Thanks.  Comments below.  Great input.


From:	James D Steffes/ENRON@enronXgate on 08/16/2001 09:59 AM
To:	Mike D Smith/HOU/EES@EES
cc:	 
Subject:	California Contract Language 

Some thoughts --

1.	Why use the "Special" term?  Just call it DA Charges.  What makes these charges special.  Parallels the def we use of "Special Utility Charges."  Also connotes that these are often imposed outside the normal course of business.
2.	Why limit to "energy procurement" or "public purpose"?  For instance, if the Utilities were to implement a line item charge for past Negative CTC payments, I don't think your language would cover this. Isn't that "future payback of past under collections"?  Seems to me to relate to energy procurement--ie their avoided cost of energy procurement
3.	Does this include the potential for "positive CTC"?  We don't want to miss this cost.  Customer pays CTC as part of "T&D Charges."  CTC is expressly included in the definition of those charges.
4.	What do we do with post March 31, 2002 rate periods?  While the AB1890 rate freeze is premised to continue until March 31, 2002 or when generation-related stranded costs are recovered, we don't know what will be happening after then.  Want to make sure that any non-bypassable charge is paid by customers, including T&D, along with our generation rates.  All T&D is passed through to customer, regardless of when.  We have only priced "retail" generation on these deals.  
5.	How does the concept of re-billing versus prospective rate adjustments get incorporated?  Maybe it gets built into the calculation of CTC, but want to make sure that the right value goes to the right party.  I think the rebilling as opposed to prospective will follow the allocation of charges in the contract.  We talk about things like "however styled or payable" to pick up things like that.

Jim

 -----Original Message-----
From: 	Smith, Mike  
Sent:	Wednesday, August 15, 2001 4:20 PM
To:	Steffes, James D.
Subject:	 

Jim--here is the relevant language.  Customer pays all "Special DA Charges."


"Special DA Charges" means any charges, fees, assessments, adders or surcharges imposed or authorized by any Governmental Authority on "direct access" customers (regardless of whether any such charge is also imposed on other classes or types of customers), however styled or payable, that are related to (i) a Utility's, ISO's or Governmental Authority's energy procurement, including, without limitation, charges for system reliability, rate recovery, future payback of under-collections, amortization of above market purchases and energy load repurchases; or (ii) public purpose programs, including, without limitation, environmental, social/low income, renewable energy utilization, and demand side management programs.  Such charges will apply regardless of whether the energy requirements of the Accounts are being supplied by us or the applicable Utility.