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Thursday, August 28, 2008   
California is the first state in the nation to fully restructure the investor-owned electric utility industry. On April 1, 1998, investor-owned utilities "unbundled" the generation from the transmission and distribution of power. Now all investor-owned utility customers have the option to purchase from competitive suppliers and potentially achieve lower prices in a competitive market. Also, municipal utilities may elect to give their customers the option of choosing their electricity supplier. This means that you are able to buy power at market prices. Power can be purchased in several ways:

Direct Access You may select an energy service provider (ESP) to provide power and other energy related services. ESPs work with the local investor-owned utility to arrange for the delivery of power to your business.

Bundled Service The local investor-owned utility will deliver power to your business that is purchased from the California Power Exchange (CalPX), California's open marketplace for the purchase and sale of electricity. Customers using this option are billed for the electricity at the average CalPX market price during the billing period.

Hourly PX Pricing Option You can choose to have the local investor-owned utility purchase power for you from the Cal PX at the hourly spot-market price.

You are billed for the electricity used on an hourly basis at the hourly CalPX price. For this option you are required to have an interval meter.

Regardless of the source of your power, Northern California's utilities will continue to provide safe and reliable delivery to your business.

The price of bundled service from the investor-owned utilities is frozen at today's level until no later than March 31, 2002. At the end of this period, the stranded costs of the investor-owned utilities, included in today's rates, will be largely removed from the pricing structure. Proposed average rate reductions, at this time, range from 26 to 43 percent for medium and large commercial and industrial customers.

The following estimates have been supplied by utilities providing distribution services in Northern California. These full-service rates include the cost of electricity supplied by the utility. However, if businesses choose to take advantage of any of the services offered by competitive energy suppliers, their cost may vary. These choices are only available in states that have made the bold choice to deregulate their electric utility industry.

Estimated Monthly Total Electric Bill (as of 9/99)

 

Large Commercial

Light Industrial

Heavy Industrial

Provider

1999

2002

1999

2002

1999

2002

PG&E — Secondary1,2

$16,885

$11,566

$40,169

$27,305

N/A

N/A

PG&E — Primary1,3

$14,506

$10,698

$33,319

$24,373

N/A

N/A

PG&E — Transmission1

N/A

N/A

N/A

N/A

$124,214

$100,365



Estimated Average Electric Rate (as of 9/99)

 

Large Commercial

Light Industrial

Heavy Industrial

Provider

1999

2002

1999

2002

1999

2002

PG&E — Secondary1,2

$0.101

$0.0694

$0.0927

$0.0630

N/A

N/A

PG&E — Primary1,3

$0.0870

$0.0642

$0.0769

$0.0562

N/A

N/A

PG&E — Transmission1

N/A

N/A

N/A

N/A

$0.0497

$0.0401


Assumptions:

Large Commercial: (e.g., distribution warehouse, back office operations) Demand: 500 kW. Annual Usage: 2 mil. kWh. Service Voltage: 277/480 V primary or secondary. Service Category: Firm. Hours of Operation: 7am-12am. Days of Operation: Mon-Sat.

Light Industrial: (e.g., electronics manufacturing, metal fabrication, plastic injection molding, wood products) Demand: 1,000 kW. Annual Usage: 5.2 mil. kWh. Service Voltage: 21,000 V primary or secondary. Service Category: Firm. Hours of Operation: 7am-12am. Days of Operation: Mon-Fri.

Heavy Industrial: (e.g., semiconductor manufacturing, food processing, glass manufacturing) Demand: 4,000 kW. Annual Usage: 30 mil. kWh. Service Voltage: 115,000 V Transmission. Service Category: Firm. Hours of Operation: 24 hours. Days of Operation: Every day.

Notes:

1. The 1999 monthly electric bill and rates are preliminary estimates based upon expected usage and electric rates currently in effect. Rate reductions for 2002 are consistent with those proposed in PG&E's 1999 General Rate Case filed with the California Public Utilities Commission and are assumed to go into effect April 1, 20021. Rate reductions are based on a class average estimate and will vary according to actual customer usage. The actual amount of the rate decrease will depend upon the outcome of several regulatory proceedings, as well as the prevailing price of energy at the time the rate goes into effect.

2.There have been published reports that PG&E rate reductions could start 18 to 20 months earlier than April 1, 2002 which is the date required under the 1996 electric industry restructuring law.

3. PG&E supplies transformer, 100 feet of cable. Customer supplies substructures.

4. Customer provides distribution facilities and transformer.
 

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