I don't understand the import of this ruling.

Judge is ruling that prudently incurred costs are recoverable therefore:
They cannot let the utility go bankrupt?????  They still can if the CPUC 
rules that the value of their assets exceed the shortfall.

Can you tell me what the significance of this ruling is??

This suggests that the utilities were bluffing about declaring chapter 11.  
Now they are protecting against it.?

Scott
---------------------- Forwarded by Scott Stoness/HOU/EES on 01/09/2001 02:18 
PM ---------------------------


Susan J Mara@ENRON
01/08/2001 05:22 PM
To: Alan Comnes/PDX/ECT@ECT, Angela Schwarz/HOU/EES@EES, Beverly 
Aden/HOU/EES@EES, Bill Votaw/HOU/EES@EES, Brenda Barreda/HOU/EES@EES, Carol 
Moffett/HOU/EES@EES, Cathy Corbin/HOU/EES@EES, Chris H Foster/HOU/ECT@ECT, 
Christina Liscano/HOU/EES@EES, Christopher F Calger/PDX/ECT@ECT, Craig H 
Sutter/HOU/EES@EES, Dan Leff/HOU/EES@EES, Debora Whitehead/HOU/EES@EES, 
Dennis Benevides/HOU/EES@EES, Don Black/HOU/EES@EES, Donna 
Fulton/Corp/Enron@ENRON, Dorothy Youngblood/HOU/ECT@ECT, Douglas 
Huth/HOU/EES@EES, Edward Sacks/Corp/Enron@ENRON, Eric Melvin/HOU/EES@EES, 
Erika Dupre/HOU/EES@EES, Evan Hughes/HOU/EES@EES, Fran Deltoro/HOU/EES@EES, 
Gayle W Muench/HOU/EES@EES, Ginger Dernehl/NA/Enron@ENRON, Gordon 
Savage/HOU/EES@EES, Harold G Buchanan/HOU/EES@EES, Harry 
Kingerski/NA/Enron@ENRON, Iris Waser/HOU/EES@EES, James D 
Steffes/NA/Enron@ENRON, James W Lewis/HOU/EES@EES, James Wright/Western 
Region/The Bentley Company@Exchange, Jeff Messina/HOU/EES@EES, Jeremy 
Blachman/HOU/EES@EES, Jess Hewitt/HOU/EES@EES, Joe Hartsoe/Corp/Enron@ENRON, 
Karen Denne/Corp/Enron@ENRON, Kathy Bass/HOU/EES@EES, Kathy 
Dodgen/HOU/EES@EES, Ken Gustafson/HOU/EES@EES, Kevin Hughes/HOU/EES@EES, 
Leasa Lopez/HOU/EES@EES, Leticia Botello/HOU/EES@EES, Mark S 
Muller/HOU/EES@EES, Marsha Suggs/HOU/EES@EES, Marty Sunde/HOU/EES@EES, 
Meredith M Eggleston/HOU/EES@EES, Michael Etringer/HOU/ECT@ECT, Michael 
Mann/HOU/EES@EES, Michelle D Cisneros/HOU/ECT@ECT, Mike D Smith/HOU/EES@EES, 
Mike M Smith/HOU/EES@EES, mpalmer@enron.com, Neil Bresnan/HOU/EES@EES, Neil 
Hong/HOU/EES@EES, Paul Kaufman/PDX/ECT@ECT, Paula Warren/HOU/EES@EES, Richard 
L Zdunkewicz/HOU/EES@EES, Richard Leibert/HOU/EES@EES, Richard 
Shapiro/NA/Enron@ENRON, Rita Hennessy/NA/Enron@ENRON, Robert 
Badeer/HOU/ECT@ECT, Roger Yang/SFO/EES@EES, Rosalinda Tijerina/HOU/EES@EES, 
Sandra McCubbin/NA/Enron@ENRON, Sarah Novosel/Corp/Enron@ENRON, Scott 
Gahn/HOU/EES@EES, Scott Stoness/HOU/EES@EES, Sharon Dick/HOU/EES@EES, 
skean@enron.com, Tanya Leslie/HOU/EES@EES, Tasha Lair/HOU/EES@EES, Ted 
Murphy/HOU/ECT@ECT, Terri Greenlee/NA/Enron@ENRON, Tim Belden/HOU/ECT@ECT, 
Tony Spruiell/HOU/EES@EES, Vicki Sharp/HOU/EES@EES, Vladimir 
Gorny/HOU/ECT@ECT, Wanda Curry/HOU/EES@EES, William S Bradford/HOU/ECT@ECT, 
Mike D Smith/HOU/EES@EES, Donna Fulton/Corp/Enron@ENRON, mjackso7@enron.com, 
psmith3@enron.com, Frank W Vickers/NA/Enron@Enron, Ren, Lazure/Western 
Region/The Bentley Company@Exchange, Jubran Whalan/HOU/EES@EES, Richard B 
Sanders/HOU/ECT@ECT, gfergus@brobeck.com, rcarroll@bracepatt.com, Kathryn 
Corbally/Corp/Enron@ENRON, dwatkiss@bracepatt.com
cc:  
Subject: FW: SCE news release -- Judge finds for SCE in Court


