Message-ID: <2348621.1075851587322.JavaMail.evans@thyme> Date: Wed, 29 Aug 2001 11:57:56 -0700 (PDT) From: jbennett@gmssr.com To: harry.kingerski@enron.com, e-mail <.jeff@enron.com>, e-mail <.jim@enron.com>, robert.neustaedter@enron.com, e-mail <.sue@enron.com> Subject: Draft Decisions Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: JBennett X-To: Kingerski, Harry , Jeff Dasovich (E-mail) , Jim Steffes (E-mail) , Neustaedter, Robert , Sue Mara (E-mail) X-cc: X-bcc: X-Folder: \Dasovich, Jeff (Non-Privileged)\Dasovich, Jeff\Deleted Items X-Origin: DASOVICH-J X-FileName: Dasovich, Jeff (Non-Privileged).pst In addition to the draft decision on the suspension of direct access, the Commission has been issuing a series of draft decisions this week pertaining to the Department of Water Resources' power purchase activities. These decisions will be voted on at next week's meeting. Additonal proposed decisions will probably follow later this week. OPINION ADOPTING RATE AGREEMENT BETWEEN THE COMMISSION AND DWR The opinion essentially adopts the draft rate agreement which was put out for comment approximately a month ago, with a few minor modifications. While the Commission acknowledges the parties' due process concerns with respect to ensuring that the costs included in DWR's revenue requirement are just and reasonable (especially given the irrevocable nature of the rate agreement), the Commission states that "adoption of the Rate Agreement, as modified today, is vital to California ability to pay for the excessive wholesale costs that were charged by power suppliers during the electricity crisis." The decision states that there is no need for the rate agreement to contain provisions detailing the procedures that DWR must sue to conduct the Section 451 process required by Water Code Section 8110. The decision notes that under the statue DWR has exclusive authority to conduct and to determine the reasonableness of its revenue requirement pursuant to Public Utilities Code Section 451 -- "because DWR is a state agency that must act in the public interest, we assume that DWR will establish those procedures necessary to ensure that its revenue requirement is just and reasonable." (of course DWR did not do that this first time around) The Decision states that whenever DWR submits a revenue requirement to the Commission, the Commission will provide an opportunity for interested parties to participate in its proceedings to set the rates to recover the revenue requirement. (of course such proceedings will be expedited because under the rate agreement they must go into effect within 90 days of submittal of the revenue requirement). The decision provides that all information that the Commission receives from DWR with respect to its revenue requirement will be made available to the public. OPINION ADOPTING RATE INCREASE TO IMPLEMENT DWR'S REVENUE REQUIREMENT (SDG&E) The decision adopts a system average rate increaseof 1.46 cents/kWh (12.1%) for SDG&E customers. The increase will take effect on or after September 15th but no later than October 1st. The monies collected will be used solely to fund the DWR power purchase costs. In reaching its decision to raise SDG&E rates, the Commission determine that neither the rate cap on SDG&E small customers (AB 265) nor the rate freeze on large customers (ABX1 43) affects the requirement to increase rates to implement DWR's revenue requirement. The proposed decision references another decision (yet to be released) pursuant to which DWR will receive from SDG&E the revenues that SDG&E collections on its behalf based on the a fixed DWR charge of 9.02 cents/kWh. The decision also states that the ordered rate increase will stay in effect until further Commission order. In this regard, the decision references the Commission 's intent to implement a revised DWR revenue reqruiment based on a DWR update to be submitted on February 1, 2002. At that time, the Commission will consider changes to SDG&E's rates. With respect to revenue allocation and rate design for the rate increase, the PD pretty much follows the concepts set forth in D. 01-05-064 (the SCE/PG&E rate design case). In this regard, the PD does not adopt SDG&E's proposal that separate average rate increases be established for small and large customers based on the assumption that the costs of utility retained generation are assigned solely to small customers.