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Enron Mail |
My understanding of AB1890 is that it says that:
The price paid by DA customers shall not be more than the frozen tariff. And the CPUC has implemented this by creating the Px credit equal to the current market. This interpretation has been supported by months of practice and lots of hearings (if that means anything). So my interpretation is that although the AB1890 does not explicity require Px credits to be based on market it does require the total effect to be that the DA customers not pay more than the frozen rates; which the CPUC previously interpreted in the only logical method available - that there needs to be a credit equal to the market value of commodity on the customers bill. This give the CPUC the latitude to change the Px but requires them to add some other credit that brings the rates down to 1996 rates if they deviate from it. So although I agree that the bill does not force Px to be equal to market value, I think it does force it to be equal to market value given the structure that they have assumed. Scott MDay <MDay@GMSSR.com< on 04/20/2001 04:52:58 PM To: "'Jeff.Dasovich@enron.com'" <Jeff.Dasovich@enron.com<, sstoness@enron.com cc: Harry.Kingerski@enron.com, JBennett <JBennett@GMSSR.com<, Leslie.Lawner@enron.com, tjohnso8@enron.com, Susan.J.Mara@enron.com, MDay <MDay@GMSSR.com< Subject: RE: SCE Advice Filing on PX Credit -- Protest Jeff is correct that AB 1890 said NOTHING about direct access credits, said nothing about whether such credits were to be market based, or whether direct access customers were to be indifferent to their choice of power providers. All of the direct access credit rules were developed by the CPUC in their approval of the direct access tariff rules (Rule 22) and in their implementation of the utility cost recovery plans (the calculation of CTC). Therefore, we cannot protest the PE advice letter on that basis. We can still argue for the DJ indexes as a more appropriate substitute for a PE credit based just on Edison's cost of generation (retained generation plus QFs plus DWR purchases) but we have to recognize that it the number is higher than the PE credit, we will be effectively asking for a subsidy to direct access providers from the utility's bundled customers. I do not expect us to succeed in obtaining that subsidy. The bottom up tariff structure is a much more likely result at this point. Mike Day -----Original Message----- From: Jeff.Dasovich@enron.com [mailto:Jeff.Dasovich@enron.com] Sent: Friday, April 20, 2001 2:26 PM To: sstoness@enron.com Cc: Harry.Kingerski@enron.com; JBennett; Leslie.Lawner@enron.com; tjohnso8@enron.com; Susan.J.Mara@enron.com; MDay@GMSSR.com Subject: Re: SCE Advice Filing on PX Credit -- Protest Looks good, Scott. One thing: I admit I'm not a lawyer, so someone needs to show me the precise language in AB 1890 that 1) requires the credit (which, I believe was created by the PUC, not the legislature) to be based on market and 2) requires DA customers to be indifferent to be from DA suppliers. Mike Day: Do you concur with Scott's interpretation in AB 1890? Like your arguments, Scott. Just want to clarify that we're on solid legal ground before putting the arguments foreward in a brief and/or protest. Best, Jeff Scott Stoness@EES To: JBennett <JBennett@GMSSR.com< @ ENRON cc: Harry Kingerski/NA/Enron@Enron, Tamara 04/20/2001 Johnson/HOU/EES@EES, Leslie Lawner/HOU/EES@EES, 10:46 AM Jeff Dasovich/NA/Enron@Enron Subject: Re: SCE Advice Filing on PX Credit -- Protest(Document link: Jeff Dasovich) We should protest this issue and argue that nothing should change but that the Px credit should be based on DJ-NP15 and DJ-SP15 rather than the defunct Px because AB1890 requires it to be based on market (not costs). Changing to procured energy is inconsistent with the law AB1890 which requires DA customers to be indifferent to buying from DA suppliers. And since DA suppliers face costs close to DJ-NP15/SP15, that is the only appropriate available method. Further, the issue of how to calculate Px is interrelated to whether DA customers should be charged the generation surcharges ($10 +$30). DA customers should be given market based Px credits (based on DJNP15/SP15) because its the law. There are 2 possible interpretations resulting from the combination of AB1890 and the new law. The DA customers should get a market based Px credit and not pay any surcharge. The DA customers should get a market based Px credit and pay the $30 + $10 surcharges Interpretation 1 results in DA customers getting lower rates than all other customers. It seems unlikely that the legislation would have this intent. Interpretation 2 results in DA customers getting the same rate as all other customers until the end of AB1890. This seems like the likely interpretation since otherwise the new legislation would have repealled AB1890. Thus given that the DA customers are being held indifferent to frozen rates plus $40, they should get a Px market based credit plus pay the surcharge until the rate freeze ends. Once the Px credit ends (Mar 2002), the surcharge should end because the law (AB1890) no longer requires them to be held at frozen rates and because: Any customer that is being served by a supplier other than DWR and the utility is not causing any costs for DWR or the utility therefore they should not be charged for them. In the event that Px credit is not set based on market value (if the courts interpret the law differently than Enron) then there should be no generation surcharge for DA customers. This is the same argument we should make in our brief on rate setting Scott JBennett <JBennett@GMSSR.com< on 04/20/2001 09:03:06 AM To: "Harry Kingerski (E-mail)" <Harry.Kingerski@enron.com<, "Robert Neustaedter (E-mail)" <Robert.Neustaedter@enron.com<, "Scott Stoness (E-mail)" <sstoness@enron.com<, "Tamara Johnson (Business Fax)" <IMCEAFAX-Tamara+20Johnson+40+2B1+20+28713+29+20345-7374@GMSSR.com< cc: "Jeff Dasovich (E-mail)" <jdasovic@enron.com<, "Sue Mara (E-mail)" <smara@enron.com< Subject: SCE Advice Filing on PX Credit -- Protest As you are aware, SCE made an advice filing on April 5th to eradicate the PX Rate Schedule and Replace it with Schedule PE --Procured Energy. As part of the filing, SCE proposes to set "on an interim basis" the cost of energy procurement, for bundled service customers for billing purposes and in the calculation of the energy credit for direct access customers equal to the Generation rate component of the Customer's otherwise applicable tariff. Two primary issues arise from SCE's statement. First what does "interim basis" mean -- how long will this be in effect. In starts on January 19th, but it is unclear as to when it would end. Second, and most important. is what is meant by the Generation rate component. While there is not much explanation in the April 5 advice letter, in a subsequent advice letter filed on April 11 (1533-E), SCE set forth "Rate Schedule Specific Generation Related Rates" which range between five and nine cents. I have forwarded both the referenced advice letters to you earlier. We need to protest the change in the PX credit by Wednesday, April 25th. All thoughts on the matter are welcome. Jeanne
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