----- Forwarded by Susan J Mara/NA/Enron on 01/08/2001 03:18 PM -----

	"Katie Kaplan" <kaplan@iepa.com>
	01/08/2001 03:08 PM
	Please respond to kaplan
		 
		 To: "Wayne Kawamoto" <wkawamoto@wm.com>, "Ward Scobee" 
<wscobee@caithnessenergy.com>, "Tony Wetzel" <twetzel@thermoecotek.com>, 
"Thomas Heller" <hellertj@apci.com>, "Steve Ponder" <steve_ponder@fpl.com>, 
"Steve Iliff" <siliff@riobravo-gm.com>, "Ross Ain" <ain@worldnet.att.net>, 
"Robert Frees" <freesrj@apci.com>, "Pete Levitt" <Pete@calwind.com>, "Paula 
Soos" <paula_soos@ogden-energy.com>, "Paul Wood" 
<paul_wood@ogden-energy.com>, "Nam Nguyen" <nam.nguyen@powersrc.com>, "Milt 
Schultz" <bfpjv@c-zone.net>, "Marty McFadden" 
<marty_mcfadden@ogden-energy.com>, "Ken Salvagno" <kbssac@aol.com>, "Ken 
Hoffman" <khoffman@caithnessenergy.com>, "Jonathan Weisgall" 
<jweisgall@aol.com>, "Joe Ronan" <joer@calpine.com>, "Joe Greco" 
<joe.greco@uaecorp.com>, "Jack Pigott" <jackp@calpine.com>, "Hap Boyd" 
<hap.boyd@enron.com>, "Frank Misseldine" <fmisseldine@caithnessenergy.com>, 
"Ed Tomeo" <ed.tomeo@uaecorp.com>, "Ed Maddox" 
<emaddox@seawestwindpower.com>, "Duane Nelsen" <dnelsen@gwfpower.com>, "Doug 
Levitt" <SDL@calwind.com>, "Doug Fernley" <fernley.doug@epenergy.com>, "Dean 
Gosselin" <dean_gosselin@fpl.com>, "Bob Escalante" 
<rescalante@riobravo-gm.com>, "Bob Ellery" <bellery@spi-ind.com>, "Bill 
Woods" <billw@calpine.com>, "Bill Carlson" <wcarlson@wm.com>, "Bill Adams" 
<sangorgon@aol.com>, "Alex Sugaoka" <Alex.sugaoka@uaecorp.com>, "Lucian Fox" 
<lucian_fox@ogden-energy.com>, "Rich Dyer" <Rich_dyer@ogden-energy.com>, "Ted 
Cortopassi" <TCortopassi@ogden-energy.com>, "William Hall" 
<wfhall2@duke-energy.com>, "Sue Mara" <smara@ect.enron.com>, "Roger Pelote" 
<roger.pelote@williams.com>, "Rob Lamkin" <rllamkin@seiworldwide.com>, "Kent 
Palmerton" <kent.palmerton@williams.com>, "Jeff Dasovich" 
<jdasovic@enron.com>, "Greg Blue" <gtbl@dynegy.com>, "Eric Eisenman" 
<eric.eisenman@neg.pge.com>, "Curt Hatton" <curt.hatton@gen.pge.com>, "Cody 
Carter" <cody.carter@williams.com>, "Carolyn Baker" 
<cabaker@duke-energy.com>, "Mark Smith" <Mark.J.Smith@fpl.com>, "Curtis 
Kebler" <curtis_l_kebler@reliantenergy.com>, "Dave Parquet" 
<dparque@ect.enron.com>, "Eileen Koch" <eileenk@calpine.com>, "Frank DeRosa" 
<frank.derosa@gen.pge.com>, "Jim Willey" <elliottsa@earthlink.net>, "Kate 
Castillo" <ccastillo@riobravo-gm.com>, "Kent Fickett" <kfickett@usgen.com>, 
"Lynn Lednicky" <lale@dynegy.com>, "Randy Hickok" <rjhickok@duke-energy.com>, 
"Scott Noll" <snoll@thermoecotek.com>, "Susan J Mara" 
<Susan_J_Mara@enron.com>, "Tom Ross" <tross@mcnallytemple.com>, "Sue Mara" 
<smara@enron.com>, "Stephanie-Newell" <stephanie-newell@reliantenergy.com>, 
"Richard Hyde" <rwhyde@duke-energy.com>, "Paula Hall-Collins" 
<paula.hall-collins@williams.com>, "Norton Kelli" 
<knorton@mcnallytemple.com>, "McNally Ray" <rmcnally@mcnallytemple.com>, 
"Marty Wilson" <mwilson@pstrategies.com>, "Kristin Vellandi" 
<kvellandi@pstrategies.com>, "Katie Kaplan" <kaplan@iepa.com>, "Kassandra 
Gough" <kgough@calpine.com>, "Karen Edson" <kedson@ns.net>, "Julee 
Malinowski-Ball" <jmball@ns.net>, "John Stout" 
<John_H_Stout@reliantenergy.com>, "Jeff Dasovich" <Jeff.Dasovich@enron.com>, 
"Jean Munoz" <jmunoz@mcnallytemple.com>, "Jan Smutny-Jones" 
<smutny@iepa.com>, "Bob Weisenmiller" <rbw@mrwassoc.com>, "B Brown Andy" 
<andybrwn@earthlink.net>, "Andy Brown" <ABB@eslawfirm.com>, "Douglas Kerner" 
<DKK@eslawfirm.com>, "John Larrea" <john.g.larrea@williams.com>
		 cc: "Carol H Hudson" <Chudson@iepa.com>, "Steven Kelly" <steven@iepa.com>
		 Subject: FW: SCE news release

