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Enron Mail |
Met early this morning with Jack Steward (pres. of CMA) and Keith McCrea
(lawyer for CMA) to follow up on the meeting that Steve and I had with them regarding the proposal Ken Lay was pushing last week: They like taking Tx out of the MOU, they like getting DWR out of the power purchase business, and they think that Edison's MOU needs a little haircut. McCrea pushed back initially on core/noncore ("why should it be mandatory to go the market?"), but after much discussion they agreed that our idea for core/noncore has a lot of merit. Our idea is that 1) the core/noncore would take effect in 18-24 months, when the markets settle and prices come down, 2) everyone (core and noncore) should pay for DWR's "past" purchases, since everyone consumed it, 3) core customers should take IOU generation, QFs and DWR contracts (which eliminates the core's "net short" position, and 4) noncore would go to market and would not have to pay for any of DWR's "going forward costs" (since core gets them, in exchange for getting all the low-cost IOU generation) I told them we are still crunching the numbers to see what the rate effects would be and would share it with them when we're done. While they are supportive of this approach and agreed that it would be useful to continue to flesh it out, they are not convinced that it will get the necessary support to get passed. They are also withholding final judgment until they see all the numbers, i.e., we've still got some work to do. They are very cynical about anything getting solved in California, and are extremely upset about the PUC's proposed rate decisions released by the judge and Loretta Lynch. They place very little trust in the Governor or the Legislature. Interestingly, the rate increase decisions, coupled with calls in Sacramento for an immediate move to core/noncore, makes our proposal very attractive to CMA. Nonetheless, they said that they will continue to engage and are willing to commit to continue meet to try to get California's mess resolved.
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