STATE OF CALIFORNIA GRAY DAVIS, Governor

PUBLIC UTILITIES COMMISSION

505 VAN NESS AVENUE

SAN FRANCISCO, CA 94102-3298

July 5, 2001 Items 12 and 12a

7/12/2001

TO: PARTIES OF RECORD IN APPLICATION 01-06-020

Enclosed are the draft decision of Commissioner Bilas and the alternate order of Administrative Law Judge (ALJ) Brown. These are Items 12 and 12a on the Commission's July 12, 2001 agenda. The Commission may act then, or it may postpone action until later.

When the Commission acts on the draft decision or the alternate, it may adopt all or part of it as written, amend or modify it, or set it aside and prepare its own decision. Only when the Commission acts does the decision become binding on the parties.

Rule 77.7(f)(9) provides for reduction or waiver of the 30-day period for public review and comment when public necessity requires such reduction. We must balance whether the public necessity of adopting an order outweighs the public interest in having the full 30-day review and comment. Having made that assessment in this case, we have established a shortened period for comments on the draft decision and the alternate.

Parties to the proceeding may serve comments on the draft decision and the alternate no later than July 10, 2001. No reply comments will be accepted. Comments on the draft decision and the ALJ's alternate order must be served separately on the ALJ and the assigned Commissioner, and for that purpose I suggest electronic service, hand delivery, overnight mail, or other expeditious method of service.

/s/ JOHN S. WONG for

Lynn T. Carew, Chief

Administrative Law Judge

LTC:sid

Attachments

ALJ/CAB/sid ALTERNATE DRAFT Item 12a

7/12/2001

Decision ALTERNATE DRAFT DECISION OF ALJ BROWN (Mailed 7/5/2001)

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of Pacific Gas and Electric Company for Approval of Open Season Procedures for Awarding Firm Capacity on its Transmission Facilities. (U 39 G)

Application 01-06-020 (Filed June 13, 2001)

OPINION DENYING APPLICATION OF PACIFIC GAS AND

ELECTRIC COMPANY FOR APPROVAL OF THE OPEN

SEASON PROCEDURES FOR AWARDING FIRM CAPACITY

ON ITS TRANSMISSION FACILITIES

I. Summary

This decision denies the application of Pacific Gas and Electric Company (PG&E) for approval of the open season procedures for awarding firm capacity on its transmission facilities and directs PG&E to cease its current open season. PG&E initiated the open season concurrently with its application and the open season must be discontinued. PG&E is ordered to file an application proposing a market structure and rules for certain years after 2002 (Gas Accord II), as soon as possible, but in no event later than July 20, 2001 and the issues raised in the instant application for the open season will be addressed in the Gas Accord II proceeding. The Gas Accord II proceeding will be conducted on an ambitious schedule that allows for data collection and review, but will allow PG&E to hold a competitive open season before the expiration of the current Gas Accord. A schedule for the Gas Accord II proceeding is included in this decision.