SUMMARY OF RECOMMENDATIONS

I. 	Introduction
II. 	Scope and Objectives of Proceeding
A. Principles for Unbundling Should Promote Effective Competition
B. The Adopted Level of Unbundling Should Allow Industry Structure to Evolve
III. Separation of Revenue Requirement
A. Comments Common to All Applicants
1. Functional Unbundling Should Not Be Confused With Cost Recovery
2. Balancing Account Treatment Should Be Consistent With the Electric Restructuring Policy Against Creating Competitive Advantages For The Utilities
3. Franchise Fees And Uncollectibles Should Be Allocated Between Generation And Non-generation Functions
4. The Commission Should Reject the Utilities’ Recommendation to Allocate All Common (Residual) Costs to the Distribution Function
a) The Commission Correctly Has Rejected the “Incremental Cost” or “Residual Cost” Approach in Allocating Embedded Revenue Requirement Between Utilities’ Regulated and Competitive (Non-regulated) Businesses
b) The Companies Should Not Be Permitted To Increase The Cost Of Transmission And Distribution By Loading Those Regulated Functions With The Share Of Current Common Costs That Would Reasonably Be Allocated To Generation
c) Common Costs Should Not Be Confused With Fixed Costs.  Common Costs Need To Be Allocated Across Functions To Establish The Revenue Requirements For Transmission And Distribution At The Moment Of Unbundling, But They Are Not Unchangeable In The Face Of Reduced Scope
5. The Utilities’ Residual Approach to Separate Transmission Revenue From Distribution Revenue (or Rate) Should Be Rejected
B. PG&E
1. PG&E’s Transition Revenue Account Should Be Rejected
C. SCE
1. Existing Generation-related Balancing Accounts Should Be Eliminated As Soon As Appropriate
D. SDG&E
1. SDG&E’s Proposal To Allocate Production (Generation) O&M Costs To The Non-Generation Functions Is To Ask The Regulated Business To Subsidize Its Competitive Business And Should Be Rejected
2. 	SDG&E’s Distribution Revenue Requirement Is Overstated
IV. REVENUE ALLOCATION AND RATE DESIGN
A. Comments Common to All Applicants
1. Revenue Allocation
a) ORA Supports SCE’s Proposed Revenue Allocation Methodology for Transmission and Distribution
b) Revenue Allocation for Public Purpose Programs, California Alternate Rates for Energy (CARE), and Nuclear Decommissioning/Incremental Cost Incentive Price (ICIP) Should Consider Both CPUC Precedents and Functional Activity
2. Functionalized Components of Rate Design Should Maintain Existing CPUC Policies
3. Rate Design for Competition Transition Charge/ Direct Access, and Virtual Direct Access Should Promote the Commission’s Restructuring Goals and Result in Appropriate Price Signals
4. Settlement Protocols Are Critical to Market Functioning and Accurate Cost Allocations
5. ORA Supports PG&E’s and SDG&E’s Proposals for Baseline and CARE Rates
6. Implementation of the AB 1890 Rate Reduction Should Promote Options for Small Customers
7. Non-Firm Rate Programs Requires Further Discussion
8. Line Extension Rules Should Rely on Current Rules Until Changed in the Line Extension OIR
B. PG&E
C. SCE
1. Real Time Pricing Must Be Continued During Restructuring, and RTP and Flexible Pricing Options Can Be Adapted to the New Industry Structure
2. Implementation of Rate Reduction Bonds Should Promote Customer Choice
3. SCE’s Base Rate vs. ECAC Seasonal Rate Adjustment Should Be Adjusted to the New Industry Structure
D. SDG&E
1. SDG&E’s CTC Cost Allocation May Require Further Consideration
2. SDG&E’s Implementation of Rate Reduction Bonds is Contrary to Commission Policy
V. Master Meter Issues
VI. Bill Format
A. Comments Common to All Applicants
1. Rate Reduction Bond Credit Proposals Are Acceptable
2. Power Exchange Energy Prices Must Be Shown On Bills
3. Other Information Should Also Be Provided 
B. PG&E
C. SDG&E
D. SCE
VII. Conclusion