The meeting to discuss California issues today has been set at:
	
	12:00 noon - 1:00 p.m.
	EB 8C1

	Dial-in #:  1-847-413-3181
	Passcode:  7816787

 -----Original Message-----
From: 	Steffes, James D.  
Sent:	Tuesday, August 28, 2001 8:58 AM
To:	Dasovich, Jeff; Kean, Steven J.; Kingerski, Harry; Belden, Tim; Sharp, Vicki; Blachman, Jeremy; Comnes, Alan; Tribolet, Michael; Walsh, Kristin; Delainey, David; Leff, Dan; Frazier, Lamar; Keeney, Kevin; Blachman, Jeremy; Gahn, Scott; Belden, Tim; Swain, Steve; Lavorato, John; Kaufman, Paul; Calger, Christopher F.; Mara, Susan; Black, Don; Richter, Jeff; Kitchen, Louise; Dietrich, Janet; Mara, Susan; Robertson, Linda; Kingerski, Harry; Denne, Karen; Palmer, Mark A. (PR); Shapiro, Richard; Curry, Wanda; Mellencamp, Lisa
Cc:	Noske, Linda J.
Subject:	RE: California Update--08.27.01

I will be setting up a conference call for later today to discuss our latest view on developments in the California market.  If anyone has any specific questions before then, please call me at 713-853-7673.

Jim

 -----Original Message-----
From: 	Dasovich, Jeff  
Sent:	Monday, August 27, 2001 8:26 PM
To:	Kean, Steven J.; Kingerski, Harry; Belden, Tim; Sharp, Vicki; Blachman, Jeremy; Comnes, Alan; Tribolet, Michael; Walsh, Kristin; Delainey, David; Leff, Dan; Frazier, Lamar; Keeney, Kevin; Blachman, Jeremy; Gahn, Scott; Belden, Tim; Swain, Steve; Lavorato, John; Kaufman, Paul; Steffes, James D.; Calger, Christopher F.; Mara, Susan; Black, Don; Richter, Jeff; Kitchen, Louise; Dietrich, Janet; Mara, Susan; Robertson, Linda; Kingerski, Harry; Denne, Karen; Palmer, Mark A. (PR); Shapiro, Richard; Curry, Wanda; Mellencamp, Lisa
Subject:	California Update--08.27.01

The California PUC
Loretta Lynch held a press conference in Sacramento today to discuss changes to the Commission's previously released proposal regarding Direct Access and the rate agreement between the PUC and DWR.
In the amended proposal discussed and distributed today, Direct Access would end retroactive to July 1.  Customers with contracts executed as of July 1 would would remain Direct Access customers.

The Legislature
The Assembly version of the Senate MOU (SB 78) has not yet been reviewed and voted on in the Committee.
It is scheduled to be reviewed and voted on at 6:30 PM PDT today.
Amendments on Direct Access were released this afternoon (based on negotiations between Davis' office and business customers):
Customers who have consistently been DA since May 2000, including those "involuntarily" returned to bundled service, would be exempt from charges for Edison's undercollection, DWR's forward contracts, and DWR-related exit fees, provided that the PUC finds that no additional stranded costs are created for Edison's remaining customers.
Customers who have consistently been on DA between May 2000 and Jan 17, 2001 would be exempt from charges for Edison's undercollection, DWR's forward contracts and DWR-realted exit fees, provided that the PUC finds that no additional stranded costs are created for Edison's remaining customers.
Customers who have been on DA between Jan 17, 2001 and August 24, 2001 would be exempt from exit fees related to DWR forward contracts, provided that the PUC finds that no additional stranded costs are created for Edison's remaining customers.
Customer's leaving after August 24th would not qualify for exemptions.
There is considerable work underway to make the August 24th date the deadline for contract execution, rather than the date by which the customer must be DASR'd, in order to qualify for the exemptions.
Direct Access would not be suspended, however, until 90 days after the bill is signed by Davis (if he signs it), i.e., the "effective date" of the bill.
So anyone going to Direct Access between Aug 24 and the effective date would not qualify for any exemptions.
After the 90-day period, DA would be suspended until 1.1.03.
Self-gen in service consistently from May 200 to August 24 would be exempt from Edison's undercollection and DWR charges.
Self-gen that submitted an application to the Energy Commission by August 24 would be exempt from DWR charges beginning the date that the self-gen comes on line.
Self-gen that comes on line after August 24 would be exempt from DWR charges beginning the date that the self-gen comes on line, but the total number of exempt MWs in this category would be limited to 250 MWs per year, on a first-come-first-serve basis.
At least 30% of any increases in net short due to increases in demand would be reserved for self gen.