The attached letter is being delivered this morning to the FERC commissioners. Since the letter concerns a matter currently pending before the commission it will also be served on the parties. We plan to talk to the press about it as well. A number of other companies and organizations are also submitting letters and we have helped prepare an EPSA filing which focusses specifically on California. Our best information at this point is that the FERC staff report regarding California is generally accurate, and therefore, favorable. While it will mention periodic exercises of market power, it is expected to lay blame for California's woes at the feet of California's own decisions about market structure. It is further expected that the report will not provide a basis for ordering refunds. On the other hand, the Commission's order (to be considered tomorrow along with the staff's report) is expected to at least put refunds on the table for comment and to discuss, and perhaps implement, further price caps. This is just our best guess at this point. the Commission has put special emphasis on putting the report and order under wraps until wednesday.

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Hoecker letter