STATE OF CALIFORNIA GRAY DAVIS, Governor

PUBLIC UTILITIES COMMISSION

505 VAN NESS AVENUE

SAN FRANCISCO, CA 94102-3298

March 26, 2001

TO: PARTIES OF RECORD IN APPLICATION 00-11-038 ET AL.

This is the draft decision of Commissioner Lynch. It will be on the Commission's agenda at the next regular meeting. The Commission may act then, or it may postpone action until later.

When the Commission acts on the draft decision, 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. We are convinced that this draft decision falls under Rule 77.7(f)(9), and for that reason, we have waived comments on the draft decision.

/s/ ANGELA K. MINKIN, for

Lynn T. Carew, Chief

Administrative Law Judge

LTC:sid

Attachments

COM/LYN/sid DRAFT Item 4

3/27/2001

Decision DRAFT DECISION OF COMMISSIONER LYNCH (Mailed 3/26/2001)

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of Southern California Edison Company (E 3338-E) for Authority to Institute a Rate Stabilization Plan with a Rate Increase and End of Rate Freeze Tariffs.	Application 00-11-038 (Filed November 16, 2000)
Emergency Application of Pacific Gas and Electric Company to Adopt a Rate Stabilization Plan. (U 39 E)	Application 00-11-056 (Filed November 22, 2000)
Petition of THE UTILITY REFORM NETWORK for Modification of Resolution E-3527.	Application 00-10-028 (Filed October 17, 2000) AB 1X

INTERIM OPINION

I. Summary

This order implements legislation allowing the state to provide electricity that its utilities are unable to provide. First, this order requires utilities to provide the Department of Water Resources with the money they have collected, that was earned by the sale of power paid for by the Department of Water Resources. Currently, both utilities and the Department of Water Resources sell power to end use customers, but the utilities collect revenues in lump sum for all power that is delivered. Second, this order determines what method the Commission will use to calculate the "CPA," the California Procurement Adjustment established by Public Utilities Code Section 360.5.¹ This order then applies that method, and calculates-for each utility-a company-wide average CPA rate. Using that rate, this order determines the CPA revenue amount, which can be used by the Department of Water Resources to begin the process of issuing bonds. Following a discussion of the context in which this decision is issued, we take these actions in Sections VI, VII and VIII, below.