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Content-Type: text/plain; charset=ANSI_X3.4-1968 Content-Transfer-Encoding: quoted-printable X-From: James D Steffes X-To: Jeff Dasovich X-cc: X-bcc: X-Folder: \Jeff_Dasovich_June2001\Notes Folders\Notes inbox X-Origin: DASOVICH-J X-FileName: jdasovic.nsf Jeff -- Some questions - 1. The $10 Billion looks low. Is there anyway to use something the UDCs=20 would have on file? 2. What interest rate is embedded within the mortgage? Does this assume th= e=20 benefits of securitization? 3. What are the appropriate rate mechanisms? The UDCs will need to be able= =20 to convince Wall Street that this rate component is "good" for the collecti= on. 4. We need to include going forward costs of CDWR in this model - how much= =20 money will rates need to raise to cover current expenses? 5. Does the kwh load include Direct Access customers? Will this rate=20 component be non-bypassable? Jim =09Jeff Dasovich =09Sent by: Jeff Dasovich =0902/26/2001 06:50 PM =09=09=20 =09=09 To: skean@enron.com, Richard Shapiro/NA/Enron@Enron, James D=20 Steffes/NA/Enron@Enron, Sandra McCubbin/NA/Enron@Enron, mpalmer@enron.com,= =20 Karen Denne/Corp/Enron@ENRON, John=20 Neslage/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Harry Kingerski/NA/Enron@Enron= ,=20 Susan J Mara/NA/Enron@ENRON, Paul Kaufman/PDX/ECT@ECT, Leslie=20 Lawner/NA/Enron@Enron, Alan Comnes/PDX/ECT@ECT =09=09 cc:=20 =09=09 Subject: Solve IOU Undercollection with a Mere 10% Average Rate Incr= ease? Greetings: Please review the attached. It's a summary I've put together of a very=20 lengthy analysis MRW did for us over the weekend. I've also attached the= =20 considerably lengthier MRW memo for those who'd like to see it. The tables= =20 included in the summary are pulled directly from the MRW memo. The analysi= s=20 only addresses the utilities undercollection (i.e., solvency) and doesn't= =20 address any additional increases that might result from DWR's buying=20 activities. The Bottom Line =06=15 By raising average rates 10% over a 10-year period, California could= 1)=20 return the utilities to solvency, and 2) help close the supply-demand gap = by=20 providing customers with better price signals. =06=15 California could achieve these goals under this new rate structure a= nd at=20 the same time exclude one-third of residential customers from any increase= s.=20 If California chose not to exclude any customers from the new rate structur= e,=20 California would only need to raise average rates by about 8.8%. =06=15 This level of increase is in line with increases enacted in other st= ates=20 (e.g., Washington: 28-34%; Montana: 4.5-32%; Idaho: 6.0-24%; Nevada:=20 7-12.5%; New Mexico 12%). We'll need to look at it critically and try to shoot holes in it before goi= ng=20 public with the numbers as part of our broader effort, but it offers a=20 reasonable benchmark against which to judge alternatives (like spending the= =20 kids lunch money on crumbling, broken down transmission systems). Please provide feedback as soon as possible, and perhaps, Paul we conclude= =20 the MRW work on the agenda for discussion on tomorrow's daily conference ca= ll. Best, Jeff - Undercollection assessment final.doc
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