State of California	Public Utilities Commission
		San Francisco
M E M O R A N D U M
		www.cpuc.ca.gov

Date:	May 3, 2000 

To:	Commissioners

From :	Douglas Long/Gurbux Kahlon
	Electric Restructure Coordinators

Subject :	Status of Electric Restructuring Matters, and Upcoming Milestones, 
		for Commissioner Reports Discussion

	Attached to this cover memo is a monthly status report on electric restructuring activity since the Commission Meeting held on April 6th. . This report presents a summary of restructuring activity including upcoming events and filings. Details from prior reports are available on the web site.

	In our continuing effort to provide more information to the public, this report will be placed on the Commission's Web site following the Commission conference at: 
http://www.cpuc.ca.gov/electric_restructuring/status/status_index.shtml.  

cc:	W. Franklin
	P. Arth
	L. Carew
	P. Clanon
	W. Meyer
             ERT

I.	Ratesetting	4
A.  Revenue Adjustment Proceedings	4
B.	Performance-Based Ratemaking (PBR)	5
C.	Unbundling Revenue Cycle Services/Utility Fees for Direct Access	5
D.	Post-Transition Period Ratemaking Applications (A.99-01-016, et. al.).	6
II.	Transition Costs	6
A.  Annual Transition Cost Proceedings (ATCP - A.98-09-003, et. al.)	6
B.  PU Section 376 Applications (A.98-05-004)	7
C.  Edison’s Application To Recover Capital Additions	7
D. Qualifying Facilities (QF) Issues	7
III.	Divestiture Proceedings	8
A. SDG&E Sec. 851 “Divestiture” Application 97-12-039	8
D.  Southern California Edison Application to Sell its Interest In Mohave Coal Plant	9
IV.	Market Valuation:	9
A.  PG&E A.98-05-022, Edison A.98-05-014	9
B.  PG&E Application for Market Valuation of Hydroelectric Generating Assets (A. 99-09-053)	10
C.  Edison Application (A.99-12-024) for Authority to Value Its Hydroelectric Generation	11
V. Distributed Generation and Distribution Competition Rulemaking (R.98-12-015)	12
VI.	Direct Access	13
A.	Introduction:	13
B.	Tariffs and Service Agreements for Direct Access (D.97-10-087)	14
C.	Meter and Data Communication Standards (D.97-12-048 and D.98-12-080)	14
D.	Retail Settlements and Information Flow (D.97-12-090 and D.98-11-044)	15
E.	Load Profiling (D.97-10-086 and D.98-12-065)	16
VII.	 FERC‑Related Issues	16
A.  Investor Owned Utilities	16
1.  PG&E Petitions for Declaratory Order on New Products	16
2.  FERC Sets PG&E’s Fourth Transmission Owner Tariff filing for Hearing	17
3.  FERC Sets for Hearing Applications to Pass-through ISO Out-of Market Charges	17
4.  FERC Accepts for Filing PG&E, ISO, and SMUD Amendment to Their Interim Agreement	17
5.  FERC Approves PG&E/Dynegy Transmission Contract Extension	17
6.  PG&E Files Special Facilities Agreements with San Joaquin CoGen and La Paloma.	18
B.  The ISO	18
1.  The ISO files Request for Rehearing of Order Rejecting Tariff Amendment No. 19	18
2.  FERC Approves ISO Amendment No. 22; CPUC Seeks Limited Rehearing	18
3.  The ISO Withdraws Tariff Amendment No. 24	18
4.   The ISO Files Tariff Amendment No. 25	19
5.   The ISO Files Tariff Amendment No. 26	19
6.   ISO Report on Zone Creation and Loss Calculation Criteria, and Ancillary Services Methodology	19
7.  FERC Sets RMR Cases for Hearing	19
8.   FERC Accepts for Filing the ISO’s Increased Grid Management Charge	20
9.   The ISO Submits Big Creek Physical Scheduling Plant Agreement	20
C.  The PX	20
1.	FERC Conditionally Accepts PX Expansion of Block-Forward Market, and New Delivery Points	20
2.	PX Files to Create Ancillary Services Markets	20
3.	PX Files Amendment No. 2 to its Tariff	20
D.	Miscellany	21
1.  FERC Issues Order on Rehearing in RTO Rulemaking	21
2.	Calpine Files for Market Rates for its new Plants	21
1.	CPUC Participating in RMR Annual Contract Amendments Filings at FERC	21
2.	Unresolved Issues Docket Partially Resolved	22
VIII.	  Public Purpose Programs	22
A.	Energy Efficiency and Demand Side Management	22
B.	Low-income Programs	22
C.	Structure and Operating Procedures of LIGB and CBEE	23
D.  California Board for Energy Efficiency	23
E.	 Low-Income Governing Board  (LIGB)	23
IX . 	CEQA Issues Related to Divestiture of Hydro and Fossil Generation	24
X.	Reliability	24
XI.	Consumer Education/Protection	25
A.	The Commission’s Outreach Plan	26
B.	The Electric Education Trust	27
C.	Consumer Protection	27

I.	Ratesetting
A.  Revenue Adjustment Proceedings
The purpose of the RAP is to consolidate the revenue requirement adjustment associated with each utility's various proceedings and ratemaking mechanisms, verify the "headroom" to be transferred to the transition cost balancing account, streamline and eliminate unnecessary balancing accounts, and consider general rate design and revenue allocation issues.  Pursuant to D.99-06-058, PG&E, SDG&E, and Edison filed their 1999 RAP applications in August, 1998.  Included in these filings are the utilities'  proposals to modify the PX credit to include certain procurement costs related to purchasing energy from the Power Exchange. 

Hearings in the RAP proceeding have concluded and opening and reply briefs have been filed. A proposed decision should be forthcoming in the next several months. 

The major issue in dispute is the calculation of the PX procurement credit.  D.99-06-058 directed the utilities in this RAP proceeding to determine the non-commodity costs (such as demand forecasting, energy scheduling, interaction with the PX/ISO) associated with their purchases from the PX and to allocate these costs on a per/kWh basis to the PX credit that customers receive.  The purpose of this credit would be to reflect that ESPs incur similar costs in their procurement activities for their direct access customers.

The major revenue requirement issue is the allocation of RMR costs between wholesale and retail customers.  Currently all RMR costs are collected from retail customers while arguments have been made that wholesale customers of the utilities also benefit from these contracts and should pay a portion of their costs.  PG&E has filed a proposed settlement agreeing to seek recovery of its future RMR costs from both its retail and wholesale customers.  Edison continues to litigate this issue.

Edison has reached a proposed settlement agreeing to forego recovery of costs assigned to its Jurisdictional Allocation Memorandum Account (JAMA) .  This account tracked the portion of Edison’s total revenue requirement that was non-CPUC jurisdictional and was assigned (prior to restructuring) to be recovered from its wholesale customers. 

D.99-06-058 addressed the utilities 1998 RAP applications.  This decision;

•	Allocated the costs of implementing electric restructuring ("Section 376 costs") on an EPMC basis and in the same manner as transition costs are currently being collected
•	Allocated transmission and distribution, public purpose, nuclear decommissioning costs , and various memorandum and balancing accounts between customer classes
•	Eliminated various memorandum and balancing accounts that are no longer needed
•	Continued the allocation of PX start-up costs to all customers
•	Changed the "Post-Real Time" settlement costs of the Power Exchange.

B.	Performance-Based Ratemaking (PBR)

On February 17, 2000, the Commission issued its decision in the PG&E GRC, D.00-02-046.  In that decision, the Commission suspended any action on the design, productivity assumptions, and financial structure for  a PG&E PBR, but indicated it will address service quality issues in A.98-11-023.   On March 23, 2000, PG&E filed a Petition to withdraw its Application 98-11-023.  In that Petition, PG&E indicated it would file a new application to address service quality performance standards.

