-----Original Message-----
From: MDay [mailto:MDay@GMSSR.com]
Sent: Tuesday, August 21, 2001 12:27 PM
To: 'Jeff Dasovich Enron SF'
Subject: Extended CTC components


JEFF:


Here are the components of extended CTC which may be recovered beyond the
statutory deadline of March 31, 2002:

PU code Section 367(a)(1)

Employee-related transition costs as defined in PU Code Section 375(b) which
include severance costs, retraining, early retirement, outplacement and
related expenses for utility employees (mainly in the generation
departments) who are no longer employed as a result of restructuring.
These costs can continue only until December 31, 2006.  As the two year
period for contract retention of generation employees has lapsed, most of
these expenses should be declining.  However, we do not have accurate
numbers for current levels of expense at this time.

367(a)(2)

Power purchase obligations which generate CTC can continue to be collected
through the duration of the contract or the duration of any agreement for
the renegotiation, buyout or buydown of a power purchase agreement so long
as it does not extend the power purchase contract.  Some of these contracts
have 15-20+ years remaining.

367(a)(4)

Nuclear incremental cost incentive payments for SCE and SDG&E's San Onofre
plant may be recovered up to but not after December 31, 2003. 

367(a)(5)

The costs of CTC exemptions granted in Section 374 (Irrigation districts,
federal power districts and UC Davis) may be recovered through the original
deadline of March 31, 2002 and up to $50 million of any cost unrecovered at
that time may be collected after that deadline.

367(a)(6)

The fixed transition amounts related to the Rate Reduction Bonds authorized
in P U Code Section 840 may be recovered from those customers for whom the
FTA charges are allocated by Section 841 until all the Rate Reduction Bonds
are repaid.

That is the complete list of "tail end" CTC.  


NOTE these related provisions of AB 1890:

367(a)(3)

BRPU settlement agreement costs can only be recovered until March 31, 2002.
Most of the BRPU cancellation claims have been settled, but some may remain.
Payments are almost certainly still being made under a variety of
settlements.  We do not have accurate information on the number of
settlements or payments.

379

Nuclear decommissioning costs are excluded from transition costs and may be
recovered as a non-bypassable charge until fully recovered, and may be
accelerated.   The statute does not describe the process for acceleration.
Presumably the normal CPUC orders on decommissioning ratemaking will
continue to apply.



Please let me know if you need more information in this regard.


Please identify the RCR account for this work.  Thank you.


Mike Day