IEP is continueing to cover the various CPUC/FERC/Fed Hearings in San Diego
related to the California marketplace.  We are doing this under the auspices
of the Market Response Project.  Below is a brief summary from Doug Kerner
regarding the series of San Diego Hearings last week.

IEP also is preparing draft comments in response to CPUC Commissioner Wood's
OII on Market Structure.  This will be circulated for your review and
comment in the very near future.


----- Original Message -----
From: Eric Janssen <EricJ@eslawfirm.com>
To: 'Steven Kelly' <steven@iepa.com>
Cc: 'Katie Kaplan' <kaplan@iepa.com>; 'Jan Smutny-Jones' <smutny@iepa.com>
Sent: Monday, September 11, 2000 3:39 PM
Subject: Market Response


> Steven,
>
> On IEP's instruction, I've paid attention to, and attended to the minimal
> extent necessary, Commission proceedings on the investigation into
> "wholesale" rate problems - with particular emphasis on SDG&E, as one
would
> expect.
>
> A prehearing conference in the Order Instituting Investigation (OII) into
> these issues was held on August 29, 2000 in San Diego.  It was
enlightening,
> for reasons I next discuss, and reaffirms pursuit of a strategic attitude
> for IEP which we previously have discussed.
>
> What I found enlightening was that a) the "consumer" representation was at
> an organized and well-informed level.  Speakers for this constituency were
> from, for example, the Chamber of Commerce, the League of Women Voters and
> AARP.  All had done their research and were almost uniform in their
interest
> in retail issues, as opposed to the obvious "greedy generator" issues
which
> certain members of the government institutions have attempted to focus on.
> These presentations were followed up nicely by a small, but significant,
> number of ESPs who presented or represented offers to provide new and
> interesting retail products if only the CPUC would get out of the way.
>
> I limited my presentation to the end, focusing on the procedural point
that
> a subsequent "scoping memo" from the Commission should invite comment, and
> in particular should certainly not preclude, inclusion of retail solutions
> in the Commission's investigation of ways to provide relief for SDG&E and
to
> prevent recurrence of similar problems with the other utilities.  As is
> obvious from this comment, I think we have a real opportunity to both
> deflect attention from the so-called wholesale-generator piracy and
increase
> retail opportunities for the Members in the context of this new OII.
>
> The only direct, adverse commentary I heard was from a Utility Workers of
> America "representative" who advocated 1) for reregulation of the industry
> and 2) against TOU metering on the view that this would favor moneyed
> ratepayers over the others.  I think our colleagues (which by the way
> include the ORA after today) will find this disregard of conservation and
> DSM opportunities to be distasteful.  I also think the underlying interest
> in these comments is pretty transparent and believe it was not lost on the
> attendees.
>
> Bottom line:  as we previously have discussed, this is an excellent time
and
> opportunity for IEP to introduce itself to the community here, and
statewide
> I suppose, as the voice of "electricity service providers" - which
includes
> the entire range of QF projects, renewable technologies, cogeneration,
> conservation, ESPs and marketers and new generators which have already and
> are now poised to invest many hundreds of millions of dollars in
California
> (to correct deficient and negligent investment in new infrastructure).
>
> I had a particularly enjoyable conversation with the AARP representative
who
> well understood, and was mystified at, the failure of responsible parties
> (SDG&E) to invest in new generation since it was "obvious" to all that
such
> investments were necessary.  I'll summarize with the mere observation that
> the BRPU story was of great interest to her.  She, and again in my
> estimation most of the serious participants, also is aware that SDG&E has
> failed to maintain the natural gas infrastructure necessary to support
even
> the existing generation, let alone needed additions.
>
> I look forward to discussing this with you in further detail.  As noted, I
> think IEP as the representative of the full range of new, old and
interested
> non-utility electricity providers has a marvelous opportunity to take the
> helm.  I'll be returning to Sacramento on Thursday.
>
> -Doug Kerner
>
>
> Eric Janssen for Doug Kerner
> Ellison Schneider & Harris  LLP
> 2015 H Street
> Sacramento, CA  95814
> Phone: (916) 447-2166
> Fax: (916) 447-3512
> mailto:ericj@eslawfirm.com
>
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