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Jeanne --
I guess the other big question is this - what is the best argument one could make that any retroactive calculation (and application in a forward-going manner) is illegal? We need to develop this argument ASAP. Jim -----Original Message----- From: JBennett <JBennett@GMSSR.com<@ENRON [mailto:IMCEANOTES-JBennett+20+3CJBennett+40GMSSR+2Ecom+3E+40ENRON@ENRON.com] Sent: Friday, August 10, 2001 2:15 PM To: jdasovic@enron.com; James_D_Steffes@enron.com Subject: RE: CPUC Authority to Adjust Rates Jim and Jeff -- I spoke with Brian Cragg about the Commission's adjustment of QF prices. He said that to date they have only done it on a going forward basis. They did say when they issued their decision in March which changed the formula for QF pricing that they were going to continue their examination of the formula inputs and additional future changes could be made retroactive to March. To date they have not taken further action. In the past, when the Commission has made changes to rates to reflect overcollections or undercollections, they have not gone back and recalculated each bill. The corrections are made on a going forward basis. Thus in the case of the PX energy charge, the energy charge on customer's future bills would be reduced to reflect the past over payments. Conversely, the PX credit would be reduced to reflect the fact that they were to high in the past. Jeanne -----Original Message----- From: James.D.Steffes@enron.com [mailto:James.D.Steffes@enron.com] Sent: Friday, August 10, 2001 8:57 AM To: JBennett@GMSSR.com; jdasovic@enron.com; James_D_Steffes@enron.com Subject: RE: CPUC Authority to Adjust Rates Jeanne -- Not quite sure that I am getting the picture. Let me lay it out more directly. The PX Credit for October 2000 was $225 based on the actual market rates. Now FERC is saying that October 2000 hourly prices for CalPX DA and CalPX HA markets were "too high" in June 2001. Can the CPUC change the PX Credit for October 2000 and make the Utilities recalculate our Negative CTC? What is prospective? Have they ever done this before? Jim -----Original Message----- From: JBennett <JBennett@GMSSR.com<@ENRON [mailto:IMCEANOTES-JBennett+20+3CJBennett+40GMSSR+2Ecom+3E+40ENRON@ENRON.com ] Sent: Thursday, August 09, 2001 7:35 PM To: Jeff Dasovich (E-mail); Jim Steffes (E-mail) Subject: CPUC Authority to Adjust Rates Jeff and Jim -- I have done some research into the issue of whether the CPUC would be able to restate the UDC's PX Energy Charges (and thus PX Credits) back to October if the FERC were to apply its mitigation plan back that far. Thus far, my research indicates that the answer is yes (or at least there is a strong argument that the answer is yes) and it would not violate the rule against retroactive rate making. The reasoning is as follows: The Commission (as affirmed by the courts) have ruled that they may subject a utility's rates to refund to account for adjustments made pursuant to a methodology or formula adopted before the date the utility's rates became subject to refund. Thus any ratemaking is considered prospective because the formulas are in place before the utility's rates are made subject to refund. The PX Energy Charge is calculated pursuant to the formula/mechanism set forth in the utility's tariffs. These charges were always subject to adjustment on a prospective basis due to the settlement process. The change in energy prices which would be effected by the FERC ruling could very well be viewed as an adjustment made pursuant to a formula. Thus the change would not be considered retroactive ratemaking. I had a chance to talk with Mike Day for a couple of minutes about this issue. He concurred with my analysis. Jeanne P.S. Please forward this e-mail to anyone you think needs to see it. ********************************************************************** This e-mail is the property of Enron Corp. and/or its relevant affiliate and may contain confidential and privileged material for the sole use of the intended recipient (s). Any review, use, distribution or disclosure by others is strictly prohibited. If you are not the intended recipient (or authorized to receive for the recipient), please contact the sender or reply to Enron Corp. at enron.messaging.administration@enron.com and delete all copies of the message. This e-mail (and any attachments hereto) are not intended to be an offer (or an acceptance) and do not create or evidence a binding and enforceable contract between Enron Corp. (or any of its affiliates) and the intended recipient or any other party, and may not be relied on by anyone as the basis of a contract by estoppel or otherwise. Thank you. **********************************************************************
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