The following points highlight legal/regulatory recommendations to the
business team on the DA suspension issue.
All intelligence indicates that the CPUC will act on this issue at its June
28, 2001 meeting (and there are sufficient votes for the decision).
Existing Contracts - It is our recommendation that EES should submit any and
all DASRs to initiate DA service to the appropriate Utility no later than
June 29, 2001 for all customers that have existing contracts if we want to
ensure DA service.
New Contracts - All new contracts should be signed by both EES and the
customer no later than June 30, 2001 (July 1, 2001 is a Sunday). DASRs for
these contracts should be submitted to the appropriate Utility as soon as
possible, but in no event later than July 6, 2001. The July 6 date is our
estimate of the last date the Utility would accept DASRs for new contracts.
It is important to note that the CPUC is keeping the clock on contract
Switching Option - Customers that are on DA service can be returned to the
Utility per the tariff process. Once the customer has been returned to
Utility service after July 1, 2001, our expectation is that there will be no
ability to have this customer receive DA service in a future timeframe. In
addition, returning to Utility service may incur a "re-entry fee".
Contract Extensions - EES should consider amending all current contracts that
terminate after July 1, 2001 with a Evergreen Provision that provides for
Index pricing with 30 day cancellation notice provisions. These amendments
should be signed prior to June 30, 2001. It is possible that the CPUC will
require marketers to detail the termination dates of their DA customers. One
additional thought - EES may consider having the customer assign any Negative
CTC receivable to EES as compensation for the Evergreen provision (to
overcome the CPUC language that indicates that the customer is due the
Negative CTC credit).
We intend to set up a call for 5pm Houston time today to discuss (call-in
number to follow).