<<X16049.DOC>>

Here are proposed amendments for the Ducheny siting bill, AB 970, which
reflect the input of Sam When and Allan Thompson.


In addition, I have reviewed the SCE/PG&E rate stabilization proposed
legislation.  This legislation extends a rate cap type rate stabilization
plan until March 31, 2003.  The language included a "flexible" rate cap so
that the commission can increase rates to reflect variations in the cost of
gas and electricity, etc.   It has some language to ensure that the
"customers which benefit from stabilized rates do not avoid costs associated
with providing the stabilized rates".   This would seemingly prevent cost
shifting and retroactive ratemaking.    The main thrust is to allow the
utility to recover all  non-CTC costs during this period.  It specifically
amends Section 368(a) to eliminate a provision which appears to require the
utilities to absorb all costs (including CTC) not recovered by the end of
the transition period.

My main reaction is that this bill is not necessary.  The SCE and PG&E caps
are still in place and will be in place through most if not all of 2001.
This bill is being offered now to increase its chances of passage in the
"crisis mode" now prevalent.  It should be deferred until the commission has
proceeded farther with its investigation.

Mike Day

 - X16049.DOC