FYI.
---------------------- Forwarded by Mona L Petrochko/NA/Enron on 12/12/2000
12:43 PM ---------------------------


"Daniel Douglass" <Douglass@ArterHadden.com> on 12/06/2000 10:37:53 AM

To:   <ARM@phaser.com>
cc:

Subject:  Fwd: PG&E Advice Letter 2057-E



You may recall that PG&E files an advice letter on 11/22 to revise all  its
tariffs because the rate freeze had purportedly ended.? The attached
letter from Paul Clanon shoots down that theory.? He writes that:

"AL 2057-E is not compliant because, at a minimum:

1. The rate freeze for PG&E is not over.? Pursuant to O.P. 2 of
D.99-10-057, the end of the rate freeze for PG&E and Southern California
Edison shall not occur before the generation assets of each utility have
been  market valued except as the law or the Commission determines
otherwise.?  The Commission has not ordered that the rate freeze can end
based on the  estimated market value of PG&E's generation assets.
2. As PG&E  acknowledges in AL 2057-E, it is required (by O.P. 1 in
D.99-10-057) to file an  advice letter three months prior to the earliest
forecasted date, and an advice  letter five days after, the rate freeze
ends.? PG&E cannot, by  unilateral action, collapse these two filings into
one without review and an  order of the Commission authorizing such a
modification. [NOTE:? This  is?similar to?what we said in our RAP response
to Edison's motion to  sever the PX Credit issue from the RAP proceeding.]
3. As PG&E  acknowledges, the proposed Distribution Revenue Adjustment
Mechanism (DRAM), and  the new rate component associated with the DRAM,
were not authorized by  D.99-10-057, which contemplated that PG&E would be
operating under a  Performance Based Ratemaking mechanism after the rate
freeze ended, or by  subsequent decisions.
4. The proposed Unrecovered Cost of Service Account  (UCSA), and the new
rate component associated with the UCSA, were not authorized  by
D.99-10-057 and are not in compliance with any Commission decision.? To
the extent that PG&E proposes to transfer TRA undercollections incurred
prior to the end of the rate freeze to the UCSA, AL2057-E violates
D.99-10-057,  O.P. 2 and D.00-03-058.
5. The treatment of retained generation revenues  proposed in this AL was
not authorized by D.99-10-057, or by subsequent  decisions."

Whoopee!

Dan
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From: "Avendano, Nel C" <NCO1@pge.com>
To: "Antonio, Sonny" <IUCGroup@email.com>, "Avendano, Nel" <nco1@pge.com>,
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Richard C." <rcelio@apt4power.com>,   "Chancellor, Craig"
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Marshall" <mclark@dgs.ca.gov>,   "Clements, Nigel"
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Phillip" <greenep@fosterfarms.com>,   "Hall, William R."
<whall@ci.glendale.ca.us>,   "Hamog, Donald"
<hamoyd@liggett-emh1.army.mil>,   "Harteloo, Kari" <klc@aelaw.com>, "Hawes,
Cathy" <chawes@eesinc.com>,   "Henton, Ms Donna" <dhenton2@csc.com>,
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<artscomm@worldnet.att.net>,   "Hurley, Lyle" <lhurley@ci.redding.ca.us>,
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Mike" <mjaske@energy.state.gov.us>,   "Karp, Joseph"
<regaffairs@sf.whitecase.com>,   "Kelly, Keith" <kkelly@tfsbrokers.com>,
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cc: "Malekos, Shelly" <SSM3@pge.com>, "Shaw, Susan" <SXS9@pge.com>,
"Smith, Anita (RegRel)" <AWS4@pge.com>
Subject: PG&E Advice Letter 2057-E
Date: Tue, 5 Dec 2000 14:08:16 -0800
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Attached for your information is a letter dated December 4,  2000,  from
Paul Clanon of Energy Division regarding the status of AL 2057-E filed by
PG&E Company on November 22,  2000.

 <<2057-E_EDletter.doc>>



Thank You,
Nel Avendano (nco1)
Rates (3-3529)



(See attached file: 2057-E_EDletter.doc)

 - 2057-E_EDletter.doc