Title: 980916 ER Status Report
Author: DUG
Last saved by: CPUC

RESTRUCTURING STATUS		updated  09-16-98

10/13/98

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

Date    :	September 16, 1998

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 status report on electric restructuring activity since the Commission Meeting held on August 6, including upcoming events and filings.

	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	
A. Performance-Based Ratemaking (PBR)	
1. Generation PBR, A. 96-07-009, A. 96-07-018	
2. Distribution PBRs - Applications Ordered by D.95-12-063, Ordering Paragraph 17.	
B. Unbundling, D. 97-08-056 (A.96-12-009; A96-12-011; A.96-12-019)	
1. Unbundling Revenue Cycle Services	
2. Unbundling Tariffs	
C. Streamlining	
II. Filings Necessitated By Delay In Implementation of the ISO/PX	
III. Transition Costs	
A. CTC:  A. 96-08-001 et. al.	
B. AB 1890 Rate Reduction Bonds	
C. Qualifying Facilities (QF) Issues	
IV. Divestiture Proceedings	
A. SDG&E Sec. 851 “Divestiture” Application 97-12-039	
B. PG&E, Second Sec. 851 "Divestiture" Application 98-01-008	
C. PG&E, Sec. 851 "Divestiture" Application 96-11-020	
D. Southern California Edison, Sec. 851 "Divestiture" Application 96-11-046	
V. Direct Access	
A. General	
B. Load Profiling (D.97-10-086)	
C. Tariffs and Service Agreements for Direct Access (D.97-10-087)	
D. Meter and Data Communication Standards (D.97-12-048)	
E. Retail Settlements and Information Flow (D.97-12-090)	
F. Registration of Electric Service Providers (ESP), 415-703-3779	
VI. FERC‑Related Issues	
A. PX files Amendment No. 3 to the PX Operating Agreement and Tariff, July 30	
B. ISO files Amendment No. 10 to the ISO Operating Agreement and Tariff, July 27	
C. ISO submits Clarification Amendment to the ISO Operating Agreement and Tariff, July 15	
D. PX Files a Revised Notice for Change in Start of Hour Ahead Market	
E. ISO files Amendment No. 9 to the ISO Operating Agreement and Tariff, July 6	
F. ISO and PX submit Tariff Compliance Filings June 1	
G. PX Reaches Settlement in Principle with Most Parties	
H. PX Files for Change in Start of Hour Ahead Market	
I. FERC Approves Settlement of the ISO Grid Management Charge	
J. FERC Sets Hearing in SMUD v. PG&E	
K. ISO Files Amendment No. 8	
L. Settlement Negotiations Continue in the Must-Run Cases	
M. The ISO to Issue Up to $310 Million in Long-Term Debt	
N. The PX files two Amendments	
O. The ISO and the PX file Revised Staging Plans at the FERC	
P. ISO files settlement with the FERC on its Grid Management Charge	
Q. The ISO and the PX Commence Operations on March 31, 1998	
R. The ISO files Amendment No. 7	
S. FERC issues orders on various FERC Electric Restructuring Dockets	
T. FERC issues order on PX Tariff Amendments	
U. FERC issues orders on ISO Tariff Amendment Nos. 1 - 6	
V. PG&E, SDG&E and Edison Refile their Transmission Owner Tariffs	
W. Settlement Negotiations in the ISO’s Grid Management Charge	
X. Prehearing Conferences held March 17-18 in Various Dockets	
Y. Variety of New Filings and Amendments by the ISO/PX to their Operating Tariffs and Protocols	
Z. A Prehearing Conference Held on February 17, 1998	
AA. Recent FERC Decisions	
1. FERC Conditionally Accepts for Filing, and Suspends, Subject to Refund, and Subject to Further Orders, the ISO’s Amendment No. 10, and Establishes Procedures.	
2. FERC Issues Order Granting Williams Energy Services Company Market-Based Rate Authority for Ancillary Services	
3. FERC Issues Order Denying Motions for Stay, but Authorizing the ISO to Take Interim Action Regarding its Ancillary Services Markets	
4. FERC Accepts for Filing Proposed Market-Based Rates for Ancillary Services  filed by Several Edison New Owners	
5. FERC Determines that Duke Energy Units Are Exempt Wholesale Generators, and Accepts for Filing Tariffs for Market-Base Power Sales	
6. FERC Conditionally Accepts ISO Amendment No. 8 for Filing	
7. Settlement Reached in SDG&E Transmission Rate Case	
8. FERC Accepts for Filing Tariff for Market Based Sales filed by Ormond Beach Power Generation	
9. FERC Rejects Meter Service Agreements for PX Participants	
10. FERC Accepts for Filing Proposed Cost-Based Rates for Ancillary Services filed by El Segundo, LLC, and Long Beach Generation, LLC	
11. FERC Denies Edison’s Motion for Clarification	
12. FERC Accepts for Filing Proposed Market-Based Rates filed by Three Edison New Owners	
13. FERC Accepts PG&E’s March 4, 1998 TO Tariff Amendments for Filing, and Consolidates the Proceeding with the Pending TO Tariff Rate Case	
14. FERC Accepts Proposed Amendments to SDG&E’s Master Must Run Agreement for Filing	
15. FERC Announces Regional Conferences on ISO policy	
VII. The Electricity Oversight Board, ISO, and PX	
VIII. Unbundling Cost of Capital	
IX. Public Purpose Programs	
A. California Board for Energy Efficiency Programs (CBEE)	
B. Governing Board For Low-Income Programs (LIGB)	
X. Hedging Energy Costs	
A. PG&E	
B. SDG&E	
XI. Small and Multi Jurisdictional Utilities	
XII. CEQA Issues Related to Divestiture of Fossil Generation	
XIII. Reliability	
A. Inspection, Reporting, & Repair Standards for Reliability	
B. Emergency Standards for Reliability	
C. Performance Standards	
D. Interstate Issues	
E. Tree Trimming Inspections	
XIV. Consumer Education	
A. The Commission’s Outreach Plan	
B. The Electric Education Trust	
C. Consumer Education	
D. The Commission’s Outreach Plan	
E. The Electric Education Trust	
F. Consumer Protection	

I.	Ratesetting
A.	Performance-Based Ratemaking (PBR)
1.	Generation PBR, A. 96-07-009, A. 96-07-018 
Recent Activity 
•	D.98-07-016 dated July 2, 1998 ordered the proceeding closed once pending intervenor compensation requests are decided. 

•	On May 1, 1998, in compliance with Ordering Paragraph 3 of D.97-12-096, PG&E submitted a report to the Energy Division on (1) the status of market valuation and divestiture of its hydroelectric and geothermal facilities; (2) the status of must-run designations for hydroelectric and geothermal facilities; and (3) any other factors affecting the need for and appropriateness of a proceeding to consider PBR for hydroelectric and geothermal facilities.

Upcoming   
•	Proceeding to be closed once pending intervenor compensation requests are decided.

2.	Distribution PBRs - Applications Ordered by D.95-12-063, Ordering Paragraph 17.
Recent Activity  
•	December 31, 1997:  Edison filed A.97-12-047 to update its distribution PBR for the customer service and reliability requirements established in D.96-09-045 and D.96-11-021. 
•	January 16, 1998:  SDG&E filed its distribution PBR application A.98-01-014, including a gas and electric distribution cost-of-service showing. 
•	February 23, 1998: A pre-hearing conference was held in A.97-12-047.
•	March 11, 1998: An Assigned Commissioner’s Ruling was issued in A.97-12-047 establishing the category of the proceeding and providing a scoping memo.
•	March 17, 1998: A pre-hearing conference was held in A.98-01-014.
•	March 31, 1998: An Assigned Commissioner’s Ruling was issued in A.98-01-014 establishing the category of the proceeding and providing a scoping memo.
•	April 20, 1998: SDG&E filed supplemental testimony in A.98-01-014.
•	May 7, 1998: A workshop was conducted by the Energy Division in A.97-12-047 to discuss electric reliability PBR proposals for SCE.
•	May 15, 1998: SDG&E files report reviewing 1997 performance of its current base rates PBR.
•	June 12, 1998:  Energy Division issues report on workshop on electric reliability PBR proposals for SCE in A.97-12-047.
•	July 3, 1998:  Intervenor testimony filed on SDG&E’s proposed PBR/Cost of Service application A.98-01-014.
•	July 23, 1998:  Commission issues decision in A.97-12-047.
•	July 31, 1998:  SDG&E files rebuttal testimony in A.98-01-014.

Upcoming Events  
•	PG&E:  It is expected that PG&E will file its distribution PBR by the end of summer 1998.
•	SDG&E, A.98-01-014:  The first week of hearings are scheduled to begin August 17, 1998.  If necessary, another week of hearings will occur starting August 31, 1998.
•	Electric utilities file proposals for post-transition ratemaking by January 15, 1999.
•	SCE: The midterm review for SCE’s base rates PBR is scheduled to begin in March 1999.

Other Past Activity/Information of Interest:
D.96-11-021 ordered electric utilities to file in PBR proceedings proposed performance standards for maintaining, repairing, and replacing  distribution facilities no later than July 1, 1998.  D.97-04-067 authorized PG&E to file its distribution PBR proposal on or after December 15, 1997, and SDG&E to file a distribution PBR application during the last quarter of 1997.  The requirement that Edison file a new distribution PBR application was vacated, since D.96-09-092 dated September 20, 1996 adopted a transmission and a distribution PBR for Edison and provided for its adaptation to a distribution-only PBR.  D.97-10-057 ordered PG&E, Edison, and SDG&E to each file an application on January 15, 1999 which proposes ratemaking mechanisms which they believe should be in place after the end of the rate freeze period.  D.97-12-041 directed SDG&E to include an electric and gas cost-of-service showing with its distribution PBR application.

B.	Unbundling, D. 97-08-056 (A.96-12-009; A96-12-011; A.96-12-019)
1.	Unbundling Revenue Cycle Services

PG&E A.97-11-004; SCE A.97-11-011; SDG&E A.97-12-012:  These are applications filed in compliance with D.97-05-039 to determine the net cost savings resulting when billing, metering and related services are provided by an entity other than the utility distribution company and propose a means for ensuring that customers are not charged by the distribution utilities for those services in such circumstances.  The Commission’s goal is to issue a decision approving unbundled charges for these services no later than January 1, 1999.  By Assigned Commissioners Ruling (ACR), a two phase ratesetting proceeding was adopted.

Recent Activity
•	Phase 1:  On July2, the final order, D.98-07-032, on phase 1 issues was voted out. PG&E was authorized to defer offering credits on the customer bills and offer checks except where the ESP directly bills the customer on a consolidated bill.  Other adopted policies: terminology for the four credit categories; rate schedule segmentation; and a one line item allowance for the customer bill.  The order also solicited parties to explore a series of questions from Commissioners about abolishing the credit approach in favor of a tariff approach and about the jurisdictional and market concerns when ESPs are required to identify savings for the consolidated billing payment option. The following parties filed comments on August 12^th:  SDG&E, PG&E, SCE, CUE, ORA, DGS/UC/CSU, CEC, Cellnet, PG&E Energy Services, ENRON, and So Cal Gas.  

•	Phase 2:   On June 26 opening briefs were filed by: PG&E, SCE; SDG&E; TURN; ORA; CLECA/CMA; Farm Bureau; UC/DGS/CSU; CUE; Enron; Cellnet; CEC.   
•	On July 10 reply briefs were filed by California Competition Network; Commonwealth Corporation; PG&E, SCE; SDG&E; TURN; ORA; UC/DGS/CSU; Enron; Cellnet; CEC.  The two new respondents addressed comments made by Commissioner Knight at the July 2 meeting and supported the methodology touted by Enron. 
•	On August 13, the ALJ issued the proposed decision and a workshop ruling.
•	On August 27 a workshop was held to construct tables for the final decision
•	On August 31, the ALJ issued a ruling asking  parties to submit credits on September 3 assuming a different series of assumptions 
•	September 2 comments on the PD;  September 8 reply comments on the PD
Upcoming Events  

September 17	Commission Decision (estimated) item 1
•	  

2.	Unbundling Tariffs
On August 1, 1997, the Commission adopted D.97-08-056, which disaggregated utility rates into various components, including generation, transmission, distribution, public purpose programs and nuclear decommissioning.

