EES has very strong interests in the regulatory and legislative outcome 
regarding the implementation of the AB1890 rate freeze and competition.  I 
understand that the following conditions is aligned with EES' interests:

Customer groups and other market participants are arguing that the AB1890 
rate freeze must legally be maintained to the statutory end date;
The Governor and Legislators are interested in managing the current crisis to 
the best interests of customers and avoid adverse impacts on the California 
economy;
The CPUC is more inclined to interpret AB1890 to maintain the rate freeze to 
the statutory end date in order to protect consumers and avoid hastily 
implementing new market structures that are not well thought out and would 
result in future problems; and
The assets that need to be valued have yet to receive a final decision from 
the CPUC;
Politicians are more focused on the crisis for San Diego customers and 
wholesale market structure issues, and may see maintaining the rate freeze 
for PG&E and SCE as a simple short-term solution.

The following are my concerns that might result in an adverse outcome to the 
current crisis:

The Governor and the CPUC are primarily interested in the best interests of 
consumers and holds competition as a lower priority, and may not see these 
two objectives as identical;
PG&E and SCE are claiming the rate freeze is over and are doing everything in 
their power to achieve this objective;
Current market prices demonstrate that there may be no short-term relief and 
the utilities' undercollections are growing;
The utilities may heighten awareness that the current top-down, PX crediting 
mechanism is resulting in payments to DA customers for use of energy;
PG&E and SCE are filing for immediate "interim rate stabilization plans" for 
bundled-service customers to be implemented; and
Customers and politicians may short-sightedly settle on the plans filed by 
PG&E and SCE as a short-term solution.

The following are the key issues that will be and will need to be addressed:

The legal interpretation of AB1890 on when the rate freeze ends;
Whether PG&E and SCE will get post-freeze relief and over what time-period 
and to a lesser extent utility cash flow issues; and
How will the post-freeze, competitive  market structure be addressed.

The following is my understanding of the regulatory and coalition building 
strategies that Government Affairs is pursuing:

The position that AB1890 mandates that the rate freeze was to benefit 
ratepayers in exchange for the utilities' opportunity to recover CTCs and CTC 
recovery can be adjusted during this timeframe such that this benefit to 
ratepayers will extend to December 31, 2001;
Resolving legislative and regulatory issues that may allow for post 2001 
recovery of undercollections for the utilities over an extended time frame.  
This is the utilities' primary concern and such a strategy may alleviate the 
pressure and desperation to implement "interim rate stabilization plans";
Raising awareness that 2001 should be used to determine the final netting of 
all revenues and costs, while that time period be used to develop a new 
default provider role for small customers and provider of last resort service 
for larger customers; and
Demonstrating where PG&E and SCE are once again trying to thwart competition, 
achieve 100% CTC recovery under all conditions, pass through all risks to 
ratepayers, and capture windfalls from the current market structure.
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