SDG&E filed its annual PBR performance report for 1999 on March 15, 2000.

SCE's electric distribution rates have been updated with an effective date of January 1, 2000 using its PBR mechanism.  SCE filed its annual PBR performance report for 1999 on April 14, 2000.  A resolution on SCE's 1997 PBR performance was issued on April 6, 2000.

Sierra Pacific filed a proposal for an electric distribution PBR on December 31, 1999, A.99-12-041.  ORA filed a protest, requesting that Sierra Pacific refile its application. 

C.	Unbundling Revenue Cycle Services/Utility Fees for Direct Access
 (A. 99-03-013, et. al./A.99-06-033, et. al.):

Hearings, which began Monday, 24 April provide a record for the Commission to either affirm existing policy, alter or create new policy in the following areas:  

•	Geographic de-averaging of meter reading credits
•	Determine proper policy:  RCS credits vs. charges
•	Address the issue of Meter Services, Reading and Billing Long Run Marginal Cost (LRMC)
•	Treatment of New Meters/ Meter Installations
•	RCS LRMC calculations/Methodological issues
•	Billing and Payments
•	Meter ownership LRMC
•	Direct Access customer switching, billing, metering and meter data management services
•	Extensions to Line Extension Rules
•	Cost Recovery for Utility Distribution Company (UDC) expenditures that facilitate retail market competition
•	Authorization for UDCs to collect exception fees (fees for services to ESPs)
•	Authorization for monopoly UDCs to compete in unregulated markets 
•	Stranded Cost Recovery (RCS/DASF related)

Closing Arguments May 10
Proposed decision by ALJ Wetzell expected by 10/10/00
Final Decision by the Commission proposed 12/21/00

D.	Post-Transition Period Ratemaking Applications (A.99-01-016, et. al.).

On January 15, 1999, PG&E, SCE and SDG&E filed the applications which propose methods of identifying the end of the transition period and establishing ratemaking mechanisms for the subsequent period.  Commissioner Duque issued a scoping memo on March 11.  The proceeding addresses the criteria that must be met in order to end the rate freeze, and ratemaking matters such as balancing account treatment for energy procurement costs and ongoing CTC recovery.  The scope of the proceeding will also include broad rate design matters which are integral to ending the rate freeze and the development of post-transition ratemaking.  The Commission considered the mechanics of ending the rate freeze in Phase 1.  In October 1999 the Commission issued D.99-10-057 in Phase 1 of the proceeding.  The issues being considered in Phase 2 involve post-transition rate regulation including regulation of the utilities’ procurement costs, and various cost allocation issues.  A proposed decision in Phase 2 is expected in March 2000.

II.	Transition Costs

Transition costs are generation asset related uneconomic costs that utilities will have an opportunity to recover through the Competition Transition Charge (CTC).  These costs also include Restructuring Implementation Costs.

A.  Annual Transition Cost Proceedings (ATCP - A.98-09-003, et. al.)

•	On September 1,1999, PG&E, SCE and SDG&E filed their first applications in their annual transition cost proceedings.  The purpose of the ATCP is to:
a.	review entries to the must-run and non-must-run memorandum accounts to ensure that excess revenues are properly credited to the TCBA,
b.	adjust accelerated depreciation and account for the results of divestiture proceedings in the TCBA; 
c.	adjust the TCBA for generation capital additions and QF contract buyouts, and
d.	review the reasonableness of costs and revenues from the ISO and PX, employee related transition costs, purchased power, and QF contract administration. 
•	The final decision was voted on February 17, 2000 as scheduled for the 1998 ATCP. It was mailed February 18, 2000. Commissioner Duque issued an ACR to correct the error in D.00-02-048 regarding interim credit to the TCBA without a corresponding debit in another account. Parties were required to comment by March 15, 2000. A decision is expected on the matter by May 31, 2000. 
•	The Assigned Commissioner for the 1999 ATCP issued a scoping memo on November 23, 1999. The following is the schedule for the 1999 ATCP:

February 23, 2000				ORA testimony 
April 3							Rebuttal testimony 
March 29						Utility updates due to 1998 ATCP decision. 
       April 17						ORA/intervenor testimony 
May 1							Utilities’ rebuttal on updates
May 5							Second Pre-hearing conference
May 15 – 26					Hearings

B.  PU Section 376 Applications (A.98-05-004)

The Commission adopted Decision 99-05-031 at the May 13 meeting.  This decision approves settlements on issues in SDG&E’s A.98-05-006 and PG&E’s A98.95-004 relating to restructuring implementation costs to which PU Code Section 376 applies.  On May 18, 1999 SCE, et.al. filed a joint motion for adoption of settlement in A.98.95-015 addressing SCE’s restructuring implementation costs.  A PD on SCE’s application was issued on July 6, 1999 and later modified. The final Decision was voted out on September 16 and mailed September 23, 1999. 
C.  Edison’s Application To Recover Capital Additions 
On April 19, 1999, Edison filed an application requesting recovery of capital additions made to its fossil and hydroelectric generating facilities between January 1, 1997 and March 31, 1998 and to its oil/gas-fired generating facilities between March 31, 1998 and the date of divestiture of the facility.  The application has been protested by ORA and TURN.  An evidentiary hearing was held on February 7-11, 2000 and is being held open for late-filed exhibits. Additional hearing was held on March 10th.  Reply briefs were filed on April 14, 2000.
TURN has filed a petition for modification of  the decision on Edison’s 1996 capital additions.
D.	Qualifying Facilities (QF) Issues
Recent Activity
The main activity currently under way in the QF world is the proceeding implementing P.U. Code Section 390 – O.I.R.99-11-022. On January 4, 2000 the Assigned Commissioner issued the Scoping Memo for this proceeding, outlining the issues and establishing a procedural schedule.  The proceeding has been divided into two phases.  Testimony on most phase one issues was filed on February 11.  Hearings on these issues were held from April 3 through April 11.  Per the schedule, a workshop on line loss issues was held in February.  The final workshop report was issued by the Energy Division on April 7, 2000.  Hearings on line loss issues are to be held May 11 and 12.  A Proposed Decision is expected by September 5, 2000.

Resolution E-3657: February 17, 2000
PG&E - Ultrapower3 QF Contract Restructuring Agreement
On October 13, 1999, PG&E filed Advice Letter 1927-E, seeking Commission approval for an agreement terminating the ISO4 QF contract with Ultrapower 3. PG&E estimates net ratepayer benefits of between $12.1 and $12.7 million. The agreement also provides for a PG&E shareholder incentive payment of $1.09 million. The buyout agreement is approved without modification.

Resolution E-3643: December 2, 1999
PG&E - Calpine Gilroy QF Contract Restructuring Agreement
This resolution approves the agreement reached between Calpine Gilroy L.P. and PG&E regarding the termination and buy-out of an Interim Standard Offer 4 power purchase contract. This resolution also approves recovery of all payments PG&E will make pursuant to the agreement and recovery of shareholder incentives. This is in response to Advice Letter 1906-E, filed September 1, 1999.

Rulemaking 99-11-022: November 18, 1999
Order Instituting Rulemaking (OIR) into Implementation of Pub. Util. Code § 390.
This proceeding is opened to address certain issues related to the prices paid to Qualifying Facilities (QFs) for energy and capacity. Specifically, the Commission will address the provisions in P.U. Code § 390 that establish various criteria for basing short run cost (SRAC) energy payments on the Power Exchange (PX) market-clearing price, as well as the specific index to be used for the QF energy payment. The Commission will address the issues associated with line losses in this proceeding, initially through Energy Division (ED) workshops. The Commission will address all other issues through testimony, formal evidentiary hearings, and workshops, as necessary. 

