----- Forwarded by Jeff Dasovich/NA/Enron on 03/12/2001 10:56 AM -----

	"Ronald Carroll" <rcarroll@bracepatt.com>
	03/12/2001 10:56 AM
		 
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		 Subject: Fwd: DJ - Calif PX Files For Chapter 11 Bankruptcy Protection


----- Message from "Tracey Bradley" <tbradley@bracepatt.com> on Mon, 12 Mar 
2001 10:42:54 -0600 -----
To:	"Marcy Kurtz" <mkurtz@bracepatt.com>
cc:	"Jeffrey Watkiss" <dwatkiss@bracepatt.com>, "Paul Fox" 
<pfox@bracepatt.com>, "Ronald Carroll" <rcarroll@bracepatt.com>
Subject:	DJ - Calif PX Files For Chapter 11 Bankruptcy Protection

DJ Calif PX Files For Chapter 11 Bankruptcy Protection 
Copyright , 2001 Dow Jones & Company, Inc. 

LOS ANGELES (Dow Jones)--The California Power Exchange, the marketplace where 
electricity is bought and sold in the state, filed for Chapter 11 bankruptcy 
protection Friday afternoon, citing multiple lawsuits filed against the 
non-profit corporation by generators since the exchange announced it was 
closing down in January, according to a filing made in U.S. Bankruptcy Court, 
Central District of California. 

     A CalPX official said a bankruptcy court could better sort out the 
lawsuits and make sure generators owed hundreds of millions of dollars get 
paid. 

     A bankruptcy court judge may decide the outcome of a lawsuit filed 
against the CalPX and Gov. Gray Davis by Duke Energy (DUK), which alleged 
that forward power contracts held by the CalPX and seized by the governor 
were done so unlawfully. 

     The CalPX was set to liquidate forward power contracts totaling about $1 
billion to pay power suppliers hundreds of millions of dollars owed by PG&E 
Corp. (PCG) unit Pacific Gas & Electric and Edison International (EIX) unit 
Southern California Edison. Both utilities defaulted on payments to the 
CalPX. 

     Gov. Davis seized the contracts minutes before the CalPX was set to 
liquidate them. 

     A spokesman for Gov. Gray Davis would not comment on the CalPX's 
bankruptcy filing. 

     Duke has reached an interim agreement with the state to continue 
supplying the power, but it has yet to agree on a price the company expects 
the state to pay for the contracts. 

     Then in late February, the CalPX still having to pay suppliers for the 
utilities defaults, attempted to bill companies such as Enron Corp. (ENE) and 
Avista Corp. (AVA), for money the utilities failed to pay. 

     The "charge-back" would have occurred under a CalPX insurance mechanism, 
which states that defaults by the exchange's participants are charged back to 
creditors' based on creditors' level of participation in the exchange in the 
three months prior to the default. 

     Enron and the other suppliers sued the CalPX in federal court in attempt 
to block the CalPX from holding the companies' responsible for PG&E and SoCal 
Ed defaults. 

     The case was postponed pending action by federal regulators. 

     The CalPX, which at one point controlled about 85% of the state's 
wholesale power market transactions, was established under the state's 1996 
landmark deregulation law. The exchange was set up to ensure that utilities 
paid a transparent price for power during the transition to deregulation. 

     The exchange operated a uniform price auction, meaning all sellers were 
paid the highest accepted bid for power regardless of what their actual bid 
may have been. The state's three investor-owned utilities were required to 
buy the bulk of their power through the CalPX. 

     In December, federal regulators announced that the CalPX's tariff, which 
allows it to operate in the state as a Power Exchange, would not be renewed 
because it was one of the flaws that contributed to the failure of 
California's wholesale power market. 

     In January, the CalPX announced that it would suspend its day-ahead, 
day-of and block forward market and that it would permanently shut down in 
April and began laying off its staff of 200 employees. 

     -By Jason Leopold, Dow Jones Newswires; 323-658-3874; 
mailto:jason.leopold@dowjones.com 

     (END) Dow Jones Newswires 10-03-01