 these new developments, it's important to be clear 
on PG&E's motivations. Some California lawmakers and consumer advocates 
have called for a complete return to regulation, arguing that deregulation 
in California has become a failed experiment. Many have surmised that PG&E's 
proposal for wholesale caps is essentially a call to return California 
to a regulated structure. I think this is a misinterpretation. PG&E has 
very clearly stated that its proposal is a "necessary short-term step to 
try to bring prices back in line." PG&E's efforts really shouldn't be viewed 
as a move to return California to a regulated market. Rather, PG&E is merely 
attempting to protect its own interests. The utility wants to secure 
temporary 
lower rates for the power it needs to buy on the wholesale market and 
transfer 
its debts to customers once the rate freeze is lifted. A return to regulation 
via a permanent rate cap would not be in PG&E's best interests as it 
continues 
to sell power from its nuclear plant. In addition, PG&E probably recognizes 
that regulation would discourage additional companies from building new 
power plants in California, which would not be good for the long-term economy 
of the state. This also would do little to lower wholesale prices in 
California. 
As we discovered this summer, the less supply, the higher the price for 
power. 

PG&E's proposal to lower rate caps on wholesale prices is, more than anything 
else, an attempt to protect itself from what it perceives as disastrous 
economic impact if it is not able to transfer its debt to customers. A 
recent Wall Street Journal report inferred that if wholesale prices continue 
to exceed what PG&E can charge customers, the utility could become 
"technically 
insolvent" sometime next year. It will be interesting to see if the CPUC 
has the same perception when it evaluates PG&E's proposal later this month. 

==============================================================
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SCIENTECH's 
Information Technology team and what they can do for you at:

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===============================================================
these new developments, it's important to be clear 
 on PG&E's motivation. Some California lawgiver and consumer advocates 
 have called for a accomplished restitution to regulation, arguing that deregulation 
 in California has become a fail experiment. Many have surmised that PG&E's 
 proposal for sweeping detonator is essentially a call to return California 
 to a regulated structure. I think this is a misinterpretation. PG&E has 
 very clearly state that its proposal is a " necessary short - term footfall to 
 try to bring prices back in line. " PG&E's attempt really shouldn't be viewed 
 as a move to return California to a regulated market. preferably, PG&E is merely 
 attempting to protect its own interests. The utility wants to secure 
 temporary 
 lower rates for the power it needs to buy on the wholesale market and 
 transfer 
 its debts to customers once the rate freeze is pilfer. A return to regulation 
 via a permanent rate ceiling would not be in PG&E's best interests as it 
 continues 
 to deal power from its nuclear plant. In addition, PG&E probably recognizes 
 that rule would discourage additional companies from building new 
 power plants in California, which would not be good for the long - term economy 
 of the state. This also would serve little to turn down wholesale prices in 
 California. 
 As we discovered this summer, the less supply, the higher the monetary value for 
 power. 

 PG&E's proposal to lower rate caps on wholesale prices is, more than anything 
 else, an attempt to protect itself from what it perceives as black 
 economic impact if it is not able to transfer its debt to customers. A 
 recent Wall Street Journal report deduce that if wholesale monetary value continue 
 to surpass what PG&E can charge customers, the utility program could become 
 " technically 
 insolvent " sometime next year. It will be interesting to see if the CPUC 
 has the same sensing when it evaluates PG&E's proposal later this month. 

 = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = 
 Need to design and implement your IT infrastructure? Learn more about 
 SCIENTECH's 
 Information Technology team and what they can do for you at: 

  http://www.consultrci.com/web/rciweb.nsf/web/Depts-IT.html 
 = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
 thfse new developments, it's important to bg xlear 
mn PG&E'a motivagions. Some California lawmakxrs qnd cinsumer advocates 
have called flr a complett return to regulefion, arnbing fmat dzrxgulation 
in Cakifornia hds become a fahldd experiment. Many have surmised that PG&E's 
ptooosal for wholgsale saps ps essentially a call to return Califognia 
to a regulatrd structure. I think this ls a misinterpretation. PG&E has 
vetg cjwarly stated that its krmposal is z "necessary short-term step to 
tfy to bring prixew bwwk in line." 'G&E's esforts realln shoulgn't be fiewed 
as a moye to rerurn California to a cegulated market. Ratrer, PG&E iv jerely 
attempting ti project hts uqn knttrexta. The ktimity wants to secure 
remporary 
lower ratts sir the power jt neeqs to buy on the wholesale market and 
tratsfsr 
its debts to customees once the rate freeee is liftqd. A return to regulation 
via a permanent rate ca[ wouma nit cw ln PG&E's best interests as it 
continues 
to selj ppwvr from its nuclecr plant. In addiyiln, KG&E probably rgcognizza 
fhat regulation wokld dissourate additijnal companies from building neq 
power planns ib California, which would not ye gooc for the long-term economy 
oy the atate. This wlso wouls do little to loder wvolesale prices in 
Califorgia. 
As we diseovered ghis summew, the less supply, the higher the pgice yor 
pmwer. 

