Q: As I have discussed with you, Citizens is concerned about the frequency of upstream supply issues that have resulted in the recent cuts in the deliveries to the Griffith power plant. Based on the information I have received, the reasons for these cuts have not risen to the level of Force Majeure, which as you know is the only event that would excuse performance under our contract for firm delivery of gas. Citizens therefore requests that Enron respond to Citizens in writing with a descriptions of the steps Enron is taking to insure that there is not a continuation of these contract performance issues into the future. Your prompt attention to this matter is appreciated.
Propose a subject line
A: Griffith Sales

Q: February 4, 2002 Enron boss cancels testimony Cites 'disturbing' TV talk: Blames 'prosecutorial' tone, claims of security fraud Jason Chow National Post Former Enron Corp. chairman Kenneth Lay said yesterday he would not testify at today's scheduled congressional hearing into the company's collapse, blaming legislators' "prosecutorial" comments on TV talk shows yesterday. "Not only were there corrupt practices, we are finding what may clearly end up being security fraud," Republican Rep. Billy Tauzin, chairman of the House Energy and Commerce Committee, told NBC's Meet the Press. An internal company report released Saturday criticized Mr. Lay, other executives, board members and auditors for the collapse. It showed managers took home millions of dollars through complex partnerships, while hiding at least US$1-billion in losses. Other politicians denounced the company's management before TV cameras yesterday in response to the report. Last night, Mr. Lay cancelled his testimony. "In the midst of our preparation, particularly disturbing statements have been made by members of Congress, even today, on the eve of Mr. Lay's scheduled appearance," his lawyer, Earl Silbert, said in a letter to lawmakers on the Senate Commerce Committee and the House Financial Services Committee. "I have instructed Mr. Lay to withdraw his prior acceptance of your invitation." Sen. Byron Dorgan, chairman of another Senate Commerce subcommittee investigating the biggest bankruptcy in U.S. history, said on Meet the Press the report "suggests massive problems" and shows "a culture of corruption." While Mr. Dorgan said it was up to the U.S. Justice Department to decide whether to press criminal charges, he added the report showed "clearly some things have happened here that are going to put some people here in real jeopardy." The 203-page report, written by a team headed by the dean of the University of Texas Law School, said Mr. Lay "bears significant responsibility" for "flawed decisions" in approving some transactions that hid debt and offset losses. The report said these transactions did not follow accounting rules and were implemented improperly, resulting in Enron overstating earnings by US$1-billion during a one-year period starting in September, 2000. "Ken Lay obviously had to know that this was a giant pyramid scheme -- a giant shell game," said Republican Sen. Peter Fitzgerald.
Propose a subject line
A: Enron boss cancels testimony

Q: This is good news, if true; but I must take exception to any characterization of FERC action on governance as "prompt." That point passed many, many months ago. State, FERC Pressure Builds To Make Cal-ISO Board More Independent Political pressure to dismiss the current independent system operator (ISO) in California and replace the board with new members appears to be reaching a head. Industry insiders believe that an order from the Federal Energy Regulatory Commission (FERC) to mandate a new board is imminent and cite the actions by the ISO during the energy crisis and in the months that have followed as reason for FERC commissioners to act promptly. A bombshell was released last week by Rep. Doug Ose (R-CA) in a letter to FERC accusing the ISO and the California Department of Water Resources (DWR) of acting in tandem to such an extent that their dealings appear to be in collusion and prohibitive of actual independence. Attached to the Ose letter was a confidential memo from energy advisor Eric Woychik to then ISO Board Governor Mike Florio. Ose states in his letter to FERC that the memo "clearly illustrates the perils of a lack of independence" from an ISO. The memo states that "current DWR practices cause very large additional costs for purchases on behalf of UDC customers and this also compromises reliability." There are three scenarios outlined in the memo that detail violations and increased costs for customers as a result of the alleged interdependence between the two entities. At one point the memo's author acknowledges the gravity of the situation by stating, "If the press, Legislature, or FERC get wind of this, I think we are toast." Woychik tells Electric Power Alert that he was trying to impress upon the ISO that "if this gets loose [the ISO officers and board members] should be very embarrassed." FERC Chairman Pat Wood tells Electric Power Alert that the commission "currently has a motion before us to address" the independence of the ISO. A source monitoring the situation says, "We are hoping that FERC says the California ISO is not an independent board and comes out and says 'You shall appoint an independent board.'" Insiders note that in the past month FERC has issued two orders adjusting Cal-ISO behavior and is actively taking a role in rectifying energy oversight in that state. In their Nov. 20 commission meeting, FERC ordered the ISO to treat the DWR without preferential treatment and like any other market participant. FERC, says one informed California source, needs to "kill the current ISO board, dismiss the lot." "This is fantastic. It's the first appropriate action to take place," says a California energy consultant about FERC's recent order. According to the source, this indicates that FERC will take the next step and require actual independence from the board. Should FERC make that move, the insider says, they have a precedent to base the action on. "They did it with PJM early on. They rejected two of their proposed boards because they said they weren't independent enough." Florio, who is now with the consumer organization The Utility Reform Network (TURN), claims that the ISO is more independent than previous boards and has local oversight. "I think if you asked the average Californian whether an entity like the ISO should be appointed by the governor or 'independent' under criteria set by FERC, I think the vast majority would say governor appointment is preferable because there is some political accountability that way," he told Electric Power Alert. He goes on to state that, having served on the ISO board and the previous stakeholder board, he is in a position to "say unequivocally that the current board gives ISO management much more free rein than the old board ever did." According to the energy consultant, Californians "have an ace up our sleeves" to force independence on the ISO board if FERC does not act swiftly. California State Senator John Burton (D) pushed through legislation two months ago that, the source says, will ensure an independent board is in place in a few months. "An independent board will be chosen next year whose members will be subject to California state [Senate] confirmation," says this source. Sources point to the ISO's failure to follow up on the suggestions made in the memo that would have served to divide the ISO and DWR as examples of the co-dependence between the two. A source familiar with the ISO dealings says, the "ISO felt that it made more sense to try to correct the problems rather than spend its time quantifying the effects." A FERC insider confirms that there have been commission level "discussions about the Cal-ISO for some time," and that they have fielded a number of complaints against the ISO for alleged lack of independence. FERC is taking a long break and will not hold another commission meeting until Dec. 19. The sunshine notice that reveals the agenda items for discussion will not be released until Dec. 12, but insiders believe that the political pressures on FERC, the fact that they have recently been issuing orders to the ISO, and the Woods' acknowledgement that it is an item before FERC indicate that they are going to be discussing the item, if not acting on it, at the next meeting. Source: EnergyWashington.com
Propose a subject line
A:
State, FERC Pressure Builds To Make Cal-ISO Board More Independent