Attached are notes from a press conference that CPUC President Lynch held earlier today.  Sue Mara works in our SF office.

As a note, all of these concepts must still be approved tomorrow at a CPUC public meeting with 3 votes.  We expect passage.

Call with any questions.  

Jim


----- Forwarded by James D Steffes/NA/Enron on 03/26/2001 02:06 PM -----


	Susan J Mara 03/26/2001 01:14 PM 	   To: Alan Comnes/PDX/ECT@ECT, Angela Schwarz/HOU/EES@EES, Beverly Aden/HOU/EES@EES, Bill Votaw/HOU/EES@EES, Brenda Barreda/HOU/EES@EES, Carol Moffett/HOU/EES@EES, Cathy Corbin/HOU/EES@EES, Chris H Foster/HOU/ECT@ECT, Christina Liscano/HOU/EES@EES, Christopher F Calger/PDX/ECT@ECT, Craig H Sutter/HOU/EES@EES, Dan Leff/HOU/EES@EES, Debora Whitehead/HOU/EES@EES, Dennis Benevides/HOU/EES@EES, Don Black/HOU/EES@EES, Douglas Huth/HOU/EES@EES, Edward Sacks/Corp/Enron@ENRON, Eric Melvin/HOU/EES@EES, Erika Dupre/HOU/EES@EES, Evan Hughes/HOU/EES@EES, Fran Deltoro/HOU/EES@EES, Gayle W Muench/HOU/EES@EES, Ginger Dernehl/NA/Enron@ENRON, Gordon Savage/HOU/EES@EES, Harold G Buchanan/HOU/EES@EES, Harry Kingerski/NA/Enron@ENRON, Iris Waser/HOU/EES@EES, James D Steffes/NA/Enron@ENRON, James W Lewis/HOU/EES@EES, James Wright/Western Region/The Bentley Company@Exchange, Jeff Messina/HOU/EES@EES, Jeremy Blachman/HOU/EES@EES, Jess Hewitt/HOU/EES@EES, Joe Hartsoe/Corp/Enron@ENRON, Karen Denne/Corp/Enron@ENRON, Kathy Bass/HOU/EES@EES, Kathy Dodgen/HOU/EES@EES, Ken Gustafson/HOU/EES@EES, Kevin Hughes/HOU/EES@EES, Leasa Lopez/HOU/EES@EES, Leticia Botello/HOU/EES@EES, Mark S Muller/HOU/EES@EES, Marsha Suggs/HOU/EES@EES, Marty Sunde/HOU/EES@EES, Meredith M Eggleston/HOU/EES@EES, Michael Etringer/HOU/ECT@ECT, Michael Mann/HOU/EES@EES, Michelle D Cisneros/HOU/ECT@ECT, mpalmer@enron.com, Neil Bresnan/HOU/EES@EES, Neil Hong/HOU/EES@EES, Paul Kaufman/PDX/ECT@ECT, Richard L Zdunkewicz/HOU/EES@EES, Richard Leibert/HOU/EES@EES, Richard Shapiro/NA/Enron@ENRON, Rita Hennessy/NA/Enron@ENRON, Robert Badeer/HOU/ECT@ECT, Rosalinda Tijerina/HOU/EES@EES, Sandra McCubbin/NA/Enron@ENRON, Sarah Novosel/Corp/Enron@ENRON, Scott Gahn/HOU/EES@EES, Scott Stoness/HOU/EES@EES, Sharon Dick/HOU/EES@EES, skean@enron.com, Susan J Mara/NA/Enron@ENRON, Tanya Leslie/HOU/EES@EES, Tasha Lair/HOU/EES@EES, Ted Murphy/HOU/ECT@ECT, Terri Greenlee/NA/Enron@ENRON, Tim Belden/HOU/ECT@ECT, Tony Spruiell/HOU/EES@EES, Vicki Sharp/HOU/EES@EES, Vladimir Gorny/HOU/ECT@ECT, Wanda Curry/HOU/EES@EES, William S Bradford/HOU/ECT@ECT, Jubran Whalan/HOU/EES@EES, triley@enron.com, Richard B Sanders/HOU/ECT@ECT, Robert C Williams/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, dwatkiss@bracepatt.com, rcarroll@bracepatt.com, Donna Fulton/Corp/Enron@ENRON, gfergus@brobeck.com, Kathryn Corbally/Corp/Enron@ENRON, Bruno Gaillard/EU/Enron@Enron, Linda Robertson/NA/Enron@ENRON, Ren? Lazure/Western Region/The Bentley Company@Exchange, Michael Tribolet/Corp/Enron@Enron, Phillip K Allen/HOU/ECT@ECT, Christian Yoder/HOU/ECT@ECT, jklauber@llgm.com, Tamara Johnson/HOU/EES@EES, Mary Hain/HOU/ECT@ECT, Greg Wolfe/HOU/ECT@ECT, Jeff Dasovich/NA/Enron@Enron, Dirk vanUlden/Western Region/The Bentley Company@Exchange, Steve Walker/SFO/EES@EES, James Wright/Western Region/The Bentley Company@Exchange, Mike D Smith/HOU/EES@EES, Richard Shapiro/NA/Enron@Enron, Leslie Lawner/NA/Enron@Enron, Robert Neustaedter/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Steve Walton/HOU/ECT@ECT, psmith3@enron.com, mjackso7@enron.com, Janel Guerrero/Corp/Enron@Enron, Mark Fillinger/SF/ECT@ECT, Jennifer Rudolph/HOU/EES@EES, Martin Wenzel/SFO/HOU/EES@EES, wgang@enron.com, Joseph Alamo/NA/Enron@Enron, Tracy Ngo/PDX/ECT@ECT, Ray Alvarez/NA/Enron@ENRON, Steve C Hall/PDX/ECT@ECT, mday@gmssr.com, sgovenar@govadv.com  cc:   Subject: CPUC News -- From Press Conference as we Speak	


