Subject: NY Unbundling Update (1)
From: [email-masked]
To: [email-masked], [email-masked], [email-masked], [email-masked], [email-masked]
Cc: [email-masked], [email-masked], [email-masked]
Date: Tue, 22 May 2001 04:52:00 -0700 (PDT)

In the Commission's March 29 order, it has identified the following 5 basic 
policy issues that need to be addressed in the proceeding:

Method for calculating unbundled costs, comprising such issues as the 
appropriate methods for performing embedded cost studies, especially the 
assignment of indirect costs;
Method for performing forward-looking incremental cost studies;
Rate treatment that should be accorded stranded costs or competitive losses;
Degree of statewide consistency in defining utility functions, assigning 
costs, and defining customer classifications that is needed to promote the 
development of a retail market;
Functional areas to which utility costs should be assigned and to distinguish 
those functional areas with the most promise of becoming competitive.

In a subsequent Procedural Ruling, the ALJ asked parties for more specific 
questions and detailed sub-issues under the 5 major issues.  As a result, 
there were over 200 questions/issues submitted to the Staff.  Concerned that 
it would be difficult to answer all the questions in any meaningful way and 
submit for Commission decision by the August deadline, Staff proposes to 
phase-in the proceeding by focusing on issues 1 and 5 first so the utilities 
can begin the embedded cost studies.  The remaining issues will be addressed 
some time after August.  

On a conference call held yesterday (May 21st), utilities expressed their 
strong feeling that all 5 issues needed to be answered before any study could 
be started while ESCOs sided with the Staff.  Staff will submit its 
phasing-in proposal to the ALJ in the May 25 Prehearing Conference and is 
ready to issue guidelines as to how costs should be classified and allocated 
to different functions.

Enron is an active party to the proceeding stand-alone and also through our 
membership in NESPA.  Please let me know if you have any questions or need 
additional information.

Stella