Smutny Letter to Senator Dunn

----- Forwarded by Jeff Dasovich/NA/Enron on 06/22/2001 07:10 PM -----

Tom Ross <tross@mcnallytemple.com<
06/22/2001 05:02 PM

To: Jean Munoz <jmunoz@mcnallytemple.com<, "'Andy Brown (E-mail)'"
<ABB@eslawfirm.com<, "'B Brown Andy (E-mail)'" <andybrwn@earthlink.net<,
"'Baker Carolyn (E-mail)'" <cabaker@duke-energy.com<, "'Bob Escalante
(E-mail)'" <rescalante@riobravo-gm.com<, "'Bob Weisenmiller (E-mail)'"
<rbw@mrwassoc.com<, "'Curtis Kebler (E-mail)'"
<curtis_l_kebler@reliantenergy.com<, "Dean. Nistetter (E-mail)"
<Dean.Nistetter@dynegy.com<, "'Douglas Kerner (E-mail)'" <DKK@eslawfirm.com<,
"'Greg Blue (E-mail)'" <gtbl@dynegy.com<, "'Jan Smutny-Jones (E-mail)'"
<smutny@iepa.com<, "'Jeff Dasovich (E-mail)'" <Jeff.Dasovich@enron.com<,
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<fernley.doug@epenergy.com<, "'Duane Nelsen (E-mail)'"
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cc:
Subject: Smutny Letter to Senator Dunn

June 22, 2001

The Honorable Joseph Dunn
Chair, Senate Select Committee
California State Senate
Room 2080
California State Capitol
Sacramento, CA 95814

Dear Senator Dunn:

Earlier this year, you met individually with IEP and various other parties to
explain the purpose of the Senate Select Committee?s hearing and the process
under which they were to be conducted. You made it very clear that you were
planning to have fact-finding hearings based upon fundamental fairness and
due process. You made a further commitment that there would be no
surprises. Prior to today, the hearings have been conducted consistent with
that representation.

Unfortunately, today it appears that the Committee has set a new course that
radically departs from these previous commitments. Today, the Committee is
hearing testimony from several surprise witnesses. These witnesses are
former employees of San Diego Gas and Electric (SDG&E) under contract with
Duke Energy for an interim period during which Duke Energy operated the
facilities in San Diego. It is our understanding that these former contract
employees are alleging that the company failed to properly maintain these
facilities, and they are alleging that Duke Energy cycled these facilities
differently than the former owner, SDG&E. It is also our understanding that
Duke Energy will not be afforded the opportunity to contemporaneously
challenge these allegations and/or provide an explanation as to the
operational behavior of the facilities. In short, the hearings are being
reduced to a media event, giving credence to the unsustainable allegations of
disgruntled ex-employees.

Respectfully, it would appear that the Committee has wandered far afield of
its stated goals. These hearings have the potential of identifying what went
wrong with California?s energy policy and how to fix it. However, this will
only occur if this inquiry is based on informal facts and complete
information, not innuendo and unsubstantiated allegations. It is the pursuit
of facts, not headlines, which will solve California?s energy crisis. These
facts will be revealed only in a fair process, where allegations made are
subject to contemporaneous response.

It is our hope that today?s process is an aberration, and not a departure
from your commitments. The Committee is at a crossroads. It can choose to
engage in fact-finding and analysis, or it can be reduced to a witch-hunt in
pursuit of headlines. For the benefit of all Californian?s, the Committee
should focus on fact-finding and analysis.

Sincerely,

Jan Smutny-Jones
Executive Director