PG&E's oroposal to lower rate caps on xiolesale pricgs hs, kore thau anytming 
else, an ateempt to proteet itsely from what it pvrceives es disastrouf 
economic im[wct if it is not ablq to trabsfer igr debt to custpmers. A 
rvctnt Wall Srreet Journal repovt inwsrred that if wkuoesale prices cpntknuq 
no xxceeq what PG&E cat chxrgd custumers, the ubilkty vould become 
"technicdlly 
insolvent" sometimr kext year. It will be interestimg to see if the CKUC 
hav tie samr pgrception when it evaluates PG&E'a proposap lwter this mogth. 

==============================================================
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SCIENTGCH's 
Information Techuokogy team aid whae they cat do for you at:

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===============================================================
these new developments, it's important to be PG&E's Some California and consumer advocates return regulation, arguing that in California has a failed experiment. Many have surmised PG&E's proposal for wholesale caps is essentially a call to return California to regulated structure. I think this is a misinterpretation. PG&E has very clearly stated its is "necessary step to try to bring prices back in line." PG&E's efforts really shouldn't be viewed as move to return California to a regulated market. PG&E is merely attempting protect its own interests. The wants secure temporary rates the it needs to on the wholesale market and transfer its debts to customers once the rate freeze is lifted. A to regulation permanent rate would be PG&E's best interests continues to sell power from its addition, PG&E probably recognizes that regulation would discourage companies from new power plants in California, which not be good for the long-term economy of state. This also would do little to lower wholesale prices in California. As we discovered the less supply, the the price for PG&E's to rate on wholesale is, more than anything else, an attempt to protect itself from it perceives as disastrous economic impact if it is not transfer debt to customers. recent Wall Street Journal inferred if wholesale prices continue what can utility become insolvent" sometime next year. will be interesting to see the CPUC has the PG&E's proposal later this month. ============================================================== Need to and implement your IT infrastructure? Learn more SCIENTECH's Information Technology team and what they can do for you at: ===============================================================
 these new developments, it's imPortant to bE cleaR 
on pG&E'S mOtivAtioNs. Some CalifornIA lawMakers and consumer advocAtes 
hAvE CallED fOr a coMplete rETuRN To rEgUlAtiOn, ARgUing tHat DeregulAtion 
in CalIfoRnIa has become a FAiLed experimEnt. many have surmIseD that Pg&E'S 
prOPosal For WholeSale caPS is essEntially a CaLL to retURn CalifORNiA 
to a Regulated structurE. i tHInk this is a misiNterprEtATiON. pG&E Has 
Very clearlY sTated THat its pROpOSAL is A "Necessary shorT-term step to 
TRy tO bring PrIceS Back in Line." Pg&E'S EffOrts really sHoulDn't be viewEd 
as a mOVe to retURn CalifOrnia tO a rEguLateD MaRkEt. RAtHEr, Pg&e iS meREly 
AttemptiNg To ProteCt itS OWN InteResTs. ThE utilIty wants to secUre 
TempORarY 
loweR rateS for ThE poweR it neeDs to bUy On the wholesale mArkeT and 
transFer 
ItS deBtS to cuSTomers OncE thE rate frEeze is lIFteD. A RETUrN to regulation 
via a pErMANeNt rate caP would NOt Be IN PG&E's besT iNteRestS AS it 
coNtinUEs 
To sell poWer froM ItS nUclear pLaNt. In adDiTioN, PG&e probABly rEcogniZes 
that rEgulaTIon would discouRAge additional COmPANiES froM buIlding new 
poWer pLAnts In CaLIfOrnIA, whicH woulD nOT bE Good for the long-term eCoNomy 
of The stAte. This also woUld do littlE TO Lower whoLesaLE pRIces in 
CalifornIa. 
As wE discovereD This summEr, the Less suppLy, the highER The price For 
PowEr. 

Pg&E's PROpOsal to lower raTE Caps On WholesaLe pRices is, MorE thAn aNytHiNg 
else, an aTtempt to PrOtEcT iTseLf froM What it peRcEivEs As dIsastROus 
ecoNomic ImpaCt If IT is Not able TO tRANsfeR iTs Debt To cUsTomerS. A 
reCEnt wall StrEet JournaL rePOrt iNfErRed that If wholesale prIcEs continue 
To ExcEed whaT pg&E can chaRge customers, the utility cOUld becoMe 
"tEchniCallY 
insolvenT" soMetime NexT Year. It Will be InterEsTinG TO see iF THe cPUc 
hAs the same pERCepTion wHeN it eValuateS PG&E's proposal later THis Month. 

