Here is the PG&E 10-K disclosure, which does not help much.


Under AB 1890, when the Utility has recovered its eligible transition 
costs, the conditions for terminating the rate freeze and ending the 
transition period will have been satisfied. At August 31, 2000, consistent 
with transition period accounting mechanisms adopted by the CPUC, the Utility 
credited its TCBA by $2.1 billion, the amount by which a negotiated $2.8 
billion hydroelectric generation asset valuation exceeded the aggregate book 
value of such assets. Based on this credit, the Utility believes it recovered 
its eligible transition costs during August 2000. At August 31, 2000, there 
was a balance of approximately $2.2 billion of undercollected wholesale power 
costs recorded in the TRA. If the final valuation for the hydroelectric assets 
is greater than $2.8 billion, as the Utility expects, the Utility believes it 
will have recovered its transition costs possibly as early as May 2000. The 
undercollected TRA balance as of the end of the earlier determined transition 
period will be less than the $2.2 billion August 31, 2000 balance and could be 
zero depending on the ultimate valuation of the hydroelectric assets and when 
the transition period actually ends. Under current CPUC decisions and AB 1890, 
the Utility's customers are responsible for wholesale power purchase costs 
after the Utility has recovered its transition costs. 
  
   In one of its March 27, 2001 decisions, the CPUC adopted TURN's proposal to 
transfer on a monthly basis the balance in each utility's TRA to the utility's 
TCBA. The accounting changes are retroactive to January 1, 1998. The Utility 
believes the CPUC is retroactively transforming the undercollected power 
purchase costs in the TRA into transition costs in the TCBA. However, the CPUC 
characterized the accounting changes as merely reducing the prior revenues 
recorded in the TCBA, thereby affecting only the amount of transition cost 
recovery achieved to date. The CPUC also ordered that the utilities restate 
and record their generation memorandum accounts balances to the TRA on a 
monthly basis before any transfer of generation revenues to the TCBA. The CPUC 
found that based on the accounting changes, the conditions for meeting the end 
of the rate freeze have not been met. 
  
   The Utility believes the adoption of TURN's proposed accounting changes 
results in illegal retroactive ratemaking and constitutes an unconstitutional 
taking of the Utility's property, and violates the federal filed rate 


 -----Original Message-----
From: 	Thome, Jennifer  
Sent:	Wednesday, August 22, 2001 6:07 PM
To:	Tribolet, Michael
Cc:	Steffes, James D.; Kingerski, Harry; Dasovich, Jeff; Neustaedter, Robert
Subject:	RE: California Rate Exposure

10 am CDT works for me.  I can find a room up here unless you would rather meet on your floor, Michael.

Jennifer

 -----Original Message-----
From: 	Tribolet, Michael  
Sent:	Wednesday, August 22, 2001 6:04 PM
To:	Dasovich, Jeff; Neustaedter, Robert
Cc:	Steffes, James D.; Thome, Jennifer; Kingerski, Harry
Subject:	RE: California Rate Exposure

Can we do a 10am CDT, 8am PDT call?

 -----Original Message-----
From: 	Dasovich, Jeff  
Sent:	Wednesday, August 22, 2001 5:52 PM
To:	Tribolet, Michael; Neustaedter, Robert
Cc:	Steffes, James D.; Thome, Jennifer; Kingerski, Harry
Subject:	RE: California Rate Exposure

Michael:

Thanks very much for your help on this.  Can we discuss first thing in the AM after all have had a chance to review?

Best,
Jeff

 -----Original Message-----
From: 	Tribolet, Michael  
Sent:	Wednesday, August 22, 2001 5:20 PM
To:	Neustaedter, Robert
Cc:	Dasovich, Jeff; Steffes, James D.; Thome, Jennifer; Kingerski, Harry
Subject:	RE: California Rate Exposure


All:

I changed the following:

1. Reduced total load from 185,000 GWh to 178,000 GWh.
2. Allocated the "costs" by utility based on total demand
3. Changed the DWR negative MTM on contracts from $7.5B to $9.55B
4. Added an undercollection of $.932 Billion for SDG&E (more below)

I did not:

1. Add the Nuclear decommissioning as it is funded on balance sheet.


I added the following:

1. Allocated the Bonds and Contracts on DWR share of Revenue Requirement %.
2. The CTC is the softest assumption.   The utilities wrote off considerable Transition Revenue Account (undercollection) and Transition Cost Balancing Account Balance (primarily stranded cost) at year end.  The Regulatory Asset for PG&E and Edison is assumed to be primarily TCBA at 6-30-01, but there is no footnote to absolutely corroborate this.   The Undercollection for SDG&E is assumed at the Regulatory Asset balance at 6-30-01.   This is due to the rate freeze having ended for SDG&E and therefore their TCBA should be recovered (reduced to zero). 

Results:

One of the key driver to the utility-by-utility allocation is the difference between total volume and share of DWR costs.   DWR allocated costs to have a uniform "rate" across the net short by utility.   Thus those with a larger portion of their total demand (SDG&E and to a lesser extent PG&E) which is covered by DWR, have a higher unit cost across all rates for the Bonds and Contracts.  Edison has the converse.

Any changes in assumptions are welcomed.



Regards,



Michael


 << File: m010822.xls >> 



 -----Original Message-----
From: 	Neustaedter, Robert  
Sent:	Tuesday, August 21, 2001 5:28 PM
To:	Tribolet, Michael
Cc:	Dasovich, Jeff; Steffes, James D.; Thome, Jennifer
Subject:	California Rate Exposure

Michael,

Jim has asked Jennifer and me to estimate the potential exposure (worst case) to the Company's book position for DA customers in California.  Starting from the  model you and Jeff developed we have added other possible categories of charges allowed by existing regulations.

We would appreciate if you could please review the attached and provide us with any feedback.  If available we would like to call you Wednesday morning to discuss.

 << File: direct access.xls >>