Customer Credit Draft Report

AB955, which extends the system benefit monies beyond 2002 to promote
renewable energy, directs the California Energy Commission ("CEC") to submit
a draft report to the legislature on the allocation of monies between the
various renewable energy programs. The draft report recommends that the
customer credit program be allocated 25% ($33.75 million per year through
2006 and $168.57 total) of the funds on an annual basis for 2002-2006.
(Under the current bill, AB 1980, the customer credit program started at 8%
and will end this year w/ 20% of the allocated funds.) Our verbal and
written comments asked the CEC to recommend allocation at least 25% of the
funds to the customer credit program, and to keep the allocation the same
over the years to provide clear market signals. While this is still in
draft form, it is unlikely that the CEC will change their recommended
allocation.

Also outlined in the draft are the following:
1. The method for reimbursement will remain the same.
2. The credit cannot exceed 1.5 cents p/kWh.
3. Currently only in-state generation is eligible for the customer credit.
The Committee is considering allowing out-of-state generation for
eligibility, provided it is connected to the WSCC grid.
4. Nonresidential and non small commercial customers will be limited to the
1,000 annual cap. The fund for large commercial and industrial customers is
restricted to 20% of the funds over the 5 year period covered.

The CEC is asking for comments on the draft (deadline next Tuesday). I am
concerned about the impact the restriction of 20% for large commercial and
industrial customers will have on EES' book. If this restriction will
negatively impact EES' business, we should submit comments on this point.
Richard, let's discuss some time today or tomorrow.

Stacey

----- Forwarded by Stacey Bolton/NA/Enron on 01/02/2001 10:15 AM -----

Stacey Bolton
10/03/2000 12:23 PM

To: Richard Ring/HOU/EES@EES, Dennis Benevides/HOU/EES@EES, Heather
Mitchell/HOU/EES@EES, Marianne Castano/HOU/EES@EES, Luis Derrota/HOU/EES@EES,
Allison McHenry/HOU/EES@EES, George Phillips/HOU/EES@EES, Derenda
Plunkett/HOU/EES@EES, cmckalip@yahoo.com
cc: Michael Terraso/OTS/Enron@ENRON, Jeffrey Keeler/Corp/Enron@ENRON, Jeff
Dasovich/NA/Enron@Enron, Mona L Petrochko/SFO/EES@EES
Subject: Customer Credit Extended

Wanted to let you know that AB995 which extends the customer credit
subaccount (collection of nonbypassable system benefit charge to go through
1/1/12) was passed by both the CA Assembly and Senate, and was signed into
law by the Governor on 9/30. Attached below is a link to the bill (click on
enrolled version).

The exact amount and allotment per year of the customer credit are to be
determined.
Stacey

http://www.assembly.ca.gov/acs/acsframeset2text.htm