---------------------- Forwarded by Alan Comnes/PDX/ECT on 03/13/2001 09:11 
AM ---------------------------


"Steven Kelly" <steven@iepa.com> on 03/13/2001 08:59:41 AM
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Subject: Status of SB47X


STATUS OF 47X:
There will be no hearing on SB47X this week, and it is very possible that
47X will not be heard in the future.  The Governor has "control of the bill"
which means that neither the Democratic nor Republican leadership want to
move the bill.  As a result, they are deferring to the CPUC to address the
QF issues.  The CPUC is expected to release a Decision on Thursday, which
will be a revised Wood PD.  While not having a lot of detail on what the PD
may say, it is expected that the price cap will be lifted in some manner.

While it is difficult to ascribe specifically why the bill has been waylaid,
it is clear that (1) SCE has been effective in arguing that the QFs are "not
in the box" established by Mr. Keeley (i.e. 7.8 cents/kWh), (2) the initial
Keeley "box" has been replaced by the Governor's box which is in some sense
related to the price DWR has been paying for its purchases and, as a result,
the QF "box" may be perceived by the Governor as less than 7.8 cents/kWh,
(3) the democrats (and even the Republican leadership) were reluctant to
tackle a complicated "rate setting" bill and assume the risk of getting
burned as occurred in AB1890, and they were reluctant to take the lead on
legislating a five-year deal, (4) the Governor has consistently wanted the
QF bill to be tied to the "mega bill" and this seems to be occurring through
the lack of action, (5) in the absence of some compelling "crises" (e.g.
wholesale shutdowns), the legislature failed to see the urgency to move the
bill at this time.


NEXT STEPS:

At this point, we will await the PD.  It is unlikely that the PD will be
able to simultaneously (1) address SRAC "within the box" as directed by the
Governor, and (2) be consistent with state (Section 390) and federal (PURPA)
law, particularly given the paucity of a "record" at the CPUC on which to
base its decision.

Upon receiving and reviewing the PD, we will convene a conference call of
the IEP QF/Renewable Committee to discuss next steps.