Conclusions of Law

1. This Commission has discretion pursuant to Rule 6.1 of its Rules of Practice and Procedure to categorize this proceeding in the manner most suitable to the circumstances of this proceeding

2. The investigatory phase of this proceeding is appropriately categorized as ratesetting. This phase of the proceeding will involve an inquiry into Respondents' past conduct and whether it complies with the Commission's holding company decisions or applicable law. It will also involve an inquiry into appropriate prospective changes in our decisions or other rules governing Respondents' holding company structure.

3. Quasi-legislative proceedings include investigative proceedings to establish policy.

4. The ex parte rules accompanying a quasi-legislative category are statutory and cannot be changed by the Commission.

5. Categorizing the first phase of the proceeding - as delineated in the previous paragraph - as quasi-legislative does not violate any Respondent's due process rights.

6. The OII, which categorized this proceeding as quasi-legislative, should not be changed. The investigatory phase of this proceeding should remain categorized as quasi-legislative. If further recategorization is required, as explained in this decision, the Commission will issue another decision at the appropriate time.

7. Rule 77.7(f)(9) permits reduction of the comment period for an alternate if failure to adopt a decision before expiration of the 30 day review and comment period would place the Commission in violation of applicable law.

8. PU Code section 1701.1(a) requires that the Commission shall render its decision on an appeal of categorization within 30 days of its filing.

9. The Commission should reduce the comment period to May 11, 2001 so the appeal can be resolved within the 30 day statutory period. No reply comments should be taken.

ORDER

IT IS ORDERED that this proceeding, preliminarily categorized as quasi-legislative, should not be recategorized.

This order is effective today.

Dated , at San Francisco, California.