Enron Mail

From:richard.sanders@enron.com
To:steven.kean@enron.com, mark.palmer@enron.com
Subject:Request to DOJ Investigation to Undertake CA Investigation
Cc:
Bcc:
Date:Fri, 15 Dec 2000 07:33:00 -0800 (PST)

----- Forwarded by Richard B Sanders/HOU/ECT on 12/15/2000 03:36 PM -----

"JOHN G KLAUBERG" <JKLAUBER@LLGM.COM<
12/15/2000 03:07 PM

To: Mark.E.Haedicke@enron.com, Mike_D_Smith@enron.com,
Richard.B.Sanders@enron.com, vsharp@enron.com
cc:
Subject: Request to DOJ Investigation to Undertake CA Investigation


FYI re: DOJ/CA Situation. I'm not sure what to make of this in light of the
upcoming change in the Administration, but I thought you would want to be
aware of it. Also, although the focus appears to be generators, I would
assume that if DOJ elected to go forward andy investigation would be likely
to expand to include major marketers. John

Friday December 15, 1:03 pm Eastern Time
Justice Dept Asked to Probe Power Crisis
WASHINGTON (Reuters) - U.S. Attorney General Janet Reno has been asked to
investigate whether possible collusion and other illegal activities among
power generators are behind the huge jump in California's electricity and
natural gas prices.

``We are concerned that market power is being abused by generators in the
electricity market to inflate prices and gouge consumers,'' California
Democratic U.S. Sen. Barbara Boxer and California State Senate President Pro
Tempore John Burton said in a letter to Reno late on Thursday.

``We request that the Department of Justice investigate potential collusion
and any other unlawful acts by generators in the electricity market,'' they
added.

They noted in the letter that one-fourth of the state's generating plants --
representing 11,000 megawatts of power -- were shut down last weekend,
allegedly for repairs or routine maintenance, when California citizens faced
rolling blackouts.

``Some have suggested that one reason for plant shutdowns is that in some
cases companies are selling natural gas they would otherwise use to operate
their plants at exorbitant prices on the natural gas market,'' they said.

If true, Boxer and Burton said it would explain some of the electricity
shortage problems and raise concern about irregular activity in the natural
gas market.

In a related action, they sent letters to power company executives asking
them to explain why their firms shut down generators while California faced
power shortages.

Wholesale electricity prices in the state have soared as high as $1,400 per
megawatt hour.

Boxer and Burton admitted time is running out for Reno to take action since a
new attorney general will take the helm of the Justice Department when
Republican George W. Bush assumes the presidency in late January.

``However, this crisis in upon us now,'' they said. ``I hope you will take
immediate steps to address this matter, thereby setting a strong example of
leadership for the new attorney general to follow.''



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John Klauberg
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
212 424-8125
jklauber@llgm.com