Decision 99-11-025: November 4, 1999
Regarding Motion for Power Exchange-Based Pricing Under Pub. Util. Code § 390(c).
On July 1, 1999, several Qualifying Facilities (QFs) filed a motion requesting the Commission's approval for short-run avoided cost (SRAC) energy payments to be based on the Power Exchange (PX) market-clearing price for those QFs that voluntarily elect such an option. The decision grants this motion on an interim basis, subject to true-up. As parties had requested, the interim payment which electing QFs will receive will be the PX's zonal, day-ahead market clearing price. Payments made under this regime will be trued up to the level determined in the larger Section 390 OIR which the Commission is opening. 

For the most up-to-date information, check the Energy Division QF Web Site at: www.cpuc.ca.gov/divisions/energy/QF_issues/qf_main_page.htm/

III.	Divestiture Proceedings  
A.	SDG&E Sec. 851 “Divestiture” Application 97-12-039

SDG&E filed its divestiture application on December 19, 1997 to divest all of its fossil plants, its 20% interest in SONGS nuclear power plant as well as all of its long term power purchase contracts.  On February 18, 1999, the Commission approved (D. 99-02-073) the sale of the Encina power plant and 17 combustion turbines by SDG&E to a consortium comprised of Dynegy Power Corporation and NRG Energy Inc.   Encina and the combustion turbines had a combined net book value as of December 31, 1997 of $94.8 million.  The sale price was $ 356 million. 

 D. 99-03-015 issued on March 4, 1999, approved the sale and donation of the South Bay Power plant to the San Diego Unified Port District.  Under the agreement, the Port District will pay $110 million for the plant to SDG&E and SDG&E will provide the Port District with a charitable donation of the main plant site land, the LNG Parcel, the Transmission parcel and the value of the South Bay plant facilities which exceeds $110 million.  The Port District has leased the plant to Duke Energy for operation.  

Comments were filed by  various parties on  ALJ Barnett’s proposed decision on issues related to auction of power purchase contracts on November 15, 1999.

SDG&E filed to withdraw its application to divest its share of the SONGS ownership on November 5, 1999. 
D.  Southern California Edison Application to Sell its Interest In Mohave Coal Plant 
Application 99-10-023
On October 14, 1999, Southern California Edison filed its application under P.U. Code 851 to sell its ownership interest in the Mohave coal plant located in Clark County, Nevada.  Mohave is a 1580 MW plant.  Edison owns 56% of the plant.  The remainder is owned by LADWP,  Nevada Power Company and the Salt River Project.  Edison has proposed a three-stage auction process similar to the one used for fossil plant divestiture.  Edison requests the Commission to find that Edison’s proposed sale is not a project under CEQA, or in the alternative find that a Negative Declaration under CEQA is appropriate. 
IV.	Market Valuation: 
 A.  PG&E A.98-05-022, Edison A.98-05-014

The purpose of this proceeding is to establish principles to arrive at a market value for assets retained by the utilities.  The Scoping Memo and Ruling of Assigned Commissioner issued on February 1, 1999 clarified that this proceeding was not designed to establish the market value for a given asset, nor to authorize the utilities to dispose of any asset and that the valuation of specific assets that are to be sold or transferred would be performed in other asset-specific proceedings

D.99-06-078 was issued on June 24, 1999.   This decision approved Edison’s proposed categorization of retained lands at its divested gas power plants.  In this decision the Commission also accepted Edison’s proposal to defer decision on market valuation of fuel oil lands, fuel oil facilities and fuel oil inventory at divested gas-fired plants until the end of the year 1999.  The decision directed Edison to file an application with a proposal to establish the market value of the remaining fuel-oil lands and fuel-oil facilities and fuel-oil inventory at the divested plants no later than January 31, 2000.  Edison’s proposal to retain transmission lands in the regulated utility was also approved.  

A proposed decision was issued on September 13th, 1999 that would require PG&E to file an application by November 15th to market value its hydroelectric assets.  The PD requires PG&E to pay for an ORA administered appraisal of the assets.  Comments on the PD were filed by the parties on October 4th.  Reply comments were filed on October 12, 1999.  

A revised draft decision was mailed to the parties on January 26, 2000.  This draft decision orders PG&E and Edison to file applications valuing retained generation and generation-related assets for which no final valuation has been proposed or completed.  These applications would be filed on April 14, 2000.  The primary purpose of the application is to establish market values for remaining retained assets in order to determine how they may affect ratepayer liability for transition costs and the timing of the end of the rate freeze ordered by AB 1890. 

Comments on the proposed decision were filed by parties on February 22nd.  The Commission approved the proposed decision on March 2, 2000 (D. 00-03-019). 
B.  PG&E Application for Market Valuation of Hydroelectric Generating Assets (A. 99-09-053)
On September 30, 1999, PG&E filed an application to market value and divest hydroelectric generating plants and related assets pursuant to P.U. Code sections 367(b) and 851. PG&E plans to market value these assets through an open auction in which all market participants, including PG&E’s affiliate company PG&E Generating Company may compete for ownership of the facilities.  The auction process proposed is similar to the one followed for fossil plant sales. 

Scoping Memo and Ruling of Assigned Commissioner and ALJ was issued on January 13, 2000.  It states that CEQA applies and that the Commission will likely prepare an EIR. It schedules a decision certifying the EIR and addressing whether divestiture is in the public interest and the specifics of any divestiture approach (like an auction) for late 2000.  Assuming some divestiture is approved, the ruling envisions that divestiture to occur in early 2001 and schedules a decision on PG&E's compliance with the Commission's divestiture decision for June 2001. It also requires PG&E to make relevant information, including the information it intends to make available to bidders in a "data room," available to all parties to the proceeding.  ALJ Hale is the designated principal hearing officer in this case.  The Ruling prohibits PG&E from withdrawing this application without the express authority of the Commission.
 
ORA filed a motion on January 13, 2000 to request the Commission to order PG&E to revise the estimates of market value of its hydro-electric facilities to $ 2 billion, which according to ORA is still a conservative value. ALJ Hale issued a ruling on January 18, 2000 directing parties to file any responses to ORA’s motion by January 26, 2000. ORA was allowed to file a response by February 1, 2000.   Agricultural Energy Consumers Association, California Industrial Users, California Large Energy Consumers/ California Manufacturers Association, East Bay Municipal Utility District, ENRON, and PG&E filed responses.  ORA filed its reply to these responses on February 1, 2000.  This motion has not been ruled on.

On February 2nd, a Ruling was issued by the Assigned Commissioner and ALJ Hale regarding access to information by parties.  The Ruling directed PG&E to remove the non-compete requirement from its confidentiality agreement filed on January 25, 2000.  The Ruling also directed PG&E that when any information involving a contractual relationship is provided to parties, PG&E must also provide information that will advise parties how to contact the other party to that contractual relationship. 

The Assigned Commissioner and ALJ issued a ruling denying the Joint Parties motion on February 28, 2000.  However, the ruling clarified the scope of environmental effects to be addressed in evidentiary hearings set for April,.  The Ruling also indicates the preferred date for receipt of comments on CEQA issues prior to the publication of the draft EIR, and schedules briefs to address the effect the CEQA environmental issues should have on the Commission's determination of whether divestiture is in the public interest.

Hearings are in progress in this proceeding.  On April 17, 2000, the assigned ALJ issued a ruling inviting appearances to submit additional testimony limited to the issue of alternative methods of valuation.  This testimony would also address the public interest issues such as tax and water rights ramifications related to PG&E’s filed auction proposal.  Appearances are invited to submit this testimony on June 8th with rebuttal testimony due on June 23.  Evidentiary hearings on this additional testimony are scheduled to begin June 26.  Concurrent and reply briefs will be due August 14th and August 28th respectively.  