Lynch started out castigating FERC for the "failure to act", sellers for high prices forcing CA into this action.  Has some charts in the press package.  Talked about how wonderful the Govs proposals have been.  Said net short is 34%.  Sellers "have us over a barrell" for those sales.  Attorney Gen continues investigation of the sellers. These are all for going forward costs -- this doesn't address the "$ for the hot dog, which is being taken care of in Sacramento."  She said these proposals ensure reliability and allow Treasurer to issue bonds.  Continues to castigate FERC throughout the call. Wants new appointments to FERC from the states -- "our cries have fallen on deaf ears"

Lynch announced the following votes for tomorrow:

1.  Wood's proposal -- modified -- Order that the IOUs to pay the QFs beginning 4/1 on a going forward basis only.  Modified existing formula in Section 390 (Legislative change to this section did not pass yet).  Shifts the SRAC gas index from Topoc (where Wood says the prices are being mnipulated) to Malin, where prices have been more stable.

2. Sets the CA Procurement Adjustment -- Orders the IOUs to pay the DWR for purchases.  At one point she said that the order would be for all power for purchased by the state beginning Jan 19; at another point she said that the payments are for going forward costs. "It's time to pay the power bills for California."  CPA calculated based on the "residual" method, rather than the proportional method.  Payments to DWR made on the proportional method, however.

3.  Lynch alternate setting a 3 cents/kWh increase in accordance with AB 1X. (The ALJ decision said no rate increase.) Makes the 1 cent temp charge permanent (we believe that this is additive with the 3 cents - 4 cent total) Believe this covers ALL needs on a going forward basis.  According to  ABX 1, small customers with 130% over baseline get no increase, small customers with 200% increase, get a 9 % increase -- the rest get socked, I guess.  Adopted TURN's accounting proposal implying that the Rate Freeze is not yet over.  Will look at rate design in a future proceeding.  Takes IOUs 30-45 days to charge the rates (although could come earlier); will conduct a rate design proceeding during that time period (see # 5).

4. Orders an investigation into the Utility holding company structure to see if it is best for the public utilities to be outside holding companies.

A new proceeding was also identified.

5.  Lynch is issuing an Assigned Comissioner ruling proposing a new rate structure. (I presume to have rates that increase greatly with more use)  Need information from DWR to calculate rates and DWR has not yet provided it.  Described the need to have a record on this. As mentioned in #3 above -- would expect this to be comepled with a decision in 30- 45 days.

In one of the above orders, Lynch said that she orders the utililities to go after sellers using all legal means for the unjust and unreasonable prices.