Presiding Judge Birchman:

I sent an email out yesterday morning with call-in information for our Tuesday 4pm call, asking for participation by representatives of all potential groups to talk about grouping and the Burbank motion issues.  The call occurred with numerous participants and lasted about 2? hours.

Out of the hundreds of parties in this case, our initial canvassing came up with 12 potential groups, though less than half of those groups plan to file testimony or conduct cross-examination about the generic proxy price calculation issues at this time.  The universe of potential groups comprise the following:

(1) the ISO
(2) the PX
(3) the California Parties (3 state entities and the 3 IOUs).
(4) the Generators
(5) the Marketers
(6) Out-of-State Load-Serving Entities
(7) California Non-Jurisdictional Entities
(8) Net Buyer Out-of-State Non-Jurisdictional Entities
(9) Net Seller Out-of-State Non-Jurisdictional Entities
(10) the Small Generators
(11) Federal Seller Entities (such as BPA)
(12) FERC Trial Staff

In addition, there are certain out-of-state governmental entities, such as state regulators, that take the position they should not be a member of any group, given their unique responsibilities.

We did not, on this call, attempt to reduce this list.  Certain smaller potential groups will be exploring the feasibility of joining a larger group.

We then explored groupings on an issue-by-issue basis, to determine what effect the above grouping approach would have on the conduct of the trial.  We determined that, at this time, and subject to change as the parties analyze data, only a few groups planned to sponsor witnesses or participate in cross-examination on the core generic issue in this case:  Issue 1 regarding the calculation of the proxy price.  Specifically, at this time, that issue will be addressed at trial by the ISO, the California Parties, the Generators, the Marketers and FERC Trial Staff.  In addition, it appears that some groups may seek separate status only for the purpose of filing concise briefs, not to participate during the trial.

We then turned to the related matters involving Issues 2 and 3 and the Burbank Motion, which concern individual amounts owed and owing.  I am authorized to state that Burbank does not request that the Presiding Judge act on or receive answers to its motion at this time.  Consistent with the discussions at the prehearing conference, the Parties will seek to narrow the scope of individualized issues as follows:

First, the ISO will work with parties to reconcile inconsistencies or errors in data reflected in the ISO's recent presentation.  We hope that most if not all such matters, which could be as simple as a transposed set of numbers, can be resolved by the parties.

Second, we are drafting a stipulation that would address individualized issues.  For example, as noted at the prehearing conference, a number of parties believe that many such issues, including settlement and payment disputes, are being, or will be, properly resolved in other forums, such as arbitration under the ISO tariff or the PG&E bankruptcy, and cannot be resolved in this case.  We are seeking to develop an approach that will involve narrow presentations on these issues, perhaps by affidavit, that would require little or no cross-examination, in a way that preserves the rights of the parties to litigate such matters to finality elsewhere.

Our objective in these efforts is to minimize the hearing time and burden involved in resolving any individualized issues, consistent with the current trial schedule.  Obviously, however, at this point in time, when the ISO and PX are still producing data and the parties are just beginning to analyze what already has been produced, no one is in a position to waive any right to raise individualized issues.  We will attempt to further define these matters arising under Issues 2 and 3 as part of our groupings effort, prompted by review of the draft stipulation.

In terms of process, we concluded that given our progress on Tuesday's call, and given (a) the need for individual parties to explore potential changes in groupings and (b) the pending work on the draft stipulation, it would not be productive to have another call on Wednesday.  We tentatively agreed to a call next Tuesday afternoon (rehearing of the Commission's July 25 order is due on Friday and on Monday numerous parties will be filing testimony in the Pacific Northwest hearing).  We hope this will give sufficient time for drafting and review of the stipulation, which will help focus us on the details involved in resolving the "individualized" issues.

We will continue to work on the above matters and would appreciate any input the Presiding Judge might have.