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----- Forwarded by Sheila Tweed/HOU/ECT on 01/04/2001 08:13 AM -----
EFeo@milbank.com 01/03/2001 10:18 PM To: cc: Subject: Summary of CPUC All-Party Meeting 1/3/01 Summary of Oral Arguments and All-Party Meeting before the CPUC taking place on January 3, 2001: Oral Arguments were held at the CPUC today for purposes of commenting on today's draft final order.? The oral arguments were presided over by ALJ Walwyn.? The All-Party Meeting, which was presided over by Commissioner Wood, was not eventful.? Many of the participants left after the Oral Arguments and those who remained mostly responded to comments made during the Oral Arguments.? Both SCE and PG&E argued that the CPUC erroneously failed to address an end to the rate freeze, recovery of past undercollections, and right to recover their full future procurement costs.? Both also argued that the surcharge will be inadequate to satisfy the financial community.? In addition, SCE requested that the CPUC relieve it of the obligation to procure power for its customers which is priced above the amount that they can recover from their customers.? PG&E argued the proposal failed to provide certainty for recovery of costs and criticized the CPUC's focus on accounting arguing that changes to the accounting methods were not a solution. The Office of Ratepayer Advocates (CPUC Division) ("ORA") suggested several additional solutions for the CPUC to consider as a final solution:? (1)? encourage the utilities to issue revenue bonds; (2) reduce utilities' return on equity by one-half; and (3) encourage energy conservation which addresses the alleged price gouging.? ORA also argued that the utility companies needed to do more to cut corporate costs. The California Industrial Users ("CIU") generally supported the proposal but criticized it for discriminating against larger customers and argued that the CPUC needs to look out for the welfare of all customers, not just smaller customers.? Both Reliant and Enron argued that the current situation is a short term problem and should be addressed with only interim relief.? Both also argued that the surcharge is not adequate and should be re-examined.? Enron complimented the CPUC on its decision not to lift the rate freeze. The citizen advocates and consumer advocates (Greenlining Institute, Aglet Consumer Alliance, Golden State Power Cooperative, California Farm Federation) were generally satisfied with the proposed final decision.? They commended the CPUC for not lifting the rate freeze and for insisting on thorough and continuing investigations but argued the CPUC also needs to study the impact rate increases would have on the California economy, not just its affect on the utility companies.? TURN blamed the marketers and the utility companies for the crisis and argued that consumers shouldn't be forced to bail out the utility companies for their own bad decisions.? A private attorney from San Diego who filed a lawsuit against out of state generators to recover alleged windfall profits suggested the CPUC not grant a rate surcharge until the utility companies actually declared bankruptcy and argued that filing for bankruptcy could provide an incentive for the utility companies to press their case against the marketers.? Commissioner Wood however expressed concern about the implications of bankruptcy on labor contracts and QF contracts. Regards, Ed ________________________________ Edwin F. Feo Milbank, Tweed, Hadley & McCloy LLP 601 South Figueroa Street, 30th Floor Los Angeles, CA? 90017 efeo@milbank.com http://www.milbank.com (213) 892-4417 - Direct Dial (213) 892-4717 - Direct Fax (213) 629-5063 - General Fax (213) 446-3206 or (310) 968-0670 - Mobile This e-mail message may contain legally privileged and/or confidential information. If you are not the intended recipient(s), or the employee or agent responsible for delivery of this message to the intended recipient(s), you are hereby notified that any dissemination, distribution or copying of this e-mail message is strictly prohibited. If you have received this message in error, please immediately notify the sender and delete this e-mail message from your computer.
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