AB1890 says DA customers cannot pay more as follows: ,
 (a) The cost recovery plan shall set rates for each customer class,rate=20
schedule, contract, or tariff option, at levels equal to the level as
shown on electric rate schedules as of June 10, 1996, provided that rates f=
or=20
residential and small commercial customers shall be
reduced so that these customers shall receive rate reductions of no less th=
an=20
10 percent for 1998 continuing through 2002. These rate levels for each=20
customer class, rate schedule, contract, or tariff option shall remain in=
=20
effect until the earlier of March 31, 2002, or the date on which the=20
commission-authorized costs for utility generation-related assets and=20
obligations have been fully recovered.
Also supports that DA customers should not pay more than frozen rates
---------------------- Forwarded by Scott Stoness/HOU/EES on 04/23/2001 07:=
04=20
PM ---------------------------


Scott Stoness
04/23/2001 07:00 PM
To: Harry.Kingerski@enron.com, JBennett@GMSSR.com, Jeff.Dasovich@enron.com,=
=20
Leslie.Lawner@enron.com, MDay@GMSSR.com, Susan.J.Mara@enron.com,=20
tjohnso8@enron.com, James D Steffes/NA/Enron@Enron
cc: =20
Subject: AB1890 says DA customers cannot pay more as follows:

The following 4 excerpts from AB1890 make a pretty compelling case that:
1) The DA customers should not pay more than bundled rates and
2) This should be accomplised through forcing utilties to participate in th=
e=20
Px
3) Px should reflect market value


367 e 2, page 33 says=20
"(2) Individual customers shall not experience rate increases as a result o=
f=20
the allocation of transition costs. However, customers who elect to purchas=
e=20
energy from suppliers other than the Power Exchange through a direct=20
transaction, may incur increases in the total price they pay for electricit=
y=20
to the extent the price for the
energy exceeds the Power Exchange price."
 Says that DA customers cannot pay more than bundled if they buy from=20
supplier at market prices.

365. confirms that the legislation intended that the utility be forced to=
=20
sell to the Px as follows:
"The actions of the commission pursuant to this chapter shallbe consistent=
=20
with the findings and declarations contained in Section330. In addition, th=
e=20
commission
shall do all of the following:
(a) Facilitate the efforts of the state=01,s electrical corporations to dev=
elop=20
and obtain authorization from the Federal Energy Regulatory Commission for=
=20
the creation and operation of an Independent System Operator and an=20
independent Power Exchange, for the determination of which transmission and
distribution facilities are subject to the exclusive jurisdiction of the=20
commission, and for approval, to the extent necessary, of the cost
recovery mechanism established as provided in Sections 367 to 376, inclusiv=
e.=20
The commission shall also participate fully in all proceedings before the=
=20
Federal Energy Regulatory Commission in connection with the Independent=20
System Operator and the independent Power Exchange, and shall encourage the=
=20
Federal
Energy Regulatory Commission to adopt protocols and procedures that=20
strengthen the reliability of the interconnected transmission
grid, encourage all publicly owned utilities in California to become full=
=20
participants, and maximize enforceability of such protocols and procedures =
by=20
all market participants.
 Says they intend that  utilities buy and sell from the Px

390 c page 49 confirms that Px is market based as follows:=20
"(c) The short-run avoided cost energy payments paid to nonutility power=20
generators by electrical corporations shall be based on the
clearing price paid by the independent Power Exchange....."
 Confirms that they intended that Px be short run avoided costs or market=
=20
value

367 (c) page 33 confirms that Px is market based as follows: " Be limited i=
n=20
the case of utility-owned fossil generation to the uneconomic portion of th=
e=20
net book value of the fossil capital investment existing as of January 1,=
=20
1998, and appropriate costs incurred after December 20, 1995, for capital=
=20
additions to generating
facilities existing as of December 20, 1995, that the commission determines=
=20
are reasonable and should be recovered, provided that
the additions are necessary to maintain such facilities through December 31=
,=20
2001. All =01+=01+going forward costs=01,=01, of fossil plant operation,
including operation and maintenance, administrative and general, fuel and=
=20
fuel transportation costs, shall be recovered solely from
independent Power Exchange Revenues or from contracts with the Independent=
=20
System Operator, provided that for the purposes of this
chapter, the following costs may be recoverable pursuant to this section:"
 Supports that the legislation intended utility generation to be sold to Px
harry.kingerski@enron.com, jbennett@gmssr.com, jeff.dasovich@enron.com, 