We will forward the ruling when we get it.

Katie Kaplan
Manager of State Policy Affairs
Independent Energy Producers Association
(916) 448-9499



Contact: Corporate Communications,
                  626-302-2255
                  World Wide Web Address: http://www.edison.com


                    Southern California Edison Applauds Court
                       Findings in Lawsuit Against CPUC

                  Southern California Edison Company (SCE) today
                    released the following statement in response to
                    today's expedited decision by the U.S. District
                    Court upholding the utility's right to recover the
                     costs of purchasing power for its customers.


                  ROSEMEAD, Calif., Jan. 8, 2001--SCE applauded
                  today's decision by U.S. District Court Judge
                  Ronald S.W. Lew upholding the central claim of our
                  lawsuit against the California Public Utilities
                  Commission (CPUC)--our right to recover the
                  reasonable costs of purchasing power for our
                  customers. This ruling is an important step toward
                  rebuilding the financial stability of California's
                  electric power system.

                  The court found that a trial is needed on the
                  question of whether SCE's purchases were prudent.
                  We believe we will prevail on that issue too because
                  the CPUC has repeatedly held that purchases
                  made through California's Power Exchange and
                  Independent System Operator are, by definition,
                  reasonable. We will work with the CPUC to
                  implement a schedule for the reasonable recovery
                  of our costs.

                  We filed the lawsuit on Nov. 15 asking the federal
                  court to overturn rulings by the CPUC that illegally
                  prevent it from the reasonable recovery of operating
                  costs for purchasing power it has been forced to
                  incur on behalf of our customers. We believe that
                  the five members of the commission violated
                  federal law when, after requiring us to procure
                  wholesale power for its customers from the state's
                  newly deregulated wholesale market, and to sell it
                  without markup, the commission blocked us from
                  recovering the full cost of doing so.

                  Our lawsuit was made necessary by the
                  commission's refusal over the past eight months to
                  heed warnings that its policies breach federal law
                  and unfairly place the company and our customers
                  in jeopardy.

                  In the lawsuit, we noted that we incurred
                  "undercollections" (the difference between
                  out-of-control wholesale power costs and frozen
                  retail rates) approaching $5 billion that have
                  seriously weakened our financial integrity and
                  service reliability.

                  This suit is one of many steps we are taking to
                  attempt to remedy serious market problems that
                  threaten the ability of the state's major utilities to

                  continue serving their customers. We are pursuing
                  every possible means of protecting our customers
                  and shareholders from California's dysfunctional
                  electricity market.

                                   ###

                  An Edison International company, Southern
                  California Edison is one of the nation's largest
                  electric utilities, serving a population of more than
                  11 million via 4.3 million customer accounts in a
                  50,000-square-mile service area within central,
                  coastal and Southern California.

--