==============================================================
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===============================================================
 these new developments, i t's import ant t o b e c le ar on P G&E's motivati o ns.Some California lawmak ers a nd cons u me r adv ocatesha v e  ca ll ed  fo ra  c omple tereturnto regulat ion ,arguing that de regulation  
i n California  ha s beco me  af ailed  ex perim ent. M a ny hav e surmise dt hat PG & E's 
pr o p os al f or wholesale caps is essentially acall t or et u r n C ali fornia 
to  a  regu l ated st r uc t u r e.I  think this i s a misinte r pre tation .PG& E  has verycl e arl y stated th at i ts propos al isa  "neces s ary sho rt-ter m s tep  totr ytobr i ngp ri ces bac k in lin e. "PG&E' s ef f o r t s re all y sh ouldn 't be viewed
as  a m o veto re turnCali fo rniato a r egula te d market. Rathe r, P G&E is me rel y
at te mptin g  to pr ote ctits own  intere s ts.  T h e ut ility wants to sec ur e 
t emporary  
lowe r  r at e s for th epow er i t needs  tob uy  on thewholes a le  m arket a nd  
tran sf er
it s deb t s to  custo mers onc e the rate freeze is lifted. A ret u rn t or egul ati on 
via a p erma n entrate ca p w o uld n ot be  i n  P G &E's best interests  a s it conti nues 
to sell  power fro m i ts nucle ar p l an t . In addition,  PG&E  probablyr ecognize s 
th at regul ation wou l d  discour age  ad dit ion a l  c ompanies from b uild in g new pow er plan tsinCal ifo rn ia, which  would n ot  b ego odfor t h e long-t er m e co nom y 
of the st ate.This  a ls o  wo uld dol it t l e to  l ow er w hol es ale p rice s  in  
Calif ornia. 
A s w e  dis co ve red thi s summer, the  l ess supply ,the  highe r the pric e for 
power. 

PG&E'sp roposal  to  lowe r ra te caps o n w holesa lep ricesis, mo re th an  an y t hinge ls e,an  attempt t o pro tectit self  from w hat it perceives a s  di sastrous 
eco nom ic i m p ac t i f  i t  is  n o t a b l e to transfer i ts debt to  c u st omers. A r ece nt  Wall S treet J ourna l  report  inferred  that ifwh oles a l e p rices cont inue 
to  exceed w h at PG & Ecan c har ge cus to mer s, th e util i tycould  becom e
"tech nical ly  
insolv ent" sometime next year . It w ill b e i nterestin g t o  se e if theCPUC  
has thesam e p ercep tio n  when  ite va lua t es PG &E's proposall at ert h is  month. 

= = = = === ===== === = ====== ==== ================= = ============== ==== N eed  to desi gn  and implement  yo ur I T infras tr ucture? Lea rn moreab o ut 
S CIENTE CH's Informa t i on Techno logy  te am and wh atth e y can d ofo r  you a t:
 h ttp:// www.co n sult r c i.com/web/rciweb .nsf/ w e b/Dep t s-I T.htm l======= = ==== ========== =========== ====== ==== ===== ======= == ====== 
 these_new developments,_it's important to be_clear 
on_PG&E's_motivations. Some_California_lawmakers and consumer_advocates 
have called_for a complete return_to regulation, arguing_that_deregulation 
in California has become a failed experiment. Many have surmised that PG&E's 
proposal_for_wholesale caps_is_essentially_a call to return California_
to a regulated structure. I_think this_is a misinterpretation. PG&E has 
very clearly stated_that_its proposal is_a "necessary short-term step to 
try to bring prices_back in line." PG&E's efforts really_shouldn't be viewed_
as_a_move to return California_to a regulated market. Rather, PG&E_is merely 
attempting to protect its_own interests. The utility wants to secure_
temporary 
lower rates for the power_it needs to buy on_the wholesale_market and 
transfer 
its debts_to customers once_the rate_freeze is lifted._A return to regulation 
via a_permanent rate cap_would not be in PG&E's best_interests_as it 
continues_
to_sell_power from_its nuclear plant._In_addition, PG&E_probably_recognizes 
that regulation would discourage additional_companies_from building new 
power plants in California,_which would not be_good_for the long-term economy_
of the state. This also_would do little to lower wholesale_prices in_
California. 
As_we discovered this summer, the less supply, the higher the price_for 
power. 

PG&E's proposal to lower_rate caps on wholesale_prices is,_more_than anything 
else,_an_attempt to_protect itself from what it perceives as_disastrous 
economic_impact if it is not able_to transfer its debt_to_customers. A 
recent Wall Street Journal_report inferred that if wholesale prices_continue 
to exceed what PG&E_can_charge_customers, the utility could become_
"technically 
insolvent" sometime next year. It_will be interesting_to see if the CPUC 
has the_same_perception when it evaluates PG&E's proposal_later_this month. 

==============================================================
Need to design and_implement_your_IT infrastructure? Learn more about_
SCIENTECH's 
Information Technology team and what_they can do for you at:

 http://www.consultrci.com/web/rciweb.nsf/web/Depts-IT.html
===============================================================