C.  Edison Application (A.99-12-024) for Authority to Value Its Hydroelectric Generation  

On December 15, 1999, Edison filed an application for authority to value its hydroelectric generation assets and to retain those assets in a regulated utility corporation pursuant to P.U. Code sections 367(b) and 377.  Edison seeks the valuation and authorization in accordance with the terms of a Memorandum of Understanding for Valuation of the SCE Hydroelectric Generation Facilities and Retain Ownership and Operation Within the CPUC Regulated Utility (MOU) entered into with 14 stakeholders, including TURN, IBEW Local 47, and several environmental and recreation groups.  Edison seeks an expedited hearing and decision.  The application has been protested by ORA, California Farm Bureau,  Enron Corp., IEPA, and Frant Power Authority.  Responses have been filed by PG&E,  Friant Water Users Authority,  and Reliant Energy Power Generation, Inc.  A PHC was held on February 22, 2000.  Scoping memo was issued on March 21, 2000.

The scoping memo directed the Commission’s Energy Division to convene a workshop so parties could gain an understanding of the many issues involved in the proceeding. The scoping memo contained a list of some questions in Appendix A attached to the scoping memo.  The workshop was held on May 2nd.  

V. Distributed Generation and Distribution Competition Rulemaking (R.98-12-015)

The Commission initiated Rulemaking (R.) 98-12-015 on December 17, 1998 to consider whether the Commission should pursue further reforms in the structure and regulatory framework governing electricity distribution services. This effort was undertaken as a collaborative effort among the Commission, the California Energy Commission (CEC) and the Electricity Oversight Board (EOB). The goal of this process was to identify the range of issues on distributed generation (DG) and distribution competition, and their interrelationships; and to explore whether a focused analysis of distributed generation or a more comprehensive consideration of distribution competition issues would be more beneficial.

Over 61 parties submitted opening comments on March 17, 1999, to respond to a series of questions and provide views on whether to undertake a more focused consideration of the utility distribution company’s (UDC) role in DG, or a broader look at the overall future role of the UDC. Reply comments from over 37 parties were filed on May 17, 1999.  

A joint agency full panel hearing (FPH) was held on June 1, 1999.  The FPH further explored the interrelationships among issues raised in the parties’ comments and elicited discussions on the procedural steps that can be undertaken to address various issues. Nine parties submitted additional written comments on the FPH questions on June 4, 1999.

Decision 99-10-065 was adopted on November 21, 1999.  This decision summarizes the issues raised in connection with this rulemaking; describes the roadmap that the Commission will follow to address the issues of distributed generation, electric distribution competition, and the role of the utility distribution companies (UDCs); and closes R.98-12-015.  The decision bifurcated the issues into two tracks.  The first track is to address distributed generation issues.  The second track issues will address distribution competition and the roles of the utility distribution companies in a competitive retail electric market.  R.99-10-025 was opened to address the first track issues.  The second track issues will be addressed in a CPUC staff study and report.  The report is to be filed on or before June 2, 2000.

A Scoping Memo was issued by the Assigned Commissioner on January 20, 2000 to address issues raised in the prehearing conference statements of parties and at the December 15, 1999 prehearing conference, and to set forth the schedule for the proceeding. 

The Energy Division held a series of workshops from December 1999 through March 2000 to consider how DG impacts distribution system planning and operations, how the UDCs can identify and incorporate forecasts of future DG deployment into the distribution system planning process. A workshop report was filed on April 17, 2000. 

The CEC also facilitated a workshop process from December 1999 through March 2000 to develop interconnection standards for DG. The CEC issued its workshop report for comment on April 17. 

Parties served testimony on Phase 1 issues on April 12. Phase 1 issues include ownership and control of DG, valuation of DG benefits, net metering, distribution wheeling, consumer education and governmental outreach.

VI.	Direct Access
A.	Introduction:  

The Commission’s basic approach to the implementation of its decisions regarding the structure of the direct access market for electricity has been to direct parties to form “working groups” for the purpose of developing any required new rules, tariffs, and business practices in a consensus-oriented atmosphere.  The Energy Division is responsible for organizing and overseeing the operation of these groups, and ensuring that they function in a fair and productive manner.  The working groups formed thus far are listed below, and the remainder of this section provides an update on the activities of each group:

1.	Tariffs and Service Agreements for Direct Access
2.	Meter and Data Communication Standards
3.	Retail Settlements and Information Flow
4.	Load Profiling

Activity Since Last Update

•	A “scoping” meeting was held on April 5, 2000 to gather input from parties regarding preparation for a June 2000 Load Profiling workshop

•	Resolution E-3662, currently scheduled for consideration at the Commission’s May 4th meeting, would provide all direct access customers an opportunity to make a one-time selection prior to June 30th, 2000 as to which method they wish to use to calculate their CTC obligation (residual or average).  All new direct access customers after June 30, 2000 will have their CTC obligations calculated using the residual CTC method.  All existing customers who do not make a selection by June 30, 2000 will continue to have their CTC obligations calculated using the average CTC method adopted by the Commission in D.97-08-056.

Ongoing Direct Access Implementation Activity

Direct Access Implementation Activity Reports are filed by PG&E, Edison, and SDG&E on the 15th of every month.  Check the following URL for electronic copies:  
http://www.cpuc.ca.gov/divisions/energy/Direct_Access/direct_main_page.htm

B.	Tariffs and Service Agreements for Direct Access (D.97-10-087)

Status of Proceeding

Direct Access Tariff Review Group:

Most discussion related to the Direct Access tariffs and service agreements takes place in the monthly meetings of the “Rule 22 Tariff Review Group”, held at PG&E on the first Wednesday of every month.

Participants at the monthly meetings have decided to form a number of “sub-groups” to resolve specific issues between meetings.  These groups operate under the umbrella of a group called the “Operations Coordinating Committee” (OCC).  The sub-groups are listed below.

1.	Meter Specific Services
2.	Billing Business Rules
3.	Meter Usage Data
4.	Internet EDI
5.	MDMA and VEE Issues (MAVI)
6.	Data Quality and Integrity (DQI) 
7.	DASR Consistency/ Account Maintenance (currently inactive) 
8.	Service Delivery Point (SDP) Identifier (currently inactive)
9.	Operations Manual Documentation (currently inactive)
10.	“Start-to-end-process” (STEP) (currently inactive)

The OCC meets at PG&E on the first Tuesday of the month, and provides a report to the Rule 22 Tariff Review Group when that group meets later in the day.

Monthly meeting notes for both the Rule 22 and OCC groups, and other documentation, may be obtained at the website: http://162.15.5.2/wk-group/
C.	Meter and Data Communication Standards (D.97-12-048 and D.98-12-080)
Status of Proceeding

The Permanent Standards Working Group (PSWG) was established by the Meter and Data Communication Standards (D.97-12-048).  Parties met together as the “Permanent Standards Working Group” (PSWG) and submitted their report in July, 1998.  On December 17, 1998, the Commission issued D.98-12-080, which addressed the recommendations made in the PSWG report.

Meter Worker Certification:  Decision 99-03-063 denied an Application for Rehearing of D.98-12-080 filed by PG&E and SDG&E.  The Application related to the meter worker certification process adopted in D.98-12-080.  Instead, the Commission modified Decision 98-12-080 to order all parties to answer two questions regarding the Commission’s adopted certification program.  Parties made these filings on April 6th 1999.  A Commission decision or ruling on these filings is pending.

