Scope and Schedule for Further Hearings in Phase 4 (Path 15)
This Summer

The scope of further hearings this summer on Path 15 issues was discussed at some length during the PHC.³ To summarize, I expect PG&E's testimony to include the following information:

· A baseline that presents the net present value (NPV) of Path 15 costs to ISO ratepayers, assuming the ratemaking treatment that PG&E would expect to request (and receive) from FERC for transmission projects sponsored in whole by an investor-owned utility. To the extent that the NPV of costs for PG&E ratepayers would be different than those allocated to ISO ratepayers as a whole, those differences should be presented.

· A comparison to the baseline that shows the NPV of Path 15 costs to ISO ratepayers that reflects the ratemaking treatment requested by the project participants in the letter agreement for the project as a whole, not just PG&E's portion. To the extent that the NPV of costs allocated specifically to PG&E ratepayers would be different than those allocated to ISO ratepayers as a whole, present those differences.

· Information with regard to the right of Trans-Elect (and other participants) to sell off firm transmission rights on Path 15, based on the specific language of the letter agreement or general expectations among project participants.

As discussed at the PHC, PG&E should meet without delay with the Office of Ratepayer Advocates (ORA) and Energy Division staff (contact: Xuguang Leng) to develop the spreadsheet format for the NPV calculations and to define the ratemaking and other assumptions that will be included in those calculations. PG&E should make the spreadsheet model fully available to ORA and Energy Division so that they can calculate NPV costs using any alternative assumptions.

The schedule for the Phase 4 evidentiary hearings this summer, is presented below.⁴

PG&E Direct Testimony	June 17, 2002
ORA and Intervenor Direct Testimony	July 3, 2002
Rebuttal Testimony5	July 15, 2002
List of Exhibits, Cross Estimates and Witness Availability6 and Last Day to Submit Motions to Strike and Discovery Requests	July 18, 2002
Replies to Motions to Strike Due	July 22, 2002
Evidentiary Hearings	July 23-26, 2002

Evidentiary hearings will begin on Tuesday, July 23, 2002 at 10:00 a.m. For the rest of the week, hearings will begin at 9:00 a.m, and my intent is to end each of those hearing days at 1:00 p.m., without a lunch break. However, if we can reduce the total number of days of hearings by extending the day until 3:30 p.m. (with a lunch break), I may do so.

All discovery disputes should be directed to the Commission's Law and Motion Judge. I plan to rule on motions to strike on the first day of hearings, based on the written filings. There will be no opportunity for oral argument.

³ See Reporter's Transcript, pp. 265-281, 325-328.

⁴ NOTE: The schedule I outlined at the PHC has been modified due to a scheduling conflict. I informed the service of this change via an electronic notice on May 16, 2002. The schedule presented above supercedes the schedule discussed at the PHC.

⁵ PG&E may file rebuttal to ORA and Intervenor Testimony. ORA and intervenors may file rebuttal testimony in response to the testimony filed on July 3, 2002 by other parties.

⁶ See Attachment.