----- Forwarded by Richard B Sanders/HOU/ECT on 02/04/2001 08:44 AM -----

	"Fergus, Gary S." <GFergus@brobeck.com>
	02/02/2001 08:26 PM
		 
		 To: "A. William Urquhart (E-mail)" <awu@qeuo.com>, "Alan Z. Yudkowsky 
(E-mail)" <ayudkowsky@strook.com>, "Andrzej Kabarowski (E-mail)" 
<andrzej_kabarowski@cargill.com>, "Arlen Orchard (E-mail)" 
<aorchard@smud.org>, "Brian Currey (E-mail)" <bcurrey@omm.com>, 
"'cfr@vnf.com'" <cfr@vnf.com>, "Cliff Gunter (E-mail)" 
<cgunter@bracepatt.com>, "Davis Smith (E-mail)" <wdsmith@sempra.com>, 
"Douglas Butz (E-mail)" <dmbutz@butzdunn.com>, "Douglas Thorpe (E-mail)" 
<thord@perkinscoie.com>, "Elizabeth Sager (E-mail)" 
<elizabeth.sager@enron.com>, "Gary Keltner (E-mail)" <gkeltner@jsslaw.com>, 
"'gbd@vnf.com'" <gbd@vnf.com>, "Gordon P. Erspamer (E-mail)" 
<gerspamer@mofo.com>, "Harry A. Olivar Jr. (E-mail)" <hao@qeuo.com>, 
"'hes@vnf.com'" <hes@vnf.com>, "Jane Alfano (E-mail)" <jdalfano@srpnet.com>, 
"Jean Frizzell (E-mail)" <jfrizzell@gibbs-bruns.com>, "Jeffrey D. (Dan) 
Watkiss (E-mail)" <dwatkiss@bracepatt.com>, "John Fryer (E-mail)" 
<john.fryer@pacificorp.com>, "John Heath (E-mail)" <jheath@fulbright.com>, 
"John W. Stamper (E-mail)" <jstamper@omm.com>, "Ken Irvin (E-mail)" 
<kirvin@mofo.com>, "'mbrosterman@stroock.com'" <mbrosterman@stroock.com>, 
"'mgoldstein@stroock.com'" <mgoldstein@stroock.com>, "Michael Helms (E-mail)" 
<mghelms@jsslaw.com>, "Nancy Loftin (E-mail)" 
<nancy.loftin@pinnaclewest.com>, "Paul Fox (E-mail)" <pfox@bracepatt.com>, 
"Phillip Fantle (E-mail)" <phillip_fantle@cargill.com>, 
"'pjazayeri@stroock.com'" <pjazayeri@stroock.com>, 
"'psteele@coral-energy.com'" <psteele@coral-energy.com>, "Richard B. Sanders 
Esq. (E-mail)" <richard.b.sanders@enron.com>, "Richard Beitler (E-mail)" 
<rbeitler@sempratrading.com>, "Richard Josephson (E-mail)" 
<rcjosephson@stoel.com>, "Ronald Carroll (E-mail)" <rcarroll@bracepatt.com>, 
"Shari Stack (E-mail)" <sstack@enron.com>, "Susan Bishop (E-mail)" 
<sbishop@gibbs-bruns.com>, "'theftler@stroock.com'" <theftler@stroock.com>, 
"Tim Bolden (E-mail)" <Timothy.Bolden@pinnaclewest.com>
		 cc: 
		 Subject: CalPX FERC and Informational Meeting


Prepared in Anticipation of Litigation

Here is the list of counsel that attended today's conference call regarding
public events involving the California Power Exchange Corporation.  I
delayed publishing this list until 6:00 p.m. because I kept receiving emails
from interested parties.  I also received the following report from John
Stamper at O'Melveny & Myers who represents SEMPRA and San Diego Gas &
Electric.

John had a conversation with Bob Moore from Millbank representing the
California PX.  Bob apparently told John that invoices for the chargebacks
will be issued on Monday February 5th and will be due and payable by
Thursday February 8th or Friday February 9th.  John asked for February 9th
rather than the 8th.  John raised again the possibility of a standstill
agreement.  Bob Moore reported that the CalPX was amenable to a standstill
agreement if everybody agreed.  They are worried, however, about being sued
for failing to liquidate collateral as soon as they are able etc.  John
pointed out that the CalPX might be subject to claims from those entities
that had their letters of credit drawn down improperly.  Bob then reported
that the number one option that the  CalPX was considering was bankruptcy.
It seems to them to be the one forum where they can get all the parties.
They are also considering dissolution and invoking the ADR procedure
themselves.

We have scheduled a teleconference to discuss the FERC options for 11:00
a.m. PST on Monday February 5, 2001.  The call in number is 1-800-205-3434,
participant code: 653687

I have also received a request to schedule an alternative teleconference for
1:00 p.m. PST to consider non-FERC alternatives.  This would include
litigation alternatives.  We will distribute the dial in number and access
code for that call on Monday morning.

Proposed Agenda for 11:00 a.m. FERC Option Teleconference:

I. Current Status of any proposed filings.
 Note:  Phil Fantle, in-house counsel for Cargill-Alliant sent me a
copy of a filing they made  with FERC on January 29th.  I will send a
copy under separate email cover.
II. Discussion of specific relevant examples where CalPX has violated
the tariff with respect to  specific PX Participants.  The purpose of
gathering these examples is to be able to  demonstrate that CalPX is
acting arbitrarily and capriciously if that is case.  This could
include identification of specific instances of inconsistent treatment of PX
Participants or  inconsistent treatment of the same PX Participant.

 For example, Phil Fantle pointed out that the way he reads the
tariff, if you look at the  chargeback formula set forth in Schedule 2,
Section 5.3, the ratio for each PX Participant  appears to be a fixed number
that  does not vary after the default of another PX Participant.     In
Phil's example, if a defaulting participant has a 25% share of the gross
MWHs sold in the Core market, during the chargeback process only 75%
of the default is paid through  chargeback because there is no provision for
recalculating the chargeback formula.

III. Summary of best arguments of why CalPX application of charge-back is
inconsistent with  tariff.
IV. Impact of Governor Davis' "commandeering" of SCE block forward
contracts.

 <<Cal PX Contact List.DOC>>

Thanks
Gary

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 - Cal PX Contact List.DOC