SECOND INTERIM ORDER

IT IS ORDERED that:

1. The September 25, 1996 motion to intervene filed by Payless ShoeSource, Inc. is granted.

2. Should CellNet Data Systems, Inc. (CellNet) desire to file its opening comments to the August 30, 1996 Direct Access Working Group (DAWG) Report, CellNet shall be permitted to late file its comments with the Docket Office. Any such filing shall comply with the applicable filing rules provided for in Article 2 of the Commission's Rules of Practice and Procedure. If the filing is in compliance with the Commission's rules, CellNet's opening comments shall be filed as of the date the document is tendered for filing.

3. The October 16, 1996 motion filed by the California Large Energy Consumers Association and the California Manufacturers Association for leave to file their reply comments to the August 30, 1996 DAWG Report one day late is granted. The Docket Office is directed to file their reply comments that were attached to the motion as of October 16, 1996.

4. The November 19, 1996 motion of Cinergy Services, Inc. (Cinergy) to supplement its reply comments to the August 30, 1996 DAWG Report is granted. The supplemental comments contained in the body of Cinergy's November 19, 1996 motion shall be treated as though it was a part of Cinergy's October 15, 1996 reply comments.

5. The following rules are adopted, and shall apply to all investor-owned electrical corporations:

a. Direct access should be made available to all California electricity consumers on January 1, 1998, regardless of customer class or size of load.

b. In order to participate in a direct access transaction, those customers with a maximum demand equal to or greater than 20 kilowatts (kW) shall have in place a meter which provides, at a minimum, hourly usage measurement. The customer shall be responsible for the cost of the meter and the cost of meter installation. Those customers with a load of less than 20 kW may participate in direct access through load profiling, or they can choose to have an hourly interval meter purchased and installed at their own cost. We shall also consider whether circumstances warrant that load profiles be developed for some customers whose loads are equal to or greater than 20 kW, but less than 50 kW.

c. In order to participate in the hourly power exchange (PX) rate option, customers are required to have an hourly interval meter.

d. All customers interested in participating in direct access transactions shall be permitted to aggregate or combine their load with other customers through an aggregator by providing the aggregator with a positive written declaration of such intent.

e. The standards and procedures set forth in this decision governing the processing of the direct access transaction requests are adopted, and shall be followed by all the utility distribution companies (UDCs).

1. In order to reasonably manage the implementation of direct access, the investor-owned electrical corporations, as the UDCs, shall be required to file a direct access implementation plan for the Commission's review and action. The direct access implementation plan shall include the pro forma tariffs for the terms and conditions of direct access.

a. A process to address the issues associated with the pro forma tariffs will be established in an assigned Commissioners' ruling or in an Administrative Law Judge's (ALJ) ruling.

2. In formulating their direct access implementation plans, the UDCs shall work with interested parties by convening a meeting within 30 days from the effective date of this decision.

1. The direct access implementation plans shall be filed on or before July 1, 1997 with the Docket Office, and served on all parties to this proceeding. Comments on the plan shall be filed and served on or before July 18, 1997.

2. Each UDC shall begin accepting direct access requests on November 1, 1997, which shall become effective on or after January 1, 1998.

3. Beginning November 15, 1997, the UDCs shall submit to the Director of the Energy Division and to other interested parties a report containing the information described in this decision regarding the previous month's direct access implementation activities. This reporting requirement shall terminate with the report ending for the month of June 30, 1999.

a. Parties interested in receiving such reports should contact the UDCs directly.

f. In the event the restructured electric environment cannot handle the volume of direct access transactions, or if the success of the marketplace is threatened in the first 12 months of operation, the independent system operator (ISO) may declare an "emergency".

1. In the event of such a declaration, the ISO should notify the Commission that an emergency exists, and recommend what actions the Commission can take to assist the ISO and other participants in alleviating the emergency.

2. If the ISO declares an emergency, the UDCs, if requested by the ISO, shall institute a 10 day moratorium on processing requests for direct access. This moratorium can be extended by a ruling of the President of the Commission or his designee.

