Here is the Seetin e-mail.  This is actually complaining about the "Fair 
Plan' which came out last week.  I have a call into Bob Levin at NYMEX.

Sue Mara
Enron Corp.
Tel: (415) 782-7802
Fax:(415) 782-7854
----- Forwarded by Susan J Mara/NA/Enron on 06/07/2001 01:28 PM -----

	Gary Ackerman <foothillservices@mindspring.com>
	06/07/2001 01:07 PM
	Please respond to foothillservices
		 
		 To: Sue Mara <smara@enron.com>
		 cc: 
		 Subject: [Fwd: "Newest" Edison Bailout Plan Has A Familiar Sound]




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From: "Mark Seetin" <nymex2@unidial.com>
To: "Andrew Skaff" <askaff@energy-law-group.com>,        "Assemblyman David 
Kelley" <assemblymember.kelley@assembly.ca.gov>,        "Brad Williams" 
<Brad.Williams@lao.ca.gov>,        "Caroline Katzin" 
<Caroline.Katzin@mail.house.gov>,        "Casey Beyer" 
<Casey.Beyer@exodus.net>,        "Chuck Cole" <ccole@advocation-inc.com>, 
<clara.brooks@ferc.fed.us>,        "Dan Skopec" <Dan.Skopec@mail.house.gov>,  
      "Dan Walters" <DWalters@sacbee.com>,        "David Lazarus" 
<dlazarus@sfchronicle.com>,        "DAVID WARD" <DWARD@bloomberg.net>,        
"Dorothy Rothrock" <drothrock@cmta.net>,        "doug John" 
<djohn@jhenergy.com>,        "Evan L. Goldberg" 
<evan.goldberg@sen.ca.gov>,        "Gary Ackerman" 
<gackerman@wptf.org>,        "Gordon Rutledge" <onyx91@IX.netcom.com>,        
"Gregg Ward" <gregg.ward@sc.siemens.com>,        "J. A. Savage" 
<honest@compuserve.com>,        "Jack M. Stewart" <jstewart@cmta.net>,        
"Joe Paul" <joe.paul@dynegy.com>,        "Keely Martin Bosler" 
<Keely.Martin@lao.ca.gov>,        "Linda L. Robertson" 
<linda.robertson@enron.com>,        "Michael Kahl" <mikahl@ka-pow.com>, 
"Randy Poole" <rdp@scwa.ca.gov>,        "Richard Costigan III" 
<richard.costigan@asm.ca.gov>,        "Roderick D. Wright" 
<Assemblymember.Wright@assembly.ca.gov>,        "Scott Govenar" 
<SGovenar@govadv.com>,        "Tara L. Ord" <tord@mail.house.gov>,        
"Terrie Williams" <twilliams@advocation-inc.com>
Cc: "Charlie DeWitt" <nymex4@unidial.com>, "Robert Levin" 
<rlevin@nymex.com>,        "Neal Wolkoff" <NWolkoff@nymex.com>
Subject: "Newest" Edison Bailout Plan Has A Familiar Sound
Date: Thu, 7 Jun 2001 11:42:39 -0400
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?

?

To:? Direct Access Coalition Members

From:? Mark Seetin, New York Mercantile Exchange

SUBJECT:? Hertzberg/ Edison &new8 proposal is &de ja vu all over again!8

?

?????? When it comes to having nerve, SoCal Edison takes second to no one.? 
The latest rescue proposal announced by Speaker Hertzberg has a familiar ring 
to it*--- like the dinner bell at the shark tank at Sea World.? 

?

The Hertzberg memo and a Dow Jones story are included in this memo.? A 
summary of the primary terms of Hertzberg/Edison,s plan is as follows:

?

o???????? &Large8 users of electricity (500 kw and up) would have direct 
access after two years.

o???????? Residential and small businesses would be &re-regulated8

o???????? The &ransom8 for direct access is that businesses would be required 
to retire Edison,s $3.1 billion or so in debt*and that the obligation would 
&follow8 them to the land of direct access

?

Does anything sound familiar here (hint*think AB 1890 without the surplus 
budget and electricity of 1995)??? Remember the 1995 CPUC action and 1996 AB 
1890?? SCE was a very active and influential player in that process.? Here,s 
a short review of AB 1890:

?

o???????? Direct access would be allowed (projected to be about 1998) after 
the utilities stranded costs were retired.? (Note: At the time of the 
bankruptcy of the PX in March 2001, direct access was not just elusive---it 
had been banned by the passage of AB ) 1X in January.)

o???????? The state created California Power Exchange was mandatory for the 
utilities*though by 1999 they began urgently to use alternatives, they were 
refused on at least four occasions by CPUC action, to use sources outside the 
PX.

o???????? Stranded costs, determined inside the PX pricing mechanism were 
applied to all transactions that occurred outside the PX, thus the obligation 
&followed8 those seeking an alternative market to the PX.

o???????? The mandatory PX forced the market into a day-ahead pricing scheme 
that effective placed the vast majority of California electricity pricing 
into the volatile spot market. 

