David:

Count on us as signatories (Carl, John, and I), however there is a need to
correct two factual errors.  These corrections do not change the sense of
any of the discussions or our suggested remedies, but are important for our
credibility.

First, the utilities were not required to sell or divest their plants.  The
Commission and the Legislature lacked the authority to do so, however, the
divestitures were encouraged in the strongest possible terms.  Therefore,
at page 2 , third line in the last paragraph, we need to change the word
"required" to "strongly encouraged."   Likewise, on page 4, the third
sentence of the second paragraph under the section heading needs to be
slightly modified to read as follows:  "First, California required
utilities to purchase nearly all their electricity on a volatile spot basis
after they divested a substantial portion of their generation...."
Finally, on page 5, the third sentence should be modified as follows:
"These divestitures, encouraged and sanctioned by the CPUC, ...."

Second, also on page 5, the second sentence inaccurately conveys that
utilities had the authority and option to pursue "backstop" fixed price
contracts from their divested plants.  In fact, they were precluded from
doing so under the rules.  Furthermore, the utilities have only divested
their fossil plants, while retaining both hydro and nuclear facilities.
These facilities represent substantial generation assets, especially for
SCE and PG&E.  Accordingly, we suggest the following minor modifications:
"Unfortunately, the utilities have already divested   (strikethrough: most
of their) generation plants without being allowed to secure contracts that
would...."

We also note that the document has not referenced the substantial new
generation capacity that has been approved and scheduled for completion
within the next two years.  If completed (and assuming interim solutions
don't undermine the investment incentives in the meantime), these additions
would add over 6,000 MW of critically needed generation capacity.   The
document should include some reference to this point.  Accordingly, we
suggest the following modification on page 6, the last sentence in full
paragraph 4:  "Only then should we seek contracts to help stabilize prices
for the two-or three-year transition until more permanent solutions can be
put in place, especially as new power plants already approved  (totalling
some 6,000 MW ) come on line within the next two years.

Lastly, we noted a few typos.  On page 5, first line of the second
paragraph under the heading has a dash after "short" which appears
unintended.   On page 7, sixth sentence of the second paragraph,
"Californians' " shouldn't have an apostrophe.  Finally, in the paragraph
that follows on page 7, we use the term "UDC" for the first time without
explanation.  We suggest saying "utilities" instead.

Let me know if you have any questions.

Thanks for the great work!

Mitch