Assignment of Proceeding

Michael R. Peevey is the Assigned Commissioner and James C. McVicar is the assigned Administrative Law Judge in this proceeding.

Findings of Fact

1. Some of NRG's existing steam customers, and some potential new customers, may install and use distributed generation technology that produces steam as a byproduct, and may use that steam to displace steam they would otherwise obtain from NRG. To the extent they do so, those customers may seek standby or partial load service from NRG, or they may depart from NRG's system entirely.

2. Departing customers result in lower contributions to offset NRG's fixed costs.

3. Lower contributions to fixed costs from departing and partial load customers tend to require increased contributions from remaining customers.

4. Under its current tariffs, NRG must use customer-specific contracts to ensure that full service customers who reduce their usage by switching to standby or partial service continue to contribute their fair share to offset NRG's fixed costs.

5. Both NRG and its customers would benefit from a uniform pricing approach to serving standby and partial load customers.

6. NRG's proposed new Schedule S-2 attached to this order as Appendix A ensures that standby and partial load customers contribute their fair share to offset NRG's fixed costs.

7. There are no material facts in dispute and no known opposition to granting the relief NRG requests. No hearing is required.

Conclusions of Law

1. A.04-08-040 should be granted. NRG should be authorized to file new Tariff Schedule S-2.

2. The new tariff and rates authorized in this order are reasonable.

3. For administrative efficiency, this decision should be made effective immediately.

ORDER

IT IS ORDERED that:

1. NRG Energy Center San Francisco LLC is authorized to file in accordance with General Order 96 and make effective five days after filing new Tariff Schedule S-2 included as Appendix A to this order. Schedule S-2 shall apply to service rendered on and after its effective date. To the extent that changes have been made, and in the future are made, to the base rate and fuel cost components in Schedule S-1, those changes shall also be reflected in Schedule S-2.

2. Application 04-08-040 is closed.

This order is effective today.

Dated January 27, 2005, at San Francisco, California.

MICHAEL R. PEEVEY

President

GEOFFREY F. BROWN

SUSAN P. KENNEDY

Commissioners

Comr. Grueneich recused herself
from this agenda item and was not
part of the quorum in its consideration.

APPENDIX A