The Commission has opened an investigation, which we are still awaiting some 
indication about its scope, however it is likely to ask questions about how 
we can "fix" California's retail markets.

Contained below are some questions that a coalition that we participate in 
has formulated.  I would like to start developing our position relative to 
those questions (ie. default provider, what product should the utility offer, 
etc.)

I am happy to take a first stab at responses to the following and circulate 
for comment, to get things started.  In the meantime, if anyone has any 
thoughts about these questions, it would be appreciated.  Thanks.

Mona

---------------------- Forwarded by Mona L Petrochko/SFO/EES on 09/14/2000 
05:37 PM ---------------------------


"Leslie, John" <jleslie@LUCE.com>@LUCE.com> on 09/07/2000 06:22:56 PM
Sent by: "Johnson, Roseann" <RJohnson@LUCE.com>
To: "ARM Members (E-mail)" <ARM@phaser.com>, "Leslie, John" <jleslie@LUCE.com>
cc:  
Subject: CPUC I.00-08-002


To The ARM Group:

 At today's ARM meeting, the Group members agreed that by next
Friday, September 15, each company will develop a position on each of the
questions enumerated below.  The questions relate to the issues that have
been raised in the CPUC's investigation in I.00-08-002.  The Group's
position on these issues will determine the basis for testimony and other
submissions that may be made in that case and elsewhere.

 The Group will meet for an all-day session on Friday, September 15
in San Francisco, at the offices of Luce, Forward at 121 Spear Street
(Rincom Center 2), Suite 200.  The meeting will begin at 9:00 a.m.  The
telephone number at the office is (415) 356-4600.

 The questions (based upon my notes) are as follows:

1. Should default energy supply service be available to all customer
classes?

2. Should the default provider be different from the provider of last
resort (POLR), and should default service be different from POLR service?

3. Should default service be different for different customer classes
(i.e. fixed price vs. spot price)?

4. How should default service be priced?

5. Should the default provider be allowed to offer more than one
pricing option?

6. Should the default provider role remain with the utility?

7. If so, should there be rules about how the utility purchases
supplies in the wholesale market (i.e. a predetermined portfolio of long-
and short-term supplies)?

8. What reasonableness review procedures, if any, should apply to
utility purchases?  Should a PBR apply to utility procurement?

9. Should the utility bear the risk if purchase costs exceed a certain
predetermined standard?

10. If the utility does not perform the default role, how will default
service be provided by one or more third parties?  Issues to be considered
include:  bid procedures; term; blocks of customers; more than one default
supplier; how to allocate customers between default suppliers; how to deal
with new customers; should the default supplier bear the risk for purchase
costs that exceed some predetermined standard, or should there be a
reasonableness review process; consumer protection standards; qualifications
to participate as a default suppler.

11. How should the utility's procurement function be separated from the
utility's transmission/distribution function?  What costs should be
unbundled from all customers' transmission/distribution rates in order to
limit the utility to providing truly monopoly services/functions?  Are there
costs currently treated by the utility as "transmission" costs (e.g. RMR)
that should be categorized as "procurement"?

12. Should the utility continue to perform the "gatekeeper" function
(DASRs, customer switching, credit review)?  If not, how should this
function be performed?

13. How can the CPUC guarantee that all ESPs (and default providers)
have equal access to the utility's essential monopoly facilities?

14. Should the CPUC establish uniform business standards and uniform
operational practices for all utilities, as applied to all ESPs and default
providers?

15. Should the CPUC change the marketing affiliate rules if the utility
exits the merchant (procurement) function?

Please let me know if I have missed -- or mischaracterized -- any of the
agreed up questions.  I look forward to seeing you on Friday, September 15
in San Francisco.

      -John








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