FYI.

Legal Group Plans Suit to Void California Power Contracts
2001-11-07 14:20 (New York)

Legal Group Plans Suit to Void California Power Contracts

     Escondido, California, Nov. 7 (Bloomberg) -- A conservative
legal foundation said it will file a lawsuit tomorrow to void long-
term contracts California signed with power generators, claiming
they put an unfair burden on taxpayers.

     The United States Justice Foundation intends to sue in
Sacramento County Superior Court, said Richard D. Ackerman, lead
counsel on the case for the group. The USJF wants a court to
terminate the long-term power contracts and require money already
paid to the generators to be returned to the state.

     The USJF proposes a class action to represent California
taxpayers and alleges violations of the state's business and open-
meeting laws. Ackerman said his group may need to forge new law to
succeed in the case.

     ``You're gonna have some serious legal battles that may go to
the appeals level in this case,'' Ackerman said.

     California officials last spring signed about $43 billion in
long-term power contracts after two investor-owned utilities
became insolvent. Governor Gray Davis has said the contracts were
needed to bring stability to California's energy market. Since
then, the cost of power has dropped, leaving California with
contracts to buy electricity above spot-market prices.

     Enron Corp., Southern California Edison Company, Pacific Gas
& Electric Company, Green Mountain Energy, San Diego Gas &
Electric Company, Reliant Energy Company, PacifiCorp Power
Marketing, Inc., Alliance Colton LLC, and Calpine Energy Company
have electricity contracts with the state, according to a USJF
press release.

     The USJF said it sent a letter to California officials giving
them notice of its intent to sue. The group, which calls itself
``Your conservative voice in the courts'' on its Web site, is
supported by individual donations, Ackerman said.

--Michael B. Marois in Sacramento (916) 503-1612