Recent Activity
•	On December 16, 1997, the Commission adopted the Unbundling Resolution, E-3510.  At that Commission meeting, it was noted that certain inadvertent errors may be in Resolution E-3510.  The Energy Division committed itself to correcting those errors.  On June 26, 1998, the Energy Division issued a Proposed Resolution, revising Resolution E-3510.  Comments on the Proposed Resolution are due in 20 days and the replies are due 10 days later.  The Energy Division will consider the comments and the replies before placing a Draft Resolution on  the Commission Agenda.  
•	Comments to the Proposed Resolution were filed on July 15 and 16, 1998. 
•	Tariff filings:  Pursuant to D.97-08-056, PG&E, SDG&E and Edison filed compliance advice letters in August, 97.  After receiving several protests to these advice letters and conducting a workshop, the Energy division directed the utilities to file supplemental advice letters.  The Energy Division reviewed those advice letters and resolved several issues related to them in Resolution E-3510, which was adopted on December 16, 1997.  Pursuant to resolution E-3510, SDG&E and Edison filed compliance filings on December 23 and December 24, 1997 respectively.  On December 17, 1997 PG&E sought an extension until December 31, 1997 to file its compliance filing.  The extension was granted on December 19, 1997.  PG&E sought another extension on January 9, 1998. PG&E’s second request for extension was granted.  PG&E made its compliance filing on January 28, 1998.
•	Pursuant to Resolution E-3510, on March 2, 1998, PG&E and SDG&E filed Advice Letters to unbundle their bills by June 1, 1998.  The Energy Division is in the process of reviewing these filings.
•	Petitions to Modify D.97-08-056:  Several parties have filed petitions to modify D.97-08-056.  The Commission has already addressed several of these and is reviewing remaining petitions:  (1)New Energy Ventures petition to modify D.97-08-056 to change the calculation of the PX credit.  A proposed decision on this matter is on the Commission’s meeting agenda;  (2) PG&E Energy Services petition to modify D.97-08-056 to clarify certain matters relating to the calculation of the PX credit; (3) PG&E’s petition to modify D.97-08-056 to permit it to provide billing information to customers which identifies the cost of each utility function in percentages of total bill rather than dollar charges.  The Commission is also considering the appropriate forum for reviewing the Energy Reliability Index pursuant to comments filed by PG&E, Edison, SDG&E, and ORA.
•	On March 9, l998, PG&E filed a petition to modify D.97-12-109 (which it titled a “motion”) to clarify the Commission’s intent to permit the recovery of must-run costs.  Edison and SDG&E support PG&E’s petition to modify.  This petition was granted on April 9, 1998.
•	On March 26,l 998, the Commission  issued D.98-03-050 which granted PG&E’s petition filed on October 29, 1997 to modify D.97-08-056 regarding the treatment of the nuclear decommissioning revenue requirement and averaging of PX costs.  It also granted  Western Mobilehome Parkowners Association’s petition filed on November 25, 1997 to modify D.97-08-056 seeking clarification of the application of the 10% rate discount in master meter tariffs. 
•	PG&E has filed an advice letter to comply with the requirement of D.98-03-050.
Upcoming Events
The Energy Division is in the process of final review of utilities’ compliance filings.

C.	Streamlining
This proceeding eliminates those accounts and procedures which are no longer necessary as electric industry regulation enters a new phase and establishes certain new accounts.  The streamlining proceeding has resulted in the elimination of ECAC, ERAM, and several other accounts, and has established a new account called the Transition Revenue Account (TRA) to facilitate calculation of headroom.

Recent Activity  
•	March 26, l998:  The Commission issued D.98-03-059 denying PG&E’s petition to modify D.97-10-057 to make an except to the rule that the utility may not carry over costs incurred during the transition period.  The order granted PG&E's request regarding the disposition of balances in certain regulatory accounts.
•	December 23, l997:  The utilities filed Advice Letters complying with Resolution E-3514.
•	December 16^th:  The Commission adopted Resolution E-3514 which accepted certain parts of the utilities’ November 3 Advice Letter filings, but required Edison and PG&E to refile the new TRA tariffs.
•	November 25^th:  PG&E filed a petition to modify D. 97-10-057 with regard to recovery of account balances which remain after the rate freeze period. Edison filed in support of the petition to modify.  The Commission has not yet acted on the petition to modify.
•	November 17^th:  Deadline for parties to file comments addressing the appropriate forum in which to consider all matters relating to the Energy Reliability Index (ERI).  This call for comments was in the streamlining proposed decision.
•	November 3^rd:  Utilities filed Advice Letters to comply with the streamlining decision, D.97-10-057.
•	On December 16, 1997, the Commission adopted the Streamlining Resolution, E-3514.  At that Commission meeting, it was noted that certain inadvertent errors may be in the Resolution E-3514.  The Energy Division committed itself to correcting those errors.  On June 26, 1998, the Energy Division issued a Proposed Resolution, revising Resolution E-3514.  Comments on the Proposed Resolution are due in 20 days and the replies are due 10 days later.  The Energy Division will consider the comments and the replies before placing a Draft Resolution on  the Commission Agenda.
•	Comments to the Proposed Resolution were filed on July 16, 1998.
Upcoming Events
The December 23^rd Advice Letter filings are being reviewed by Energy Division for compliance with Resolution E-3514.

II.	Filings Necessitated By Delay In Implementation of the ISO/PX

PG&E’s, Edison’s and SDG&E’s  advice letters 1735-E, 1285-E, and 1075-E filed pursuant to D.97-12-131 address the delayed implementation of the ISO and the PX.  The advice letters contain revisions to the utilities’ tariffs which were filed previously in various proceedings related to the electric restructuring (e.g., Transition Costs, Unbundling, Direct Access, Streamlining), and establish an ISO/PX Implementation Delay Memorandum Account for each utility.  PG&E and Edison have supplemented their 1998 ECAC applications to address the recovery of funds booked to the IPIDMA.  SDG&E did so by separate application in June.

III.	Transition Costs
A.	CTC:  A. 96-08-001 et. al.
Transition costs are generation asset related uneconomic costs that utilities will have an opportunity to recover through the Competition Transition Charge (CTC).  The transition cost proceeding (A.96-08-001 et. al.) has addressed most transition cost and CTC terms and conditions issues in two phases and 5 decisions.

Recent Activity

•	PG&E’s, SCE’s and SDG&E’s advice letters addressing their transition cost balancing account tariffs were approved in August.
•	A.98-05-004, et. al.: A scoping memo was issued on July 10.  On July 20 the utilities amended their applications to address issues to be considered in Phase 1.  PG&E’s, SDG&E’s, and Edison’s applications address electric restructuring implementation costs pursuant to PU Code Section 376.  In their applications, the 3 utilities combined identify $98 million of capital and expense related electric restructuring implementation costs for 1997.  The combined utilities’ estimates of these costs for the entire period through 2001 total $980 million. 
•	A.98-05-022, et. al.:  A Pre-hearing conference will be held in September in PG&E and SCE’s applications.  Pursuant to D.97-11-074, PG&E, SCE and SDG&E filed applications to establish the principles necessary to appraise their retained assets and to report assessments of the materials and supplies inventories.

Upcoming Events

•	A.98-05-004, et. al.:  The schedule set forth in the scoping memo is:  ORA testimony August 26; Intervenor testimony Sept 9; Hearings Oct 19 to Oct 30; PD March 1999; Decision April ’99.
•	An ALJ proposed decision in A.96-08-001, et. al, relating to the applicability of CTC charges to new customer load addressed in PU Code Section 369, is expected in August.
•	PG&E, SCE and SDG&E will file their applications in the first annual transition cost proceeding on September 1.

Other Past Activity and Information of Interest
•	The CTC terms and conditions tariffs of PG&E, SCE, and SDG&E, (AL’s 1719-E, 1274-E, and 1062-E) filed on December 12, 1998 were approved effective January 1, 1998.
•	On December 3^rd, 1997 the Commission issued the transition cost tariff issues decision, D.97-12-039.  This decision provides clarification to CTC terms and conditions tariff issues that were not addressed in the Phase I decision.  This decision also addresses tracking of transition cost obligations and calculation of departing load customer lump sum penalties.
•	On November 19^th, 1997 the Commission issued the transition cost phase II decision (D.97-11-074).  This decision addresses the transition cost eligibility of utility costs and a method to determine the amount of these costs that are eligible for transition cost recovery.
•	D.97-07-059 was issued in July.  This decision ordered utilities to establish memorandum account to track the reduced rate of return applicable to costs for which utilities seek transition cost eligibility.  It was issued on July 16^th. 
•	Transition cost Phase I decision D.97-06-060 addresses accounting mechanisms to apply CTC revenues to transition costs, resolving questions such as which uneconomic costs can be amortized first and how accelerated amortization works.  The decision also establishes broad guidelines regarding transition cost eligibility of certain utility cost items and CTC terms and conditions issues.   

B.	AB 1890 Rate Reduction Bonds

Recent Activity
•	January - February 1998:  Tariff language regarding the FTA and the 10% rate reduction continues to be fine-tuned.  
•	January 1, 1998:  The Trust Transfer Amount (TTA, a.k.a. Fixed Transition Amount Charges (FTAC), became effective, along with the 10% rate reduction for residential and small commercial customers.

C.	Qualifying Facilities (QF) Issues
Recent Activity
•	For the most up-to-date information, check the Energy Division QF Web Site at: http://www.cpuc.ca.gov/divisions/energy/QF_issues/qf_main_page.htm
•	October 23, 1998: Proposed Decision is expected on the Proposed Settlement Agreement. 
•	July 27 & 28, 1998: Short Run Avoided Cost and the PX Clearing Price Meeting at PG&E, 77 Beale Street, Room 308, San Francisco, California. For more information, contact Elsie at 626-302-8514. Prior to attending, parties must execute a confidentiality agreement. 
•	July 27, 1998: Reply comments on the July 10th comments are due. 
•	July 10, 1998: Comments on the June 10th Error! Bookmark not defined. submitted jointly by Edison, PG&E, SDG&E, IEP, CCC, NRG Energy, and Enron. Comments were also submitted by ORA, TURN, Watson, and SoCalGas. 
•	June 18, 1998:  Assigned Commissioner and ALJ Ruling Requesting Comments on Additional Procedure Issue.   
•	June 8, 1998:  Joint Assigned Commissioner and ALJ Ruling Regarding Further Scheduling.  
•	May 7, 1998:  Settlement Conference at 2pm at the Commission in San Francisco.  See Notice on the website.
•	April 29, 1998:  Reply Comments filed:  PG&E, Edison, SDG&E, IEP, CCC, NRG Energy Inc. (Jointly), ORA, Watson Cogeneration, and Enron.
•	April 21, 1998: Extension #3 and New Schedule. ALJ Econome granted an oral request by PG&E, Edison, and SDG&E for an extension of time to file Reply Comments on the February 6, 1998 Ruling. This request was made and granted in accordance with Rule 48a of the Commission's Rules of Practice and Procedure. PG&E, Edison, and SDG&E are charged with sending.  The following schedule has been revised for the third time and is as follows: 
•	Opening Comments (include request for evidentiary hearings) March 25th, 1998 (unchanged).
•	Reply Comments (include request for closing argument) Now April 29, 1998.
•	Proposed Decision Now No later than July 29, 1998 
•	March 25, 1998: Eight sets of comments were received from: PG&E, Edison, and SDG&E, IEP/CCC, ORA, Watson Cogen., Calif. Integrated Waste Management Board, NRG Energy, Inc., Enron, and SoCalGas in response to the February 6^th Ruling.
•	February 6^th:  Assigned Commissioner and ALJ Ruling Regarding Review of QF Contract Restructurings and Modifications.  This ruling sets forth a procedural schedule for addressing at least four key issues necessary to resolve in order to further facilitate QF contract restructurings or modifications and review thereof.  Opening Comments due on March 9^th.  Reply Comments due on March 23^rd.  Proposed Decision anticipated no later than June 22^nd.  It is not anticipated that hearings will be called for on these issues.  For more information, contact Dave Gamson (dmg@cpuc.ca.gov) or Theo Kemos (tsk@cpuc.ca.gov).

