Two of the three Commission-hired witnesses testified today -- Peter
Bradford and George Sterzinger.  While Bradford did nothing to really help
or hurt our cause, Sterzinger was amazingly helpful.  He practically
endorsed Enron's proposal.  He noted that it was the best design to elicit
strong conservation response by, as he put it, "grabbing hold of some of the
usage and making it responsive to the manipulation of the market."  The idea
was that customers would respond to the high prices which, are the product
of market manipulation, by reducing usage.  He focused alot on the
decremenatal usage credit and the incentive it would provide to conserve.
He proposed an alternative manner of funding in that the rebate would be
flowed back to customers as a bill reduction over an extended period of
time.  He also noted that he would implement the proposal as a voluntary one
(at least initially).

As to the other parties proposals, on cross, he expressed strong concerns
about shifting usage from peak to should peak (as that does nothing but
shift the peak period) and stressed that the Commission should carefully
examine any rate design which would have the potential to do such.  He also
testified that of the two forms of conservation being discussed in this
proceeding -- load shifting or load reduction -- the latter was far more
important and that the goal should be to lower energy usage at all times.

All in all, not a bad afternoon for our proposal.  His testimony appears to
have renewed interest in what was beginning to look like a nonstarter.

Tomorrow, the remaining Commission witness (Bornstein) is up.  Followed by
Bill Marcus for TURN, and PG&E witness Coyne.  The billing constraint
witnesses are up Thursday.  The hearing should conclude by noon on Thursday,
with briefs due noon on Monday.

Jeanne Bennett