* Yesterday meeting

---------------------- Forwarded by Jennifer Rudolph/HOU/EES on 04/13/2001 
10:34 AM ---------------------------


JBennett <JBennett@GMSSR.com> on 04/12/2001 04:32:15 PM



Today a workshop was held over at the Commission in order to explain /
discuss Governor Davis' rate design proposal.  It is unclear as to how the
Governor's proposal will factor into the rate design hearings which are now
scheduled for next week.  Specifically, the issue as to whether there will
be someone sponsoring the proposal (i.e., subject to cross examination),
whether workpapers will be provided, whether the proposal will be put in the
standardized template form that other parties are using, were discussed --
but with no resolution.

From what I could discern from the workshop, the Governor's proposal was
crafted as follows:

It was first determined, with respect to each UDC, what the overall rate
increase on the generation component of their respective rates should be.
Thus, for PG&E, the average increase (across all customer classes/ groups)
is to be 44%; for SCE the average increase is to be 32% and for SDG&E the
average increase is to be 44%

Having determined the average across the board rate increase, the next step
was to begin looking a the usage of different customer classes.  Based on
this analysis, the revenue to be derived from the rate increase was
allocated 1/3 to residential and 2/3 to commercial and industrial.

Looking next at residential, the Governor's plan created three tiers: (1)
130% of baseline and less (2) 130-200 of baseline and (3) over 200% of
baseline.  The first tier, gets no increase.  For PG&E the average increase
on the total bill for the 2nd tier is 28% ( 25% for SEC),with the average
increase on the total bill for above 200% being 37% (32% for SCE).

For Commercial/Industrial classes, a division was made between time of use
customers and non time of use customers.

PG&E will have an average increase of 30% on total time of use (this equates
to a zero increase for off peak usage and a 50% increase for mid peak and
on-peak usage.  For SCE the average overall increase  for TOU is 32% (with
zero increase for off peak and 40% increase for mid peak and on peak).  For
non TOU customers the average rate increase on the PG&E system will be 29%
(23% for SCE).

Asked as to whether the rate increase was applicable to DA customers,the
response was that such was a policy question that had yet to be  determined.
The analysis reflected in the rate design proposal did nothing, however, to
segregate out DA customers.

I will fax the hand out given out at the workshop  to Jeff Dasovich and
Harry Kingerski.  If you have any questions, please give me a call.

Jeanne Bennett