Ron -

If you have any conclusions on this, please get to Jeff Dasovich.  He is 
calling Mike Peevey to try and get CDWR to take over the contracts fully 
(including our LCs).

Jim



	"Ronald Carroll" <rcarroll@bracepatt.com>
	02/07/2001 03:54 PM
		 
		 To: <andrea.settanni@enron.com>, <jsteffe@enron.com>, <Mary.Hain@enron.com>, 
<smara@enron.com>, <steve.c.hall@enron.com>
		 cc: 
		 Subject: Re: Challenge to exercise of Eminent Domain - Confidential Attorney 
WorkProduct

Mary, I like your points about the state being without jurisdiction over the 
BFM contracts (without commenting on whether such arguments would be better 
made at FERC or Dist. Ct. or both venues).  We would need to research those 
arguments to see if they hold up.   Ron

>>> <Mary.Hain@enron.com> 02/05/01 11:18AM >>>
Good point.
---------------------- Forwarded by Mary Hain/HOU/ECT on 02/05/2001 08:29
AM ---------------------------


Steve C Hall
02/05/2001 08:16 AM

To:   Mary Hain/HOU/ECT@ECT
cc:
Subject:  Re: Challenge to exercise of Eminent Domain - Confidential
      Attorney Work Product  (Document link: Mary Hain)

I think it may also be significant that the governor exercised his
authority over contracts, as opposed to real property.  Who ever heard of
the state "condemning a contract?"



                                                      
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To:   Phillip K Allen/HOU/ECT@ECT, Robert Badeer/HOU/ECT@ECT, Tim
      Belden/HOU/ECT@ECT, Shelia Benke/Corp/Enron@Enron, Donald M- ECT
      Origination Black/HOU/ECT@ECT, William S Bradford/HOU/ECT@ECT, Rick
      Buy/HOU/ECT@ECT, Andre Cangucu/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT,
      Alan Comnes/PDX/ECT@ECT, Wanda Curry/HOU/EES@EES, Jeff
      Dasovich/NA/Enron@Enron, Karen Denne/Corp/Enron@ENRON, Mike
      Grigsby/HOU/ECT@ECT, Mark E Haedicke/HOU/ECT@ECT, Mary
      Hain/HOU/ECT@ECT, Steve C Hall/PDX/ECT@ECT, Joe
      Hartsoe/Corp/Enron@Enron, Keith Holst/HOU/ECT@ect, Robert
      Johnston/HOU/ECT@ECT, Paul Kaufman/PDX/ECT@ECT, Steven J
      Kean/NA/Enron@Enron, Harry Kingerski/NA/Enron@Enron, Susan J
      Mara/NA/Enron@Enron, Sandra McCubbin/NA/Enron@Enron, Travis
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      Novosel/Corp/Enron@Enron, Mark Palmer/Corp/Enron@Enron, Linda
      Robertson/NA/Enron@ENRON, Richard B Sanders/HOU/ECT@ECT, Gordon
      Savage/HOU/EES@EES, Richard Shapiro/NA/Enron@Enron, Vicki
      Sharp/HOU/EES@EES, Mike D Smith/HOU/EES@EES, Shari Stack/HOU/ECT@ECT,
      James D Steffes/NA/Enron@Enron, Marty Sunde/HOU/EES@EES, Stephen
      Swain/PDX/ECT@ECT, Mitchell Taylor/Corp/Enron@ENRON, Michael
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      Yoder/HOU/ECT@ECT, dwatkiss@bracepatt.com, carrrn@bracepatt.com,
      andrea settanni
cc:   Debra Davidson/PDX/ECT@ECT, Paula Warren/HOU/EES@EES, Mercy
      Gil/NA/Enron@Enron, Karen K Heathman/HOU/ECT@ECT, Lysa
      Akin/PDX/ECT@ECT, Leticia Botello/HOU/EES@EES, Joseph
      Alamo/NA/Enron@Enron, Janette Elbertson/HOU/ECT@ECT, Bernadette
      Hawkins/Corp/Enron@ENRON, Sharon Purswell/HOU/ECT@ECT, Maureen
      McVicker/NA/Enron@Enron, Rubena
      Buerger/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Dolores
      Fisher/NA/Enron@Enron, Cindy Derecskey/Corp/Enron@Enron, Lora
      Sullivan/Corp/Enron@ENRON, Twanda Sweet/HOU/ECT@ECT, Ginger
      Dernehl/NA/Enron@Enron, Leasa Lopez/HOU/EES@EES, Iris
      Waser/HOU/EES@EES, Jan M King/HOU/ECT@ECT, Marcia A
      Linton/NA/Enron@Enron, Carol Moffett/HOU/EES@EES, Esmeralda
      Hinojosa/HOU/EES@EES, Kathryn Sheppard/PDX/ECT@ECT, Rosario
      Boling/Corp/Enron@ENRON, Emy Geraldo/NA/Enron@ENRON, Stephanie
      Truss/NA/Enron@ENRON, Anna Mehrer/PDX/ECT@ECT

Subject:  Challenge to exercise of Eminent Domain - Confidential Attorney
      Work Product

Although I don't yet have all the facts, Steve Hall said that late
yesterday (Friday) afternoon, the Governor exercised eminent domain over
the IOU forward contracts that the PX had been in the process of auctioning
to pay PX participants.  I would like Bracewell to research at least the
following two possible ways this action is unlawful.  First, this violates
the banking provisions of the PX tariff (Section 6).  These provisions
requires the PX to hold all PX accounts in trust for PX participants.
Second, these are wholesale contracts and the State only has the right to
exercise eminent domain concerning retail service.  I don't have any law to
support the second idea but think it should be researched nonetheless.