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Best, Jeff
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This touches the issues you and I discussed yesterday.
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Seems important to have this sort of information flowing well in advance of the activity.
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Have you or anyone else had a chance to peek at what Sam intends to present to legislators?
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The more the right is aware of the left hand, and vice versa, seems the better off we'll be.
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No big deal, but if we get our internal process in order at the outset, likely make it easier when the missiles really start flying.
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Your pal, Jeff
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EES' receivables related to PX-credit payments that PG&E continues to withhold has grown dramatically EES is going to meet internally to re-visit the issue of putting customers back on utility service (but honoring the financial terms of our contracts) They will try to convene a meeting, as early as Tuesday to discuss the switch-back issue w/Steve, Mark, Blachman, Sunde, etc., similar to the meeting held a couple of weeks ago Given the market's negative response to the Commission's decision, EES will immediately try to tie up bankruptcy counsel in anticipation of the fact that the utilities may be forced to file, which EES estimates will occur by end of next week, if it happens
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Jennifer: I will unfortunately not be able to make the call because I have to be at the California PUC for the decision that they're issuing today.
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Harry Kingerski, in Houston, might be able to join, though.
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The Commission voted out the order 5-0, essentially as it appeared yesterday.
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Three key changes: They clarified that the surcharge applies to Direct Access customers (but the entire "rate freeze" structure remains intact for now).
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The Commission reversed itself and chose not to adopt TURN's "netting out" of gen revenues and CTC collections, and said instead that the Commission will consider it as an option in the next phase (a move likely made in order to lower chances of a successful utility appeal).
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The Commission added to the decision language saying that it will study the pros/cons of securitizating the utilities' power purchase costs.
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They will submit a report on the issue to the Governor and Legislature.
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On this last point, wire reports are rampant about the possibility that legislation will be introduced as early as today proposing to securitize the utilties' power purchase costs.
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This action has reportedly been the result of discussions that occured through the night between the governor's office, the utilities and the ratings agencies in reponse to the fact that the decision issued by the PUC falls well short of what's needed to keep the IOUs credit worthy and solvent.
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As a result of those wires stories, the utilities' stock has come back (Edison was down as low as 6.25 and is currently at 10 7/8; PG&E was at 8 7/8 and is currently at 11 7/8).
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We're working with Sandi McCubbin, who heads-up our legislative activities in California, to get more info and will report back.
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The hearing was dominated by highly charged anti-generator, anti-marketer rhetoric, which is likely to play a prominent role in the press accounts.
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Only FERC was demonized more.
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Each of the Commissioners, including the most recent "interim" appointee, made strong statements regarding the undesirability of utility bankruptcy.
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The Commission left open the possibility of "doing more" at their next meeting (two weeks from today), which means the negotiations with the utilities and ratings agencies are likely to continue.
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And if an agreement is reached, it could end up on the next agenda.
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Yes, I'll get to Mike Day.
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you're a goddess.
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thank you.
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Vicki: Do we need to add the PX letter to the agenda for tomorrow's 10 AM call?
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If so, make sense to have Bracewell (Ron Carroll?) and Mike Day on as well?
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Jeff
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Ron Carrol works at Bracewell and he handles a lot of our FERC-related PX and ISO activity, including tariff activity.
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Ron works for Dan Watkiss, who also handles a lot of that work for us .
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Man, you ain't kiddin'.
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Jeez.....
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Greetings, Kari.
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Today's installment includes: Background on Nord Pool Information on the status of de-regulation in Pennsylvania.
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The rumors regarding securitization of utilities' power purchase costs had a very positive effect on the utilities' stock today.
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Congratulations.
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Theris conflicting information floating around, though.
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Some wires stories say that a state senator will sponsor a securitizationbill.
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Others say that it will be the Governor's bill.
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Is securitizationlegislation something that the Governor intends to sponsor/support?
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Though there are clearly some challenges to securitization, we think it offers a promising option.
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Hope the information is useful.
