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AGENDA

1. SDG&E Rate Surcharge - Enron Actions
2. Sacramento Update
 Rate Freeze End Date
 Direct Access "Ban"
 Consolidation of Legislation?
 QF Language?
3. Northwest AG Action  - Any news?
4. California AG Action against PG&E at FERC - Issues?
5. PG&E OPTIONAL BINDING MANDATORY CURTAILMENT PLAN
6. Other


 
MIKE DAY UPDATE FROM LAST NIGHT - 

Today the special Wright Assembly committee held an infomational hearing
on bankruptcy procedures.  No substantive action.  However, at his
evening briefing Assmblyman Wright said that ABX -18 was now stripped
down to just the "arrearage" language and was only 4 pages.  It should
be out soon.  There is no schedule for a hearing, but the next hearing
will be to vote on  a bill.  Our proposed language on the end of the
rate freeze is under consideration.  Edison has agreed to support our
concept and wants to see a redraft of the language making it explicit
that they can recover past costs in the future.  We will provide a draft
to them tomorrow morning.

The Senate appropriations committee met all day to work over the ABX-1
bill and considered amendments and testimony.  The bill included
amendments suspending all  direct access once the DWR was buying
power.   We have a major problem in that Sen Burton, Bowen, and
Assmblyman Keeley all believe that the DWR will get lower prices and
avoid stranded contract costs in the later years of the contract if
customers are locked into the DWR market.  The witness from NYMEX
described this approach as making sure the state goes broke as soon as
possible.

We offered our amended language to preserve existing and future direct
access to staff.  After the recess the bill had not been amended. I
presented testimony supporting direct access, as did many consumer
groups, UC/CSU, and industrial customers.   The compromise from the
chair was to promis that language would be added to grandfather in
existing direct access contracts which could be retain, renegotiated or
renewed.  However, the CPUC could suspend the right to enter into new
direct access deals.  Sen. Bowen committed to introduce a "clean up"
bill tomorrow which could deal comprehensively with the issue and
perhaps detail the conditions under which customers could choose direct
access in the future.  However, as the bills are not "joined" in
legislative parlance, we have no real assurance that the Bowen bill will
be passed or signed.  We have a major selling job to do in conjunction
with the other ESPs, and customer groups in order to try to get this
fixed.  NEV tried to introduce amendments which would impose very
specific conditions on new direct access, preferring to spell out the
language in the bill  rather than risk getting an adverse decision from
the CPUC.  We indicated our unwillingness to support significant
restrictions on future industrial direct access, and they did not push
the language too hard, but we now have to have Enron get more involved
in determining ARM's position.  Aaron Thomas and Counihan will be
working on this tomorrow in Sacto.  For tomorrow, my suggested action
points are as follows:   Jim Steffes should brief Sue Mara on his
suggestions for managing direct access under the new structure, and she
should try to contact Aaron and Rick, while Sandi and I will do the same
from here.