On December 9, 1996, Enron Capital and Trade Resources, New Energy Ventures, Inc., the School Project for Utility Rate Reduction and the Regional Energy Management Coalition (together, SPURR/REMAC), The Utility Reform Network (TURN), Utility Consumers’ Action Network (UCAN), and XENERGY, Inc. (collectively, Petitioners) filed a "Petition for Order Instituting Rulemaking" which for procedural reasons was accepted as a motion in the electric restructuring docket. In their motion, the Petitioners request the Commission issue an order instituting a rulemaking to establish standards of conduct governing relationships between California’s natural gas local distribution companies and electric utilities and their affiliated, unregulated marketing entities. They also request that the utilities be required to have their nonregulated activities conducted by their affiliate companies, rather than the utility itself, subject to the affiliate standards.

By this decision, we grant the motion for a rulemaking. Interested persons are directed to Rulemaking (R.) 97-04-011, adopted today, for the particulars of our rulemaking. In that docket, we will establish standards of conduct governing relationships between energy utilities and their affiliated, unregulated entities

providing energy and energy-related services, and determine whether the utilities should be required to have their nonregulated activities conducted by their affiliated companies.