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Enron Mail |
(I had type of bunch of this and them my computer died, so I have to rewrit=
e=20 it - UGH) Harry's testimony was brilliant, and here is a summary. =20 Harry explained our proposal and how it achieves goals of equity and=20 conservation (equity because all customers sacrifice equally and=20 conservation because there will be reductions in usage). The other proposa= ls=20 in the case arbitrarily allocate costs to peak, whereas our proposal will= =20 have customers reacting to price signals, and if affords flexibility. The= =20 Hearing Examiner (HE) asked what services EES provides, and whether our=20 customers were DA customers (she was trying to get to our real interest in= =20 this case, which the PG&E attorney helped with later). Slocum (PG&E) did not understand that our proposal was only for TOU=20 customerrs and asked a lot of questions about implementation problems that= =20 were based on implementation for all classes.(Questions like moving usage= =20 data to billing system, 30% turnover in customers, lack of data for new=20 customers, lack of metering). Harry acknowledged that the peak defined by = DJ=20 might not match the rate class peak definition and that some adjustments=20 might have to be made. Slocum noted that TOU meters do not show hourly=20 usage, and that hourly interval meters would need to be installed to make o= ur=20 proposal work. Harry answered that we recognize that our proposal would ta= ke=20 time, but that we need to move to this and that customers need price signal= s=20 this summer. =20 Our proposal is only for TOU customers, and for those for whom it cannot be= =20 implemented, an equal 3 cents per kwh is appropriate. Harry noted that we= =20 have not taken a position on the proposal that should be adopted for other= =20 customer classes yet. =20 He was asked where the 87% came from, ands he pointed out the derivation th= at=20 was in his testimony based on predicted market price and cost of retained= =20 generation. Two assumptions were made: a $300 average market price and=20 customers have same billing determinants for 2001 in combination with marke= t=20 price assumptions and existing generation rate to get the revenue=20 requirements. It is possible that the price may not be $300 and our revenu= e=20 requirements may be off, but this is true with every other proposal as=20 well. The basis for the $300 is the COB and PV Nymex contracts. =20 If our proposal cannot be implemented this summer, the 3 cent charge sends = an=20 adequate and strong signal to consumers across the board. When asked wheth= er=20 PG&E would have to program a different method for TOU customers if Enron=01= ,s=20 proposal is adopted, Harry answered that they already have to program a=20 different method for TOU customers under existing rates. PG&E asked how th= e=20 decremental reward program would be funded. Harry noted that it could be= =20 funded through the ISO, DWR, utility bonding. The PG&E attorney noted that= =20 the utilities have been downgraded to junk bond status and couldn=01,t issu= e=20 bonds. Funding is an issue. Then PG&E asked if we left the market on 2/1/01. Harry answered no. We=20 simply began sourcing power from the utility, but our contracts are still i= n=20 effect. She asked Harry what kind of customers we had, were they mostly=20 large TOU customers? Do they have interval meters? She asked if we were o= n=20 the hook for the difference between the bundled rate and the contract rate.= =20 Harry answered that he didn=01,t know on balance what impact our proposal w= ould=20 have on our TOU customers. Our proposal helps to foster the goals and=20 pursue the incentives to get to the needed solutions in CA. He also noted= =20 that all parties to this proceeding were proposing methodologies that were= =20 most beneficial to them. SC&E asked a bunch of questions about recovery of T&D costs, if the 87%=20 target were used. Harry answered that any undercollections that may result= =20 (and this could be true under any of the proposals) could be dealt with it = a=20 rate case filing. They also talked about how the customer would know the= =20 daily prices, would the utility be obligated to make that info available? = HK=20 answered that it is forecast a day ahead and is publicly available. Then h= e=20 was asked whether Enron would fund the decremental reward program. Harry= =20 noted that we might under the right conditions, but this was outside his=20 expertise. ORA asked about weather normalization, again under the misapprehension that= =20 our proposal applied to weather sensitive smaller customers. Harry also to= ld=20 him that the indices we proposed were very liquid. He also handled questio= ns=20 on whether a different average price would yield a different break point, a= nd=20 we need to provide calculations that show an average price of $200 and $500= . =20 The Hearing Examiner then asked for Enron=01,s estimates of summer on peak = and=20 off peak prices, and ruled that we must supply that info by COB Monday, ove= r=20 counsel=01,s objections. In general, I think there was a lot of confusion about our proposal (not=20 understanding that it was only directed to one type of customer). There is= =20 also a lot of distrust of Enron and I would add dislike as well. I do not= =20 think the HE will consider any of our proposals seriously and in fact our= =20 support on some of the other proposals could be the kiss of death. I would= =20 keep our brief very short and very limited, as we can weigh in on support = of=20 the other A and RD methodologies after the HE issues her recommended=20 decision. In fact, we might even like a proposal she recommends.
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