X22480.DOC

<<X22480.DOC<<

Here is the redraft of the SB 27X amendments based on the input of the
direct access coalition yesterday. The major thrust of the bill is to allow
customers to switch to direct access as easily as possible (without an exit
fee) when ever there is "headroom" between DWR's firm contracts and total
demand including recent load growth. Once that free DA capacity is used up,
customers can still elect for DA, but must pay the exit fee. All customers
will be on the hook for the financing costs they benefitted from while
taking DWR procured power before they switch to DA.

This will be shown to the coalition now as well. Our goal is to get
approval to show this to the committee consultant and DWR and Finance today.
Please comment to MBD by voice mail as soon as possible. Thanks, Mike Day

- X22480.DOC