3. Upon the declaration of an emergency by the ISO, the Energy Division shall ensure that a workshop is held within five days from such a declaration, in conjunction with the UDCs, the ISO, and all other interested parties to discuss and develop a contingency plan. A workshop report shall be prepared by the UDCs, in conjunction with the other workshop participants, and filed with the Docket Office no later than five days after the workshop.

4. The Executive Director, subject to later ratification by the Commission, may implement any emergency contingency plan.

g. Other market participants may petition the Commission to implement a transition emergency mitigation plan if the volume of direct access requests cannot be handled.

h. The UDC shall provide nondiscriminatory distribution services on equivalent terms and conditions to all customers in its service territory regardless of their choice of electricity supplier, and furthermore, shall be required to supply electricity to those customers who choose to remain with their existing electric utility.

1. During the four year transition period, the three largest UDCs must bid all their generation into the PX, and purchase power on behalf of the utility's customers from the PX.

2. As the distribution entity, the UDC shall be responsible for service connection and disconnection until such time the Commission may otherwise decide.

3. The Commission will continue to regulate the rates, terms, and conditions of the distribution and electric services provided by the UDCs, including their ability, if any, to engage in competitive market services and transactions in the post-transition era.

4. It shall be presumed that a customer who does not initiate the process needed to change providers will, by default, be provided with power by the UDC.

5. The UDC shall be obligated to serve any customer who no longer engages in direct access so long as adequate notice is provided to the UDC, and the customer pays for the electricity.

i. Any retailer offering electric service to small commercial or residential customers is required to register with the Commission by completing and forwarding a registration form identical to the one attached hereto as Appendix B, a copy of which shall be made available by the Commission upon request and which shall also be made available on the Commission's Internet Web site, verifying the form in accordance with the text of this decision, and paying the $100 registration fee.

1. Each registrant shall be obligated to inform the Commission in writing within 30 days of any changes to the registration form.

2. Registration forms will be accepted by the Commission's Energy Division beginning July 1, 1997.

3. Upon registration, the Energy Division shall issue a registration number to each registrant.

4. This registration requirement shall terminate on January 1, 2002 unless it is extended by a later enacted statute.

5. The Executive Director shall take all necessary steps to ensure that the Commission staff has the necessary support mechanisms in place by July 1, 1997, to undertake this registration procedure.

6. Each entity who is registered pursuant to Public Utilities (PU) Code Section 394 shall, at the time of offering the electrical service, provide the notices described in PU Code Section 394(b), and in this decision, and shall abide by whatever consumer protection rules the Commission may adopt in the future.

j. Each investor-owned electrical corporation shall ensure that its electrical bills contain the billing components specified by PU Code Section 392(c)(1), and the PU Code Section 392(c)(2) notice as described in the text of this decision.

k. In accordance with PU Code Section 370, to the extent the customer does not use the electrical corporation's facilities for direct access, the electricity marketer must advise the customer to confirm in writing that the customer is obligated to pay the transition costs.

l. Upon written authorization by a customer, every UDC shall be required to disclose to the designated electric service provider the customer's basic customer information. Access to this type of information shall be provided up to two times per year free of charge to the customer or the recipient of such information.

1. The UDCs shall be required to offer to all electric service providers a data base containing customer-specific usage information and locational and Standard Industrial Code information, with the customer's identity removed.

m. The eleven affiliate transaction guidelines listed in this decision shall be adhered to by the investor-owned electrical corporations in any transactions with their affiliates.

6. The metering installation schedule called for in the Preferred Policy Decision is suspended until further notice.

7. The Energy Division shall ensure that the following workshops are held:

a. A workshop shall be held with the UDCs and other interested parties to address the technical specifications for metering and metering communication standards.

