----- Forwarded by Elizabeth Sager/HOU/ECT on 05/01/2001 11:06 AM -----

	Rebecca W Cantrell
	05/01/2001 11:04 AM
		 
		 To: Richard B Sanders/HOU/ECT@ECT, Elizabeth Sager/HOU/ECT@ECT, Jeffrey T 
Hodge/HOU/ECT@ECT, Tim Belden/HOU/ECT@ECT
		 cc: 
		 Subject: Breaking News : Williams Ordered to Pay $8 Million Refund to Cal-ISO

FYI.
---------------------- Forwarded by Rebecca W Cantrell/HOU/ECT on 05/01/2001 
11:04 AM ---------------------------
   
	Enron North America Corp.
	
	From:  Rebecca W Cantrell                           05/01/2001 10:21 AM
	

To: Steve Walton/HOU/ECT@ECT, Susan J Mara/NA/Enron@ENRON, Alan 
Comnes/PDX/ECT@ECT, Ray Alvarez/NA/Enron@ENRON, Leslie Lawner/NA/Enron@Enron, 
Donna Fulton/Corp/Enron@ENRON, Jeff Dasovich/NA/Enron@Enron, Christi L 
Nicolay/HOU/ECT@ECT, Joe Hartsoe/Corp/Enron@ENRON, Linda 
Robertson/NA/Enron@ENRON, Richard Shapiro/NA/Enron@Enron, Shelley 
Corman/Enron@EnronXGate, James D Steffes/NA/Enron@Enron
cc: Phillip K Allen/HOU/ECT@ECT, Barry Tycholiz/NA/Enron@ENRON, Stephanie 
Miller/Corp/Enron 
Subject: Breaking News : Williams Ordered to Pay $8 Million Refund to Cal-ISO

From Natural Gas Intelligence:

Breaking News : Williams Ordered to Pay $8 Million Refund to Cal-ISO 
posted 10:05 AM (CST) May 1, 2001 


Williams Energy Marketing & Trading has been ordered by FERC to refund $8 
million to the California Independent System Operator (Cal-ISO) and has had a 
"prospective condition" placed on its authority to sell power at market-based 
rates for a year as part of a stipulation and consent agreement.

The agreement, which FERC approved Monday, was in response to a mid-March 
order that directed Williams Energy and AES Southland Inc. to show cause why 
they shouldn't be found in violation of the Federal Power Act (FPA) for 
allegedly engaging in actions that drove up prices in the California bulk 
power market and potentially compromised the reliability of the transmission 
gid. The two companies entered into the agreement with FERC's Market 
Oversight and Enforcement Section to resolve all the issues in the show-cause 
order [IN0I-3-001].

Specifically, the agreement calls for Williams to refund $8 million of the 
$10.85 million in additional revenues it received when two AES generation 
units, designated as reliability must-run (RMR) units, failed to provide 
immediate service to the Cal-ISO in April and May. The ISO was forced to call 
upon other non-RMR units and pay a much higher price (near or at $750/MWh) to 
Williams. Williams is the exclusive marketer for power from the two AES 
plants at issue --- AES Alamitos LLC and AES Huntington Beach LLC in Southern 
California. The Commission also conditioned Williams' market-based authority 
such that it will have to bear the financial cost of replacement power if a 
RMR unit is unavailable at any time over the next year.

Significantly, the agreement does not find that either Williams or AES abused 
their market power in California. It rejected the California Public Utilities 
Commission's request to impose penalties --- over and above refunds --- on 
the companies. Moreover, the agreement does not put an end to the "formal, 
non-public investigation" that FERC ordered in mid-March into violations 
arising out of the conduct of Williams and AES.