proposed decision the gd article today regarding the proposed decision is a pretty good readers
digest version of the order . susan and i spoke with jeff dasovich and mark
baldwin yesterday , and the consensus of those conversations was that
transwestern should remain involved in this proceeding only for purposes of
implementation / documentation . jeff offered that he might send a letter to
governor gray ' s office expressing both dismay and indignation that the cpuc
didn ' t complete their task and warning of the adverse outcome to california
ratepayers if these more modest reforms are approved . he may ask the other
comprehensive settlement parties to join in signing the letter . susan , mark
and i spoke about this idea later , and we ' ve got some reservations about tw ' s
role in admonishing the cpuc . we should probably wait to see this letter
first before committing to anything .
bilas draft cautious toward socal competition
mindful of the current chaos over energy markets in the state , california
public utilities
commissioner richard bilas has recommended the adoption of a much more
moderate
approach to promoting competition on southern california gas  , ( socal ) system .
in his draft decision , bilas advised the commission to reject the unbundling
of intrastate
transmission and instead approve the first settlement filed in the case , the
less far - reaching
interim settlement ( is ) , submitted in december 1999 . socal , san diego gas and
electric and
other parties filed two more settlements after the is , reaching a
comprehensive agreement in
april this year .
but since then , gas and power prices skyrocketed in the state , prompting a
consumer
backlash and giving competition a bad name . the draft language notes that
the first interim
settlement was supported by more customer groups than the later agreements .
recent events  & lead us to conclude that the centerpiece of this
investigation , the unbundling
of intrastate transmission and the implementation of a system of firm ,
tradable intrastate transmission rights , should be delayed ,  8 according to the
draft order .  & this unbundling is the basis of the [ comprehensive settlement ]
and we cannot approve it . we do not , however , wish to commit to paralysis
until 2006 , as the [ post - interim settlement ] would have us do . accordingly ,
we believe californians are better served at this juncture by the adoption ,
with modifications , of the is .  8
the biggest change to the is in the draft is the rejection of an automatic
capacity expansion
by socal at wheeler ridge , calif . , with rolled - in rates if certain criteria
are met . el paso
energy had objected to the provision in the is that would have allowed socal
to automatically
expand capacity at wheeler ridge by 100 million cfd if a certain number of
curtailments oc - curred .
el paso objected to forcing all shippers to pay for the expansion at wheeler
when only certain customers would benefit .
the draft says socal can file a separate application for the wheeler ridge
expansion , but approval would be conditioned on a traditional hearing process .
the draft decision would also :
  end socal  , s current 
  establish hector road as a formal receipt point for nominations ;
  institute an operational flow order ( ofo ) procedure . provides a forum for
more changes
in ofo procedures if excessive ofos are made ;
  set up 
  make changes to balancing rules , while retaining the current 10 % monthly
imbalance
tolerance ;
  make socal  , s own gas acquisition unit subject to the same balancing rules
and penalties
as all other shippers ;
  allow some limited imbalances trading , as well as the right to assign and
reassign unbundled
storage contract in a secondary market , with a socal electronic bulletin
board set up
for it ;
  unbundle from core transportation rates the storage capacity cost exceeding
that required
for core minimum reliability ; and
  provide for rate recovery of up to $ 3 . 5 million in implementation costs .
in addition , the draft would unbundle core interstate transportation from
rates , eliminate
core contribution to noncore interstate transition cost surcharges , eliminate
the core subscription
option as well as the caps for core aggregation programs . the threshold for
participating in
core aggregation is reduced , and billing options are offered to core
aggregators .
bilas  , draft also warned that the commission may come back in two years to
open another
investigation into gas competition , taking into account any changes in market
conditions .
bilas gave a little more insight into his decision in the text of the draft .

we question whether there will be an opportunity for discounting by marketers
if more competition is allowed ,  8
bilas wrote in the draft decision .  & with half the state already committed to
a
restructured competitive natural gas industry , it suddenly seems as if the
benefits of such re -
structuring to enhance competition are speculative , particularly at this
time . with one leg in the
water , the current has switched direction and it will be difficult , if not
foolhardy , to reach our
goals by forging ahead .
 & we choose to take a cautious approach again ,  8 the draft continues .  & rather
than proceeding
to unbundle transmission in southern california now , we approve , with
modifications , the settle -
ment suggesting smaller steps towards a competitive market . additionally , we
unbundle core
interstate transmission and once again urge the legislature to pass consumer
protection legisla -
tion aimed at unregulated marketers while we facilitate growth in core
aggregation programs .  8
the cpuc would not rule out the unbundling of intrastate transmission and
other restruc -
turing in the future  & but believe that at this point in time the certain
benefits do not outweigh
the costs to most ratepayers .  8
all drafts must be filed 30 days before the meetings at which they will be
discussed . the
draft decision is currently on the agenda for the cpuc  , s dec . 21 meeting .
