Dan.  You might want to amend.  The decision puts everyone on notice that the Commission is going to consider taking it back to July 1---no info on what the decision process would be.
 
Best,
Jeff

-----Original Message-----
From: Dan Douglass [mailto:douglass@energyattorney.com]
Sent: Thursday, September 20, 2001 2:34 PM
To: ARM
Cc: Vicki Sandler; Tamara Johnson; Mara, Susan; Steve Huhman; Roger Pelote; Rob Nichol; Randy Hickok; Nam Nguyen; Jim Crossen; Dasovich, Jeff; Janie Mollon; Jack Pigott; Greg Blue; George Vaughn; Gary Ackerman; Ed Cazalet; Denice Cazalet Purdum; Curtis Kebler; Curt Hatton; Corby Gardiner; Charles Miessner; Carolyn Baker; Bill Ross; Karen Shea; Max Bulk
Subject: DA Suspended, but NOT retroactively


The Commission has just voted 3-2 to approve the draft ALJ Barnett decision, modified to be prospective only.  There is NO retroactive suspension.
 

Carl Wood introduced the ALJ's draft decision, with a diatribe against direct access.  He said that DA is a subsidy from less attractive customers to large customers and an example of the saying that, "big dogs eat first and big dogs eat best."  He added that most comments advocated delay of suspension and no retroactivity.  He said he "finds it hard to consider these comments to be anything but misleading and disingenuous."  He added that, "Small consumers effectively have no options."  He said retroactivity will be the subject of further review, although it was not clear what this meant.  Within 14 days, the UDCs must inform the Energy Division of steps taken not to accept DASRs for contracts entered into after 9/20/01.  He said that direct access is half of the failed deregulation process; the other half was opening ourselves up to the erratic wholesale market.  He said that supporters of DA engage in "hollow rhetoric."  The market has failed in the state, and, "We need to put an end to the lack of social responsibility in the electric market."

He concluded that several commenters had indicated that direct access was a way for making green power available to residential customers.  He responded that this just means other customers are getting more dirty coal-fired power.  He concluded that advocates of direct access make a "fraudulent claim of customer choice." <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

Commissioner Bilas then spoke for his alternate, responding to Wood.  He said he had learned how to count, and he can count to three.  He then briefly summarized his alternate.  First, he expressed disappointment in the Sacramento process and the fact that they had not yet done something to rescue direct access.  Second, he indicated his view of DA was a lot different from that of other people.  He said he had always opposed the AB 1890 provision that instituted the UDC buy-sell arrangement, saying that it eliminated the largest customers from direct access.  Commissioner Duque then spoke briefly to indicate his support for the Bilas alternate draft decision and his strong support for direct access. 

Commissioner Brown said first, "In the weight of these sad times we must obey.  We are paying the price of the severe energy crisis which occurred last year and the extraordinary means that were used to resolve it."  In an ordinary market, he thinks DA is good, but there is no way it can coexist with the State's $22 billion worth of bonds.  Therefore, there is no question that it has to be suspended.  "We probably should have done so months ago, in order to avoid a last-minute stampede."  There is an inequity between customers that have moved to opt for direct access and those who have not.  But sometimes "you don't have a lot of good choices, and this is one of those times."  "If future legislation comes forward, and we hope that it would," the Commission will attempt to revise this action.   

President Lynch noted the State Senate leadership has written asking for a study to be delivered by 1/1/02 as to how DA can be maintained without bias to ratepayers and she supported this action. 

Bilas and Duque indicated they will both file dissents. 

In conclusion, we have prevailed in our opposition to retroactive direct access suspension.  We now need to consider whether we want to contest the suspension itself, on legal/procedural grounds.

Dan
 
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