1. This workshop shall be held within 45 days of the effective date of this decision. A workshop report shall be jointly prepared by the UDCs in conjunction with the other workshop participants, and filed with the Commission's Docket Office within 70 days of the decision's effective date. The workshop report shall be served only on those participants attending the workshop, on the assigned Commissioners and ALJ, and anyone else requesting a copy before the workshop report is filed. A copy of the workshop report, together with a computer diskette of the workshop report, shall be served on the Energy Division. Comments to this report shall be filed within 85 days of the decision's effective date.

b. A workshop shall be held with the UDCs and other interested parties to develop statistical load profile methodologies.

1. This workshop shall be held within 30 days of the effective date of this decision. A workshop report shall be jointly prepared by the UDCs in conjunction with the other workshop participants, and filed with the Docket Office within 40 days of the effective date of this decision, and served as described in Ordering Paragraph 7.a. Comments to this report shall be filed within 55 days of the decision's effective date.

2. If evidentiary hearings are needed for load profiling issues, these hearings will tentatively take place during the week of July 21, 1997 or July 28, 1997, and prepared testimony shall be due sometime during the week of June 30, 1997, and reply testimony during the week of July 14, 1997.

c. A workshop shall be held with the UDCs and other interested parties to address the settlement and information flow issues. This workshop shall be held within 60 days of the effective date of this decision. A workshop report shall be jointly prepared by the UDCs in conjunction with the other workshop participants, and filed with the Docket Office within 80 days of the decision's effective date, and served as described in Ordering Paragraph 7.a. Comments to this report shall be filed within 95 days of the decision's effective date.

d. A workshop shall be held with the UDCs and with other interested parties within 75 days from the effective date of this decision to address the specifics of the customer information data base, the cost of providing such information, and the timing for providing such information. A workshop report shall be jointly prepared by the UDCs in conjunction with the other workshop participants. The workshop report shall be filed with the Docket Office within 100 days from the effective date of this decision, and served as described in Ordering Paragraph 7.a. Comments to this report shall be filed within 115 days from the effective date of this decision.

e. The Energy Division staff shall have the discretion to combine each of the workshops ordered above with any of the other workshops to facilitate the resolution of common issues. If the workshops are combined, the Energy Division staff shall notify the assigned Commissioners and ALJ and recommend a schedule for the filing of the combined workshop reports and comments.

8. The investor-owned electrical corporations are authorized immediately to establish an interim, 90-day memorandum account to track the costs incurred for the activities pointed out by Edison and PG&E in the August 30, 1996 DAWG Report and summarized in this decision. The investor-owned electrical corporations shall file advice letters within 21 days from the effective date of this decision to establish this interim memorandum account.

9. Within 21 days from the effective date of this decision, the investor-owned electrical corporations shall file advice letters to establish the subaccounts described in this decision under the Industry Restructuring Memorandum Account (IRMA). Upon approval of these advice letters, all of the amounts recorded in the interim memorandum account described in the ordering paragraph above will be transferred into the appropriate subaccounts, and such subaccounts shall track all future costs associated with such subaccounts until terminated by the Commission. The subaccount advice letters shall contain proposed tariff language and shall clearly specify the criteria for allocating the kinds of activities to each appropriate IRMA subaccount.

10. Each investor-owned electrical corporation shall file comments on how it intends to comply with the affiliate transaction guidelines adopted in this decision. These comments shall be filed with the Docket Office within 45 days from the effective date of this decision, and served on all parties to this proceeding. Reply comments may be filed by any interested party and shall be filed within 60 days from the effective date of this decision.

11. The assigned Commissioners or the ALJ, acting on their behalf, may issue rulings to amend the schedule as necessary to accomplish the objectives set forth in the ordering paragraphs above.

This order is effective today.

Dated May 6, 1997, at San Francisco, California.

A. GREGORY CONLON
President
JESSIE J. KNIGHT, JR.
HENRY M. DUQUE
JOSIAH L. NEEPER
RICHARD A. BILAS
Commissioners

I will file a concurring opinion.
/s/ P. GREGORY CONLON
President