STATE OF CALIFORNIA GRAY DAVIS, Governor

PUBLIC UTILITIES COMMISSION

505 VAN NESS AVENUE

SAN FRANCISCO, CA 94102-3298

May 7, 2001

TO: PARTIES OF RECORD IN INVESTIGATION 01-04-002.

Enclosed is the alternate draft decision of Commissioner Richard A. Bilas. This item will be on the Commission's agenda for its May 14, 2001 meeting. Public Utilities Code section 1701.1(a) requires the Commission to act on this matter at that meeting.

When the Commission acts on the draft alternate decision, it may adopt all or part of it as written, amend or modify it, or set it aside and adopt the proposed decision of the Administrative Law Judge, Item H-20. Only when the Commission acts does the decision become binding on the parties.

Public Utilities Code Sections 311 (e) and 311(g)(1) require this item to be served on all parties and subject to at least 30 days' public review and comment before the Commission may vote on them. Section 311(g)(2) and Rule 77.7(f)(9) provide that the 30-day period may be reduced or waived by the Commission upon a finding of public necessity. The comment period on this item is being shortened under this authority as failure to adopt the decision by May 14, 2001 would place the Commission in violation of Section 1701.1(a).

Comments on this item shall be filed and served by May 11, 2001, as provided in Article 19, attached, of the Commission's "Rules of Practice and Procedure." Pursuant to Rule 77.3 comments shall not exceed 15 pages. In addition, comments must be served separately on the ALJ, Ann Waton and all Commissioners, preferably by hand delivery, overnight mail, electronic mail or other expeditious method of service. There will be no reply comments.

/s/ LYNN T. CAREW

Lynn T. Carew, Chief

Administrative Law Judge

LTC:acb

Enclosures

COM/RB1/acb ALTERNATE H-20a

5/14/2001

Decision _______________

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Investigation whether Pacific Gas and Electric Company, Southern California Edison Company, San Diego Gas & Electric Company, and their respective holding companies, PG&E Corporation, Edison International, and Sempra Energy, respondents, have violated relevant statutes and Commission decisions, and whether changes should be made to rules, orders, and conditions pertaining to respondents' holding company systems.

Investigation 01-04-002 (Filed April 3, 2001)

INTERIM OPINION ON CATEGORIZATION

I. Summary

This decision does not at this time recategorize this proceeding from the quasi-legislative to another category. However, should our investigation result in a decision that there is probable cause to believe Respondents Pacific Gas and Electric Company (PG&E), Southern California Edison Company (SCE), and San Diego Gas & Electric Company (SDG&E), as well as their respective parent holding companies, PG&E Corporation (PG&E Corp.), Edison International (EIX), and Sempra Energy (Sempra) (collectively, Respondents) violated past decisions of this Commission or other law, we will recategorize the proceeding as adjudicatory if we opt to determine finally whether such violations occurred and consider remedies.