WONNELLv1.docx

VIA FED EX
June 22, 1998
Donn T. Wonnell
410 W 37th Street
Vancouver, WA 98660
RE: Electric Restructuring Task Force
Dear Donn,
Following up our conversation of last Thursday, I have enclosed for your review several documents.  First, let me update you on the status of the Attorney General’s task force.  Last Thursday, the task force had its first regularly scheduled, bimonthly meeting.  Our ultimate task is to prepare a report for the Legislature on electric restructuring with a delivery date of mid-December 1998.
As you know, we have scheduled our next meeting for July 2 at 11:00 a.m. (10:00 a.m. PST for you).  Please let me know whether to contact you in Vancouver or at Hood River.  The purpose of our next meeting is to discuss the enclosed time table for the delivery of our report to the Legislature.  Brett DeLange has taken a first stab at setting out a time line.  We will discuss the time line and would like for you to take a first cut at drafting an outline for the Legislative Report.  I have also enclosed some suggested topics for the report outline.
The other major item that we want to discuss at the July 2 meeting is reserving approximately three days at the end of July or the first of August to receive restructuring input from various stakeholders.  I have already forwarded to Lawrence your “open” dates for that period.  We envision that you would come to Boise for the three days of presentations.  We are considering inviting the following stakeholders to give us presentations:  the three utilities; municipalities and co-ops; consumer groups; NWPPC; industrial customer groups (including large business customers and irrigators); BPA; the statewide business lobbying group; and other stakeholders that we may have overlooked.  We would like your thoughts on the structure or length of the presentations.  One question that did arise was whether to invite academics (e.g., economics professors) to give a general presentation on electric restructuring but we were unsure of whom to invite, how we would get a balanced presentation from both ends of the spectrum, and the protocols involved with inviting representatives of one state university and not the other universities.  We even considered whether we should have someone from out of state.  Your thoughts on this question and whether we have left out any stakeholder group would be helpful.
I have also enclosed two packages—one from Montana and the other from Maine.  As a background section to our Legislative report, we are considering whether we should have a brief overview of deregulation activities in three states: Montana (because of its proximity and water right issues); Maine (hydro generation); and California (because of its market impact in our region).  The Montana package includes the May 1997 Electric Restructuring Bill (Senate Bill 390).  Also included is Montana Power’s and PacifiCorp’s transitional plans from regulation to competition.  Items 6 through 9 are Consumer Protection Rules and Regulations.  Finally, Item No. 10 includes recent newspaper articles from the Billings Gazette concerning deregulation.
The Maine package contains similar items.  Item No. 1 is a summary of the Maine PUC’s recommendations on electric restructuring and Item 2 is the actual bill that they enacted in May 1997.  Items 3 and 4 are PUC documents establishing new rules and policy for cogenerators and small power producers.  Item 5 is some general background information provided by Central Maine Power Company including its facilities and information on its sale of generating facilities to Florida based FLP group.  Item No. 6 is a PUC rate increase order for Bangor Hydro Electric Company.  Item No. 7 includes various PUC Orders regarding several issues including divestiture of generating assets, renewable resource portfolio, and  stranded costs for Bangor Hydro.  Finally, I have included a February 1998 report to the Legislature from the Attorney General and the PUC.  This interim report generally addresses the concentration of market power by various electric suppliers to ensure there is robust competition among electric suppliers when retail competition begins on March 1, 2000.
Finally, I have included some materials on the Administration’s Electric Restructuring Plan.
If you have any questions regarding this material, you can call me at [phone] or Lawrence at [phone].
Sincerely yours,
Donald L. Howell, II
Deputy Attorney General
DLH/vld:L:wonnell.dh3
Enclosure
cc:Task Force Members