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Enron Mail |
Cc: jeff.dasovich@enron.com, susan.mara@enron.com
Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit Bcc: jeff.dasovich@enron.com, susan.mara@enron.com X-From: Chris Holmes X-To: Tom Riley X-cc: Jeff Dasovich, Susan J Mara X-bcc: X-Folder: \Jeff_Dasovich_June2001\Notes Folders\All documents X-Origin: DASOVICH-J X-FileName: jdasovic.nsf FYI ---------------------- Forwarded by Chris Holmes/HOU/EES on 05/14/2001 06:47 AM --------------------------- Marty Sunde 05/13/2001 08:31 PM To: Kevin Keeney/HOU/EES@EES, Marcus Dotson/HOU/EES@EES, Lamar Frazier, Evan Hughes, Chris Holmes/HOU/EES@EES cc: Subject: FW: Direct Access Legislation and the impact on Settlement Discussion s with UC/CSU fyi ---------------------- Forwarded by Marty Sunde/HOU/EES on 05/13/2001 08:31 PM --------------------------- From: Robert C Williams/ENRON@enronXgate on 05/11/2001 05:39 PM To: Vicki Sharp/HOU/EES@EES, Marty Sunde/HOU/EES@EES, Dan Leff/HOU/EES@EES cc: Subject: FW: Direct Access Legislation and the impact on Settlement Discussion s with UC/CSU fyi -----Original Message----- From: MDay <MDay@GMSSR.com<@ENRON [mailto:IMCEANOTES-MDay+20+3CMDay+40GMSSR+2Ecom+3E+40ENRON@ENRON.com] Sent: Friday, May 11, 2001 5:27 PM To: 'Kristen Bird'; 'awu@quinnemanuel.com'; 'Richard.Sanders, Enron'; Williams, Robert C. Cc: JBennett Subject: Direct Access Legislation and the impact on Settlement Discussion s with UC/CSU Richard Sanders and Bob Williams asked that I provide the following brief memo in order to summarize wherer the legislative efforts are at this time and how they might impact settlement discussions. With the close of the first extraordinary session today, a second extraordinary session will open on Monday and all the existing but unpassed bills will be reintroduced--so we are told. That means there will continue to be at least 2 bills which would substantially protect the rights of customers to choose direct access, although both contemplate that under varying circumstances the customer could be required to pay an exit fee. What is relatively likely is this: A direct access bill will pass this session. It will likely create the following situation: Any customer who has not been on direct access continuously since before January 17, 2001 will have used some power purchased by DWR while being charged bundled utility rates far lower than the actual cost. If these customers (like UC) eventually elect to return to direct access they WILL be required to pay the shortfall that has accrued while they were on bundled service. Other stranded costs which may be incurred by DWR after the customer leaves bundled service for direct access may also be passed on in an exit fee. This would include stranded contract costs if DWR has contracted for more long term power than it has customers, as well as any costs related to the bond financing intended to pay for the long term power contracts. We HOPE that the legislation will have a provision excusing the customers from such an exit fee if DWR has not purchased all the net short power by long term contracts and DWR can match its supply to the new lower demand simply by reducing daily spot purchases. UC would potentially face the first type of exit fee in any event, it may face the second, although there is a possibility of a short "open enrollement" period following passage of the bill, which would allow customers to switch to DA immediately without paying the second type of exit fee. There may be other exceptions to the exit fees for customers who install self generation or distributed generation. This might affect a few UC campuses, but not all. At least one of the bills might give the CPUC enough discretion to permit it to impose onerous conditions on direct access and thereby prohibit it. However, this provision is strongly opposed by many customer groups and we believe it can be defeated. We do not know when the direct access legislation will be adopted. We hope within the next month. We will keep you advised, and please feel free to call for an update at any time. Mike Day
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