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Enron Mail |
The PUCT ruled today that the utilities' excess earnings balance will be
credited to the wires...amortized over 7 years with 7.5% interest beginning Jan 1, 2002. (Trueup was not until 2004). Utilities are unhappy however, this is the direction the commission had indicated they were heading a few weeks ago. The excess earnings total over $6 billion dollars (new numbers came out today). I visited with Rep. Turner today after the commission's ruling, AECT set up a meeting with him to cut a deal. Our commitment with Turner is that he will not harm the headroom created in SB 7 and subsequent PUCT decisions. Turner was not completely happy with the commission's order because he was hoping for a larger refund check to rate payers. Our amendment to HB 2107 (which refunds the excess earnings to the wires) is in line with the commission's decision. When we signed on board with Turner, he said that if we stood with him, he would protect our interest. Thank you for letting us get on board with him. The IOUs are trying to cut a deal with him and because we stood with him...our interest should come first (as he has stated). During the HB 2107 committee hearing in March, Baker (TXU) indicated that excess earnings should be returned to the wires (in 2004 trueup). (I am getting the transcript of that hearing in the morning to confirm my memory). In a hearing on Nov 8, 2000 at the PUCT, Shaeffer ( Reliant) testified "We believe that if we overrecover stranded investment, that we're going to refund the dollars down to the book value". Of course he meant during the 2004 trueup, however, with the overcollection reaching $6 billion - and with today's commission ruling - a refund of the overcollection before 2004 is inevitable. Chairman Wolens (off the record) indicated today that HB 2107 would go to conference. I think it is safe to infer he thinks the bill will pass the House and move to the Senate. Turner has worked the Black Caucus, Hispanic Caucus and the Democratic Caucus. Rep. Counts (West Texas Conservative D) stood with Turner at the press conference along with Rep. Bailey and Rep. Hodge...each of them advocated for a refund of the overcollection. (At the press conference Turner stated that he would drop his bill and wait until the 2004 trueup if the utilities would agree to keep everyone's lights on until the 2004 trueup.) The bill is likely to be heard on the House floor next Tuesday. I did not provide comments/quotes to Fort Worth Star Telegram...they were told I was at the Capitol at a hearing. I am working on a formal statement and gathering the support of other market participants with our interest to sign on. I will run that by you before anything goes out. Thus far, Enron, Calpine, New Energy, Strategic, and Excelon are willing to publically support our amendment to HB 2107. (Others are supporting it but won't come out of the closet because they fear the utilities.) We are talking to Shell on Friday. (They got confused and are supporting the bill as filed...which hurts headroom...they like our amendment but want to talk Friday before supporting it.) Thanks for your help with this, Jean
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