FINDINGS

1. D.03-04-029 directed PG&E, SDG&E, and SCE to file initial Gas Supply Plans on April 17, 2003 and subsequent gas supply plans every six months thereafter for the term of the Operating Agreements/Order.

2. SCE filed AL 1701-E on April 18, 2003 requesting approval of its proposed Gas Supply Plan for the State of California Department of Water Resources (DWR) Tolling Agreements, pursuant to D.03-04-029 and D.02-12-069.

3. On April 21, 2003, SCE filed a "Substitute Sheet for 1701-E" which contained a slightly revised copy of the Gas Supply Plan submitted on April 18, 2003. Both copies of the Gas Supply Plan are the same, except that the April 21, 2003 copy added "confidentiality language that was inadvertently omitted from Appendix A" when first filed on April 18, 2003.

4. Also on April 21, 2003, SCE filed "Supporting Workpapers" for AL 1701-E. The workpapers, on computer diskette, consisted of hourly forecasts of power prices and gas prices for the period May 1, 2003 through December 31, 2007.

5. AL 1701-E was timely protested by ORA, CAC, and DWR on April 28, 2003, although DWR requested more review time.

6. On May 2, 2003, SCE filed both a public and a confidential response to the protests of ORA, CAC, and DWR.

7. Also on May 2, 2003, DWR submitted both a redacted and a confidential memo which set forth DWR's specific concerns ("DWR Supplemental

Protest") with SCE's proposed Gas Supply Plan.

8. On May 9, 2003, SCE filed both a redacted and a confidential response to DWR's May 2, 2003 memo regarding SCE's proposed Gas Supply Plan.

9. On May 21, 2003, SCE filed additional "Substitute Sheets for 1701-E" which amounted to a revised copy of the Gas Supply Plan from that submitted on April 18, 2003. The May 21, 2003 version of the Gas Supply Plan includes certain "editorial corrections to the original Appendix A" which are itemized in the transmittal letter.

10. On July 2, 2003, DWR emailed separate draft Fuels Protocols for SCE, PG&E, and SDG&E to the Energy Division. DWR indicated that these were non-public documents.

11. D.03-04-029 found that "...in the event that DWR only authorizes a subset of what the Commission has approved, the utilities must operate within the limitations of DWR's approval. Similarly, if the Commission rejects portions of the Gas Supply Plans that DWR would otherwise authorize, we expect the utilities to operate within the limitations of the Commission's decision."

12. We recognize that the SCE is bound by both the gas supply plan as well as the approval of DWR, and that DWR is at liberty to impose additional restrictions and requirements outside the scope of the gas supply plan.

13. The Commission is not adopting DWR's Fuels Protocols as part of the utilities' Gas Supply Plan approval process. DWR has informed the Commission that it will provide the Commission a final copy of its Fuels Protocols once they are complete. To the extent that DWR's Fuels Protocols only authorize a subset of what the Commission has approved, the utilities must operate within the limitations of DWR's authorization.

14. SCE's proposed Gas Supply Plan should be modified with language proposed by DWR, as accepted by SCE in SCE's May 9, 2003 public response to DWR's Supplemental Protest at pages 17-18.

15. We decline to accept any provisions of either the CAC or the ORA protests.

16. D.03-04-029 recommended that SCE circulate a proposed Gas Supply Plan to its Procurement Review Group (PRG) for review and comment, which SCE did do.

17. We require SCE to file cost data associated with awarded storage in future gas supply plan filings.

18. The Consumer Risk Tolerance (CRT) is applicable to SCE's gas supply plan.

19. Gas supply plans should meet all standards in adopted procurement plans.

20. With regard to the Consumer Risk Tolerance (CRT) and future gas supply plan filings, we require SCE to present a comparison of the countervailing risks presented by short positions with skyrocketing market prices in relation to the CRT, as compared with the risks of long positions with plummeting market prices in relation to the CRT, specifically, discussing the tradeoffs between these two general risks scenarios.

21. When filing clarifications or modifications to an advice letter (as opposed to tariff sheets), utilities must submit supplemental advice letters per General Order 96-A, Part III, Section I, given that substitute sheets are specific to certain types of tariff sheet modifications, not modifications to advice letters, as specified in General Order 96-A, Part III, Section J.

22. DWR requests that Commission approval of SCE's Gas Supply Plan constitutes "prior consultation" between DWR and the Commission for purposes of complying with D.02-02-051, Appendix C, the Rate Agreement, Article 1, Section 1.1, Definitions, "Priority Long Term Power Contracts."

23. SCE should file its next Gas Supply Plan on August 15, 2003, for the period October 2003 through March 2004.