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Best, Jeff
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I sent Kari Dohn some more information today--thanks, Jim, for the Pennsylvania info.
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In the note, I asked her if the rumors about securitization are true, and whether the Governor, indeed, intends to push it actively.
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I also mentioned that we viewed it as a very promising option, particularly if accompanied by significant concessions by the utilities.
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The response from Kari is very encouraging, and will hopefully help the utilities' credit position, though I heard PG&E was downgraded to junk by at least one credit agency today, but haven't confirmed it.
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Think it's prudent to keep Kari's info very close to the vest--here's Kari'her response: Jeff -- thank you so much for the information!
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Re: securitization, I don't think the exact form has been decided in terms of legislation, but its fair to say there are very active discussions at the highest level regarding the best way to do this (with good support, between us, it appears).
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All major parties will need to be supportive.
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I hear you.
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Feels like I haven't slept for about a week.
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Congratulations--securitization would be an extremely constructive outcome.
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If there's anything at all that we can do to help, please don't hesitate to ask.
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(Since folks view us as, well, somewhat controversial, we continue to try to do productive things away from the spot light.) Talk to you soon.
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Best, Jeff
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Hmmm, sounds like the pressure's getting to Mike a bit.
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A vacation might help.
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I think you're entitled to continue on, if that's your decision.
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You may not have the attendance you prefer, but I don't oppose moving the Gas Accord talks forward.
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Jeff
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Greetings: Thanks for all the help with information.
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Here's what we've sent to the Governor.
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Best, Jeff
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You ain't kiddin'.
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Mike: This should offer a guide to developing legislation that narrows PUC review of utility purchases to approval of the competitive solicitation used by the utility to procure the contracts.
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We have consistently argued against being prescriptive (i.e., the contracts should be of 3 years long, less than $60/MWH, etc.)
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Thanks.
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I'll touch base withJulee at IEP.
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Thanks, Harry.
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I want to re-enforce the switching issue, since EES is likely to be very focused on moving customers back to the utility on Tuesday.
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Switching would certainly reduce EES' going-forward exposure to 1) growing "credit receivables" that the utilities refuse to pay and 2) the risk that the Commission will end the rate freeze altogether---and the PX credit with it--as part of the hearing process that commences with the pre-hearing conference on Wednesday.
dev33
Reducing that exposure is clealry important to EES.
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But the utilities' ability to resist taking back customers is likely to be significant, particularly since 90% of the volumes that we serve are on Enron meters.
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Imagine the road blocks that the utility can/will construct over the "complex process" of changing-out the meters.
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In addition, when CA border gas prices spiked several weeks ago, many large gas customers tried to switch from noncore to core service on SoCalGas' system.
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SoCalGas submitted an emergency motion at the Commission to prevent the switching and the Commission granted it in the wink of an eye.
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It will be important for EES to drill down fairly deeply in its analysis of all the ways that the utility can frustrate any switching.
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Otherwise, we may find ourselves confronting a lot of negative PR without having reduced any of EES' exposure.
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Customers who have been unwillingly switched back to the utility have become very vocal about their displeasure and have turned negative on ESPs as a result.
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Best, Jeff
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Greetings and Happy New Year to you both.
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Eve: Has the sub-group met since things were put on hold a few weeks ago?
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If so, I'm very interested in hearing about what's going on.
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If the group is going to meet between now and the 16th, I'm also very interested in participating in those meetings.
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Delaney, I'll be attending the meeting on the 16th.
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The Angelides proposal has certainly spiced things up--just what we need, more David Freeman.......
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Best to you and yours in the New Year.
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Jeff "Delaney Hunter" Please respond to dhunter
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Sounds like a good idea.
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It might be a good idea to have a conference call to discuss the state treasurer's proposal released last Friday.
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A summary is attached.
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If folks agree that a call would be useful, does Noon PST (on Monday) work?
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Best, Jeff
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FYI.
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More info to follow.
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I'll give you a ring (tomorrow).
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Best, Jeff
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