IV.	Divestiture Proceedings  

Recent Activity 

A.	SDG&E Sec. 851 “Divestiture” Application 97-12-039
Filed December 19, 1997 for the sale of its fossil fuel plants and 20% interest in SONGS. Protests were due February 4, 1998. Protests or responses were filed by the City of Carlsbad, the California Cogeneration Council, and the Independent Energy Producers Association.  SDG&E filed a reply on February 17, 1998, and it filed direct testimony on February 26, 1998.  An ALJ Ruling was issued March 9, 1998, which permits interested parties to file a response on or before March 30, 1998, subsequently extended to April 6, 1998.  A prehearing conference was held on April 30, 1998, and a scoping memo was issued.  The matter has be re-assigned to Judge Barnett.
B.	PG&E, Second Sec. 851 "Divestiture" Application 98-01-008
Filed January 14, 1998, for the sale of Hunters Point, Potrero Hill, Pittsburg, and Contra Costa fossil-fuel plants and the Geysers geothermal plant.  Protests or responses were filed by ORA; Calpine Geysers Company L.P. and Calpine Corporation; the City and County of San Francisco; the Southeast Alliance for Environmental Justice; and Union Oil Company of California, NEC Acquisition Company and Thermal Power Company.  PG&E’s reply was filed on February 27, 1998, and a scoping memo was issued on March 12, 1998.  Phase I briefs were filed on March 23, 1998, and March 30, 1998, and an interim decision was issued July 23, 1998. SAEJ has filed a petition for rehearing.
C.	PG&E, Sec. 851 "Divestiture" Application 96-11-020
•	This proceeding remains open to deal with intervenor compensation issues.  ACR on eligibility has been prepared and is under review by the assigned offices.
•	December 16^th:  D 97-12-107 approved sale of three fossil plants by PG&E to Duke Energy Power Services, Inc. for the highest bid of $501 million.  Of the three plants, two (Moss Landing and Oakland) are required for the reliable operation of the electrical system.  Pursuant to Code Section 362, the Commission must ensure that such plants remain available and operational.  The sale is subject to the new owners signing an agreement with the Independent System Operator in the form filed with the FERC on March 31^st and substantially approved by the FERC on October 30, 1997.  ORA was the only party to file a protest.  ORA supported approval of the sale but objected to PG&E's request for reinstatement of the cut in return on equity (ROE) on fossil plants that the Commission's policy decision had imposed. 
•	September 3^rd:  D.97-09-046 was issued.
•	Oct 22^nd:  D.97-10-058 was issued certifying the mitigated negative declaration.
D.	Southern California Edison, Sec. 851 "Divestiture" Application 96-11-046

~~•~~	Edison filed its transaction documents for the Long Beach Plant on February 6, 1998.  ORA filed a protest on February 17, 1998, and Destec, Inc. (the buyer) filed a response in support.  An interim decision approving the sale was signed out on March 24, 1998.  Edison has announced the sale of its final plant, the Ormand Plant, and Edison filed its transaction documents for Commission approval on April 17, 1998, and a draft decision is circulating within the Commission.
December 16^th:   D.97-12-106 approved sale of 10 fossil plants by Edison.  Sale of two additional plants has not yet been completed.  Edison has sold the 10 plants for a total of $1.115 billion.  The buyers are AES, Houston Industries, NRG Energy/Destec, and a subsidiary of Thermo Electron.  A final decision was signed out July 2, 1998, and no petition for rehearing was filed

V.	Direct Access
General
Recent Activity
•	Workshop Scheduled:  The Energy Division will conduct a workshop on September 25, 1998, in order to address the topics listed below.  A copy of the workshop notice may be obtained at http://162.15.5.2:80/wk-group/dai/lp/msg00027.htm

•	To assess the impacts of requiring metering for customers with maximum demands between 20 and 50 kW

•	To determine whether the exemption allowing load profiles for 20 to 50 kW customers should continue past January 1, 1999

•	To examine any inconsistencies in the 20 kW load profile cut-off points

•	September 8^th:  The Energy Division issued a workshop report, on the two topics listed below.  A copy of the report may be obtained at http://162.15.5.2:80/wk-group/dai/lp/msg00026.htm

•	Technical and Methodological Issues Related to Load Profiling (pursuant to Assigned Commissioners Ruling Dated January 13, 1998)

•	Data And Information Necessary To Assess The Effects Of Load Profiling, And To Determine How Load Profiling Methodologies And Administration Can Be Improved (pursuant to D.97-10-086, Ordering Paragraph 10)
•	September 15^th:  Direct Access Implementation Activity Reports were filed by PG&E, Edison, and SDG&E.  These reports are filed on the 15^th of every month.  Check the following URL for electronic copies: 
	http://www.cpuc.ca.gov/divisions/energy/Direct_Access/direct_main_page.htm
	
•	ONGOING:  The Energy Division is working with UDCs, ESPs, and other parties to address and resolve specific issues related to the start-up of direct access.  Recent activity has focused on billing system issues and Meter Service Provider (MSP)/UDC relationships.

•	The “Rule 22 Tariff Review Group” held its monthly meeting September 1, 1998.  The next monthly meeting is scheduled for October 6^th, 1998.
Load Profiling (D.97-10-086)
Recent Activity
•	Workshop Scheduled:  The Energy Division will conduct a workshop on September 25, 1998, in order to address the topics listed below.  A copy of the workshop notice may be obtained at http://162.15.5.2:80/wk-group/dai/lp/msg00027.htm

•	To assess the impacts of requiring metering for customers with maximum demands between 20 and 50 kW

•	To determine whether the exemption allowing load profiles for 20 to 50 kW customers should continue past January 1, 1999

•	To examine any inconsistencies in the 20 kW load profile cut-off points

•	September 8^th:  The Energy Division issued a workshop report, on the two topics listed below.  A copy of the report may be obtained at  http://162.15.5.2:80/wk-group/dai/lp/msg00026.htm

•	Technical and Methodological Issues Related to Load Profiling (pursuant to Assigned Commissioners Ruling Dated January 13, 1998)

•	Data And Information Necessary To Assess The Effects Of Load Profiling, And To Determine How Load Profiling Methodologies And Administration Can Be Improved (pursuant to D.97-10-086, Ordering Paragraph 10)

•	June 9^th:  An Assigned Commissioner’s Ruling (ACR) was issued in order to propose a process that will allow parties to propose additional load profile segments within each UDC’s existing customer class load profiles.  The ACR describes the proposed concept, and gives interested parties an opportunity to comment, in order to allow adoption and implementation of a workable and effective segmentation procedure as quickly as possible.  Parties filed comments on the proposal on July 1^st, 1998.

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

•	September 1^st:  The “Rule 22” Tariff Review Group held its seventh regular monthly meeting.  The next meeting is scheduled for October 6^th.  See http://162.15.5.2:80/wk-group/dai/tariff for meeting notes, agenda items, and other updates.

Meter and Data Communication Standards (D.97-12-048)

Recent Activity

•	July 29^th: The Permanent Standards Working Group (PSWG) issues its final report to the CPUC.  The PSWG and its four subgroups have been meeting bi-weekly since February, 1998.  The Permanent Standards Working Group was established by the Meter and Data Communication Standards (D.97-12-048).

Pursuant to Ordering Paragraph 7.d and 7.e. of D.97-12-048, PG&E, SDG&E, and Edison are directed to serve a notice of availability of the report on the electric restructuring service list.  Interested parties may file comments on the report within 35 days of the date of service of the notice of availability.

Copies of the report may be downloaded from the Commission’s website at:

http://162.15.5.2:80/wk-group/dai/pswg/
	
•	ONGOING:  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.  Twelve MSPs have been certified to date.  A list of certified MSPs may be obtained from the Commission’s website, at: http://www.cpuc.ca.gov/electric_restructuring/msp_registration/meter_providers.htm

Retail Settlements and Information Flow (D.97-12-090)

Recent Activity

•	The “Data Quality and Integrity” Working Group (DQIWG) filed an “Interim Report” with the CPUC on August 21^st.

The Working Group was formed at a workshop conducted by the Energy Division on February 27^th, 1998 and has been meeting since that time..  A final report is expected by mid-November, 1998.  The Interim Report and other DQIWG materials are available at the following website: http://162.15.5.2:80/wk-group/dai/dqi/
	
•	The “Distribution Loss Factors” Working Group (DLFWG). filed its final report with the Commission on August 11^th, 1998

The DLFWG was formed at a workshop conducted by the Energy Division on March 25^th, 1998 in order to examine how distribution loss factor methodologies can be improved. 
	
	See http://162.15.5.2:80/wk-group/dai/dlf a copy of the final report and other updates.
	
•	The Universal Node Identifiers System Working Group (UNISWG) was formed at a workshop conducted by the Energy Division on January 29^th, 1998.  The UNISWG filed its final report with the Commission on March 25^th, 1998.  A copy may be downloaded from this address: http://162.15.5.2:80/wk-group/dai/uni/msg00011.htm  
	
	Parties filed comments on the report on April 20, 1998.

•	The “Distribution Loss Factors” Working Group (DLFWG) was formed at a workshop conducted by the Energy Division on March 25^th, 1998.  The DLFWG will examine how distribution loss factor methodologies can be improved.  See http://162.15.5.2:80/wk-group/dai/dlf for updates.
F.	Registration of Electric Service Providers (ESP), 415-703-3779

ESPs  as of September 14, 1998
Fully active	36	
Inactive	113	
Cancelled	38	
Suspended	113	
Total	300	
 		
•	Updated. 

Senate Bill No. 477 which was approved by the Governor on August 15, 1997, restructured the electrical services industry in California in such a way that provided direct transactions between electricity suppliers and end use customers.  Section 394 of the Bill was later incorporated in the Public Utilities Code.  

On March 26, 1998, the Commission issued Decision 98-03-072 in which it clarified Energy Division’s duties and responsibilities concerning the operations of ESPs. 

Before the appearance of D.98-03-072, some 300 entities signed up to become ESPs.  Those numbers dropped significantly after the above decision required proof of financial viability and operational ability as condition for registration.    

Currently, there are seven requirements that need to be met in order to start a business as an ESP.  These are

•	A completed application [appendix A to D.98-03-072]
•	Fingerprints of officers and directors
•	Utility Distribution Company [UDC] service agreements
•	Standard Service Plan [appendix B to D.98-03-072]
•	Section 394.5 customer notice [appendix C toD.98-03-072]
•	Scheduling Coordinator agreements with the Independent System Operator
•	Financial guarantee bond.

Up to the appearance of D.98-03-072 in March 26, 1998, there were  20 ESPs that were active, in the sense that they had submitted Direct Access Service Requests [DASRs] to the UDCs.  As of June 30, 1998, the number of active ESPs had increase to about 28.       

VI.	FERC‑Related Issues
A.	ISO Issues RFP for 1999 Local Area Reliability Services

On August 28, 1998, the ISO issued a Request for Proposals from suppliers capable of providing during calendar year 1999 Local Area Reliability Service (“LARS”) to help ensure that the reliability of the ISO Controlled Grid is maintained.  Qualified resources include, but are not limited to, qualified generating resources, transmission infrastructure projects, and load management capabilities. Although the ISO expects to secure its calendar year 1999 LARS requirements primarily from the existing RMR Agreements, pursuant to Section 3.2 of the ISO Tariff, transmission infrastructure additions are permitted and are encouraged to promote reliability and decrease costs for California’s ratepayers.  Additionally, load management may assist the ISO with providing Ancillary Services pursuant to Section 2.5 of the ISO Tariff.  Therefore, additions to transmission infrastructure and load management capabilities can also provide LARS and reduce the need for RMR generation. In particular, the ISO has identified two areas (Fresno and LA Basin) where there are more generating resources available than are necessary to satisfy the ISO’s reliability criteria, and therefore offer the greatest opportunity for existing resources to compete to provide local reliability service.  Responses to the RFP for 1999 for all local reliability areas will be due on or before October 31, 1998 (except the South Coast sub-area of the LA Basin, as to which responses were due September 11, 1998).

The ISO intends to initiate a process for competitively procuring LARS for the year 2000 shortly.  The ISO intends to initiate that process in the Fall of 1998, with an anticipated completion date of February, 1999.
B.	ISO Releases Five-Year RMR Study and Proposes 1999 RMR Designations

On August 31, 1998, the ISO completed a draft report, entitled “Five-Year Reliability Must-Run Technical Study of the ISO-Controlled Grid – Final Draft Version.” This study examines the need for Reliability Must Run (RMR) resources through the year 2003 and sets forth the selection criteria the ISO will use to designate annual RMR units. This Study is available on the ISO Web Site in the Market Participants window under Documents. Based on these selection criteria, ISO management recommends
that between 126 – 142 units be designated as RMR for 1999. This number of units would be about a 2% increase on a MW basis and between an 8% and 21% increase on a generator unit basis compared to 1998.  In 1998 there were 117 units designated as RMR.  A stakeholder meeting on the 1999 RMR selection process, open to the public, is scheduled for September 8, 1998, at the Lake Natoma Inn in Folsom.  The ISO Board expects to determine which units will be designated as RMR for 1999 at its September Board meeting.  

