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To: D.B. Cooper who wrote (8094)	7/11/2002 12:55:21 AM
From: D.B. Cooper	Respond to of 13815

AP Finance News Ross Perot to Be Grilled by Senators By JENNIFER COLEMAN 07/10/2002 22:11:43 EST SACRAMENTO, Calif. (AP) - Even before California's deregulated energy market opened for business, employees with Perot Systems, the firm that helped implement the computer network for the market, understood how to game the system for higher profits, a state senator said documents received by his committee show. Sen. Joe Dunn and other senators will seek more information on that and other points Thursday when their committee questions two-time presidential candidate H. Ross Perot, the founder and chairman of Texas-based Perot Systems. The Senate Select Committee to Investigate Price Manipulation of the Wholesale Energy Market has asked Perot to discuss his company's involvement in getting technology for the California Independent System Operator and the now-defunct Power Exchange off the ground. But the committee is especially interested in Perot's defense of "the marketing of the flaws in the system to market participants," Dunn said. Rep. Doug Ose, R-Calif., is also probing those matters, and announced Wednesday that Perot will testify at a July 22 hearing of the House Subcommittee on Energy Policy, Natural Resources and Regulatory Affairs. Perot came to the attention of the state Senate committee, which is investigating California's energy crisis, in early June, when a Perot Systems presentation surfaced among documents subpoenaed from Reliant Energy. The sales pitch to Reliant energy traders detailed "holes" in the California energy market that "allowed strategies that would destabilize the market." Dunn said the presentation amounts to a blueprint for gaming the energy market and noted that several strategies mirrored ones detailed in recently released Enron Corp. memos. Since then, the computer firm was subpoenaed and turned over about 20 boxes of paperwork related to its work for the California energy market. The company has denied any wrongdoing. In statements submitted to the committee Wednesday, Perot Systems said the company "played no role in the California energy crisis." The company retained three economists to review the marketing presentations, all of which concluded that Perot Systems didn't divulge any confidential information or violate conflict of interest clauses in the contract with the ISO or PX. Managers of the Independent System Operator objected when they learned that Perot Systems was marketing to energy companies. Perot Systems "has maintained that they got ISO's approval" to conduct seminars with the energy companies, but the former head of the power grid denied that, Dunn said. "There's no letter granting approval," he said, "and we don't think any such approval was ever given. Once ISO objected to Perot Systems' marketing the flaws, there was no approval given to continue that effort." Perot Systems said the ISO came to the conclusion that the presentations didn't violate the contract, but never heard back from the ISO on proposed steps that the computer company would take to avoid the appearance of a conflict. Of particular interest to Dunn is a 1997 presentation to the Tokyo Electric Power Co. That report detailed how the California market rules were similar to markets in the United Kingdom and some South American energy systems and how to find loopholes that would let traders drive up energy costs. The document "suggests that California wasn't the first deregulated market to be exploited," Dunn said. The report's section on gaming includes various strategies used in the British market "that can be used on an ongoing basis until the market or its regulators act upon such strategies." Perot's information technology services company has maintained that it wasn't marketing any confidential information and didn't complete any deals with energy companies. The committee will also hear from former Perot Systems employees Dariush Shirmohammadi and Paul Gribik, ISO chief executive officer Terry Winter and representatives from Reliant Energy, Southern California Edison and other energy companies. __ On the Net: perotsystems.com