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Enron Mail |
Hertzberg called. We very briefly discussed the scenarios that he asked us
to build for him. I've attached the file. the supporting spreadsheets are not included. If folks would like them, let me know. Please keep the file confidential. Hertzberg wanted to see what happened to rates for large (noncore) customers if the small (core) customers' share of past utility debt is shifted to noncore customers. Our analsis shows that noncore rates approach Loretta's recent rate increases when approximately 50% of core's share of utility past debt is shifted to businesess (i.e., to noncore). (In fact, Edison's rate in this scenario is below the Lynch rate, while PG&E's is modestly above.) Increasing the cost shift above the 50% level would start to push rates significantly above the Lynch rates. Note, however, that in its recent submission to the PUC, DWR's asserts that it's revenue requirement is substantially higher than the revenues support by the Lynch rate increase, suggesting that Lynch will have to increase rates again soon. In addition, Loretta's rates also do not reflect past utility costs, which will require yet additional increases. I expect to have another conversation with the Speaker later this evening or tomorrow to discuss the scenarios in more detail (he would still like to put 100% of the IOUs past debts on noncore in exchange for getting a competitive market and out from under Loretta). I will report back after we've spoken. All ideas, suggestions, etc. regarding the attached spreadsheet are welcome and appreciated. Best, Jeff
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