Message-ID: <16192781.1075851648717.JavaMail.evans@thyme> Date: Thu, 27 Sep 2001 09:31:33 -0700 (PDT) From: michael.tribolet@enron.com To: jeff.dasovich@enron.com, wanda.curry@enron.com Subject: TURN accounting Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Tribolet, Michael X-To: Dasovich, Jeff , Curry, Wanda X-cc: X-bcc: X-Folder: \Dasovich, Jeff (Non-Privileged)\Dasovich, Jeff\Inbox X-Origin: DASOVICH-J X-FileName: Dasovich, Jeff (Non-Privileged).pst In its March 27 decisions, the CPUC granted a petition previously filed by The Utility Reform Network (TURN), a ratepayer advocacy group, that was opposed by SCE and Pacific Gas and Electric Company. The CPUC directed that the balance in SCE's TRA, whether positive or negative, be transferred on a monthly basis to SCE's transition cost balancing account (TCBA), effective retroactively to January 1, 1998. The TRA is a regulatory asset account in which SCE records the difference between revenues received from customers through currently frozen rates and the costs of providing service to customers, including power procurement costs. The TCBA is a regulatory balancing account that tracks the recovery of generation-related transition costs, including stranded investments. The CPUC also ordered SCE to retroactively restate and record balances in its generation memorandum accounts to the TRA on a monthly basis before any transfer of generation revenues to the TCBA. SCE believes that this decision by the CPUC is a fundamental departure from established regulatory accounting and ratemaking procedures and is unlawful and unconstitutional. SCE believes the CPUC's intent was to deny SCE lawful recovery of its costs and to artificially extend the end of the current rate freeze. The CPUC characterized the changes as merely reducing the prior revenues recorded in the TCBA, thereby affecting only the amount of transition cost recovery achieved to date. Based upon the transfer of balances into the TCBA, the CPUC stated that the current rate freeze has not ended and will not end until the earlier of recovery of all specified transition costs or March 31, 2002. The CPUC said that any undercollection in the TRA cannot be recovered after the rate freeze ends. But the CPUC also said that it will monitor the balances remaining in the TCBA and consider how to address remaining balances in the ongoing proceedings. If the CPUC does not modify this decision in a manner consistent with the MOU, SCE intends to challenge this CPUC decision through all appropriate avenues.