Meter Services:  On February 26th, 1999 Commissioner Duque issued a Coordinating Commissioner Ruling (CCR) requesting comments on issues pertaining to the provision of competitive metering services in the restructured electric industry.  Opening Comments were filed April 13th, and Reply Comments on April 27th.  Commission action is pending.

Ongoing Activity

The Energy Division’s “Meter Service Provider Certification Unit” has been reviewing applications and provisionally certifying MSPs to install meters for ESPs in the UDC service territories.  A list of certified MSPs may be obtained from the Commission’s website: http://www.cpuc.ca.gov/electric_restructuring/msp_registration/msp_index.htm

D.98-12-080 directed the Energy Division to develop the appropriate forms, procedures, and criteria for accepting and reviewing Direct Access meter type self-certification forms provided by meter manufacturers, and for posting the complying meter types on the Commission’s web site.  The Energy Division made the forms available on March 19, 1999, and requested an extension on final implementation of the website, to August 1, 1999.  The list is now posted at the following URL:
http://www.cpuc.ca.gov/electric_restructuring/meters/Table%20of%20Contents.htm
D.	Retail Settlements and Information Flow (D.97-12-090 and D.98-11-044)

Status of Proceeding

The Retail Settlements and Information Flow (RSIF) decision established three working groups to address certain issues regarding the information flows that will be required for the new electric market structure to function.  Final reports have now been issued by all three groups:  the “Universal Node Identifier” Working Group, the “Distribution Loss Factor” Working Group, and the “Data Quality and Integrity Working Group”.  These reports may be found at the URLs below:

	Working Group	Web address for Report	Addressed by CPUC Decision?	
1.		Universal Node Identifier	http://162.15.5.2/wk-group/dai/uni/	D.98-11-044	
2.		Distribution Loss Factor	http://162.15.5.2/wk-group/dai/dlf/	Pending	
3.		Data Quality and Integrity Working Group	http://162.15.5.2/wk-group/dai/dqi/
	Pending	

E.	Load Profiling (D.97-10-086 and D.98-12-065)

Status of Proceeding

D.98-12-065 ordered the Energy Division to conduct a workshop no later than June 30, 2000 to examine the use of load profiles, including whether the meter exemption for 20 to 50 kW direct access customers and for direct access customers with a demand of less than 20 kW should continue or be terminated, and whether hourly interval meters should be required of bundled customers with a demand of less than 50 kW

In D.97-05-040, the Commission allowed customers whose accounts have a maximum demand of less than 20 kW, to participate in direct access through statistical load profiling, and stated its intention to “reevaluate the use of statistical load profiles in the year 2000.”  Subsequently, the Commission issued D.98-12-065, which allowed customers with maximum demands between 20 kW and 50 kW to be exempt from the hourly interval meter requirement until March 31, 2002, and ordered the Energy Division to convene a workshop no later than June 30, 2000 to “examine the use of load profiles, whether the meter exemption for 20 to 50 kW direct access customers and for direct access customers with a demand of less than 20 kW should continue or be terminated, and whether hourly interval meters should be required of bundled customers with a demand of less than 50 kW.” (D.98-12-065, Ordering Paragraphs 1 and 2)

•	April, 2000	Energy Division conducted a “scoping” technical workshop to get parties started on preparations for the June, 2000 CPUC-ordered workshop

•	No later than:  6/30/2000	 ED will conduct a public Workshop to address the questions noted above

.
Historical documents related to the load profiling workshops that led to Commission Decisions 97-10-086 and 98-12-065 may be obtained at:
http://162.15.5.2/wk-group/dai/lp/

