - 0136365.01
tim.belden@enron.com