Jim:
 
During the CA call today, you requested a copy of this bill and asked about its language concerning rates after March 02.
 
* This is the link to the bill: <http://info.sen.ca.gov/cgi-bin/postquery?bill_number=sbx2_78&sess=CUR&house=B&site=sen>
 
* The mechanism for setting rates is a little unclear, however, at the end of this message I have attached part of a Senate analysis of this bill that may provide you with the information you need. Please let me know if you require additional information. 
 
* FYI - Scott and I are finalizing a matrix of relevant CA legislation and will circulate it shortly for feedback.  I will keep it updated and distribute updated versions to the group on a regular basis.  I will also update the binders in the CA meeting room with the most recent versions for our reference.
 
Jennifer
 
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          "Existing provisions of the Public Utilities Act  
          restructuring the electrical industry establish a process  
          for the recovery by electrical corporations regulated by  
          the Public Utilities Commission of uneconomic transition  
          costs for a certain period of time, and requires the  
          commission to establish a mechanism for recovery of these  
          costs.

          This bill would also provide for recovery by a specified  
          electrical corporation of qualified costs, as defined,  
          subject to verification and approval by the commission, if  
          the corporation and its holding company enter into a  
          specified binding and enforceable agreement with the state  
          for performance of various requirements including, the sale  
          to retail end-use customers of and the application of  
          cost-based rates to all electricity produced by generation  
          assets owned by the corporation, dedication of certain  
          generation output to the state, conveyance of certain lands  
          to the state, termination of actual or potential  
          litigation, agreement to resume procurement of full  
          electricity requirements for its service area as soon as it  
          is deemed creditworthy or January 1, 2003, whichever is  
          sooner, providing an irrevocable option to purchase  
          transmission facilities, and application of a specified tax  
          refund to reduction or elimination of debt.  The bill would  
          require the commission, until December 15, 2006, to approve  
          an irrevocable financing order for the recovery by the  
          electrical corporation of an electrical corporation debt  
          repayment set-aside, in an amount not to exceed  
          $2,500,000,000 of qualified costs.  The bill would require  
          the electrical corporation repayment set-aside established  
          pursuant to these provisions to be paid exclusively by  
          customers with electric loads exceeding 125 kilowatt  
          billing demand.  The bill would enact various other related  
          provisions in that regard, including authorizing the  
          issuance of electricity market stabilization bonds by the  
          electrical corporation secured by the set-aside and  
          requiring the approval of the commission of those bonds.   
          The bill would require the electrical corporation to apply  
          the net proceeds from the sale of electricity market  
          stabilization bonds to certain of the corporation's debts.

          Existing law requires the commission to identify certain  
          generation-related costs of electrical corporations that  
          are uneconomic under the restructuring of the electrical  
          industry, and provides for recovery of those uneconomic  
          costs by the corporations from customers in a specified  
          manner.

          This bill would provide that these and certain related  
          provisions are repealed on January 1, 2002.

          The Public Utilities Act provides for the continued  
          regulation by the commission of the facilities for the  
          generation of electricity owned by any public utility prior  
          to January 1, 1997, but pursuant to Chapter 2 of the  
          2001-02 First Extraordinary Session, also prohibits any  
          disposal of a facility of this nature prior to January 1,  
          2006.

          This bill would enact new provisions authorizing the  
          commission to require an electrical corporation to make  
          direct investments in generation facilities, and providing  
          for the commission to approve rates sufficient to support  
          that investment.  The bill would prohibit the commission,  
          on or before January 1, 2006, from reducing a specified  
          electrical corporation's authorized rate of return on  
          generation assets below a certain level, if the electrical  
          corporation has entered into the specified binding and  
          enforceable agreement with the state described above."

 
Existing provisions of the Public Utilities Act restructuring the electrical industry establish a process  for the recovery by electrical corporations regulated by  
          the Public Utilities Commission of uneconomic transition  
          costs for a certain period of time, and requires the  
          commission to establish a mechanism for recovery of these  
          costs.