Status of efforts to fix Direct Access ban in ABX -1

----- Forwarded by Jeff Dasovich/NA/Enron on 02/01/2001 06:38 PM -----

Scott Govenar <sgovenar@govadv.com<
02/01/2001 02:40 PM

To: Jim Steffes <james.d.steffes@enron.com<, Rick Shapiro
<rshapiro@enron.com<, Jeff Dasovich <jdasovic@enron.com<, Mike Day
<MDay@GMSSR.com<, Paul Kaufman <paul.kaufman@enron.com<, Sandra McCubbin
<Sandra.McCubbin@enron.com<, Susan J Mara <smara@enron.com<,
"Harry.Kingerski@enron.com" <Harry.Kingerski@enron.com<
cc:
Subject: Status of efforts to fix Direct Access ban in ABX -1

We are now engaged with a large coalition of customer groups
committed to passing language in a Bowen bill (a spot bill SBX - 27 has
been introduced for this purpose by Bowen) to fix the language in ABX -1
which permits a ban on new direct access agreements. We have committed
to Bowen to get her staff a first attempt at draft language by close of
business tomorrow. The attachment to this email is a draft which has
been discussed by the customers group coalition. We would like to have
input on this language by 11 am PST tomorrow if at all possible. Please
email responses to Mike Day at mday@gmssr.com or calling 415-279-0702.

The aim of the bill is to provide specific direction to the DWR and CPUC
so that they cannot use their discretion to make customer choice more
difficult. In addition to the language in the draft attachment, several
other issues were discussed on the call. Please comment on these as
well if you can.

1. In sub para. © it was felt we should carefully define the stranded
costs DWR might face so they have to show actual damage from a customer
leaving. CMA proposed defining these "actual costs" as "the costs that
DWR cannot reasonably avoid until one or more of its long term power
contracts expire." Thus, if the load electing direct access fits
within the DWR short term purchases, there are no stranded costs and no
exit fee.

2. Should there a limitation on the number of times a customer can
switch into and out of the bundled service portfolio? CMA and other
customers were willing to live with a limit of one switch a year.

3. Should customers be required to give DWR notice of their desire to
return or the expiration of their direct access deal? There was some
willingness to do this, balanced against a desire to not be too specific
or to do DWR's work for them.

4. The large customers were very uncomfortable with having the
definition between small customers who could switch without restriction
and large customers who could not be 500 Kw. That is the number the
core/noncore advocates are pushing as a dividing line. The group would
prefer that the limit be 100 Kw, which is the limitation adopted in AB
265, the SDG&E rate cap bill from the end of last session. Thus the
100 kW figure has a legislative connection, but still allows a fair
number of commercial customers to have unlimited flexibility to switch.

This is detailed and prescriptive language, but the customer group
parties were strongly convinced that any effort to craft regulations at
the CPUC would be much worse, leading to the desire to limit the CPUC's
discretion with specific language. At this stage, after hearing that
CPUC Comm. Wood hoped to use ABX -1 to end direct access ( a comment
made to NEV or Greenmountain), we tend to agree. We will get a better
negotiated result at the legislature than at the CPUC.

Thanks in advance for your fast turnaround on this. Mike Day

- subscription.protocols.doc