From:     MIKE JASKE, CEC
Sent:     Friday, January 17, 1997
Subject:  Scope of Meeting for 1/22

Here are some items that help define the issues that we should be
discussing at the 1/22 meeting on settlement cost identification and
allocation to customers.  The CEC might be willing to present some
initial information forum our assessment of the load research data on
the issue of multiplicity of load shapes present in residential
populations.

Here is my list:

1. How are UDC load bids to the PX to be computed?  What is the
methodology for developing these load bids?  How do these loads bids
adapt through time to the progression of customers into direct access
status?  What is the planned methodology for adaptively responding to
errors in one day's load bids in making load bids for a subsequent day?

2. What is the basis for allocating overall ISO energy imbalances at the
zonal level to UDC customers' load forecast errors, direct access load
profile customer errors, changes in losses from standard loss factors,
theft and other sources of error at the system level?  What are the
steps from initial allocation to various iterations of reallocation
among the PX (various UDCs) and scheduling coordinators?

3.  What steps are being taken to ensure that imbalance costs estimation
practices do not violate the CTC firewall requirements of AB 1890?

4. How are the various fixed and variable costs of UDC bidding into the
PX, specialized metering and load forecasting techniques to support
these loads bids, practices and personnel devoted to energy imbalance
identification and "fights" with scheduling coordinators determined? 
Where have these costs been classified in the rate applications filed
12/6/96?  Where should these costs be classified to ensure a "fair"
comparison with direct access provider generation costs?

5. What are the size of errors resulting from preliminary WEPEX
decisions to not install and use ISO grid out take point meters at all
out take points rather than zones as the basis for energy imbalance
settlements?  What are the costs of installing these meters and using
the data on a comprehensive basis?  How do the errors in the allocation
of energy imbalance and other costs compare to these metering investment
and operating costs?

6. What are the costs of using the existing ISO grid metering capability
in a partial coverage of all ISO grid out take points?  What are the
capabilities of these meters, and what incremental investment and
operating costs would be required to make use of the data in ISO energy
imbalance settlements?  How do the locations of these existing meters
correlate with customers likely to participate in direct access, e.g.
substations and transmission line takeoffs that largely serve industrial
customers?

7. What are the expected regulatory oversight procedures needed to
ensure fair allocation of energy imbalance costs to UDC customers, to
various UDC customer classes, given the uncertainties implicit in the
settlement methods proposed in the utility 12/6/96 rate applications? 
What opportunities are likely to be used by intervenors to press their
case for alternative allocation methods?