Re: PX-Based SRAC Payments to QFs

The haircut notion, I believe, arises from Edison's claim that the PX price
includes a capacity payment, particularly when demand (i.e., the price) is
higher. I think there's discussion of it in the proposed decision that came
out some time ago and which sits in "hold" limbo on the Commission's agenda.
I've attached it. Alan could you see if it's included in the decision? If
not, I can poke around more. Thanks.

Best,
Jeff

Alan Comnes@ECT
12/18/2000 03:59 PM

To: paul.kaufman@enron.com, jdasovich@enron.com
cc:
Subject: PX-Based SRAC Payments to QFs

Jeff, Paul,

I talked to Mike Etringer and found out that the reason why he wanted to talk
to Jeff is Mike's recollection of a conversation with Jeff that a SRAC
"haIrcut" in the 5-10% range had been suggested based on the total amount of
load in California about 39,000 to 40,000 MW.

Jeff, is there anything we can point Mike to to better understand this basis
of a capacity adjustment?

In our call with Doug Kerner last week, the best guess, summed up by Calger,
was that SRAC would go PX based beginning in '03 with a capacity clipping of
20% (half way between SCE o 40% and IEP of 0%). However, I think Mike is
struggling to justify a smaller haircut. Thus, the follow up call to Jeff.

Alan Comnes