----- Forwarded by Richard B Sanders/HOU/ECT on 12/15/2000 03:36 PM -----

	"JOHN G KLAUBERG" <JKLAUBER@LLGM.COM>
	12/15/2000 03:07 PM
		 
		 To: Mark.E.Haedicke@enron.com, Mike_D_Smith@enron.com, 
Richard.B.Sanders@enron.com, vsharp@enron.com
		 cc: 
		 Subject: Request to DOJ Investigation to Undertake CA Investigation


FYI re: DOJ/CA Situation.  I'm not sure what to make of this in light of the 
upcoming change in the Administration, but I thought you would want to be 
aware of it.  Also, although the focus appears to be generators, I would 
assume that if DOJ elected to go forward andy investigation would be likely 
to expand to include major marketers.  John

Friday December 15, 1:03 pm Eastern Time
Justice Dept Asked to Probe Power Crisis
WASHINGTON (Reuters) - U.S. Attorney General Janet Reno has been asked to 
investigate whether possible collusion and other illegal activities among 
power generators are behind the huge jump in California's electricity and 
natural gas prices.

``We are concerned that market power is being abused by generators in the 
electricity market to inflate prices and gouge consumers,'' California 
Democratic U.S. Sen. Barbara Boxer and California State Senate President Pro 
Tempore John Burton said in a letter to Reno late on Thursday.

``We request that the Department of Justice investigate potential collusion 
and any other unlawful acts by generators in the electricity market,'' they 
added.

They noted in the letter that one-fourth of the state's generating plants -- 
representing 11,000 megawatts of power -- were shut down last weekend, 
allegedly for repairs or routine maintenance, when California citizens faced 
rolling blackouts.

``Some have suggested that one reason for plant shutdowns is that in some 
cases companies are selling natural gas they would otherwise use to operate 
their plants at exorbitant prices on the natural gas market,'' they said.

If true, Boxer and Burton said it would explain some of the electricity 
shortage problems and raise concern about irregular activity in the natural 
gas market.

In a related action, they sent letters to power company executives asking 
them to explain why their firms shut down generators while California faced 
power shortages.

Wholesale electricity prices in the state have soared as high as $1,400 per 
megawatt hour.

Boxer and Burton admitted time is running out for Reno to take action since a 
new attorney general will take the helm of the Justice Department when 
Republican George W. Bush assumes the presidency in late January.

``However, this crisis in upon us now,'' they said. ``I hope you will take 
immediate steps to address this matter, thereby setting a strong example of 
leadership for the new attorney general to follow.''



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John Klauberg
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
212 424-8125
jklauber@llgm.com