C.	ISO and PX Market Monitoring Committee file Ancillary Service Market Reports at FERC

The ISO and PX have recently filed reports on the Ancillary Services Markets filed at the FERC.  On August 17, 1998, the PX’s Market Monitoring Committee prepared its “Report on Market Issues in the California Power Exchange Energy Markets,” and on August 19, 1998, the ISO’s Market Surveillance Committee filed its “Preliminary Report on the Operation of the Ancillary Services Markets of the California Independent System Operator.” In a nutshell, both reports conclude that the Ancillary Services markets (Spinning Reserve, Non-Spinning Reserve, Regulation and Replacement Reserves) are not workably competitive.  Both reports contain specific recommendations.

The PX report concludes that the principal solution to problem of exercise of market power in the Ancillary Services markets is the entry of new units and new participants into the ancillary services markets and advocates for the removal of any restrictions on who is allowed to participate in the market.  The PX Market Monitoring Committee also recommends that Regulatory Must-Run (“RMR”) Contracts be considered in the overall context of the provision of system reserves.  The PX Market Monitoring Committee also recommends that the ISO consider obtaining Ancillary Services requirements from the PX Day-Ahead Market, which has demonstrated itself to be workably competitive.  Finally, the PX Market Monitoring Committee concludes that the current market problems are sufficiently severe to call for short-term intervention in the market, such as price caps.  However, the PX Market Monitoring Committee cautions regarding the use of price caps and their long-term effects on the market and indicates that price caps, if they are used, must be carefully selected and set at a level that will provide the entry that we seek as the long-term solution to the structural problem.  The PX Market Monitoring Committee also weighs in against the low cost-based caps for the utilities as inappropriate, which set the prices for those participants well below the prices that generally clear  the energy markets during times of high demand.  The PX Market Monitoring Committee report states that this gives an incentive for such participants to not offer capacity to Ancillary Services and instead to sell their capacity in one of the energy markets. 

The ISO report makes similar observations and recommendations and advocates the adoption of rational and transparent purchasing practices.  For example the ISO Market Surveillance Committee recommends imposing the requirement on market participants that all bids for superior services also apply to inferior ones, resulting in rolling bids that would improve the efficiency of the Ancillary Services markets.  The ISO Market Surveillance Committee also recommends revising or supplementing existing RMR Contracts to supply the Ancillary Services markets through fixed payments.  The ISO Market Surveillance Committee further recommends the granting of market-based rates for all market participants, with the use of Ancillary Services contract for differences to mitigate market power.  The ISO Market Surveillance Committee also recommends retaining the authority to utilize a damage control price cap.  The ISO Market Surveillance Committee acknowledges that it is the goal of regulators and stakeholders to let market processes determine prices for electricity services in the California market, given the current laws in the design and implementation of these markets, the ISO Market Surveillance Committee believes that use of price caps in the short-term is necessary.  The ISO Market Surveillance Committee further advocates the purchase of Ancillary Services using a State-Wide auction, rather than by zone and advocates the revision of protocols to held reduce the need for regulation services.  

D.	ISO files Amendment No. 11 to the ISO Operating Agreement and Tariff, August 14
      
On August 14, 1998, the ISO filed Amendment No. 11 to its ISO Tariff.  Amendment No.11 would modify the ISO Tariff and Protocols in three respects relating to the ISO’s procurement of Ancillary Services.  Two of the proposed modifications affect the ISO’s procurement of Regulation and are designed to increase the amount of capacity available in the ISO’s markets for Regulation and other Ancillary Services.  The third modification eliminates an unnecessary and ambiguous restriction in one of the Protocols that has proven unwarranted in practice and that might be read to restrict the ISO’s ability to procure sufficient Regulation capacity to satisfy applicable reliability criteria.  In a letter dated August 20, 1998, the ISO indicated that the software necessary to implement these changes was not yet ready, and requested an effective date of September 21, 1998, for Amendment No. 11.

E.	PX files Amendment No. 4 to the PX Operating Agreement and Tariff, August 12
      
On August 12, 1998, the PX filed Amendment No. 4 to its PX Tariff.  Amendment 4 modifies the Day Ahead Market timeline.

F.	ISO files Amendments to RPTO Agreements to Move towards Participation of Municipal Utilities in Ancillary Service Markets

On August 3, 1998, in Docket No. ER98-4106, the ISO tendered for filing an amendment to Appendix A to the Responsible Participating Transmission Owner Agreement between the ISO and the Southern California Edison Company (SCE).  The ISO states that the amendment revises the Appendix to remove the California Department of Water Resources, the City of Colton, the City of Riverside, and Southern California Water Company.  The ISO filed similar amendments in Docket No. ER98-4107 to the Responsible Participating Transmission Owner Agreement between the ISO and the Pacific Gas & Electric Company (PG&E).  These amendments are part of an ongoing process which would ultimately permit municipal utilities to sell ancillary services to the ISO.
G.	PX files Amendment No. 3 to the PX Operating Agreement and Tariff, July 30
      
On July 30, 1998, the PX filed Amendment No. 3 to its PX Tariff.  Amendment 3 modifies and clarifies various Tariff provisions relating to the Hour-Ahead Market and PX Certification and Meter Service Agreements issues as well as other clarifications.  The FERC has set August 15, 1998, as the date for interventions and protests.  

H.	ISO files Amendment No. 10 to the ISO Operating Agreement and Tariff, July 27
      
On July 27, 1998, the ISO filed Amendment No. 10 to its ISO Tariff.  Amendment 10 would allow Scheduling Coordinators to bid and self-supply Spinning Reserve, Non-spinning Reserves and Replacement Reserves from resources outside the ISO Control Area.  Amendment 10 also revises a penalty provision relating to Ancillary Services.  The FERC has set July 30, 1998, as the date for interventions and protests.  The FERC issued an order on Amendment 10, on July 31, 1998.  See discussion of the FERC order below.

I.	ISO submits Clarification Amendment to the ISO Operating Agreement and Tariff, July 15
      
The ISO submitted its Clarification Amendment to its Operating Agreement and Tariff July 15.  This Clarification Filing involves corrects and clarification to the ISO Tariff that are intended to be essentially non-substantive. The FERC has set August 4, 1998, as the date for interventions and protests.  

J.	PX Files a Revised Notice for Change in Start of Hour Ahead Market

On July 15, 1998, the PX filed with FERC to request a new effective date of July 30, 1998 instead of June 26, 1998 to introduce the Hour-Ahead Market

K.	ISO files Amendment No. 9 to the ISO Operating Agreement and Tariff, July 6
      
On July 6, 1998, the ISO filed Amendment No. 9 to its ISO Tariff with respect to the issuance and use of Firm Transmission Rights. The FERC has set July 20, 1998, as the date for interventions and protests. 

L.	ISO and PX submit Tariff Compliance Filings June 1
      
The ISO and PX submitted their Tariff Compliance filings June 1 to comply with the FERC’s October 30, 1997, Order.  In addition, the ISO filed a revised Transmission Control Agreement and Amended Pro-Forma Meter Service Agreements, Scheduling Coordinator Agreements, Participating Generator Agreements and Utility Distribution Agreements.  The FERC has set August 5, 1998, as the date for interventions and protests.  

M.	PX Reaches Settlement in Principle with Most Parties
      
The PX filed a motion to suspend the procedural schedule in its rate case in FERC Docket No. ER98-210-000, to give the parties time to finalize the settlement in principle reached on May 29, 1998.

N.	PX Files for Change in Start of Hour Ahead Market

On May 22, 1998, the PX filed with FERC to request an effective date of June 27, 1998 instead of June 8, 1998 to introduce the Hour-Ahead Market

O.	FERC Approves Settlement of the ISO Grid Management Charge

On June 1, 1998, FERC Approved by letter order the settlement in the ISO rate case, FERC Docket No. ER98-211-000.

P.	FERC Sets Hearing in SMUD v. PG&E

On June 1, 1998, in SMUD v. PG&E, FERC Docket No. EL98-16-000, FERC set for hearing the issue of whether PG&E's wholesale power rates charged to SMUD reflected imprudently incurred natural gas costs.

Q.	ISO Files Amendment No. 8

On May 19, 1998, the ISO filed Amendment No. 8 to temporarily correct financial disincentives in the regulation ancillary services market, pending a permanent solution.

R.	Settlement Negotiations Continue in the Must-Run Cases

Settlement negotiations continue with respect to FERC Issues Order Authorizing PG&E’s SDG&E’s and Edison’s Must-Run Rate Cases and Must-Run Terms and Conditions Cases (Docket Nos. ER98-441-000; ER98-441-001; ER98-495-000; ER98-495-001; ER98-496-000; and ER98-495-001 ).  Settlement Discussions are currently scheduled through May, and are expected to continue on into June.

S.	The ISO to Issue Up to $310 Million in Long-Term Debt

On April 14, 1998, the FERC issued an order in Docket No. ES98-9-001, authorizing the ISO to issue up to $310 million in long term debt, increased from its previous authorization for $260 million.  California Independent System Operator, 83 FERC ¶62,039 (1998).
T.	The PX files two Amendments

On April 10, 1998, the PX filed two Amendments to its PX Operating Agreement and Tariff (including Protocols).  Interventions and Protests are due on May 1.
U.	The ISO and the PX file Revised Staging Plans at the FERC

On April 6, 1998, the ISO filed its Revised Staging Plan No. 3 at the FERC.  The PX filed its Revised Staging Plan No. 2 on April 10, 1998.  Both Staging Plans inform the FERC of the remainder of the California restructuring proposal that would not be implemented on the ISO and PX Operations date  The Staging Plans also provide new projected timing changes of functions that are to be staged as a result in the delay in the start of initial operations.
V.	ISO files settlement with the FERC on its Grid Management Charge

On April 7, 1998, the ISO filed a settlement with the FERC of its Grid Management Charge, in FERC Docket No. ER98-211-000.  On April 17, 1998, the CPUC filed comments at the FERC in support of the settlement.

W.	The ISO and the PX Commence Operations on March 31, 1998

On March 31, 1998, the ISO and the PX successfully commenced operations.  Details on current market summary and ISO and PX prices can be obtained through the ISO and PX Home Pages.  The ISO’s Home Page internet address is: http://www.caiso.com/iso/index.html.  The PX’s Home Page internet address is : http://www.calpx.com/index.html.

X.	The ISO files Amendment No. 7

On March 31, 1998, the ISO filed Amendment No. 7 to the ISO’s Operating Agreement and Tariff, including the ISO Protocols.  Interventions and Protests are due May 1, 1998.
Y.	FERC issues orders on various FERC Electric Restructuring Dockets

On March 30, 1998, the FERC issued three separate orders on various pending FERC Dockets.  In its “Order Accepting for Filing and Suspending Proposed Rates, Consolidating Proceedings, and Establishing Hearing Procedures,” Pacific Gas and Electric Company, 82 FERC ¶61,326 (1998), the FERC, accepted for filing with modifications, suspended, set for hearing and consolidated with ongoing proceedings numerous Participating Generator Agreements and A Utility Distribution Company Operating Agreement,, and modifications proposed Scheduling Coordinator Agreements filed by the ISO, as well as accepted for filing and suspended proposed amendments to Reliability Must0-Run Agreements filed by PG&E.  In its “Order Accepting for Filing and Suspending Proposed Rates, Consolidating Proceedings, and Establishing Hearing Procedures, California Independent System Operator, 82 FERC ¶61,325 (1998), the FERC accepted for filing with modifications and d suspended, subject to the outcome of pending proceedings, numerous ISO filings including Meter Service Agreements for ISO Metered Entities, Meter Service Agreements for Scheduling Coordinators, and the Transmission Control Agreement between the ISO and PG&E, SDG&E and Edison.  The FERC also accepted for filing and suspended subject to the outcome of pending proceedings, a proposed Meter Service Agreement filed by the PX.  In its “Order Accepting for Filing and Suspending Revised Open Access Transmission Tariffs, Establishing Hearing Procedures and Consolidating Proceedings, and Granting Hearing in Part and Denying in Part Rehearing of Prior Order,” San Diego Gas & Electric Company, 82 FERC ¶61,324 (1998), the FERC accepted for filing, suspended and set for hearing proposed revisions to the Tariff Administration “TA”) Charge of the PX, the proposed changes to the Transmission Owner (“TO”) Edison and SDG&E and also consolidated these proceedings with the pending hearing proceedings concerning the TA charge and TO Tariffs.

