----- Forwarded by Jeff Dasovich/NA/Enron on 04/20/2001 04:28 PM -----

	Jeff Dasovich
	Sent by: Jeff Dasovich
	04/20/2001 04:25 PM
		
		 To: Scott Stoness/HOU/EES@EES
		 cc: Harry Kingerski/NA/Enron@ENRON, JBennett <JBennett@GMSSR.com>, Leslie 
Lawner/HOU/EES@EES, Tamara Johnson/HOU/EES@EES, Susan J Mara/NA/Enron@ENRON, 
MDay@GMSSR.com
		 Subject: Re: SCE Advice Filing on PX Credit -- Protest

Looks good, Scott.  One thing:  I admit I'm not a lawyer, so someone needs to 
show me the precise language in AB 1890 that 1) requires the credit (which, I 
believe was created by the PUC, not the legislature) to be based on market 
and 2) requires DA customers to be indifferent to be from DA suppliers. 

Mike Day:  Do you concur with Scott's interpretation in AB 1890?

Like your arguments, Scott.  Just want to clarify that we're on solid legal 
ground before putting the arguments foreward in a brief and/or protest. 

Best,
Jeff



	Scott Stoness@EES
	04/20/2001 10:46 AM
		
		 To: JBennett <JBennett@GMSSR.com> @ ENRON
		 cc: Harry Kingerski/NA/Enron@Enron, Tamara Johnson/HOU/EES@EES, Leslie 
Lawner/HOU/EES@EES, Jeff Dasovich/NA/Enron@Enron
		 Subject: Re: SCE Advice Filing on PX Credit -- Protest

We should protest this issue and argue that nothing should change but that 
the Px credit should be based on DJ-NP15 and DJ-SP15 rather than the defunct 
Px because AB1890 requires it to be based on market (not costs).  Changing to 
procured energy is inconsistent with the law AB1890 which requires DA 
customers to be indifferent to buying from DA suppliers.  
And since DA suppliers face costs close to DJ-NP15/SP15, that is the only 
appropriate available method.  

Further, the issue of how to calculate Px is interrelated to whether DA 
customers should be charged the generation surcharges ($10 +$30).  DA 
customers should be given market based Px credits (based on DJNP15/SP15) 
because its the law.  There are 2 possible interpretations resulting from the 
combination of AB1890 and the new law.  
The DA customers should get a market based Px credit and not pay any 
surcharge.
The DA customers should get a market based Px credit and pay the $30 + $10 
surcharges
Interpretation 1 results in DA customers getting lower rates than all other 
customers.  It seems unlikely that the legislation would have this intent.
Interpretation 2 results in DA customers getting the same rate as all other 
customers until the end of AB1890.  This seems like the likely interpretation 
since otherwise the new legislation would have repealled AB1890.  Thus given 
that the DA customers are being held indifferent to frozen rates plus $40, 
they should get a Px market based credit plus pay the surcharge until the 
rate freeze ends.

Once the Px credit ends (Mar 2002), the surcharge should end because the law 
(AB1890) no longer requires them to be held at frozen rates and because:
Any customer that is being served by a supplier other than DWR and the 
utility is not causing any costs for DWR or the utility therefore they should 
not be charged for them.

In the event that Px credit is not set based on market value (if the courts 
interpret the law differently than Enron) then there should be no generation 
surcharge for DA customers.

This is the same argument we should make in our brief on rate setting
Scott



JBennett <JBennett@GMSSR.com> on 04/20/2001 09:03:06 AM
To: "Harry Kingerski (E-mail)" <Harry.Kingerski@enron.com>, "Robert 
Neustaedter (E-mail)" <Robert.Neustaedter@enron.com>, "Scott Stoness 
(E-mail)" <sstoness@enron.com>, "Tamara Johnson (Business Fax)"  
<IMCEAFAX-Tamara+20Johnson+40+2B1+20+28713+29+20345-7374@GMSSR.com>
cc: "Jeff Dasovich (E-mail)" <jdasovic@enron.com>, "Sue Mara (E-mail)"  
<smara@enron.com> 
Subject: SCE Advice Filing on PX Credit -- Protest


As you are aware, SCE made an advice filing on April 5th to eradicate the PX
Rate Schedule and Replace it with Schedule PE --Procured Energy.  As part of
the filing, SCE proposes to set "on an interim basis" the cost of energy
procurement, for bundled service customers for billing purposes and in the
calculation of the energy credit for direct access customers equal to the
Generation rate component of the Customer's otherwise applicable tariff.

Two primary issues arise from SCE's statement. First what does "interim
basis" mean -- how long will this be in effect.  In starts on January 19th,
but it is unclear as to when it would end. Second, and most important. is
what is meant by the Generation rate component.  While there is not much
explanation in the April 5 advice letter, in a subsequent advice letter
filed on April 11 (1533-E), SCE set forth "Rate Schedule Specific Generation
Related Rates" which range between five and nine cents.

I have forwarded both the referenced advice letters to you earlier.  We need
to protest the change in the PX credit by Wednesday, April 25th.  All
thoughts on the matter are welcome.

Jeanne