proposed decision
the gd article today regarding the proposed decision is a pretty good readers
digest version of the order . susan and i spoke with jeff dasovich and mark
baldwin yesterday , and the consensus of those conversations was that
transwestern should remain involved in this proceeding only for purposes of
implementation / documentation . jeff offered that he might send a letter to
governor gray ' s office expressing both dismay and indignation that the cpuc
didn ' t complete their task and warning of the adverse outcome to california
ratepayers if these more modest reforms are approved . he may ask the other
comprehensive settlement parties to join in signing the letter . susan , mark
and i spoke about this idea later , and we ' ve got some reservations about tw ' s
role in admonishing the cpuc . we should probably wait to see this letter
first before committing to anything .
bilas draft cautious toward socal competition
mindful of the current chaos over energy markets in the state , california
public utilities
commissioner richard bilas has recommended the adoption of a much more
moderate
approach to promoting competition on southern california gas  , ( socal ) system .
in his draft decision , bilas advised the commission to reject the unbundling
of intrastate
transmission and instead approve the first settlement filed in the case , the
less far - reaching
interim settlement ( is ) , submitted in december 1999 . socal , san diego gas and
electric and
other parties filed two more settlements after the is , reaching a
comprehensive agreement in
april this year .
but since then , gas and power prices skyrocketed in the state , prompting a
consumer
backlash and giving competition a bad name . the draft language notes that
the first interim
settlement was supported by more customer groups than the later agreements .
recent events  & lead us to conclude that the centerpiece of this
investigation , the unbundling
of intrastate transmission and the implementation of a system of firm ,
tradable intrastate transmission rights , should be delayed ,  8 according to the
draft order .  & this unbundling is the basis of the [ comprehensive settlement ]
and we cannot approve it . we do not , however , wish to commit to paralysis
until 2006 , as the [ post - interim settlement ] would have us do . accordingly ,
we believe californians are better served at this juncture by the adoption ,
with modifications , of the is .  8
the biggest change to the is in the draft is the rejection of an automatic
capacity expansion
by socal at wheeler ridge , calif . , with rolled - in rates if certain criteria
are met . el paso
energy had objected to the provision in the is that would have allowed socal
to automatically
expand capacity at wheeler ridge by 100 million cfd if a certain number of
curtailments oc - curred .
el paso objected to forcing all shippers to pay for the expansion at wheeler
when only certain customers would benefit .
the draft says socal can file a separate application for the wheeler ridge
expansion , but approval would be conditioned on a traditional hearing process .
the draft decision would also :
  end socal  , s current 
  establish hector road as a formal receipt point for nominations ;
  institute an operational flow order ( ofo ) procedure . provides a forum for
more changes
in ofo procedures if excessive ofos are made ;
  set up 
  make changes to balancing rules , while retaining the current 10 % monthly
imbalance
tolerance ;
  make socal  , s own gas acquisition unit subject to the same balancing rules
and penalties
as all other shippers ;
  allow some limited imbalances trading , as well as the right to assign and
reassign unbundled
storage contract in a secondary market , with a socal electronic bulletin
board set up
for it ;
  unbundle from core transportation rates the storage capacity cost exceeding
that required
for core minimum reliability ; and
  provide for rate recovery of up to $ 3 . 5 million in implementation costs .
in addition , the draft would unbundle core interstate transportation from
rates , eliminate
core contribution to noncore interstate transition cost surcharges , eliminate
the core subscription
option as well as the caps for core aggregation programs . the threshold for
participating in
core aggregation is reduced , and billing options are offered to core
aggregators .
bilas  , draft also warned that the commission may come back in two years to
open another
investigation into gas competition , taking into account any changes in market
conditions .
bilas gave a little more insight into his decision in the text of the draft .

we question whether there will be an opportunity for discounting by marketers
if more competition is allowed ,  8
bilas wrote in the draft decision .  & with half the state already committed to
a
restructured competitive natural gas industry , it suddenly seems as if the
benefits of such re -
structuring to enhance competition are speculative , particularly at this
time . with one leg in the
water , the current has switched direction and it will be difficult , if not
foolhardy , to reach our
goals by forging ahead .
 & we choose to take a cautious approach again ,  8 the draft continues .  & rather
than proceeding
to unbundle transmission in southern california now , we approve , with
modifications , the settle -
ment suggesting smaller steps towards a competitive market . additionally , we
unbundle core
interstate transmission and once again urge the legislature to pass consumer
protection legisla -
tion aimed at unregulated marketers while we facilitate growth in core
aggregation programs .  8
the cpuc would not rule out the unbundling of intrastate transmission and
other restruc -
turing in the future  & but believe that at this point in time the certain
benefits do not outweigh
the costs to most ratepayers .  8
all drafts must be filed 30 days before the meetings at which they will be
discussed . the
draft decision is currently on the agenda for the cpuc  , s dec . 21 meeting .