PX Credit Audit Comments

I applaud the UDCs for jointly advancing the 10/8/98 "PX CREDIT AUDITING
PROPOSAL," and for setting up the 10/27 workshop.  I hope that the ensuing
negotiations in the Rule 22 Working Group forum can lead to the
establishment of a process that will be acceptable to all parties.

It is important to recognize that: 1) PX Credits represent ESPs' gross
income associated with direct access; 2) the PX Credit computation is an
extremely complex, data-intensive and opaque process; 3) the UDCs would
benefit from relatively low PX Credits; and 4) publishing certain PX Credit
computation inputs might compromise the UDCs' electric procurement
strategies.  Given all this, we should consider the merits of assigning the
task of PX Credit calculations (rather than auditing) to a neutral,
technically competent party that can ensure data confidentiality.  One
obvious possibility would be the California Power Exchange, which in fact
produces virtually all of the inputs to the PX Credit calculations (other
than class load profiles).

I'll provide one comment here on the "AUDITING PROPOSAL" itself, in order to
illustrate the magnitude of this predicament.  ESPs are interested in the
accuracy of the calculation of the single dollar-denominated PX Credit
amount that shows up in direct access bills produced by the UDCs.  Verifying
the accuracy of this dollar amount goes well beyond verifying the "hourly PX
credits for each trading month" that is referenced in the proposal's Purpose
and Scope.  Instead, verifying the accuracy of the dollar amount will
require (for each week), a different PX Credit number for each UDC rate
schedule, for each voltage class, for each TOU period, and for each
permutation of a 4- 5- or 6-week billing period.  Thus, meeting ESPs'
objectives will require more than that which is contemplated in the 10/8/98
draft.


Peter Bray
Manager, California 
   Electric Deregulation
PG&E Energy Services
 <mailto:peter.bray@pgees.com> peter.bray@pgees.com
415/733-4752
415/733-4963 fax

PG&E Energy Services is not the same company as Pacific Gas and Electric
Company.  PG&E Energy Services is not regulated by the California Public
Utilities Commission; and you do not have to buy PG&E Energy Services
products in order to continue to receive quality regulated services from
Pacific Gas and Electric Company, the utility.

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