Jess, there is little more than I indicated in my note.
I received a phone call from Sarita Sarvate, an analyst at the Energy
Division of the CPUC asking why we were returning gas customers to utility
service, citing "a number of customer complaints, including a school and a
hospital".  It now turns out that the school and the hospital are from the
same customer essentially.  The CPUC staff recognizes that they have no
direct jurisdiction over gas sales, but are concerned about the effect of
turnbacks on their utility regulation, as they are in the process of
eliminating the core subscription program which allows noncore customers to
take core service.  In fact there is now a resolution in place barring
noncore customers from taking core subscrition service from SoCalGas or
SDG&E.  They want to know if this is part of a trend which they will have to
adapt to or whether it is an isolated incident.  In addition, they would
like to be able to offer the customer some options for continuing gas
service.

Let me know if I can add any more or if you can assist us in responding to
the CPUC.

Thanks, Mike Day



-----Original Message-----
From: Jess Hewitt [mailto:jhewitt@enron.com]
Sent: Tuesday, February 27, 2001 3:58 PM
To: MDay@GMSSR.com
Subject: CPUC inquiry re gas customer turnbacks





Mike,

My name is Jess Hewitt and I am in charge of the gas desk at EES.  I came in
late on this email string so can you give me a background on this situation?

jess
---------------------- Forwarded by Jess Hewitt/HOU/EES on 02/27/2001 05:56
PM
---------------------------

From: Harry Kingerski@ENRON on 02/27/2001 05:50 PM

To:   Jess Hewitt/HOU/EES@EES, Leslie Lawner/NA/Enron@Enron
cc:
Subject:  CPUC inquiry re gas customer turnbacks

any insights?  thanks.
----- Forwarded by Harry Kingerski/NA/Enron on 02/27/2001 05:49 PM -----
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Catherine/Roger:

Here are some more details forwarded by our outside counsel.

Best,
Jeff
----- Forwarded by Jeff Dasovich/NA/Enron on 02/27/2001 05:44 PM -----
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Jeff:

Here is some more useful information.  Sarita Sarvate of the CPUC spoke to
the woman in person.  The school in question is the Providence High School
in Burbank, California (not Ontario), operated by the Sisters of Providence.
Ms. Kathy Pentalio (sp?) at 818-846-8140 wrote to the CPUC asking about the
school's options after receiving phone and letter notification that their
gas service would be terminated by Enron.  Apparently the Sisters also
operate a hospital which is also served by Enron.  Ms. Pentalio indicated
that she was told that the school would no longer be served on the same
contract as the hospital (claimed to be an attractive 86 cents/th rate)
because the school's load was so small that it was a core customer, while
the hospital was a noncore customer with a larger load.   Neither Ms.
Sarvate nor Ms. Pentalio was clear if the school was served as a core
aggregation customer or as part of the Sisters of Providence noncore
contract.  Ms. Pentalio claimed she spoke with Enron employees Dennis Harris
in Dublin, Ohio as well as Roger Pons in New Mexico.  She indicated that
service would be terminated on June 1, 2001 and she is looking for
alternative sources of gas.

Sarita Sarvate of the CPUC Energy Division would like to understand the
specifics of this case, but her main concern, and the purpose for sending a
letter (if she does send one) is that Dynergy has told her that a number of
small noncore businesses are being returned to the utilities by marketers
because they no longer meet credit requirements.  She assumed that must be
true with Enron as well.  I indicated to her that she should never assume
that we are doing what Dynegy is doing and that we would respond and advise
her if there was any significant trend of noncore customer turnbacks.  The
Commission's concern, which I know you understand, is that it is phasing out
the core subscription schedule (and has a moratorium on switches to the
SoCalGas core subscription schedule) therefore leaving no place for such
customers to go if they cannot contract with a replacement aggregator.

Please advise me of what you discover about this matter and we can talk
further about a response to the CPUC.   Thank you.


Mike Day