Z.	FERC issues order on PX Tariff Amendments

On March 30, 1998, the FERC issued its “Order Conditionally Accepting For Filing and Suspending Proposed Tariff Amendments, Subject to Refund, and Subject to Further Orders, Establishing Procedures and Providing Clarification and Guidance,” California Power Exchange Corporation, 82 FERC ¶61,328 (1998).  In that order, the FERC indicated that its preliminary review of the PX Amendments indicated that these proposed tariff changes may be unjust and unreasonable or unduly discriminatory or preferential.  Therefore, the FERC conditionally accepted the ISO’s proposed tariff amendments for filing and suspended them for a nominal period, to become effective on the date that the PX operations commence, as requested, subject to refund and subject to the conditions and modifications, and subject to further FERC orders.

AA.	FERC issues orders on ISO Tariff Amendment Nos. 1 - 6

On March 27, 1998, the FERC issued an order accepting the ISO’s Amendment 1,and rejecting the ISO’s Amendment Nos. 2 and 3.  “Order Conditionally Accepting and Rejecting Proposed Amendments to the ISO Tariff and Protocols,” California Independent System Operator Corporation, 82 FERC ¶61,312 (1998). On March 30, 1998, the FERC issued its “Order Conditionally Accepting for Filing and Suspending Proposed Tariff Amendments, Subject to Refund, and Subject to Further Orders, Establishing Procedures and Providing Clarification and Guidance,” California Independent System Operator Corporation, 82 FERC ¶ 61,327 (1998) (“March 30 Order”), in which the FERC indicated that its preliminary review of the Amendment Nos.  4, 5, and 6 indicated that these proposed tariff changes may be unjust and unreasonable or unduly discriminatory or preferential.  Therefore, the FERC conditionally accepted the ISO’s proposed tariff amendments for filing and suspended them for a nominal period, to become effective on the date that the ISO operations commence, as requested, subject to refund and subject to the conditions and modifications discussed in the March 30 Order, and subject to further FERC orders.
BB.	PG&E, SDG&E and Edison Refile their Transmission Owner Tariffs

SDG&E and Edison refiled their Transmission Owner Tariffs Terms and Conditions on March 26, 1998.  (FERC Docket Nos. ER98-2371-000 and ER98-2322-000, respectively).  PG&E refiled its Transmission Owner Rate Case, including Terms and Conditions on March 29, 1998.  (FERC Docket No. ER98-2351-000.  The CPUC filed protests in each of these dockets.
CC.	Settlement Negotiations in the ISO’s Grid Management Charge
Rate Case the PX’s Administrative Charge Rate Case and PG&E’s and SDG&E’s and Edison’s Must-Run Rate Cases 

Parties to FERC Docket Nos. ER98-210-000 (PX Administrative Charge Rate Case), ER98-211-000 (ISO rid Management Charge Rate Case), and Docket Nos. ER98-441-000; ER98-441-001; ER98-495-000; ER98-495-001; ER98-496-000; and ER98-495-001 (PG&E, SDG&E and Edison Must-Run Rate Cases) were held the week of March 16, 1998.  Additional settlement talks have been scheduled during March and April.
DD.	Prehearing Conferences held March 17-18 in Various Dockets
with Respect to Participating Generator Agreements, Interconnected Control Area Operating Agreements, Responsible Participating Owner Agreements, Utility Distribution Company Operating Agreements, and Meter Service Agreements  

Three prehearing conferences took place last week at the FERC.  On March 17, 1998, a prehearing conference took place in FERC Docket. Nos. ER98-992-000; ER98-996-000; ER98-997-000; ER98-1002-000; ER98-1309-000; ER98-1310; ER98-1028-000; ER98-1029-000; ER98-1030-000; ER98-1032-000; ER981057-000; ER98-1058-000.  This prehearing conference related to Participating Generator Agreements, Interconnected Control Area Operating Agreements and Responsible Participating Owner Agreements.  On March 17, 1998, another prehearing conference took place in FERC Docket No. ER98-899-000, relating to Utility Distribution Company Agreements.  On March 18, 1998, a prehearing conference took place in FERC Docket Nos. ER98-1499-000; ER98-1500-000; ER98-1501-000; ER98-1502-000; and ER98-1503-000 relating to Meter Service Agreements. All three prehearing conferences have been continued until April 14, 1998. 

EE.	Variety of New Filings and Amendments by the ISO/PX to their Operating Tariffs and Protocols

On February 12, 13, 18, 19, 20, 27, and March 3,6,9,18, and 23, 1998, the ISO and the PX have made numerous filings, including Scheduling Coordinator Agreements for ISO Metered Entities, Meter Service Agreements for Scheduling Coordinators, Meter Service Agreements for ISO Metered Entities, Participating Generator Agreements, Utility Distribution Company Operating Agreements, and Various Amendments to the ISO (Amendments 1-6)  and the PX (two amendments) Operating Tariffs and Protocols. 

FF.	A Prehearing Conference Held on February 17, 1998
to Schedule Non-Rate Terms and Conditions in Must-Run and Transmission Rate Cases into Generic Proceedings for all three California IOU’s

A procedural schedule was adopted in a new docket for the Transmission Owner Tariff Rate filings and adoption of a procedural schedule in any generic proceeding related to the Must-Run Contract filings was deferred.  PG&E and SDG&E announced that they were each close to partial settlement of issues with the ISO related to their Must-run filings.  They were ordered to provide those settlements on March 12, 1998 to the parties and a settlement conference was now been set to discuss these settlement offers on March 18 and 19, 1998.

GG.	Recent FERC Decisions

1.	FERC Accepts Most of the ISO’s Clarification Filing, Rejects ISO’s Proposed Procedures to Consider Unresolved Issues in the WEPEX Dockets, and Directs the Parties to Report a List of All Active Issues to FERC in January

On September 11, 1998, FERC conditionally accepted for filing certain amendments to the ISO Operating Agreement and Tariff as proposed in the ISO’s July 15, 1998, “Clarification Filing” (ER98-3760-000), rejected one proposed amendments, and denied without prejudice the ISO’s proposed procedures to consider unresolved issues in the WEPEX dockets.  The Clarification Filing proposed 133 revisions to the ISO tariff which the ISO characterized as non-substantive.  FERC accepted the bulk of the proposed changes, to become effective March 31, 1998,subject to the outcome of the ISO’s June 1, 1998, Compliance Filing (Docket Nos. EC96-19-029 and ER96-1663-30).  With respect to a proposal to delete the requirement in ISO Tariff section 2.2.12.1 that it develop protocols to waive the timing requirements of ISO Tariff section 2.2, FERC expressed its concern that the change would give the ISO unfettered discretion to waive its timing requirements, and directed the ISO to develop appropriate waiver criteria within 15 days.  FERC rejected a proposed amendment to ISO Tariff section 2.5.20.7(e), which the ISO represented had been superseded by Amendment No. 10.  FERC also rejected the ISO’s proposal to transfer all open and unresolved issues from the WEPEX dockets to the Clarification docket.  The ISO had argued that this procedure would facilitate closing out the “old multiple-sub-docket WEPEX proceedings,” and would result in a more focused service list.  Although FERC rejected the ISO’s proposed procedure, FERC directed the ISO and the parties to develop a list of all active issues in these dockets, to negotiate resolutions with respect to as many of these issues as possible, and to file a report with FERC within 120 days (January 9, 1999).  FERC also directed FERC Trial Staff to establish procedures for and to facilitate the negotiations to complete this objective.  California Independent System Operator Corporation, 84 FERC ¶ 61,217 (1998).

2.	FERC ALJ Certifies SDG&E Transmission Owner Rate Case Settlement to FERC 

On October 2, 1998, FERC ALJ William Cowan certified the uncontested offer of settlement in the San Diego Gas & Electric Transmission Owner rate case to the full Commission.  (See item 12 below).  The settlement calls for a transmission revenue requirement of $104 million, presented as a “black box.”  This represents a savings to California consumers of over $17 million from the rates originally filed by SDG&E.

3.	FERC Determines that Ormond Beach Power Generation, L.L.C is an Exempt Wholesale Generator

In a Letter Order in FERC docket number EG98-93-000 dated August 26, 1998, the FERC granted the application of Ormond Beach Power Generation, L.L.C. for determination that it is an exempt wholesale generator (EWG) as defined in section 32 of the Public Utilities Holding Company Act  (PUHCA).  The CPUC had filed an intervention supporting the application.  Ormond Beach Power Generation, L.L.C., 84 FERC ¶ 62,184 (1998).

4.	FERC Issues Order Granting Duke Energy Market-Based Rate Authority for Ancillary Services

On August 17, 1998, the FERC granted market-based rates for Ancillary Services to three separate subsidiaries of Duke Energy Corporation.  The three subsidiaries are Duke Energy Oakland LLC (FERC docket no. ER98-3416-000), Duke Energy Morro Bay LLC (FERC docket no. ER98-3417-000)  and Duke Energy Moss Landing LLC (Duke/Moss Landing) (FERC docket no. ER98-3418-000). Duke Energy Oakland LLC, 84 FERC ¶ 61,186 (1998). The FERC limited the market-based rate to sales of Ancillary Services to either ISO or others that are self-supplying Ancillary Services to the ISO.  

5.	FERC Issues Order Approving Assignment of AES’ RMR Contracts to Williams Energy Services Co.

In an order dated August 12, 1998, FERC approved the applications of AES Alamitos, L.L.C., AES Huntington Beach, L.L.C. and AES Redondo Beach, L.L.C. (collectively, Applicants) for authorization to assign three RMR contracts to Williams Energy Services Company (WESCO).  Applicants are wholly-owned subsidiaries of The AES Corporation (AES).  AES, through Applicants, has purchased three natural gas-fired electric generating stations from Southern California Edison Company (Edison):  Alamitos, Huntington Beach, and Redondo Beach.  Certain units at each of these generating stations have been identified by the California Independent System Operator Corporation (ISO) as reliability must-run (RMR) units.  Pursuant to the assignment, WESCO will assume the responsibility to fulfill the California ISO’s dispatch notices issued to these RMR units.   The application indicated that the ISO has executed a consent to the assignment of the RMR Agreements to Applicants. AES Alamitos, L.L.C., 84 FERC ¶ 62,130 (1998).

6.	FERC Conditionally Accepts for Filing, and Suspends, Subject to Refund, and Subject to Further Orders, the ISO’s Amendment No. 10, and Establishes Procedures. 

On July 31, 1998, the FERC conditionally accepted for filing and suspended , subject to refund and to further order, the ISO’s Amendment No. 10.  The FERC also established  procedures for the notice of the date upon which the ISO will be able to accept Ancillary Services bids from Outside the ISO’s Control Area.  The FERC also requested that the ISO provide responses to several FERC questions.  The FERC gave parties additional time, up to August 6, 1998, to intervene and comment. California Independent System Operator, 84 FERC ¶ 61,121 (1998).

7.	FERC Issues Order Granting Williams Energy Services Company Market-Based Rate Authority for Ancillary Services

On July 24, 1998, the FERC granted Williams Energy Services Company (“WESCO”) market-based rates for Ancillary Services. Williams Energy Services Company, 84 FERC ¶ 61, 072 (1998).  The FERC however, directed WESCO to revise its market-based rate schedule so as to identify the Ancillary Services it will be selling and to limit sales of Ancillary Services to either ISO or others that are self-supplying Ancillary Services to the ISO.  The FERC noted in its order, its July 17 Order , discussed immediately below, the current situation with respect to the Ancillary Services Markets in California.

8.	FERC Issues Order Denying Motions for Stay, but Authorizing the ISO to Take Interim Action Regarding its Ancillary Services Markets

On July 17, 1998, in response to the ISO’s, Edison’s and SDG&E’s Motions for Stay of the FERC’s June 30, 1998  and July 10, 1998, orders authorizing market-based rates for Ancillary Services which motions were supported by the CPUC and the Oversight Board, the FERC issued an order denying the request for stays, but granting the ISO interim authority to limit the prices it will pay to those bidders that have been granted market-based rate authority for Regulation, Spinning, Non-spinning and Replacement Reserves until such time as the ISO and PX market surveillance staffs conduct further studies and file reports with the FERC.  This FERC action was taken after very high price spikes reaching as high as $5,000/MW and $9,999/MW were submitted in the replacement reserve market after the issuance of these three FERC orders authorizing market-based rates for Ancillary Services.  AES Redondo Beach. LLC, 84 FERC ¶ 61,046 (July 17, 1998).  These motions for stay and motions filed in support of said motions, expressed serious concerns about the competitiveness of these markets during certain hours, resulting in extraordinarily high bids and market-clearing prices.  The FERC is allowing parties thirty days to intervene , protest and comment on this order. 

