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             California Public Utilities Commission
505 Van Ness Avenue, Room 5301            San Francisco, CA 94102
CONTACT:  Dianne Dienstein              April 10, 1996  CPUC - 33
          415-703-2423                  (R.94-04-031/I.94-04-032)
                                        (Revised News Release)
    CPUC TELLS RESTRUCTURING PARTIES TO COLLABORATE ON A CTC

     Responding today to a request by Pacific Gas and Electric
(PG&E), the California Public Utilities Commission (CPUC)
directed parties in its electric industry restructuring
proceeding to collaborate to recommend to the Commission an
interim Competitive Transition Charge (CTC), and provided
guidance on how to do so.  The Commission made it clear that the
while the issue required action today, the Commission is not
prejudging the issues before the Legislature and will continue to
work cooperatively with the Legislature on all aspects of
electric industry restructuring.
     Under the electric industry restructuring order, the
Commission authorized utilities to collect a CTC from all
customers to offset: the reasonable costs utilities incurred in
building generation plants to serve their customers, above-market
costs associated with nuclear power plant settlements and power
purchase contracts, and costs arising from regulatory
obligations.
     These costs are currently collected in rates from all
customers. In the competitive electric generation market to
come, however, it is reasonable to assume utilities will lose
some customers to competing suppliers.  To assure utility
viability and recovery of approved past expenses, all utility
retail customers who were customers on and after December 20,
1995 -- the date the Commission adopted a policy to restructure
California's electric industry no later than January 1, 1998 and
reform regulation -- would pay the CTC.
                            - more-
     PG&E contends that some of its larger customers now being
sought by municipal utilities, irrigation districts or other
public-owned utilities as potential customers may seek to evade,
or be offered an opportunity to evade, the CTC.  PG&E asserts
that if these customers do not pay their share of the CTC,
remaining customers will have to pay higher costs.  This would
undermine the Commission's plan for gradual, orderly and fair
transition to competition.
     According to the Commission, customers who leave a utility
system should be given an opportunity to sign an agreement to pay
their fair share of transition costs, an effective reminder of
this responsibility, but whether the customer signs the agreement
or not, any customer served on December 20, 1995 will have this
obligation.
     Though PG&E sought to have the Commission require a customer
to pay all CTC before leaving the system, the Commission views
this as too severe a remedy because it could discourage customers
from leaving a utility system to participate in the competitive
market.  Instead the Commission urges parties to develop a
mechanism to assure payment by requiring monthly payment of CTC
until the Commission completes the proceeding to develop the
amount and mechanisms for CTC collection.  Customers' payments
will be trued up, through either a refund or additional payment,
once the final amount of CTC is set.
     Collecting interim CTC from customers leaving a utility
system before Jan. l, 1998 is consistent with the Commission's
goal of retaining the broadest possible base for collecting those
costs, so that smaller customers -- who may not have competitive
options until later -- don't bear the CTC others seek to evade.
     The Commission envisions parties collaborating over a 3-day
or less period to develop specific market assumptions and
recommend an interim CTC amount.  If parties do not reach
                            - more -
consensus, they will forward a report on the issues to a CPUC
Administrative Law Judge for quick resolution.
     The Commission offered this guidance to parties as they
collaborate to develop an interim CTC:
o  Identify components of today's rates that should be given CTC
   treatment. The charge should be high enough to cover all
   transition costs embedded in current rates.
o  Measure the extent to which a generation resource or power
   purchase agreement is uneconomic against today's short-term
   energy wholesale market conditions and limit projections to
   the next 20 months.
o  The interim CTC should be collected monthly, not in a lump
   sum.  A customer may choose to pay all interim CTC in advance,
   provided the customer commits to pay any shortfall, with
   interest, when the final CTC is set; PG&E will refund any
   overcollection with interest.
o  The interim CTC should not result in cost-shifting between or
   within customer classes.



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