III. Summary of Modified Stipulation

The following is a summary of major terms in the Modified Stipulation (attached in its entirety as Attachment B):

Term 1. PG&E's tariffs will be amended to allow common area electric customers the option of taking service on a commercial rate schedule for which they qualify.

Terms 4 and 5. For common area customers choosing a time-of-use (TOU) schedule, a demand-metered schedule, or a demand-metered TOU schedule, PG&E shall install the needed meter, or reprogram an existing qualified meter, on a first-come, first-served basis according to the date it receives the customer's application.¹

· PG&E will install a TOU or demand meter, or reprogram an existing qualified meter, within 60 days upon receipt of each valid application and payment of the related charges. Exceptions are provided if requests exceed 1,500 per month and during a blackout period when PG&E's new customer information and billing system, CorDaptix, is installed, currently scheduled for late 2002 or early 2003.

· A customer may request service under commercial Schedule A-1 for an interim period pending meter installation or reprogramming needed for other schedules.

Term 7. For a two-calendar-month period beginning 14 months after the Commission approves the stipulation, common area customers who have transferred to a commercial class will have an opportunity to return to the residential class. PG&E will provide written notice to all eligible common area commercial customers of their right of return to a residential schedule within a reasonable time in advance of the beginning of this two-month right-of-return period.

Term 8. Common area customers will have a final opportunity to transfer back to the residential class if both of the following occur: (1) the Commission substantially reduces the three-cent surcharge or substantially amends any or all of PG&E's commercial or residential rate schedules, and (2) ECHO directs PG&E in writing to begin an optional second right-of-return period. PG&E will notify all eligible common area customers within 30 days. This final right-of-return period will begin 15 days after PG&E receives the written directive and will continue for 105 days.

Term 9. Once the Term 7 right-of-return window has passed and the one described in Term 8 has either passed or is never exercised, common area customers will not be able to transfer to the residential class. If Term 8 is invoked prior to Term 7, this will be the only opportunity for customers to return to the residential class. Term 7 will be void if Term 8 is exercised before the 14-month period ends.

Term 10. During the right-of-return periods, common area customers will be allowed to return to Schedule E-8, even though it is otherwise closed to new customers, if all of the following have occurred: (1) Schedule E-8 has not been terminated in its entirety by the Commission, (2) the Commission authorizes commercial common area customers to return to Schedule E-8 by approving this stipulation, and (3) the returning party compensates PG&E at a fixed charge of $40 per account for the full cost of manually processing its requests and/or reprogramming its billing system to allow the customer to return.

Term 11. The expected revenue shortfall of up to $18 million per year from common area migration to commercial schedules must be ruled by the Commission decision adopting the stipulation to be fully recoverable and subject to tracking in a separate, dedicated new balancing account perhaps called the Common Area Balancing Account (CABA). Recovery of the common area migration revenue shortfalls will be effected through whatever Commission decision first determines both class allocation and rate changes needed for revenue neutrality in R.01-05-047. Specifically, the decision on this stipulation would authorize recovery, through future rate changes, of both the uncollected CABA balances and any expected ongoing revenue shortfalls due to common area migration after the rate change decision in R.01-05-047.

Terms 12 and 13. PG&E will have 30 days upon approval of the stipulation by the Commission to mail written confirmation to common area customers correctly designated in its billing system as "common usage" and who would save at least $100 per year exclusive of any meter installation charge by moving to the commercial class, that this option is now open to them. These customers will receive an historical analysis comparing their bills for the latest available 12 months on their current residential schedule to the anticipated bills, at the same usage, for commercial rate Schedules A-1, A-6, A-10, and E-19W. All other common area customers will be notified through a bill insert (with no bill analysis) within 90 days of Commission approval of the Stipulation.