(I had type of bunch of this and them my computer died, so I have to rewrite 
it - UGH)
Harry's testimony was brilliant, and here is a summary.  
Harry explained our proposal and how it achieves goals of equity and 
conservation  (equity because all customers sacrifice equally and 
conservation because there will be reductions in usage).  The other proposals 
in the case arbitrarily allocate costs to peak, whereas our proposal will 
have customers reacting to price signals, and if affords flexibility.  The 
Hearing Examiner (HE) asked what services EES provides, and whether our 
customers were DA customers (she was trying to get to our real interest in 
this case, which the PG&E attorney helped with later).

Slocum (PG&E) did not understand that our proposal was only for TOU 
customerrs and asked a lot of questions about implementation problems that 
were based on implementation for all classes.(Questions like moving usage 
data to billing system, 30% turnover in customers, lack of data for new 
customers, lack of metering).  Harry acknowledged that the peak defined by DJ 
might not match the rate class peak definition and that some adjustments 
might have to be made.  Slocum noted that TOU meters do not show hourly 
usage, and that hourly interval meters would need to be installed to make our 
proposal work.  Harry answered that we recognize that our proposal would take 
time, but that we need to move to this and that customers need price signals 
this summer.  

Our proposal is only for TOU customers, and for those for whom it cannot be 
implemented, an equal 3 cents per kwh is appropriate.  Harry noted that we 
have not taken a position on the proposal that should be adopted for other 
customer classes yet.  

He was asked where the 87% came from, ands he pointed out the derivation that 
was in his testimony based on predicted market price and cost of retained 
generation.  Two assumptions were made:  a $300 average market price and 
customers have same billing determinants for 2001 in combination with market 
price assumptions and existing generation rate to get the revenue 
requirements.  It is possible that the price may not be $300 and our revenue 
requirements may be off, but this is true with every other proposal  as 
well.  The basis for the $300 is the COB and PV Nymex contracts.  

If our proposal cannot be implemented this summer, the 3 cent charge sends an 
adequate and strong signal to consumers across the board.  When asked whether 
PG&E would have to program a different method for TOU customers if Enron,s 
proposal is adopted, Harry answered that they already have to program a 
different method for TOU customers under existing rates.  PG&E asked how the 
decremental reward program would be funded.  Harry noted that it could be 
funded through the ISO, DWR, utility bonding.  The PG&E attorney noted that 
the utilities have been downgraded to junk bond status and couldn,t issue 
bonds.  Funding is an issue.

Then PG&E asked if we left the market on 2/1/01.  Harry answered no.  We 
simply began sourcing power from the utility, but our contracts are still in 
effect.  She asked Harry what kind of customers we had, were they mostly 
large TOU customers?  Do they have interval meters?  She asked if we were on 
the hook for the difference between the bundled rate and the contract rate.  
Harry answered that he didn,t know on balance what impact our proposal would 
have on our TOU customers.   Our proposal helps to foster the goals and 
pursue the incentives to get to the needed solutions in CA.  He also noted 
that all parties to this proceeding were proposing methodologies that were 
most beneficial to them.

SC&E asked a bunch of questions about recovery of T&D costs, if the 87% 
target were used.  Harry answered that any undercollections that may result 
(and this could be true under any of the proposals) could be dealt with it a 
rate case filing.  They also talked about how the customer would know the 
daily prices, would the utility be obligated to make that info available?  HK 
answered that it is forecast a day ahead and is publicly available.  Then he 
was asked whether Enron would fund the decremental reward program.  Harry 
noted that we might under the right conditions, but this was outside his 
expertise.

ORA asked about weather normalization, again under the misapprehension that 
our proposal applied to weather sensitive smaller customers.  Harry also told 
him that the indices we proposed were very liquid.  He also handled questions 
on whether a different average price would yield a different break point, and 
we need to provide calculations that show an average price of $200 and $500.  

The Hearing Examiner then asked for Enron,s estimates of summer on peak and 
off peak prices, and ruled that we must supply that info by COB Monday, over 
counsel,s objections.

In general, I think there was a lot of confusion about our proposal (not 
understanding that it was only directed to one type of customer).  There is 
also a lot of distrust of Enron and I would add dislike as well.  I do not 
think the HE will consider any of our proposals seriously and in fact our 
support on some of the other proposals could be the kiss of death.  I would 
keep our brief very short and very limited,  as we can weigh in on support of 
the other A and RD methodologies after the HE issues her recommended 
decision.  In fact, we might even like a proposal she recommends.