RETAIL RECIPROCITY
                           DAWG TEAM B
                       Malcolm McCay, SDG&E

Issue:

Should the CPUC place restrictions on retail providers of electric services
which are affiliates of electric service companies with franchise service areas
where equivalent competition does not exist?

Discussion:

Competition is coming to the electric services industry.  Public policy is
endorsing this movement.  In this light, policy makers should promote expanded
competition by requiring affiliates of utility companies wishing to participat
in Californias competitive market to open their own markets as a condition of
a CPUC issued certificate.  Failure to so require will impede the spread of
retail competition and establish a system where some participants will have
advantages that Californias investor owned utilities will not.

In practice, this would mean such affiliates of utilities could sell energy
into the wholesale market but not in the state jurisdictional retail market
until its own market was opened to competition.  Such an entity would need to
participate through another entity for retail sales.  This would keep the
affiliate from developing its brand name unfairly in states where competition
exists while preventing such competition in its own territory.

Alternatively, the CPUC might require all providers to disclose to customers
whether or not they have affiliates with service territories in which
equivalent competition is denied.

There have been public assertions that the CPUC does not have the legal
authority to impose such conditions.  The Commission may wish to receive legal
briefs on this issue.

dawgbrec.doc/mmccay/6/9/96

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George M. Samaniego - Distribution Management & Strategies
Principal Engineer, X8266, PINS SAMANIEG, Mail CP5203A

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