COMMONWEALTH ENERGY CORP
EXHIBIT 10.23
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<TYPE>EX-10.23
<SEQUENCE>8
<FILENAME>a94018exv10w23.txt
<DESCRIPTION>EXHIBIT 10.23
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                                                                   EXHIBIT 10.23

CONFIDENTIAL & PROPRIETARY                               [DTE ENERGY LETTERHEAD]

                                                        DTE Energy Trading, Inc.
                                                          414 S. Main, Suite 200
                                                            Ann Arbor, MI  48104
                                             Tel: 734.887.2000 Fax: 734.887.2104

Date: July 24, 2003

To:   Commonwealth Energy Corp.
      15901 Red Hill Ave., Suite 100
      Tustin, CA  92780
      Attn:  Dick Paulsen
      Phone:    714.259.2523
      Fax:      714.259.2563

RE:   CONFIRMATION OF TRANSACTION WITH COMMONWEALTH ENERGY FOR WHOLESALE
      ELECTRICITY TO SUPPLY COMMONWEALTH ENERGY'S RETAIL CUSTOMER LOAD IN
      DETROIT EDISON'S SERVICE TERRITORY

This Confirmation memorializes the oral Transaction agreement between Steve
Sheppard of DTE Energy Trading, Inc. ("DTEET") and Dick Paulsen of Commonwealth
Energy ("CE") dated July 24, 2003 regarding the Transaction set forth below.

AGREED TO ECONOMIC TERMS

BUYER:         CE

SELLER:        DTEET

PRODUCT:       Full requirements service product ("FRSP") (as defined below) for
               CE's retail customers in Detroit Edison's service territory (the
               "CE Customers"):

               Energy delivery is measured and billed at the CE Customer
               meter(s). Energy is to be used only to serve CE Customer load
               under Detroit Edison's Electric Choice Program.

               FRSP means firm Energy as measured and delivered to the CE
               Customer retail meters which shall include load following Energy,
               load forecasting and scheduling services, applicable Detroit
               Edison/International Transmission Company ("ITC") and Midwest
               Independent System Operator ("MISO") transmission and ancillary
               services charges, including imbalance charges.
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CONFIDENTIAL & PROPRIETARY                               [DTE ENERGY LETTERHEAD]


DELIVERY       As defined in Sections 2.2 and 2.3 of the Revised Operating
PERIOD:        Agreement between Seller and Buyer, effective July 24, 2003
               ("Operating Agreement") and with respect to this Transaction:

               [Confidential Treatment Requested]

WHOLESALE      As defined in Sections 2.2, 2.3, and 3.1 of the Operating
CONTRACT       Agreement and with respect to this Transaction:
QUANTITY:


               [Confidential Treatment Requested]

TRANSMISSION   Seller will function as CE's Marketer in accordance with the
& SCHEDULING   Marketer Agreement for Electric Choice Program between The
REQUIREMENTS:  Detroit Edison Company and Seller.  Seller will schedule
               point-to-point or network integrated transmission service and
               schedule ancillary services up to the CE Customer meter(s).

CONTRACT       As defined in Sections 2.2 and 3.2 of the Operating Agreement and
PRICE:         with respect to this Transaction:


               [Confidential Treatment Requested]

DELIVERY       CE Customer meter(s)
POINT:

PRODUCT        Physical, Firm Energy with Liquidated Damages
FIRMNESS:

SCHEDULING     Seller will schedule and deliver Energy according to the
REQUIREMENTS:  Wholesale Contract Quantity.  Further, Seller will develop its
               own day-ahead forecast for energy scheduling.

SPECIAL        Buyer will function as the AES/Retailer in accordance with the
CONDITIONS:    AES/Retailer Agreement for Electric Choice Program between The
               Detroit Edison Company and Buyer.

               Buyer will select Optional Retail Access Backup Service when
               enrolling CE Customers in Detroit Edison's Electric Choice
               Program.

               Buyer will transfer to Seller its rights to any congestion hedges
               provided through MISO. Such congestion rights include, but are
               not limited to, Financial Transmission Rights ("FTRs"). Seller
               will request, procure, and utilize all FTRs to which the Buyer is
               entitled and Seller elects to receive. Seller shall retain all
               value, positive or negative, associated with such FTRs.


                                      -2-
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CONFIDENTIAL & PROPRIETARY                               [DTE ENERGY LETTERHEAD]


               If in any hour of any day during the Delivery Period, the actual
               CE Customer demand exceeds [Confidential Treatment Requested],
               Buyer will compensate Seller for the excess MW of demand as
               specified below:

               [Confidential Treatment Requested]

               Buyer is responsible for all expenses, including taxes, after the
               Delivery Point. Seller is responsible for all expenses, including
               taxes, before the Delivery Point.

