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Sue Mara Enron Corp. Tel: (415) 782-7802 Fax:(415) 782-7854 ----- Forwarded by Susan J Mara/NA/Enron on 05/16/2001 08:23 AM ----- "Daniel Douglass" <Douglass@ArterHadden.com< 05/15/2001 04:53 PM To: <Barbara_Klemstine@apsc.com<, <Bob_Anderson@apses.com<, <Vicki_Sandler@apses.com<, <berry@apx.com<, <dcazalet@apx.com<, <ed@apx.com<, <billr@calpine.com<, <jackp@calpine.com<, <sschleimer@calpine.com<, <gavaughn@duke-energy.com<, <rjhickok@duke-energy.com<, <gtbl@dynegy.com<, <jmpa@dynegy.com<, <jdasovic@enron.com<, <susan_j_mara@enron.com<, <Tamara_Johnson@enron.com<, <curt.hatton@gen.pge.com<, <foothillservices@mindspring.com<, <camiessn@newwestenergy.com<, <jcgardin@newwestenergy.com<, <jsmollon@newwestenergy.com<, <rsnichol@newwestenergy.com<, <nam.nguyen@powersrc.com<, <curtis_l_kebler@reliantenergy.com<, <JTeeter@SDGE.com<, <roger.pelote@williams.com< cc: Subject: Today's Rate Design Decision President Lynch's draft decision was voted out today.? The CPUC currently has the attached version posted on its website, although the final version may differ somewhat.? The decision continues to provide (see p. 29) that Direct Access?customers will not be subject to the surcharge, as AReM has advocated. ? Based on some of the discussion which occurred at oral argument on Friday, the decision now has wording indicating that although the utilities are authorized to include the load of DA customers in calculating the revenue requirement associated with the surcharge, DA customers do not have to pay the surcharge for the same reasons AReM expressed repeatedly in the proceeding.? Any shortfall in utility revenues due to including DA demand in the revenue requirement will be allocated on an equal cents/kWh basis to all non-exempt sales.? It is noted that this may shift costs to residential customers "since the majority of direct access demand, and thus the majority of the resulting shortfall, is non-residential." ? The decision also makes clear that DA customers will not be entitled to include the surcharge under the current direct access credit system and that the Commission intends to reexamine and restructure the current direct access credit system "to reflect current structural reality."? Hopefully, this will mean movement to a "bottoms-up" calculation methodology, as AReM has also advocated.? My understanding from Peter Bray is that Commissioner Bilas made some remarks indicating that he would support instituting a proceeding to restructure DA pricing. ? This is the result we wanted with regard to exempting DA customers from the surcharge.? We now need to see if TURN or any other consumer advocacy group chooses to challenge the allocation methodology for any shortfall.? ? Dan - 5-16-01 Proposed Decision of President Lynch.doc
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