VII.	 FERC‑Related Issues
A.  Investor Owned Utilities
1.  PG&E Petitions for Declaratory Order on New Products
On September 1, 1999 PG&E filed a Petition for Declaratory Order requesting ratemaking treatment for new products and services that make secondary uses of its transmission assets.  Some examples of the proposed products and services are: right of way leases for fiber optic cable with third-parties, transmission tower licenses and leases for wireless antennae with third parties, and property leases for farming, or grazing.  The CPUC filed an Intervention on September 30, 1999.  
2.  FERC Sets PG&E’s Fourth Transmission Owner Tariff filing for Hearing
On October 27, 1999, FERC issued an order accepting, suspending, and setting for hearing, PG&E’s fourth Transmission Owner Tariff case filed in the last two years.  Pacific Gas & Electric Company, 89 FERC ¶ 61,081 (1999), Docket No. ER99-4323-000.  The proposed rates will go into effect, subject to refund, on April 1, 2000.  PG&E is seeking a $46 million rate increase over the rates filed just five months earlier.  The CPUC has protested the rates.
3.  FERC Sets for Hearing Applications to Pass-through ISO Out-of Market Charges
In Southern California Edison Company, (“Edison”) FERC Docket No. ER00-845-000; Pacific Gas & Electric Company, (“PG&E”) FERC Docket No. ER00-851-000; and San Diego Gas & Electric Company, (“SDG&E”) FERC Docket No. ER00-860-000, PG&E, Edison, and SDG&E, (referred to collectively as the Participating Transmission Owners (“PTOs”)) the PTOs have filed with FERC proposed mechanisms for recovering certain reliability-related costs that the ISO will impose on the PTOs when and if FERC approves Amendment 23 to the ISO’s Tariff.  The PTOs made their filings on December 17, 1999 (Edison), December 20, 1999 (PG&E), and December 21, 1999 (SDG&E).
On February 9, 2000, the FERC set the three cases for hearing.  At a February 25, 2000 pre-hearing conference, the presiding administrative law judge set a hearing date of September 6, 2000.
4.  FERC Accepts for Filing PG&E, ISO, and SMUD Amendment to Their Interim Agreement 
This filing was made on December 22, 1999, in Pacific Gas and Electric Company, (?) FERC Docket No. ER00-879-000.  In April 1998, after FERC rejected ISO Amendment No. 2, PG&E, SMUD, and the ISO negotiated an Interim Agreement to provide for the communication of information concerning SMUD’s internal generation and load to the ISO, and the accounting of such information by the ISO.  The Interim Agreement has been in effect since April 1998, but was never filed at FERC.  The parties have negotiated an Amendment to the Interim Agreement to separately account for UC Davis’ generating unit, which has executed a Participating Generator Agreement with the ISO, and will participate in the ISO’s Ancillary Services and Imbalance Energy markets.  By letter order dated February 9, 2000, the FERC accepted the Amendment for filing.
5.  FERC Approves PG&E/Dynegy Transmission Contract Extension
FERC issued an order in Pacific Gas & Electric Company, FERC Docket No. ER00-902-000, accepting a filing by PG&E extending its existing transmission contract with Dynegy Power Services Inc. (“Dynegy”) over Path 15 to Dec. 31 2001.  It had been set to expire February 29, 2000.  The ISO consented to the extension.  During the extension the level of Dynegy's capacity reservation will be reduced and transmission-only services will be provided, with all Ancillary services supplied under the ISO tariff. The order, 90 FERC 61,190, was issued February 24, 2000.
6.  PG&E Files Special Facilities Agreements with San Joaquin CoGen and La Paloma.
PG&E submitted to FERC Generator Special Facilities Agreements with a former Qualifying Facility, San Joaquin Cogen Limited.  Pacific Gas & Electric Company, FERC Docket No. ER00-1462-000, and with a PG&E affiliate, La Paloma Generating Company, LLC.  Pacific Gas & Electric Company, FERC Docket No. ER00-1552-000.  
B.  The ISO
1.  The ISO files Request for Rehearing of Order Rejecting Tariff Amendment No. 19
On June 23, 1999, the ISO filed its proposed Tariff Amendment No. 19 which would modify the ISO’s New Generator Interconnection Policy which sets forth the obligations and responsibilities of Generating Units requesting interconnection to the ISO Controlled Grid and the procedures and requirements for processing such interconnection requests. California Independent System Operator Corporation,FERC Docket No. ER99-3339-000.  FERC rejected Amendment No. 19 in an order dated September 15, 1999, California Independent System Operator Corporation, 88 FERC ¶ 61,221 (1999), primarily on the ground that the ISO’s policy results in excess costs for intrazonal congestion.  On October 15 the ISO filed a Request for Rehearing.  The rehearing application argues that the ISO already uses current RMR contracts to manage congestion, thus eliminating the excess cost issue
2.  FERC Approves ISO Amendment No. 22; CPUC Seeks Limited Rehearing
In California Independent System Operator Corporation, FERC Docket No. ER99-4545-000, FERC has approved Amendment No. 22 to the ISO Tariff.  In Amendment No. 22, filed September 27, 1999, the ISO, among other things, amended § 5.2.8 of its tariff to provide for allocation of costs of Reliability Must Run (“RMR”) units which may be located outside of the service territory of a Responsible Utility.  The CPUC supported this aspect of the Amendment, with the proviso that it may need to be revisited should the ISO seek to designate RMR units outside of the ISO Controlled Grid. 
In its request for rehearing, the CPUC notes that with Amendment No. 22, for the first time, the ISO may be able to agree enter into RMR contracts with non-FERC jurisdictional entities.  Such contracts might not be subject to regulatory review, yet the costs associated with these contracts might be passed through to ratepayers.  
Accordingly, the CPUC has sought rehearing on Amendment No. 22, and has requested that FERC order the ISO to make separate filings under § 205 of the Federal Power Act,  whenever it seeks to pass through the costs of RMR contracts with non-jurisdictional entities to a Responsible Utility, and to file each such contract with FERC.  
3.  The ISO Withdraws Tariff Amendment No. 24
On February 4, 2000, in California Independent System Operator Corporation, FERC Docket No. ER00-866-000, the ISO filed to withdraw Amendment No. 24 to the ISO tariff.  Amendment No. 24 provided for a “Long Term Grid Planning Process.”  The ISO stated in its filing that it withdrew the Amendment in light of the comprehensive review it will undertake of its congestion management protocols, and to respond to stakeholder concerns.
4.   The ISO Files Tariff Amendment No. 25
In its quarterly tariff filing, made January 27, 2000, the ISO has proposed a variety of changes to its tariff, including: (1) removal of restrictions on imports of Regulation service; (2) procedures for cancellation or rescheduling of planned transmission outage;   (3) delayed publication of individual bid data; (4) changes to the ISO Payments Calendar; (5) implementation of FTRs; (6) allocation of RMR costs in the event that the San Onofre Nuclear Generating Station (SONGS) is designated as an RMR unit; (7) procedures for information issued in the event of transmission derates between the day-ahead and hour-ahead markets.  The CPUC filed Comments in this docket, California Independent System Operator Corporation, FERC Docket No. ER00-1239-000, on February 17, 2000.  The CPUC supported the ISO proposal to publish bid data.  The CPUC also supported an equitable allocation of RMR costs, but cautioned against assuming that SONGS should become and RMR unit.  The CPUC took no position on the balance of Amendment No. 25.
5.   The ISO Files Tariff Amendment No. 26
The ISO on January 28, 2000 filed Tariff Amendment No. 26, in which the ISO proposes to change the timing of its issuance of dispatch notices to RMR units.  This ISO submittal, California Independent System Operator Corporation, FERC Docket No. ER00-1365-000, is generally referred to as the “pre-dispatch” filing.  The ISO seeks authority to dispatch RMR units prior to the running of the California Power Exchange’s Day-Ahead market.  The CPUC on February 18, 2000 filed comments supporting the ISO’s proposal.
6.   ISO Report on Zone Creation and Loss Calculation Criteria, and Ancillary Services Methodology 
On December 1, 1999, the ISO filed a report in , California Independent System Operator Corporation, FERC Docket No. ER00-703-000, entitled “Report to the Federal Energy Regulatory Commission: Studies Conducted Pursuant to the October 30, 1997 Order.” In its filing, the ISO provides the results of its studies of the effectiveness of current criteria for creating and modifying Congestion Management Zones.  In addition, the report provides results of a study that evaluates the ISO’s methodology for calculating and assigning losses.  Finally, the report provides results of a study on one-part v. two-part Ancillary Services bid evaluation methodologies.  
7.  FERC Sets RMR Cases for Hearing
FERC has set Pacific Gas & Electric Company, Docket Nos. ER98-495-000, ER98-1614-000, ER98-2145, and ER99-3603-000 for a hearing date of March 20, 2000.  These dockets pertain to generating units owned by Southern Energy Potrero, L.L.C. and Southern Energy Delta, L.L.C., as well as one combustion turbine unit owned by PG&E.
FERC has set San Diego Gas and Electric Company, Docket Nos. ER98-496-000 and ER98-2160 for hearing commencing on March 27, 2000.  These dockets pertain to generating units owned by Duke Energy South Bay LLC.
FERC has set San Diego Gas and Electric Company, Docket Nos. ER98-496-006 and ER98-2160-004 for hearing commencing on April 3, 2000.  These dockets pertain to generating units owned by Cabrillo Power I LLC and Cabrillo Power II LLC.
8.   FERC Accepts for Filing the ISO’s Increased Grid Management Charge
In California Independent System Operator Corporation, FERC Docket No. ER00-800-000, on December 15, 1999 the ISO filed information concerning the calculation of the Grid Management Charge (“GMC”) to be effective for the year 2000. The GMC increase is from $.7831 per MWh to $.8300 per MWh.  The FERC accepted the filing, subject to refund. The ER00-800 order also accepted PG&E's GMC pass through rate, Pacific Gas & Electric Company, FERC Docket No. ER00-900, suspended it for a nominal period, and made it effective subject to refund and subject to the outcome of the pending proceedings which will eventually rule on the GMC rate once the ISO comes up with a GMC unbundling study.
9.   The ISO Submits Big Creek Physical Scheduling Plant Agreement
On February 14, 2000, the ISO submitted for filing the Big Creek Physical Scheduling Plant Agreement between the ISO and Southern California Edison Company. California Independent System Operator Corporation, FERC Docket No. ER00-1620-000.  The agreement is a pilot program under which all 23 Big Creek Hydroelectric Project Generation Units will be treated as a single unit for purposes of providing Regulation to the ISO. Interventions and Comments are due by March 6, 2000.
C.  The PX
1.	FERC Conditionally Accepts PX Expansion of Block-Forward Market, and New Delivery Points
In California Power Exchange Corporation, FERC Docket No. ER00-951-000, the PX on December 31, 1999 proposed two new Block-Forward products:  “Super Peak Energy” and “Peak Shoulder Energy.”  In addition, the PX proposes to allow for delivery at three new locations:  COB, Mead, and Palo Verde.  Finally, the PX proposes to delete three references to “monthly” in its tariff sheet, which enable the PX to eventually offer forward products of on an other-than-monthly duration.  The CPUC has filed comments supporting the PX’s filing.  On February 24, 2000, the FERC accepted the PX’s filing subject to the PX agreeing to file certain conforming amendments to its tariff.  In addition, the FERC required that the PX make future changes to its block forward delivery points via FERC filings and not unilaterally via changes to the PX manual.
2.	PX Files to Create Ancillary Services Markets
In California Power Exchange Corporation, FERC Docket No. ER00-1642-000, the PX seeks to establish forward and bilateral markets for ancillary services.  In addition, the PX seeks to allow participants with both load and generation to self-provide ancillary services.  The PX submitted its proposed filing on February 17, 2000.  Interventions and comments are due March 9, 2000.  
3.	PX Files Amendment No. 2 to its Tariff
In California Power Exchange Corporation, FERC Docket No. ER00-1641-000, the PX proposes tariff changes to accommodate the changes proposed in FERC Docket No. ER00-1641-000. The PX submitted its proposed filing on February 17, 2000.  Interventions and comments are due March 9, 2000.
D.	Miscellany
1.  FERC Issues Order on Rehearing in RTO Rulemaking
FERC issued its order on rehearing on Order 2000, its RTO order.  The new order, Order 2000-A, was issued February 25. FERC is holding regional RTO collaborative conferences in March, with a west-focused conference set for March 23-24 in Las Vegas.
2.	Calpine Files for Market Rates for its new Plants
Calpine Files for Market Rates for its new Plants in Calpine Construction Finance Company, FERC Docket No. ER00-1115-000.  In its application, submitted January 14, 2000, Calpine Construction Finance Company (“CCFC”) states that it will build and initially operate a variety of new generation facilities nationwide, including the Sutter and Los Medanos (Pittsburg) projects in California, and the South Point project in Arizona (some sales from which are contemplated to be made into California).  The application seeks market-based rate authority for sales of energy and capacity in California and other relevant states.  The CPUC filed a non-substantive Notice of Intervention on February 3, 2000.
1.	 CPUC Participating in RMR Annual Contract Amendments Filings at FERC 
Generators Whose Reliability Must Run Contracts have been Renewed by the ISO for 2000 have been Filing Annual Contract Amendments at FERC.  The CPUC has Participated in the Following Dockets:

