Proposed and alternative decisions for tomorrow as well as E&S summary memo
for today's press conference

Katie Kaplan
Manager of State Policy Affairs
Independent Energy Producers Association
(916) 448-9499

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From: Katie Kaplan [mailto:kaplan@iepa.com]
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Subject: Loretta Lynch's press conference

Greetings:
Here is a quick summary:

Loretta Lynch is having a press conference right now in which she has
outlined the 4 decisions that will come before the commission tomorrow.  We
are listening in and trying to get our hands on the materials.  When we get
them we will send them out.
The four items are:
1) Order the IOU's to pay the QF's going forward starting April 1, 2001
a. Treatment of payments would modify 390
i. Shift the index from Topck (because it has been gammed) it will be moved
to Malin (which is lower)
ii. Heat rate/ O&M may be addressed through workshops
iii. Withdrawing for long term fixed price proposal
b. Legislation solution has broken down and this is why they must act
c. Wood's proposed decision due out today (He indicates most QF's do not
need to withhold- and it is difficult to tell.  This withholding by the QF's
resulted in the recent blackouts
2) Instruct the IOU's to pay CDWR for all past due amounts in which they
have purchased for the IOU's net short position based on a formula by amount
of energy purchased * specified dollar amount (it is unclear what this is)
3) As a result of increasing power prices Lynch proposes to increase
residential and commercial rates by 3 cents per KWh.  This will not be voted
upon tomorrow and this proposal will "jump start the process"
a. This will not affect all the CARE customers and anyone who uses under
130% of baseline. If you use under 200% of baseline the increase is only 9%.
b. Authorization to collect more $ will begin on March 27th.  Authorization
to receive more money for power purchases and once they receive the data
from CDWR than they will determine which part of that will be allocated to
the state.
4) Investigation into the IOU's holding companies and that data from them
needs to become available to the commission with in 10 days.
She blamed FERC for sleeping on the job and said if these (any # of them)
investigations into unjust and unreasonable rates result in a favorable
outcome for the state than there will be a refund.

"FERC needs to see the light"

Katie Kaplan
Manager of State Policy Affairs
Independent Energy Producers Association
(916) 448-9499

 - 032701 IEP Agenda mm.doc
 - 5944.doc
 - 5951.doc