9.	FERC Accepts for Filing Proposed Market-Based Rates for Ancillary Services  filed by Several Edison New Owners

On June 30, 1998, and on July 10, 1998, the FERC issued three orders authorizing market-based rates for Ancillary Services.  In those three orders, the FERC authorized market-based rates for Ancillary Services for all of the Edison-divested plants.  The applicants had all applied for market-based rate authority for Spinning Reserve, Non-spinning Reserve, Regulation and Replacement Reserves.  The FERC clarified that of the four, only Spinning Reserve, Non-spinning Reserve, and Regulation were ancillary services defined by its Order No. 888, and that Replacement Reserve was not an Ancillary Service.  The FERC stated that there is no requirement for any public utility with market-based rate authority to seek separate approval to sell replacement reserves at market-based rates (i.e., any generator who has authority to bid at market-based rates into the PX, can bid into the replacement reserve market at market-based rates).  The FERC approved these market-based rates for ancillary services without caps.   AES Redondo Beach. LLC, 83 FERC ¶ 61,358 (June 30, 1998); El Segundo Power, LLC, 84 FERC ¶ 61,011 (July 10, 1998); Ocean Vista Power Generation, L.L.C., 84 FERC ¶ 61,013 (July 10, 1998).  

10.	FERC Determines that Duke Energy Units Are Exempt Wholesale Generators, and Accepts for Filing Tariffs for Market-Base Power Sales

In a Letter Order in FERC docket number EG98-70-000 dated June 9, 1998, the FERC granted the application of Duke Energy Morro Bay LLC (Duke/Morro Bay) for determination that it is an exempt wholesale generator (EWG) as defined in section 32 of the Public Utilities Holding Company Act  (PUHCA).  On June 23, 1998, in docket number EG98-68-000, the FERC granted a similar application by Duke Energy Oakland LLC (Duke/Oakland), finding that it is an EWG under PUHCA.  Duke Energy Oakland LLC, 83 FERC ¶ 61,304.

On June 25, 1998, FERC accepted for filing, without suspension or hearing, three separate requests by three separate subsidiaries of Duke Energy Corporation under which they proposed to sell wholesale power at market-based rates.  The three subsidiaries are Duke Energy Moss Landing LLC (Duke/Moss Landing) (FERC docket no. ER98-2680-000), Duke Energy Morro Bay LLC (FERC docket no. ER98-2681-000) and Duke Energy Oakland LLC (FERC docket no. ER98-2682-000).  Each have purchased generating facilities from PG&E.  Duke/Moss Landing and Duke/Oakland have separately filed cost-based rates for must run services in docket nos. ER98-2668-000 and ER98-2785-000.  FERC’s grant of market-based rate authority to Duke/Moss Landing and Duke/Oakland is not applicable to sales during must run conditions.  The Duke subsidiaries performed a hub and spoke market power analysis which identifies the state of California as the relevant market, and treats the state as a single market.  FERC found this approach appropriate, and held that the subsidiaries do not possess market power in the market as defined.  FERC additionally found that the subsidiaries’ market-based rate schedules satisfied reciprocal dealing and affiliate abuse concerns.  

11.	FERC Conditionally Accepts ISO Amendment No. 8 for Filing

On June 24, 1998, FERC conditionally accepted the ISO’s Amendment No. 8 to the ISO Operating Agreement and Tariff for filing to become effective May 19, 1998, subject to certain clarification and future reporting requirements, FERC docket nos. EC96-19-027 and EC96-19-028.  Amendment No. 8 proposes an interim Regulation Energy Payment Adjustment  (REPA) to address reliability problems due to insufficient Regulation service bid into the ISO’s ancillary services market.  Due to a thin market for Regulation the ISO has had to rely on expensive Must-Run units to provide necessary Regulation services.  The REPA is designed as a short term solution to attract regulation bids from other generators to meet system needs.  FERC accepted the REPA for filing, and ordered the ISO to file a report with FERC in 30 days describing the status of the regulation market.  FERC further required the ISO to file a report in 90 days proposing a long term solution.  California Independent System Operator, 83 FERC ¶ 61,309 (1998).

12.	Settlement Reached in SDG&E Transmission Rate Case

On June 24, 1998 a FERC administrative law judge suspended the procedural schedule in the SDG&E transmission rate case, FERC docket nos. ER97-2364-000, ER97-4235-000, ER98-497-000, ER98-1682-000, and ER98-2375-000.  A settlement in principle has been reached in the rate case which the parties will incorporate into an offer of settlement to be presented to FERC.  An offer of settlement or status report on the settlement is to be filed by July 21, 1998.

13.	FERC Accepts for Filing Tariff for Market Based Sales filed by Ormond Beach Power Generation

On June 24, 1998, the FERC accepted for filing, without suspension or hearing, the tariff filed by Ormond Beach Power Generation, LLC (Ormond Beach), under which it proposes to sell power at market-based rates, FERC docket no. ER98-2878-000.  Ormond Beach is acquiring a generation facility on Oxnard from Southern California Edison.  Ormond Beach is affiliated with Houston Industries, an exempt holding company under PUHCA, as are several other Edison new owners (Ocean Vista, Alta, Mountain Vista, and Oeste), each of which own a generation facility and have been authorized to sell power at market based rates.  FERC held that Ormond Beach’s generation dominance analysis demonstrated that Ormond Beach and its affiliates do not possess generation market power, and that there are no other barriers to entry, reciprocal dealing considerations, or affiliate abuse problems.  Ormond Beach Power Generation, 83 FERC ¶ 61,306.

14.	FERC Rejects Meter Service Agreements for PX Participants

On June 25, 1998, the FERC rejected without prejudice numerous Meter Service Agreements for PX Participants filed by the PX.  FERC also rejected the PX’s request for confidential treatment of the Meter Service Agreement schedules.  FERC had previously rejected the PX’s requests for disclaimer of jurisdiction over Meter Service Agreements in an order dated March 30, 1998.  (See California Power Exchange Corporation, 82 FERC ¶ 61,325).  FERC held that filing the Agreements on a confidential basis did not comply with the March 30 order, rejected the filings, and ordered the PX to refile the agreements on a non-confidential basis.  Alternatively, in lieu of refiling the rejected agreements and/or future agreements, the PX may enter into Meter Service Agreements that are identical to the pro forma agreement ultimately accepted by FERC, and periodically submit to FERC a list of customers.  The PX has submitted a pro forma agreement which is currently pending in docket no. ER98-1955-001.

15.	FERC Accepts for Filing Proposed Cost-Based Rates for Ancillary Services filed by El Segundo, LLC, and Long Beach Generation, LLC

On June 10, 1998, the FERC suspended rates in El Segundo and Long Beach Generation’s applications for cost-based rates for Ancillary Services, FERC Docket Nos. ER98-2537-000 and ER98-2550-000, set them for hearing and consolidated these proceedings with ongoing hearings in Docket Nos. ER97-2355-000 and ER98-441-000.  Long Beach Generation , LLC, 83 FERC ¶ 61,277 (1998).

16.	FERC Denies Edison’s Motion for Clarification

On April 20, 1998, FERC issued an order in Docket Nos. EC96-19-001 et al., ER96-1663 et al., and ER97-2355-000 denying Edison’s Motion for Clarification.  Edison argued that since FERC approved the ISO Tariff in its October 30, 1997, order, no party may challenge the ratemaking principles approved in the ISO Tariff which are reflected in Edison’s Transmission Owner and Wholesale Distribution Tariffs, Docket No. ER97-2355-000.  Edison also argued that certain issues raised by parties in the TO/WDT proceeding should be deferred to later proceedings.  FERC observed that it set the TO and WD tariffs for hearing December 17, 1997, order and held that all issues not summarily disposed of by that Order could be pursued at hearing.  Southern California Edison Co. 83 FERC ¶ 61,033 (1998).

17.	FERC Accepts for Filing Proposed Market-Based Rates filed by Three Edison New Owners

On April 30, 1998, FERC issued an order accepting for filing, without suspension or hearing, market-based rates filed by the new owners of three divested Edison must-run plants, AES Huntington Beach, L.L.C., AES Alamitos, L.L.C., and AES Redondo Beach, L.L.C.  The applications sought authority to engage in wholesale sale of electric capacity in excess of their must-run obligations.  (These applications did not seek market-based rate authority for the sale of ancillary services).  FERC denied the applicants request for waiver of the requirement to file their long-term service agreements.  AES Huntington Beach et al, 83 FERC ¶ 61,100.

18.	FERC Accepts PG&E’s March 4, 1998 TO Tariff Amendments for Filing, and Consolidates the Proceeding with the Pending TO Tariff Rate Case

On May 1, 1998, FERC issued an order accepting PG&E’s March 4, 1998 TO Tariff amendments, Docket No. ER98-2087-000 for filing, and consolidated this docket with PG&E’s pending TO/WDT Tariff rate case, Docket No. ER97-2358-000.  An ALJ Order issued May 4 held that the trial schedule issued May 4 held that the trial schedule issued April 22 in ER97-2358 shall apply to these consolidated proceedings.  FERC has not yet acted on PG&E’s new TO/WDT rate case, Docket No. ER98-2351-000, which supersedes the 1997 filing and amendments.  Pacific Gas & Electric, 83 FERC ¶ 61,112 (1998).

19.	FERC Accepts Proposed Amendments to SDG&E’s Master Must Run Agreement for Filing

 On May 1, 1998, FERC issued an order accepting for filing, suspending, and setting for hearing proposed amendments to SDG&E’s Master Must-Run Agreement, and consolidated the proceeding, Docket No. ER98-2160-000, with the ongoing proceeding, Docket No. ER98-496-000.  The proposed amendments would add black start service from some units to the ancillary service provided by SDG&E under its must run agreements; modify billing, payment and settlement procedures to conform to current ISO practices, and update and correct unit performance data.  San Diego Gas & Electric, 83 FERC ¶ 61,113 (1998).

20.	FERC Announces Regional Conferences on ISO policy

 On April 27, 1998, FERC announced that it will hold seven public conferences to discuss regional factors relevant to its policy concerning Independent System operators (ISOs).  The regional conferences follow FERC’s two-day public conference on ISO’ held on April 15-16, 1998.  The Commission intends each regional conference to examine specific regional characteristics and institutional factors that bear upon the formation, governance, design, and functions of ISOs or other types of organizations formed to administer the elctric transmission grid on a regional basis.  It wishes to examine whether the incorporation of such considerations into the Commission’s policy on ISOs will foster more rapid ISO formation.  The Commission also wishes to examine whether regional factors present barriors to the formation of ISOs, including ISOs of appropriate size, scope, and membership as may be necessary to promote competition and reliability in bulk power markets and to support state initiatives providing for retail customer choice and direct access, and, if so, what actions can be undertaken to remove or reduce such barriers.  Regional conferences will be held in Phoenix, on May 28, and in Portland, on June 5.

VII.	The Electricity Oversight Board, ISO, and PX

•	The ISO is headquartered in Folsom, California with a back-up office in Alhambra, (Southern) California, whereas, the PX is headquartered in Alhambra with a back-up office in Folsom.
•	On November 19^th , the CPUC issued  D.97-11-077 authorizing additional loan guarantees by PG&E, Edison and SDG&E for funding the PX and the ISO.
•	For more information on Oversight Board meetings (e.g., agendas, etc.), see their web site at:  http://www.energy.ca.gov/OSB/, or call the Interim Executive Director, Gary Heath, at 916-653-0761, or email a request to gheath@energy.ca.gov.
•	Oversight Board Web Site:  http://www.energy.ca.gov/OSB.  See Notices link on this web site for meeting information.
•	Independent System Operator Web Site:  http://www.caiso.com/iso/index.html.  See draft protocols under the Technical Information section of this web site.
•	Power Exchange Web Site: http://www.calpx.com/.

Upcoming Events 
•	Next full PX Board meeting :   September 17^th 
•	Next full ISO Board meeting:   September 24^th 

On-going 
•	ISO and PX Committee Meetings are on-going.
See http://www.energyonline.com/wepex/meeting/ for more information.
•	Meetings of Associated Groups--PX Participant Group:  This is a forum for prospective buyers and sellers in the PX to provide input to the development of PX rules and procedures, to become certified to participate in the PX, to understand how to effectively participate in the PX, and to identify and resolve ongoing issues related to PX operations and participation.  See http://www.energyonline.com/wepex/px_group/pxpg714.html for more information.
•	Scheduling Coordinators Users Group:  All transactions will be scheduled through the ISO.  Only certified Scheduling Coordinators (SCs) may submit schedules.
      See http://www.energyonline.com/wepex/schedule/sch_meet.html for more information.
•	The ISO and PX is hiring staff.  See: http://www.careermosaic.com/cm/iso_px/
 
VIII.	Unbundling Cost of Capital
Unbundling Cost of Capital
Unbundling the cost of capital involves developing appropriate rates of return for regulated utilities when these utilities are also providing unregulated services.