Reliant Etiwanda, LLC, FERC Docket No. ER99-4398-000, Amendment to RMR Agreement for Reliant Etiwanda generating plant, CPUC Motion for Leave to Intervene out of Time and Protest filed December 17, 1999.  
Southern Energy Delta, L.L.C., FERC Docket No. ER00-936-000; revisions to RMR agreement for the Contra Costa Power Plant and the Pittsburg Power Plant, CPUC Notice of Intervention and Limited Protest filed January 14, 2000.  By letter order dated February 23, 2000, the FERC accepted in part and rejected in part Southern’s proposed filing.  The FERC observed that the RMR Agreement permitted only limited alterations to the RMR Agreement Schedules, and refused to accept for filing changes not permitted under the RMR Agreement.
Southern Energy Potrero, L.L.C., FERC Docket No. ER00-937-000; revisions to RMR agreement for the Potrero Power Plant, CPUC Notice of Intervention and Limited Protest filed January 14, 2000. By letter order dated February 23, 2000, the FERC accepted in part and rejected in part Southern’s proposed filing. The FERC observed that the RMR Agreement permitted only limited alterations to the RMR Agreement Schedules, and refused to accept for filing changes not permitted under the RMR Agreement.
Duke Energy South Bay, LLC, FERC Docket No. ER00-824-000; revisions to correct inaccuracies in the reactive power figures set forth in item no. 2 of Schedule A to the RMR agreement for the South Bay generating plant.  CPUC Notice of Intervention and Comments filed January 14, 2000.
Duke Energy South Bay, LLC, FERC Docket No. ER00-435-000; revisions to Schedules A and B to the RMR agreement for the South Bay generating plant.  CPUC Notice of Intervention and Comments filed January 14, 2000.  The FERC accepted Duke’s filing by letter order dated January 28, 2000.
Geysers Power Company, LLC, FERC Docket No. ER00-894-000; revisions to Schedules A and B to the RMR agreement for the Geysers generating units.  CPUC Notice of Intervention and Comments filed January 10, 2000.  By letter order dated February 9, 2000, the FERC accepted in part and rejected in part Geysers’ proposed filing. The FERC observed that the RMR Agreement permitted only limited alterations to the RMR Agreement Schedules, and refused to accept for filing changes not permitted under the RMR Agreement.
2.	Unresolved Issues Docket Partially Resolved
FERC accepted a partial settlement filed in the “unresolved issues” case, California Independent System Operator Corporation, FERC Docket Nos. ER98-3760-000 et al.  Briefs on the approximately one hundred remaining issues were filed February 14, 2000 and reply briefs are due March 27, 2000.  The order accepting the settlement is at 90 FERC 61,178.
VIII.	  Public Purpose Programs
A.	Energy Efficiency and Demand Side Management 

Two outstanding proceedings concern Energy Efficiency and Demand Side Management programs.  Proposed Phase 1 and Phase 2 decisions are pending for the utilities’ Annual Earning Assessment Proceeding (AEAP), covering accomplishments for years 1994 and 1997, 1998. (A.99-05-002; A.99-05-005; A.99-05-007; A.99-05-008).  
On September 27, 1999, the utilities filed their compliance applications seeking approval of proposed program year (PY) 2000 and 2001 energy efficiency programs, budgets, performance incentive mechanisms, and market assessment and evaluation studies, as required by D.99-08-021.  Decision 99-12-053, issued on December 16, 1999, authorized the utilities to implement their proposed PY 2000 energy efficiency programs and budgets on an interim basis, subject to mid-year adjustment after further hearings.  D.99-12-053 deferred a determination regarding the utilities’ program-specific performance award mechanisms to the final decision.  Evidentiary hearings concluded February 2, 2000.  Closing briefs will be submitted on February 29, 2000.  Proposed decision is likely to be mailed out May 8th. 
On February 17, 2000, the Commission adopted D.00-02-045 concerning the Structure and Operating Procedures of the California Board for Energy Efficiency (CBEE) and the Low-Income Governing Board (LIGB).  In this decision, the Commission disbanded the CBEE effective March 31, 2000, while continuing the LIGB.  The Commission also approved changing the LIGB name to the Low Income Advisory Board, or LIAB.
B.	Low-income Programs 

On May 17, 1999, PG&E, on behalf of itself, Edison, SDG&E, and SoCal Gas, filed a joint proposal for standardizing the treatment of administrative costs for the CARE and LIEE programs.  Comments on the Joint Proposal were due June 30, 1999.  Responses were due July 12, 1999.  On June 1, 1999, LIGB submitted its recommendations on standardized utility reporting guidelines for the CARE and LIEE programs.  

Applications from the utilities to competitively bid out their program year 2000 LIEE programs were due July 1, 1999.  Hearings were held in November.  Opening briefs were due December 23, 1999 and reply briefs are due January 11, 2000.  Public participation hearings are scheduled for January 11 in Sacramento and January 13 in Los Angeles.  Supplemental opening briefs on the public participation hearings are due February 1, 2000.

Pursuant to the December 29, 1999 Assigned Commissioner’s Ruling; parties and LIGB Advisory Committee members are beginning a project to propose standardized Low Income Weatherization Installation Program & Policy Procedures Manuals and Weatherization Installation Standards Manuals.  The proposed standardized manuals and proposed policy revisions are due March 17, 2000.  These revisions would be effective for the program year 2001.

C.	Structure and Operating Procedures of LIGB and CBEE

Energy Division convened a workshop on April 12 and 13, 1999 to solicit input on the structure and operating procedures of the LIGB and the CBEE.  The draft Workshop Report was distributed for public comment on May 26, 1999.  Comments on the draft report were due June 11, 1999.  The final Workshop Report was filed on June 30, 1999.

