VIII. Next Steps

In D.00-12-067, we promised action at the Commission's regular business meeting on January 4, 2001. We believe that the public interest is served by allowing temporary electricity rate relief. We therefore adopt an interim electric surcharge subject to refund, on an emergency basis. We recognize that these proceedings must necessarily include further hearings and a thorough assessment of the utilities' claims, the revenues and costs accrued by the utilities, their affiliates, and parent companies over the entire rate freeze period. We also note the need for action by the California Legislature.

The 90-day interim period will allow the independent auditors sufficient time to perform a comprehensive review of the overall financial position of the utilities. We expect the auditors to review and analyze the positions of the utilities, the holding companies, and the affiliates, as well as the flow of funds among these entities, among other work performed. The independent auditors will present their reports, subject to cross-examination.

The critical ratemaking issues facing this Commission will require significant discovery and additional evidentiary hearings. TURN's proposal to adjust the TRA and TCBA accounting mechanisms must be addressed. Parties have raised numerous related issues and have proposed additional creative solutions that should be explored. In the next phases of these proceedings, we will consider the accounting issues and such isues as: (1) the necessary ratemaking to ensure that power produced from retained assets is dedicated to serve native load; (2) the utilities' cost-cutting efforts; (3) the utilities'efforts to pursue remedies at FERC or Courts reviewing FERC, and lawsuits against generators or marketers of electricity and natural gas; (4) whether and how holding company assets or guarantees should be applied to utility power procurement requirements; (5) conservation and rate design issues; (6) additional CARE discounts and program improvements; (7) how to approach consumer education; (8) condemnation efforts to ensure generation availability; (9) whether the utilities should issue additional rate reduction bonds; and (10) mechanisms and options to securitize existing liabilities, in order to report to the Governor and the Legislature regarding those options during the interim period.