REGULATORY OR  If any of the following occurrences have material adverse
RULE CHANGES:  economic consequences to Seller or Buyer, then the parties agree
               to use their best efforts to negotiate in good faith to restore
               the original economic value of this Transaction: 1) a change in
               existing rules, regulations, procedures or protocols of the
               entity governing the transmission of Energy, capacity, scheduling
               or ancillary services, or 2) a change in the obligations of load
               serving entities in the Detroit Edison service territory or the
               Michigan Electric Coordinated Systems ("MECS") (or its successor
               entity) control area.

SECURITY FOR   In connection with Energy provided by DTEET under this
CE'S           Transaction, CE will grant DTEET a security interest in, and lien
PERFORMANCE:   on (and right of setoff against), and assignment of, all account
               receivables relating to the sale of Energy by CE to certain CE
               Customers (the "Secured Party Accounts Receivable") pursuant to
               that certain Security Agreement dated July 24, 2002, which is
               hereby incorporated by reference ("the Security Agreement").

SPECIAL        CE will pay DTEET for the Energy pursuant to the terms of that
PAYMENT TERMS: certain Escrow Agreement dated July 24, 2002, which is
               incorporated by reference (the "Escrow Agreement").

CE'S           CE represents and warrants that there are no encumbrances
REPRESENTATION limiting or interfering with DTEET's rights in the Secured Party
AND            Accounts Receivable;
WARRANTIES:

               CE represents and warrants that it will undertake no action to
               negate or diminish DTEET's interest in the Secured Party Accounts
               Receivable and will cooperate fully with DTEET to protect DTEET's
               interest arising under this Transaction;

               CE represents and warrants that it has irrevocably instructed
               each CE Customer receiving the Energy and all other persons or
               entities paying CE for the Energy, and shall so instruct all
               future


                                      -3-
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CONFIDENTIAL & PROPRIETARY                               [DTE ENERGY LETTERHEAD]


               CE Customers receiving the Energy and all other persons or
               entities at any time paying CE for the Energy, to make payment to
               the Lockbox (as defined in the Escrow Agreement), and that it
               will use all commercially reasonable efforts to cause all such
               persons or entities to agree to make payments to the Lockbox;
               provided, however, that CE may, subject to the terms and
               conditions of the Escrow Agreement, Security Agreement, and EEI
               Master Power Purchase and Sale Agreement, instruct each CE
               Customer receiving the Energy and all other persons or entities
               paying CE for the Energy to make payment to a different account
               upon the termination of this Transaction or the Escrow
               Agreement); and

               CE represents and warrants that it will promptly notify DTEET if
               it is aware that any person or entity instructed to make payment
               to the Lockbox has refused or failed to make any such payment to
               the Lockbox, and will as promptly as possible deposit such
               payments received by CE into the Lockbox.

               CE represents and warrants that to further protect DTEET's first
               priority security interest in the Secured Party Accounts
               Receivable, it acknowledges that DTEET is the customer of
               Standard Federal Bank with respect to the Lockbox/Escrow Account,
               and furthermore, that CE agrees that it will not, at any time
               during the Term of this Transaction, enter into any credit
               transaction with Standard Federal Bank (because it is the Bank
               maintaining the Lockbox/Escrow Account).

               CE represents and warrants that it will only use the Product
               purchased hereunder to serve its retail customer load under the
               Detroit Edison Electric Choice Program, and that it will not be
               resold in the wholesale market.

This Transaction Letter shall be governed by the terms and conditions set forth
herein and the EEI Master Power Purchase and Sale Agreement between DTEET and
Buyer, effective July 1, 2003 (the "Master Agreement") which is incorporated by
reference and made a part hereof. In the event of a conflict between this
Transaction Letter and the terms and conditions of the Master Agreement,
including, but not limited to, the product definitions in Schedule P of the
Master Agreement, this Transaction Letter shall govern.

Please execute this Transaction Letter by signing below and returning a copy to
Joseph Gallagher, Risk Monitor, by facsimile at 734.887.2056.


                                      -4-
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CONFIDENTIAL & PROPRIETARY                               [DTE ENERGY LETTERHEAD]


If this Transaction Letter is not executed and returned within two (2) Business
Days, it shall be deemed correct as sent. Questions should be referred to Joseph
Gallagher, of DTEET, at 734.887.2004.


Sincerely,

DTE Energy Trading, Inc.


Approved:


/S/      RANDALL D. BALHORN
--------------------------------------------
Randall D. Balhorn, President

7/24/03
--------------------------------------------
Date



ACCEPTED AND AGREED:

Commonwealth Energy Corporation

/S/      DICK PAULSEN
--------------------------------------------


Dick Paulsen, COO
--------------------------------------------
Printed Name and Title

7/24/03
--------------------------------------------
Date


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