(a) The cost recovery plan shall set rates for each customer class,rate 
schedule, contract, or tariff option, at levels equal to the level as
shown on electric rate schedules as of June 10, 1996, provided that rates for 
residential and small commercial customers shall be
reduced so that these customers shall receive rate reductions of no less than 
10 percent for 1998 continuing through 2002. These rate levels for each 
customer class, rate schedule, contract, or tariff option shall remain in 
effect until the earlier of March 31, 2002, or the date on which the 
commission-authorized costs for utility generation-related assets and 
obligations have been fully recovered.
Also supports that DA customers should not pay more than frozen rates
---------------------- Forwarded by Scott Stoness/HOU/EES on 04/23/2001 07:04 
PM ---------------------------


Scott Stoness
04/23/2001 07:00 PM
To: Harry.Kingerski@enron.com, JBennett@GMSSR.com, Jeff.Dasovich@enron.com, 
Leslie.Lawner@enron.com, MDay@GMSSR.com, Susan.J.Mara@enron.com, 
tjohnso8@enron.com, James D Steffes/NA/Enron@Enron
cc:  
Subject: AB1890 says DA customers cannot pay more as follows:

The following 4 excerpts from AB1890 make a pretty compelling case that:
1) The DA customers should not pay more than bundled rates and
2) This should be accomplised through forcing utilties to participate in the 
Px
3) Px should reflect market value


367 e 2, page 33 says 
"(2) Individual customers shall not experience rate increases as a result of 
the allocation of transition costs. However, customers who elect to purchase 
energy from suppliers other than the Power Exchange through a direct 
transaction, may incur increases in the total price they pay for electricity 
to the extent the price for the
energy exceeds the Power Exchange price."
 Says that DA customers cannot pay more than bundled if they buy from 
supplier at market prices.

365. confirms that the legislation intended that the utility be forced to 
sell to the Px as follows:
"The actions of the commission pursuant to this chapter shallbe consistent 
with the findings and declarations contained in Section330. In addition, the 
commission
shall do all of the following:
(a) Facilitate the efforts of the state,s electrical corporations to develop 
and obtain authorization from the Federal Energy Regulatory Commission for 
the creation and operation of an Independent System Operator and an 
independent Power Exchange, for the determination of which transmission and
distribution facilities are subject to the exclusive jurisdiction of the 
commission, and for approval, to the extent necessary, of the cost
recovery mechanism established as provided in Sections 367 to 376, inclusive. 
The commission shall also participate fully in all proceedings before the 
Federal Energy Regulatory Commission in connection with the Independent 
System Operator and the independent Power Exchange, and shall encourage the 
Federal
Energy Regulatory Commission to adopt protocols and procedures that 
strengthen the reliability of the interconnected transmission
grid, encourage all publicly owned utilities in California to become full 
participants, and maximize enforceability of such protocols and procedures by 
all market participants.
 Says they intend that  utilities buy and sell from the Px

390 c page 49 confirms that Px is market based as follows: 
"(c) The short-run avoided cost energy payments paid to nonutility power 
generators by electrical corporations shall be based on the
clearing price paid by the independent Power Exchange....."
 Confirms that they intended that Px be short run avoided costs or market 
value

367 (c) page 33 confirms that Px is market based as follows: " Be limited in 
the case of utility-owned fossil generation to the uneconomic portion of the 
net book value of the fossil capital investment existing as of January 1, 
1998, and appropriate costs incurred after December 20, 1995, for capital 
additions to generating
facilities existing as of December 20, 1995, that the commission determines 
are reasonable and should be recovered, provided that
the additions are necessary to maintain such facilities through December 31, 
2001. All ++going forward costs,, of fossil plant operation,
including operation and maintenance, administrative and general, fuel and 
fuel transportation costs, shall be recovered solely from
independent Power Exchange Revenues or from contracts with the Independent 
System Operator, provided that for the purposes of this
chapter, the following costs may be recoverable pursuant to this section:"
 Supports that the legislation intended utility generation to be sold to Px