Upcoming Events

•	November 6 Opening Briefs
•	October 20 Late filed exhibits
•	September 28- October 14, 1998 Hearings
	
Recent Activity 

•	September 11 All parties filed rebuttal testimony.
•	August 17 ALJ Ruling found intervenors:UCAN, TURN, James Weil, Ronald Knecht, and Raymond Czahar  have met eligibility  requirements for compensation under PU Code Section 1804(a).
•	August 10 ORA and intervenors filed testimony.
•	July 30  ALJ Ruling conditionally granted Edison’s move for a protective order regarding its responses to parts of a discovery request by TURN.
•	July 27  Assigned Commissioner's Ruling denied ORA's motion to compel responses by Edison regarding cost of capital calculations for two nonutility affiliates of Edison.
•	July 7 ALJ Ruling granted PG&E’s  and SDG&E’s motion to withdraw their joint petition for modification of  the ratecase plan. 
•	June 29.  The Scoping Memo and Ruling of Assigned Commissioner Duque set the procedural schedule, addressed the scope of the proceeding, assigned ALJ Barnett as the principal hearing officer, and confirmed that this proceeding is a ratesetting proceeding.
•	June 23.  A PHC was held to establish the schedule and scope for the 1999 COC proceeding.  The ALJ denied PG&E's motion to defer the 1999 COC proceeding.
•	June 16.  Parties filed PHC statements.
•	June 8.  PG&E filed a reply to the Responses of TURN, ORA, and the California Farm Bureau Federation opposing PG&E's motion to defer the 1999 COC proceeding.
•	June 1.    ORA, TURN, and the California Farm Bureau Federation filed responses in opposition to PG&E's motion to defer the 1999 COC proceeding.  SCE filed a response supporting PG&E's motion to defer the 1999 COC proceeding.
•	June 1.  PG&E, SDG&E, and SCE filed a motion to withdraw their joint petition for modification of the ratecase plan.
•	May 15.  PG&E filed a motion to differ the proceeding until 1999.
•	May 8.  SDG&E, PG&E, and SCE filed applications to unbundle and establish their 1999 COC.
•	April 10.  The Energy Division’s Unbundling COC Workshop Report was issued.
•	March 6.  PG&E, SDG&E, and SCE  filed a joint petition for modification of the ratecase plan to accommodate the expanded scope of the 1999 COC proceeding  and parties' interest in having an opportunity to prepare and present rebuttal testimony.
IX.  Public Purpose Programs
A.	California Board for Energy Efficiency Programs (CBEE)

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

Recent Activity
•	July 2, 1998.  Decision 98-07-036 authorized the issuance of a request for proposals (RFP) to select program administrators for energy efficiency programs funded under Public Utilities (PU) Code Section 381(c)(1).  

•	March 23, 1998.  Reply comments to the Assigned Commissioners’ Ruling (ACR), which were due by March 23, 1998, were filed by eight parties.

X.	Hedging Energy Costs

Hedging Energy Costs

PG&E  claims its gas transmission facilities are subject to substantial risk during the Gas Accord period.  PG&E is concerned that this risk is exacerbated during the Gas Accord period because the Accord sets a cap on the rates PG&E can charge for gas transmission and storage services, yet leaves PG&E's ability to recover the costs associated with providing those services fully exposed to market forces.  PG&E has filed an application for authority to use gas-related financial instruments to manage this risk.
PG&E and SDG&E contend that they need to hedge their costs of power generation and power procurement in order to protect themselves from unforeseen increases in the cost of gas, fuel oil and electricity.  They have concerns that increases in power costs could limit their recovery of transition costs by reducing headroom.  The utilities have filed applications for authority to use energy-related financial instruments (derivatives) to manage gas and electric price volatility during the rate freeze period.  These financial instruments include all financial instruments whose values change relative to a change in an underlying commodity or commodity transportation cost, including forward contracts, futures, options, and swaps.  The Energy Division has concerns with these ex parte applications, specifically with potential impacts on debt costs, market power issues, violations of the mandatory buy/sell requirement and because granting the applications unconditionally would result in modifications of the Preferred Policy Decision.
A.	PG&E
Recent Activity

•	Septermber 1, 1998 ALJ  ruling  requested additional information on the mechanics of the proposed transactions, market power, and the interaction of authorized limits for various hedging programs in A.98-04-008.
•	June 18, 1998.  D.98-06-076  This decision conditionally approves PG&E’s request to use natural gas-based financial instruments to manage the impact of natural gas prices on the cost of electricity purchased pursuant to existing power purchase contracts.
•	April 24,  1998  ALJ ruling required additional service of A.98-04-008, PG&E’s request to use natural gas-based financial instruments to mange market risks associated with its California Gas Transmission’s assets.,
•	March 26, 1998.  D.98-03-068  This decision conditionally approves PG&E’s request to use natural gas-based financial instruments to manage costs associated with natural gas purchased for utility electric generation.
B.	SDG&E
Recent Activity
December 3^rd:  SDG&E.  Agenda Items H-1 and H-1a were withdrawn.  Original and Alternate.  For an order under Section 701 of the Public Utilities Code granting SDG&E permission to use Financial Energy Commodity Derivative Transactions.
XI.	Small and Multi Jurisdictional Utilities 
D.97-12-093 in A.97-05-011, et. al.  “Order Addressing the Application of AB 1890 to Smaller and Multi-Jurisdictional Utilities” clarified and specified the applicability of AB 1890 to the small and multi jurisdictional utilities (SMJUs) which sell electricity to California customers.  These utilities include Southern California Water Company’s Bear Valley Electric, Kirkwood Gas & Electric, PacifiCorp, and Sierra Pacific Power Company.  In D.97-12-093, the Commission required each of these companies to unbundle their rates into components that reflect the underlying cost for generation, transmission, distribution and public purpose programs.  Additionally, the Commission concluded that companies seeking to recover any uneconomic cost of generations, i.e., PacifiCorp and SPPC, must reflect the resulting transition charges on its bills to all customers, track its collection of transition costs in a balancing account, undergo a market valuation process, surrender control of its jurisdictional transmission facilities to the Independent System Operator (ISO), freeze its rates at June 10, 1996 levels and provide a 10% rate reduction for residential and small commercial customers.  The Commission also ordered PacifiCorp, SPPC, and Bear Valley to provide their customers with direct access to competitive energy services and to accommodate third-party meters and metering services in a manner consistent with D.97-05-039, and required Kirkwood to file a general rate case application by December 31, 1998.

On February 4, 1998 Kirkwood changed its name to Mountain Utilities.

Recent Activity
•	At the 7/23 meeting, the Commission approved Bear Valley Electric’s request to increase rates by $112,000 to fund new R&D and Renewable programs by Resolution E 3556.
•	On June 24 Sierra Pacific Power filed application A.98-06-046 requesting authority to issue rate reduction bonds of up to $25 million to recover the cost of the 10% rate reduction.  No party protested the application.

Upcoming Events
•	Kirkwood is expected to file its first GRC application in September.
•	PacifiCorp’s and Sierra Pacific’s applications to rehear D.97-12-093 are on the 10/9 Commission meeting agenda.

Past Activities of Interest
•	January - March 1998:  The SMJUs made Advice Letter compliance filings pursuant to D.97-12-093 which are still under review. 
January 1998:  PacifiCorp and Sierra Pacific Power Corp. filed applications to rehear D.97-12-093.  These applications allege a number of errors including claims that rates resulting from the required 10% reduction for residential and small commercial customers are unreasonable, and that AB 1890 and/or D.97-12-093 do not meet constitutional requirements relating to confiscation and equal protection.

XII.	 CEQA Issues Related to Divestiture of Fossil Generation
These issues relate to the application of the California Environmental Quality Act (CEQA) to the fossil-fueled generation plants being divested by the utilities as part of electric restructuring.  Environmental assessments of the sale of the plants under CEQA were accomplished in 1997 for some plants.  Further assessments are planned for 1998.

Recent Activity 
•	See http://www.cpuc.ca.gov/environ.html, or http://www.pgedivest.com/ or http://www.scedivest.com/ for more information.

XIII.	Reliability 
The project includes analysis of outage data, utility maintenance (including tree trimming), and work on interstate issues.  Remaining work for AB 1890 includes ongoing participation in the ISO’s reliability study, adoption of standards for electric emergencies, and pursuing an interstate compact for reliability.

A.	Inspection, Reporting, & Repair Standards for Reliability

The Commission has ordered utilities to patrol their systems every 1-2 years, to perform detailed inspections every 3-5 years, to set dates for necessary repairs, and to inspect the integrity of power poles every 10-20 years.

Recent Activity
After reviewing compliance filings from July 1997, Utilities Safety Branch staff sent letters to the utilities that were deficient in their G.O. 165 compliance plans.  The letters requested those utilities to submit revised plans by April 1, 1998, that would comply with G.O. 165 requirements.  Those utilities have submitted their revised compliance plans to the Commission.

Most reports for the first year were submitted in July 1998.  Commission staff has been reviewing the reports.  On June 28, Edison wrote the Executive Director reporting delays in aggregating data and promising to file raw data on July 1, with aggregated data a month later.  On July 1, SDG&E called Energy Division Staff to say that they believed no data was required in this years report; staff disagreed, and asked for a good faith effort to file as soon as possible.  SDG&E said verbally it would as much data as possible within 45 days
B.	Emergency Standards for Reliability
Required by AB 1890

Recent Activity
On March 12, 1998, the Commission issued D.98-03-036 proposing rules for comment regarding emergency response activities and reporting.  The order set forth some guidelines for the Commission’s consideration of final rules.  Commissioner Knight and Commissioner Conlon each filed concurring opinions seeking comments on additional issues, i.e., whether final rules should distinguish between natural disasters and other emergencies, and whether the Commission should require more aggressive undergrounding efforts by the utilities in order to promote safety and system reliability.  The decision solicited comments by April 1, 1998.  Several parties have sought an extension of time to May 1, 1998, by way of a letter to the Executive Director dated March 19.
C.	Performance Standards
Utilities must report annually on the duration and frequency of outages, the largest outages, and circuits with more than 12 outages per year.

All the utilities have filed their reports for calendar year 1997.  These reports are available on the Commission’s web page at this site:  http://www.cpuc.ca.gov/divisions/energy/index.htm then go into “Library”, then into “Electric Reliability”.

Upcoming:
•	PG&E, Sierra Pacific, SDG&E, and Edison shall file in a performance-based ratemaking application proposed performance standards for maintaining, repairing, and replacing distribution system facilities no later than July 1, 1998.  (Ordering Paragraph 2 from D.96-11-021 in I.95-02-015).
D.	Interstate Issues
AB 1890 established as state policy that California enter an interstate compact that will enforce reliability standards.

Recent Activity
At its December 1997 Board and membership meeting, Western Systems Coordinating Council (WSCC) approved a program to enforce reliability standards, but also voted to participate in discussions to design legislation establishing a self-managed reliability program, based on current, measurable standards.  Staff participated in design of the program.

Meanwhile, the Committee on Regional Electric Power Cooperation (CREPC), an informal group of western regulators, supported the WSCC program as an interim step toward federal legislation.  Pursuant to that meeting, staff is preparing options for federal legislation, as a contribution to a report by the Western Interstate Energy Board (WIEB).  CREPC is also planning a seminar/workshop on how current deterministic standards can be given an economic basis using probability data.

Two efforts are underway to influence legislation on reliability.  First, the Western Interconnection Coordination Forum (WICF), is sponsoring a group to prepare a western alternative to proposals by NERC.  The group met May 17 in Reno, and set up a steering committee, which has held two conference calls and selected a drafting Committee.  Meanwhile, WSCC has convened a legislative task force which will review NERC’s proposed legislation in order to provide input at NERC’s July 9-10 Board of Trustees meeting.  Mark Ziering serves on WICF drafting committee and on WSCC’s task force.

The Western Governor’s Conference which met in Alberta on June 29-30, 1998did not address reliability issues

E.	Tree Trimming Inspections
On January 23, 1997 by D.97-01-044, the Commission adopted revised tree trimming standards for public utilities under our jurisdiction, requiring that a minimum clearance of 18 inches between utility conductors and vegetation be maintained at all times.  Staff from the Consumer Services Division (CSD) prepared a report, dated March, 1998, alleging safety violations by San Diego Gas & Electric (SDG&E) arising from failure to maintain proper clearances between utility facilities (electric wires) and trees in SDG&E’s service territory.  Such safety violations, if proven, would constitute violations of the Public Utilities Code, Commission decisions, and GO 95, in addition to other statutory and regulatory violations.  An order instituting investigation (OII) was established on April 9, 1998 (I.98-04-010) to investigate this matter.

