The purpose of this meeting was to (i) review the capability and limitations of the utilities' billing systems to present unbundled rate components, (ii) to identify track 1 (crucial unbundling elements) and track 2 (potentially desirable but not as urgent as track 1 issues) issues, and to (iii) identify Performance-Based Ratemaking (PBR) issues. Jim Price of DRA facilitated the meeting. He distributed the minutes from last meeting (4/15/96) and the Assigned Commissioner's Ruling (ACR) in areas related to unbundling and PBR on May 8, 1996.

Maryam Ebke of CACD briefed the group on the ACR. She pointed out that by May 15, 1996, in preparation for the scoping workshop on May 20, 1996, parties should submit statements of issues to CACD. The statements should include issues and sub-issues related to unbundling and PBR to be addressed by the working groups, scheduling and sequencing of those issues, and issues related to transitioning from the current ratemakings (GRC, ECAC, etc.) to the PBR or post-restructured ratemaking. A scoping workshop meeting agenda is expected to be posted at the CPUC on May 19, 1996.

Issues Raised at the Meeting:

Can a more detailed level of unbundling for the bills be done before the policy issues associated with credit collections, deposits, partial payment, etc. are sorted out?

Should the discussion and time table associated with the unbundling of services (and cost studies) be separated from showing the unbundled pieces on the bills?

What potential options can be used by the utilities to communicate more detailed information to customers but accommodate the current billing limitation?

• Certain market information posted on electronic bulletin board.
• Bill inserts or newsletters
• Tariffs.
• Media.

The billing detail may have to vary to fit different customer needs. How can the bill provide sufficient information for customers to make their economic choice decision? Need to communicate with the customers and provide necessary education.

Whose responsibility should it be in terms of providing more detailed information to the customers, UDC or the marketers?

Parties have different views in terms of what consists of the crucial elements to be unbundled such that the 1/1/98 electric restructuring implementation date can be accomplished. In other words, some had a longer list of track 1 issues while others were concerned that it was not practically possible to complete so many unbundling pieces without jeopardizing the 1/1/98 implementation date.

Should the generation portfolio also be communicated on customer bills?

Parties also seemed to have different perceptions as to the degree of competition that is allowed under the electric restructuring arena. Should all the potentially competitive services be unbundled? Or, should it be limited to generation? Some parties believe that all potentially competitive services should be unbundled, such as metering, billing, wire maintenance, wire connection, etc. There was also an issue related to whether it might create unfair competition if unbundling for all services doesn't start at the same time (i.e., track 2 items may be disadvantaged). For example, direct access for generation might, in some cases, require some duplication of "customer" costs. Without unbundling and competition, some customers may be deterred from participating in direct access if the duplicative customer costs become a significant portion of the customer bill. Additionally, the decision to determine the level of unbundling may also impact the magnitude of the potential stranded costs (i.e., to what extent will additional stranded costs be created if unbundling of metering and/or billing is allowed?). Other parties pointed out that the discussion of Track 1 vs. Track 2 issues is one of timing, and that the proceeding should focus on what can reasonably be done by January 1, 1998.

DRA submitted a list of issues that it wishes to be covered by the utilities' PBR applications. Other parties were invited to also make their desires known.

Some parties believe that there is a limited linkage between the PBR and rate unbundling. Some also voiced the concern that PBR issues were litigated for SDG&E and SCE already and should not be relitigated. It is not clear what the Commission expects from the utilities' PBR filings. The status of SCE's PBR is also uncertain since the Commission has not put out a decision yet. In addition, it was pointed out that there was a monitoring and evaluation (M&E) issue which may fall into several areas, such as PBR, customer protection, etc.

1. In discussing the "Letter Seeking Recognition as Working Group", the parties agreed that DRA would submit the letter on behalf of all parties who agreed to be listed as sponsors, and that the letter would be appropriately addressed to both the Coordinating Commissioner and the subject Assigned Commissioner.

2. PG&E, SCE, and SDG&E are all developing new computer systems which will support unbundling. Current systems will not support calculation and printing of detailed line items on all customers' bills, although PG&E does have capability to include additional line item data for a limit of 200,000 customers. SDG&E stated that its system will be able to allow many detail line items almost without any constraint for all customers by 1/1/98.

3. Parties agreed that generation ancillary services should belong to track 1 issues. Ancillary service cost information should be separately identified so that the direct access customers will not be double charged if they self-procure their own ancillary services.

4. Parties decided that the O&M and A&G items are cost allocation issues that should be considered as part of each track 1 and track 2 item.

5. Working from a draft table prepared by Jim Price from suggestions received to date, no further agreements were reached as to whether other items from an initial column labeled "To Be Determined" should be placed in Track 1 or Track 2, and a suggestion was made to place line extensions in the "To Be Determined" column instead of Track 2. This discussion concluded by combining the "To Be Determined" and Track 2 columns into a single column labeled "Unresolved or Track 2", with timing stated as "as soon as possible". The resulting table is attached.

6. In preparation for the May 29 meeting, parties who wish may provide position papers to Jim Price by May 24, 1996, for posting on the Web server, and fax them to those who don't have access to the Web. (requests for fax service: Barbara Barkovich of CLECA, 415-457-1948, and Ron Liebert of Calif. Farm Bureau, 916-923-5318) Parties should review and prepare to discuss the papers at the next meeting on May 29, 1996. For track 1 issues, the position paper should identify the costing methodology that the party proposes. For track 2 issues, the position paper should (1) state whether we have identified the correct issues, (2) propose the appropriate costing methodologies for each unbundling item, and (3) identify what this group should accomplish by 1/1/98.

7. Parties defer forming subteams on track 2 issues and billing issues since most people are simultaneously interested in both track 1 and track 2 issues now; subteams will be formed if needs become apparent. The formation of the PBR subteam is also deferred until after the utilities' July 15 filings. Parties wish to concentrate their efforts mostly on the unbundling issues for now.

8. Jim will present the proceedings of the group to date to represent this working group's list of issues in response to the ACR's request. Any new issues identified by the assigned Commissioner's scoping workshop will be discussed by this working group on May 29, 1996.

9. Jim will post meeting minutes, agenda and related items on the Web site. Parties are to provide any comments to Jim on the "Comparison of Issues Between Unbundling/ Pricing/ Rate Design/ PBR and Other Working Groups".

Future meeting dates (all day; subteams are Analysis, and Interpretation of Existing Tariffs):

5/29, whole team, at CPUC Auditorium
6/26, whole team, at PG&E Energy Center.
6/27, subteams, at CPUC Room 5305.
7/25, subteams, at CPUC Room 5305.
7/26, whole team, at PG&E Energy Center.
8/12, whole team, at PG&E Energy Center.
8/13, subteams, at CPUC Room 5305.