Draft and Alternate Decisions re PX Credit and Suspension of Dire ,
 On Friday, June 15th, a Draft Decision (by ALJ Barnett) and an Alternate
Decision (by Commissioner Bilas) were released addressing the suspension of
the PX credit and the suspension of direct access.  In short, both the Draft
and the Alternate granted SCE's Petition to suspend payment of the PX credit
as of January 5, 2001.  The Draft Decision continues by invoking Section
80110 of the Water Code (enacted under ABX1 1) and suspending new Direct
Access transactions as of July 1, 2001.  The Alternate does not suspend
direct access but requests comments on how the Commission can accommodate
the concerns of DWR with respect to continuation of direct access (besides
suspension) without violating Section 80110.

Barnett Draft Decision

The Barnett draft goes through an illustration of the PX credit with the
intent of showing that during the rate freeze period "should a direct access
customer pay less than the PX energy price to its ESP, the direct access
customer is being subsidized by the public utility and, perhaps the
utility's ratepayers."  The decision goes on to say, that "we note in the
stipulation between SCE, Enron and WPTF, there is no mention of a cash
refund to direct access customers -- the reference is to a credit." There is
no provision in the stipulation which would require SCE to make a cash
payment in lieu of a credit.  "Utility cash which is in short supply, should
be conserved to provide reliable service, not subsidize direct access."
The draft decision continues by suspending DA as of July 1, 2001 and
applying the order to PG&E as well.

Bilas Alternate

The Bilas Alternate goes through a similar analysis with respect to the PX
credit payments (without as much verbiage as to the subsidization of DA
customers).  Bilas also makes it clear that while payment of cash is
suspended, "SCE must continue to track and accrue credits for DA customers."

With respect to the suspension of direct access, the Bilas Alternate holds
off.  It appends a letter from DWR to the Commission as to its concerns
about the impact of the continuation of Direct Access on the issuance of the
bonds and asks parties to comment thereon. It is letter, DWR has set forth
what it believes will be required in the way of exit fees by DA customers to
allow the issuance of long term bonds with investment grade.

In addition, Bilas is looking for comments on getting away from the PX
credit and going to a bottoms up calculation of DA customer bills.

Comments

Comments on Both the Draft and Alternate are due on Monday the 25th.

Comments on moving to a bottoms up approach are due on July 6th.


Copies of the decisions have been faxed to Sue Mara in SF and Jim Steffes in
Houston. They are also available on the commission's web site under the
"currently open for comment" section.  If anyone would like me to fax them a
copy directly, let me know.

Jeanne Bennett
harry.kingerski@enron.com, jdasovic@enron.com, james_d_steffes@enron.com, 