On October 12, 1999, the proposed decision of Commissioner Neeper on the structure and operating procedures of the Boards was distributed for comment.  On December 20, 1999, 
An alternate of Commissioner Duque to abolish the Boards was distributed for comment.  On January 20, an alternate of Commissioner Lynch was distributed.  Commissioner :Lynch’s alternate would retain the LIGB while abolishing the CBEE.  These decisions are on the Commission’s agenda for February 3, 2000.
D.  California Board for Energy Efficiency 

For information on the Board’s current activities and background, see the CBEE website at http://www.cbee.org.
E.	 Low-Income Governing Board  (LIGB)

For information on the Board’s current activities and background, see the LIGB’s website at http://www.ligb.org

See the Commission’s Daily Calendar for CBEE and LIGB meeting dates and information at  http://www.cpuc.ca.gov/calendars/current/table_of_contents.htm
under Public Meetings and Workshops.
IX . 	CEQA Issues Related to Divestiture of Hydro and Fossil Generation

Hydro:
Regarding hydroelectric generation assets, PG&E and Edison have filed applications in 1999.  PG&E seeks to divest its entire hydroelectric system via an auction, while Edison has filed to retain its facilities.  The Energy Division issued a Notice of Preparation of an Environmental Impact Report (EIR) on PG&E’s application (April 28, 2000) and will conduct several public scoping meetings throughout northern and central California to obtain community and stakeholder input on environmental issues and concerns regarding the sale.  These meetings will be from May 8 through May 25.  The Energy Division’s EIR team will also be conducting technical consultations with state, local and federal agencies.   Written comments on the scope of the EIR and PG&E’s proposal are due by June 1, 2000.
Edison’s application requests retention of its hydroelectric assets.  The application is currently undergoing the initial stages of the CEQA review.  

Fossil: 
Environmental assessments of the sale of the utilities’ fossil-fuel plants under the California Environmental Quality Act (CEQA) were accomplished in 1997 and 1998 for Edison, PG&E, and SDG&E.  The Commission voted to adopt the CEQA documents for these plant sales and approved the results of the auctions in 1998 and 1999. 

In 1999, Edison filed an application (A. 99-10-023) to sell its majority ownership (56%) in the Mohave Generating Station.  The Commission released a Final Mitigated Negative Declaration which analyzes environmental impacts that could result from the sale.  The Commission is awaiting Edison to announce the winner of the auction.  Sierra Pacific Power Company also filed a divestiture application (1999) concerning its fossil-fuel plants located in Nevada.  This application is currently under review.

Recent Activity 
See http://www.cpuc.ca.gov/environ.html or 
http://www.cpuc.ca.gov/divisions/energy/environmental/info/aspen/pgehydro/pgehydro.htm 
or http://www.pgedivest.com/ or http://www.scedivest.com/ or http://www.sdgedivest.com for more information.
X.	Reliability 

Currently the staff are analyzing electric distribution system outage data, reporting on audits of utility record keeping (inspections and maintenance including tree trimming), working on undergrounding conversion OIR, and assisting the distributed generation OIR.  Work remaining from AB 1890 includes an interstate compact for reliability.
 	
Outage Reports
•	Determining whether each major electric utility has satisfied the reporting requirements of D.96-09-045 (SAIDI and related reliability indices).  Following up with requests for more data or information as needed.
•	Investigate why certain circuits seem to repeatedly perform poorly within the utilities’ service territory.
Inspection/Maintenance Standards
•	Determining whether each major electric utility has satisfied the reporting requirements in GO 165.
•	Performed GO 165 audits of PG&E; staff report to follow.
•	D.99-12-052 reaffirms that municipal and publicly owned utilities are subject to GO 165 requirements.
Emergency Standards
•	Staff is requiring utility rotating outage plans to comply with standing decisions and emergency response plans to comply with GO 166.
•	Utilities notify Energy Division of major service outages via an emergency phone number, voice mailbox, and pagers. ED plans to merge it with a similar accident notification system used by the Utility Safety Branch, and is considering a statewide (ISO, OES, CEC, utilities) beeper system for energy emergencies.
•	GO 166 Standards- ALJ O’Donnell’s proposed decision was Item 1 on the Commission’s April 20 agenda and was held. 
•	OIR 00-01-005 will assess whether existing programs begun in the 1970s to put overhead lines underground should be expanded, ended, or otherwise modified or improved.  The first of 4 workshops were held February 10/11, 2000.  Comments were received 4/25, with reply comments in two weeks.
•	Staff working with the Department of Health Services (DHS) on EMF issues received utility data on cost and reliability of underground vs. overhead lines. 
Y2K
•	Staff expects to close out this program uneventfully after February 29, 2000 passes (leap year date). 
Interstate Compact
•	Western Interconnection Coordination Forum is working on a proposal for unifying western electricity institutions under the North American Electricity Reliability Organization; to be finalized by December, 2000.  CREPC, WSCC and the RTOs support a provision in proposed federal legislation that would authorize FERC to defer to reliability organizations and organizations of States, if they are interconnection-wide.
XI.	Consumer Education/Protection

The settlement approved by Decision (D.) 99-05-051 on issues related to SDG&E’s post-transition rate freeze/ratemaking applications required SDG&E to design and implement a communications plan to provide consumers with information about the post-transition competitive energy market. The communications plan includes bill inserts, print and radio advertisements, and brochures available through the Electric Education Call Center and SDG&E. The materials developed by SDG&E are subject to Commission review and approval. 

The utilities’ customer education program mandated by AB1890 and approved by the Commission in D.97-08-064 concluded on May 31, 1998. The Electric Education Call Center continues to serve residential and small business customers in 11 languages, with further language support available when necessary, providing customer service operators to answer questions and forward printed materials. Consumers may also access the consumer education website at www.knowledgeispower.org.

English/Consumers		800-253-0500
English/Businesses		800-789-0550
Spanish					800-365-0550
Chinese/Mandarin		800-940-3883
Chinese/Cantonese		800-957-8558
Vietnamese				800-474-5335	
Hmong					800-462-3749
Lao						800-442-2489	
Cambodian				800-465-6543
Japanese				800-210-7933
Tagalog					800-683-8448	
Korean					800-930-9559	
Thai						800-462-1244	
TDD						800-933-3119

The Electric Education Call Center is scheduled to terminate on December 31, 1999. (D.99-08-024)  In accordance with D.99-08-024, the Consumer Services Division filed a report on October 8, 1999 indicating that it can take over the functions of the Electric Education Call Center by November 1, 2000.

Knowledge is Power website   The Knowledge is Power website may be accessed at: http://www.knowledgeispower.org/.  The website is another resource for consumers to learn more about how the coming changes to the electric industry will affect their energy choices. Help topics provides answers to consumers’ frequently asked questions and invites consumers to e-mail questions for an e-mail response.  Links to the CPUC and the CEC website are also provided.

A.	The Commission’s Outreach Plan
The Commission’s own Outreach Plan builds upon the Commission’s unique resources and expertise to assist and educate consumers about the changes taking place in the electric industry.  

Throughout 1999, the Commission is participating in Town Hall meetings and briefings in legislative districts statewide. These activities are designed to assist legislators in providing their constituencies with information about electric industry restructuring. 
B.	The Electric Education Trust
D.97-08-064 directed the EET to work with community-based organizations to focus its educational efforts on customer groups and communities where understanding of the changes to the electric industry is low.  The Commission authorized a budget of $13 million to the EET. 
C.	Consumer Protection 

Pursuant to Senate Bill 477, the Commission adopted rules to protect consumers from unfair or abusive marketing practices by electric service providers (ESP).  Among other things, an ESP offering service to residential or small commercial customers must register with the Commission.  The Commission established interim standards for ESP registration in D. 98-03-072 and final standards in D. 99-05-034.  The number of ESPs with active registration status has remained fairly constant for some time between 30 and 35.  With the termination of the inactive status on July 1, 2000, the over 60 ESPs with inactive registration status shall either fulfill all registration requirements to achieve active status, request cancellation, or be permanently revoked.  Information for consumers and ESPs is available at the Electric Service Provider Link on the CPUC's web page.