All,  this is currently an issue not only with the Annual Merger Savings 
Credit, but also the SDGE Rate Reduction Bond Credits.  SDGE recently 
refunded these credits to our customers by check.  We are currently in the 
process of collecting these credits from the commercial accounts.   But, do 
we recover these credits (amounting to $765,000) from the residential 
customers?

 Below is a description of the reason for this credit.


> This credit has been made possible due to a unique set of circumstances
> involving electric industry restructuring, which has proceeded in
> accordance with California State law (AB 1890).  AB 1890 required SDG&E
to
> lower electric rates by 10% for residential and small commercial
> customers, then froze rate levels for up to 4? years.  AB 1890 also
> allowed SDG&E to issue rate reduction bonds to finance the rate
reduction.
> In 1997, SDG&E issued rate reduction bonds in an amount adequate to
> provide a 10% rate reduction for 4? years.
>
> However, SDG&E was able to recover many costs related to the transition
to
> a competitive market 2
 years early -- by last July -- through the sale
of
> its two San Diego power plants at higher than expected prices and through
> numerous other actions.  That combination of factors and the benefits of
> the rate reduction bonds mean SDG&E is able to distribute about $390
> million to its customers.
>
> The bonds cannot be paid off early, so the current "trust transfer
amount"
> line item on the SDG&E bill, which pays for the bonds, will continue for
> the bond life.
>
> An important point to clarify is that the money being distributed does
not
> represent over-collections from prior years.  Customers have benefited
> from many of the changes brought about by electric industry
restructuring.
> These include the 10% electric rate reduction, the electric rate freeze
> and the monthly trust transfer amount credit.  The trust transfer amount
> is the charge that pays for the rate reduction bonds, has funded the
> benefits customers have already received and is funding this "lump sum
> trust transfer amount credit".
>


   
	Enron Energy Services
	
	From:  Marianne Castano                           09/28/2000 12:39 PM
	

To: Dennis Benevides/HOU/EES@EES
cc: Jeff Dasovich/NA/Enron@Enron, Karen A Cordova/HOU/EES@EES, Diann 
Huddleson/HOU/EES@EES 
Subject: Re: SDG&E Credits  


	

Dennis:  Just wanted to bring this item to your attention.  We've researched 
the terms of our residential agreements and have noted that they are silent 
as to the issue of credits/refunds.  I've asked Jeff and Mike Day, our 
regulatory counsel in CA, for their input on whether we should refund these 
credits back to our residential customers.

 Notwithstanding  the fact that the language of the original decision 
allowing the credits does not address direct access customers, Jeff and Mike 
recommend, given the current climate in California, that we take action to 
refund these credits to our residential customers. 

 Just want to make sure you're "on board" with this before we direct CSC to 
refund the credit back to our residential accounts...Marianne

.  



	Enron Energy Services
	
	From:  Karen A Cordova                           09/21/2000 05:00 PM
	Phone No: 713.853.3150
  713.646.8860 - FAX No.
	



To: Marianne Castano/HOU/EES@EES
cc:  
Subject: SDG&E Credits

Diane Huddelston called Lori Pinder about an issue;  Here it is:

Due to the merger btw SDG&G & Sempra Energy (about a year or less ago), a 
savings was realized.  The CPUC said these savings must be passed on to 
customers 1 time per year, in September.  They are called Annual Merger 
Credits.

Pursuant to all commercial contracts, Enron is entitled to keep the savings 
(per Diane).  What about the residential customer accounts?

Enron keeps the savings or should the residential customer receive?

Who could handle this issue for Diane?

Thanks, KC