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STATE OF CALIFORNIA GRAY DAVIS, Governor

PUBLIC UTILITIES COMMISSION

505 VAN NESS AVENUE

SAN FRANCISCO, CA 94102-3298

June 14, 2001

TO: ALL PARTIES OF RECORD IN APPLICATION 00-11-038 ET AL. AND
RULEMAKING 99-11-022

Decision 01-06-015 is being mailed without the Concurrence of Commissioner Carl Wood. The Concurrence will be mailed separately.

Very truly yours,

/s/ LYNN T. CAREW BY PSW

Lynn T. Carew, Chief

Administrative Law Judge

LTC:hkr

COM/LYN/GIG/abw _ _ Mailed 6/14/2001

Decision 01-06-015 June 13, 2001

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of Southern California Edison Company (E 3338-E) for Authority to Institute a Rate Stabilization Plan with a Rate Increase and End of Rate Freeze Tariffs.

Application 00-11-038

(Filed November 16, 2000)

Emergency Application of Pacific Gas and Electric Company to Adopt a Rate Stabilization Plan. (U 39 E)

Application 00-11-056

(Filed November 22, 2000)

Petition of THE UTILITY REFORM NETWORK for Modification of Resolution E-3527.

Application 00-10-028

(Filed October 17, 2000)

Order Instituting Rulemaking into Implementation of Public Utilities Code Section 390.

Rulemaking 99-11-022

(Filed November 18, 1999)

OPINION

Summary

This decision is another interim measure we adopt to bring stability to the electric supply arrangements represented by the long-term contracts between utilities and sellers known as Qualifying Facilities (QFs). In this decision, we pre-approve three voluntary QF contract amendments for Southern California Edison Company (SCE), San Diego Gas & Electric Company (SDG&E), and Pacific Gas and Electric Company (PG&E) that address the special circumstances presented by the dysfunctional wholesale market in California. We also direct SCE to make payments of 15% of all amounts owed by the utilities to any QF which demonstrates an immediate need for such funds to continue or reestablish safe and reliable operation.

In Decision (D.) 01-030-067 (March 27, 2001) we ordered utilities to pay QFs going forward in accordance with their existing contracts as modified by certain changes to the Short Run Avoided Cost (SRAC) formula. In April, we initiated Investigation (I.) 01-04-027 into the nature and status of the delivery obligations represented by the long-term contracts, recognizing that ongoing disputes over payment raise fundamental questions about these obligations. With this decision we take another step toward resolving disputes in a way that will preserve the benefit of these long-term contracts for ratepayers.

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