Attached is an Assigned Commissioner's Ruling issued yesterday by
Commissioners Lynch and Brown soliciting comments on the Revenue Requirement
submitted by DWR on July 23rd.

The revenue requirement is increased from the $9.2 billion submitted in May
to $13.072 billion, but covers a longer period of time (the period of
January 17, 2001 through December 31, 2002).  The revenue requirement is
expected to pay for 118,930 GWh of power.  The revenue requirement is
divided among the three UDCs as follows (1) PG&E = $5.2 billion; (2) SCE =
$5.8 billion; and (3) SDG&E = $2.1 billion. The revenue requirement was
divided among the three UDCs based on a uniform cost per MWh of net short
energy purchased by DWR.  The bond proceeds will be applied in a manner to
supplement the revenue from the customers to DWR such that the net revenue
requirement falls within the retail rate adjustments adopted by the CPUC for
PG&E and SCE (i.e., the three cents), and assumes a comparable rate
adjustment for SDG&E

The ACR asks for comments on the revenue requirement submitted by DWR,
particularly in the areas of (a) the relationship between the UDCs retained
generation revenue requirement and the DWR revenue requirement ; and (b)
DWR's request for the establishment of "specific charges payable to DWR for
the power sold by DWR to retail end use customers" (e.g., should this be in
a form of separate rate element or in the form of a gross revenue amount to
be derived from rates).

The ACR also requests more information from DWR.  Specifically it requests
information on (a) the revenue DWR has already received from the UDCs; (2)
how the revenue requirement for ancillary services was calculated; (c) more
specifics on Operating Costs; and (4) a numerical illustration of the
derivation of the 1.65 cents per kWh as representing the average portion of
the 3 cent rate increase that DWR needs to generate its $13 billion revenue
requirement (a figure that was apparently reported in the press).  DWR is
suppose to serve this information on the Commission and parties to the
proceeding by Thursday the 26th.

There will be a technical workshop held on Friday the 27th to address DWR's
revenue requirement.

It is the Commission's intent after the receipt and review of comments to
issue a PD and to vote on the revenue requirement at its August 23rd
meeting.

Please let me know as soon as possible if you would like to submit comments
on the revenue requirement or have me attend the workshop.

Jeanne Bennett


-----Original Message-----
From: Wong, John S. [mailto:jsw@cpuc.ca.gov]
Sent: Tuesday, July 24, 2001 5:24 PM

Subject: Joint ACR Regarding DWR's Revenue Requirement And July 27, 2001 W
orkshop



Attached is an advance draft of a joint assigned Commissioners' ruling
asking parties to comment on DWR's revised revenue requirement by August 3,
2001, asking for additional information from DWR, and setting a workshop for
July 27, 2001 at 9:00 am at the Commission to discuss the revenue
requirement assumptions with representatives from DWR.

Due to computer difficulties, this ruling will be filed with the Docket
Office tomorrow, July 25.

<<joint ACR.doc>>

John S. Wong
CPUC - ALJ
(415) 703-3130


 - joint ACR.doc