Recent Activity
Additional tree trimming compliance inspections were conducted in SDG&E’s service territory by Commission staff from CSD and the Energy Division the last week of May 1998 and the first week of June 1998.  The purpose of these additional compliance inspections was to determine the current level of SDG&E’s compliance with the Commission’s decisions and orders relating to the clearance between trees and overhead high voltage power lines.  In this combined effort a number of tree trimming findings were discovered.  After these were identified, SDG&E staff went out with Commission staff to view, verify, and confirm these findings.  Most of these infractions were verified and confirmed by SDG&E staff.

Tree-trimming compliance inspections were also conducted in PG&E’s territory by Commission staff during portions of June and July 1998.  On August 28, 1998, staff from CSD issued an investigative report on PG&E’s tree-trimming practices and activities.

Upcoming Events
Evidentiary hearings for I.98-04-010 are scheduled to begin on August 27, 1998.

XIV.	Consumer Education
The utilities’ customer education program mandated by AB1890 and approved by the Commission in D.97-08-064 concluded on May 31, 1998. However, 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

•	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 topic 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.

Recent Activity 
•	Interim Education Plan D.98-07-098 ordered the Consumer Services Division to file a near-term interim education plan to continue the Plug In California! effort using unspent CEP monies. 
•	CEP Monitoring Survey The Commission’s Consumer Services Division filed its independent monitoring survey of the Plug In! California educational effort with the Commission on July 30. The Commission ordered the study in D.97-08-064 to measure 1) consumers’ familiarity with the changes to the electric industry, and 2) consumers’ understanding that they now have choices available to them. The aided awareness goal set by the Commission was 60%. The research data indicates an average net recall of 94 %; 94% of consumers understood at least one of the CEP’s target messages of change or choice. An average of 74% of the study population recalled both messages of change and choice.
•	Educational Video  A CEP video featuring CPUC Commissioners Conlon and Knight, Commissioner Moore of the CEC, Doug Long, and Valerie Beck is now being aired on approximately 250 public access cable channels statewide. The video provides information about the changes to California’s electric industry. 
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 1998, the Commission is participating in Town Hall meetings in approximately 20 legislative districts statewide. The Town Hall meetings are designed to assist legislators in providing their constituencies with information about electric industry restructuring. 
B.	 The Electric Education Trust
The EET was directed by D.98-07-098 to submit two plans to the Commission: a community-based organizational outreach plan, and a plan to implement an educational effort using specific monies allocated in D.97-03-069. Both plans must be filed by September 30, 1998.

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 total of $13 million to the EET; $10 million is to be distributed to community-based organizations (CBOs). The EET expects to distribute CBO grants by February 1999.
C.	Consumer Protection 
The Commission issued its decision on Consumer Protection at the March 26 meeting. Pursuant to Senate Bill 477, the Commission adopted rules to protect consumers from unfair or abusive marketing practices by electric service providers.

The decision provides market participants with specific, meaningful CPUC registration criteria, such as providing proof of technical, operation and financial viability, executing service agreements with one or more utility distribution companies, obtaining a scheduling coordinator, submitting fingerprints of company officers and posting a deposit or bond with the Commission.  Additionally, the Commission instituted a 30-day waiting period to conduct a background check prior to issuing an ESP’s registration number.

Each ESP must also provide the Commission and consumers with its Notice of Price, Terms and Conditions, using the uniform format suggested by the Commission, so that consumers may compare competing service offerings.  Utilities and ESPs must adopt a standard bill format to allow consumers to recalculate the bill to verify its accuracy.The CPUC’s Consumer Services Division (CSD) will track and investigate consumer complaints, and make this information available on the Commission’s web site.  The CSD will also maintain a Don’t Call Me List.  Consumers wishing to avoid telephone solicitations by electric service providers can ask to be placed on the Don’t Call Me List  by mailing a written request to CSD.

On the Agenda for September 3, 1998

09-03-98

Pacific Gas and Electric Company (PG&E).
For authority to identify and separate components of electric rates, effective January 1, 1998. A96-12-011, A96-12-019 - Related matters.
This decision grants PG&E's petition to modify D97-08-056, filed April 2, 1998, seeking authority to change information provided on customer bills.
(Com Duque - ALJ Malcolm)

CA-33

A96-12-009

09-03-98

Pacific Gas and Electric Company (PG&E).
For authority to identify and separate components of electric rates, effective January 1, 1998. A96-12-011, A96-12-019 - Related matters.
This decision denies the petition of PG&E Energy Services to modify 
D97-08-056. This proceeding is closed.
(Com Duque - ALJ Malcolm)

CA-37

A96-12-009

09-03-98

Pacific Gas and Electric Company (PG&E), Glenwood Inn, and Lunardi Market (joint applicants).
This decision approves, the joint applicants' request for exemption from competition transition charges. This proceeding is closed.
(Com Bilas - ALJ Minkin)

CA-47

A98-07-014

09-03-98

Order instituting rulemaking to establish standards of conduct governing relationships between energy utilities and their affiliates. I97-04-012 - Related matter.
This decision imposes a penalty of $336,000 against Pacific Gas and Electric Company for 18 separate violations of Rule V.F.1 of the Affiliate Transaction Rules. This penalty consists of $17,500 for each of the four publications of the March 16, 1998, "High Voltage" advertisement and $19,000 for the publication of each of the fourteen remaining advertisements. The factors we consider in determining the amount of the penalty for each violation include the appropriateness of such a penalty to the size of the business, the gravity of the violation, and the good faith of the person charged in attempting to achieve compliance after having received notification of the violation. 
(Coms Bilas/Knight - ALJ Econome)

Order 4

R97-04-011

09-03-98

Southern California Edison Company (Edison).
Edison transmits its affiliate transactions compliance plan in accordance with Ordering Paragraph (OP 2) of D97-12-088. Edison's compliance plans were effective upon filing. This resolution rejects portions of Edison's filings and approves other portions. Edison is ordered to file a new Advice Letter to comply with OP 2 of the Decision.
(Advice Letter (AL) 1278-E, filed December 31, 1997 and AL 1278-E-A, filed January 30, 1998)
(Agenda 2993, Item E-2, 5/21/98; Agenda 2994, Item E-2, 6/4/98; Agenda 2996, Item E-1, 7/2/98; Agenda 2997, Item E-2, 7/23/98; Req - Commission)

E-1

Res E-3539 -

09-03-98

San Diego Gas & Electric Company (SDG&E).
SDG&E transmits its affiliate transactions compliance plan in accordance with Ordering Paragraph (OP) 2 of D97-12-088. SDG&E's compliance plans were effective upon filing. This resolution rejects portions of SDG&E's filings and approves other portions. SDG&E is ordered to file a new Advice Letter to comply with OP 2 of the Decision.
(Advice Letter (AL) 1068-E/1078-G, filed December 31, 1997 and AL 1068-E-A/1078-G-A, filed January 30, 1998)
(Agenda 2996, Item E-6, 7/2/98; Agenda 2997, Item E-4, 7/23/98; Req - Commission)

E-2

Res E-3548 -

09-03-98

Pacific Gas and Electric Company (PG&E).
PG&E transmits its affiliate transactions compliance plan in accordance with Ordering Paragraph (OP) 2 of D97-12-088. PG&E's compliance plans were effective upon filing. This resolution rejects portions of PG&E's filings and approves other portions. PG&E is ordered to file a new Advice Letter to comply with OP 2 of the Decision.
(Advice Letter (AL) 2058-G/1725-E, filed December 31, 1997, AL 2068-G-A/1725-E-A, filed January 30, 1998, AL 2058-G-B/1725-E-B, filed April 20, 1998, and AL 2058-G-C/1725-E-B, filed June 16, 1998)
(Agenda 2996, Item E-7, 7/2/98; Agenda 2997, Item E-5, 7/23/98; Req - Commission)

E-3

Res E-3540 -

09-03-98

Pacific Gas and Electric Company (PG&E).
This resolution denies PG&E's request to add a special condition to Schedule E-Exempt that would allow electric customers who select certain irrigation districts as their energy service provider and who take direct access service from PG&E, to be exempt from paying the competition transition charge.
(Advice Letter 1738-E, filed January 29, 1998)
(Agenda 2993, Item E-4, 5/21/98; Agenda 2994, Item E-4, 6/4/98; Agenda 2995, Item E-3, 6/18/98; Agenda 2997, Item E-1, 7/23/98; Agenda 2998, Item E-2, 8/6/98; Req - Commission)

E-5

Res E-3531

ALTERNATE RESOLUTION TO E-5. Approves, with modifications, a special condition to Schedule E-Exempt that would allow electric customers who select certain irrigation districts as their energy service provider and who take direct access service from Pacific Gas and Electric Company, to be exempt from paying the competition transition charge. 
(Agenda 2997, Item E-1a, 7/23/98; Agenda 2998, Item E-2a, 8/6/98; Req - Commission)

E-5a

| ALTERNATE RESOLUTION TO E-5. Pacific Gas and Electric Company must track the Competition Transition Charge payments of customers of those irrigation districts which have a petition for an interconnection agreement pending at the Federal Energy Regulatory Commission (FERC) until FERC renders its decision. If FERC approves a district's petition, the amount tracked plus interest will be refunded to each customer. If FERC denies a district's petition, the tracking account will be eliminated and no refunds will be made. | E-5b |

09-03-98

Kern County Local Agency Formation Commission.
Request for a Commission opinion on the effect of the proposed formation of McAllister Ranch Irrigation District (MRID) within Pacific Gas and Electric Company's (PG&E) service territory including the establishment of a sphere of influence. This resolution finds that the proposed MRID will not substantially impair PG&E's ability to provide adequate service at reasonable rates in the remainder of PG&E's service territory.

E-6

Res E-3549 -

09-03-98

San Diego Gas & Electric (SDG&E).
This resolution approves SDG&E's request of a rate of $0.02400 per KWH for the month of April 1998 as the monthly average power exchange price.
(Advice Letter 1089-E, filed April 1, 1998)

E-7

Res E-3552

09-03-98 | Disposition of Pacific Gas and Electric Company's (PG&E) application for rehearing of D96-12-025, in the Commission's electric restructuring docket. PG&E requests that the Commission reassign disallowances and settled amounts in reasonableness disputes to the Energy Cost Adjustment Clause and not the Electric Deferred Refund Account." | EX-7 | R94-04-031, I94-04-032

Final Decisions from the August 6, 1998 Meeting

08-06-98

Order instituting rulemaking on the Commission’s proposed policies governing restructuring California’s electric service industry and reforming regulation. I94-04-032 - Related matter.
This decision grants Pacific Gas and Electric Company’s (PG&E) petition to modify D96-12-025 and allow PG&E to change the authorized calculation methodology used to provide refunds of the 1998 Electric Deferred Refund Account in order to allow customers to receive refunds beginning October 1998.
(Com Conlon - ALJ Minkin)

CA-22

D.98-07-092

A 98-01-008

08-06-98

Sierra Pacific Power Company.
For authority to sell, assign or encumber transition property; authority to service rate reduction bonds; authority to establish charges sufficient to recover fixed transition amounts; and such further authority necessary for the company to carry out the transactions described in this application. Order approving Assigned Commissioner’s Ruling changing the preliminary determination on need for hearing, from yes to no.
(Com Duque - ALJ Careaga)
(Rule 6.5(b)).

CA-24

D. 	98-08-020

A98-06-046

08-06-98

Order instituting rulemaking to establish standards of conduct governing relationships between energy utilities and their affiliates. I97-04-012 - Related matter.
This decision addresses the following Petitions for Modification of D97-12-088: San Diego Gas & Electric Company’s (SDG&E) January 15, 1998 petition seeking modification of Affiliate Transaction Rule (Rule) V.G regarding the temporary use of utility employees by affiliates; Southern California Gas Company’s (SoCalGas) January 15, 1998 petition seeking modification of Rule V.G regarding the temporary use of utility employees by affiliates; Southern California Edison Company’s (Edison) January 30, 1998 petition seeking modification of many of the Rules on various issues; Edison and SoCalGas’s January 30, 1998 petition seeking modification of Rule VII regarding utility products and services; SoCalGas and SDG&E’s March 16, 1998 petition seeking various modifications of the Rule VI.C regarding the affiliate audit, and IV.C regarding service provider information. 
(Coms Bilas/Knight - ALJ Econome)

Order 2

D.98-08-035

R97-04-011

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