?

If this were not California, one would have to say that this is 
&unbelievable,8 but the legislative/regulatory track record since 1995 in 
California is consistent, if anything.? Adoption of this plan would not only 
mean that Californians did not &get the baby (direct access) after paying the 
ransom (the Competition Transition Charge, CTC)8 since 1996----BUT, they,ve 
been taken hostage themselves now, and another ransom is due.? 

?
California Kafkaesque

??????????? Since the beginning of the deregulatory process in 1994-95, 
California has taken a novel approach to its energy markets---Unfortunately, 
that novel must have been written by Franz Kafka.

?

?

?

Hertzberg/Edison Plan

A Fair Plan for California

Assembly Democratic Caucus

?

What the California public believes about the energy crisis:

?

Utilities are to blame.
Out-of-state generators have made huge profits.
We need to build more power plants to keep up with demand.
Deregulation is a failure.
The economy of the state is at risk.

?

What the public wants in a solution to the energy crisis:

?

Re-regulation (restore balance to system).
Very small, if any, rate increases.
Reliability of supply (no more blackouts).
No permanent damage to environment, more emphasis on renewable sources.
Penalties for those who gouged the state.
Guarantee this won,t happen again.

?

Themes of the Fair Plan:

?

Federal role:? The feds have refused to obey the law to maintain fair & 
reasonable rates.
Restore fairness:? Solutions must protect residential and small business 
users.
Re-regulation:? Reassert our authority over California,s energy destiny.
Stability & Reliability:? Increase supply and keep a lid on rates.

?

?

Goals of the Fair Plan:

?

Provide customers with reliable power and stable rates.
Restore regulated utilities to credit-worthiness to enable them to resume 
role of energy supplier.
Ensure that mega-users of electricity have direct access to independent 
electricity providers to protect California,s economy.

?

?

Many elements of the proposed Edison MOU remain unchanged, except for:
Option to purchase the transmission system.
Re-regulates service for all residential and small business consumers.
Provides direct access to providers for mega-users above 500 kW.
Mega-users pay DRC to cover SCE debt.

?

Added elements to the MOU
Transmission option at book value.
Federal tax refund must be applied to debt.
SCE purchases net short only for residences and small businesses, if 
necessary.
PUC retains jurisdiction over rates.
EIX provides assurance to keep SCE creditworthy.

?

?

Residential & Small Protection Plan 
Protects 99.9% of all customers (those who never peak above 500 kilowatts) 
who utilize 81.5 % of load??????????? 
Will be served by SCE through native generation, bilateral contracts 
(including QFs) and Sunrise
Present average PUC bundled rate = 15.7 cents per KW hour 
Under Fair Plan, average rate would be 14 cents per KW hour including AB1X 
payments

?

Mega-Users Direct Access Plan
Mega-users peak demand 500 KW or more represent 3,600 SCE customers and 18.5% 
of total load
Mega-users would gain direct access to the wholesale market

?

Mega-Users Direct Access Plan (continued)

Current average PUC rate = 12.98 cents/KW hour

Fair Plan average wholesale price in 2003 = 12 cents per KW hour

Mega-users would pay SCE,s $3.5 billion debt minus $400 million+ dollars tax 
refund from EIX
DRC for debt and cost of electricity fits within existing PUC rates

?

Dow Jones Story

LOS ANGELES (Dow Jones)--A plan that would put most of the burden of rescuing 

embattled Edison International (EIX) unit Southern California Edison on large 

businesses "has possibilities" if it can gain stakeholder approval, said Bob 

Foster, Edison's senior vice president of public affairs, during a conference 

call Tuesday.

?

The plan would have customers who use more than 500 kilowatt-hours a month of 

electricity finance the cost of power the utility must purchase, or have 

purchased on its behalf, in the wholesale market. The "non-core" customers 
would 

also help the utility recoup most of its $5.5 billion in unrecovered power 
costs 

through a surcharge on their bills.

?

"Core" residential customers would be protected from the wholesale power 
market 

as the primary beneficiaries of the low-cost power the utility generates 
itself 

or has secured through long-term contracts.

?

Assembly Speaker Bob Hertzberg, D-Van Nuys, strongly supports the plan, and 
has 

asked a former Sacramento mayor to help him take the temperature of Edison 

stakeholders "to see if the approach has merit or can be acceptable," Foster 

said.

?

"Some of the legislative leadership believes this is an attractive option in 

both houses," Foster said.

?

Business groups worry that the plan could cost the state billions in lost 

economic activity, because it may force companies to relocate to other states.

?

The core/non-core proposal is one of several being discussed by lawmakers as 

alternatives to a memorandum of understanding reached between Edison and Gov. 

Gray Davis in April. The MOU, which would have the state buy the utility's 

transmission lines, has been pronounced dead by many in the legislature, 
though 

Edison and Davis' administration say they are still devoted to seeing it 
through.

?

?