UNITED STATES OF AMERICA
BEFORE THE
FEDERAL ENERGY REGULATORY COMMISSION

California Independent System Operator 	)
Corporation						)	Docket No. ER98-211-000   
California Power Exchange Corporation		)	Docket No. ER98-210-000
							)	(Consolidated)
Southern California Edison Company		)	Docket No. ER98-462-000
							)
Pacific Gas & Electric Company			)	Docket No. ER98-556-000
Pacific Gas & Electric Company			)	Docket No. ER98-557-000
							)	(Consolidated)

ANSWER OF THE CALIFORNIA INDEPENDENT OPERATOR CORPORATION TO JANUARY 16, 1998 MOTION FOR CLARIFICATION

On January 16, 1998, the Transmission Authority of Northern California and other parties (hereinafter Joint Movants) filed a request for clarification in the above captioned dockets.
In Docket No. ER98-211-000, the California Independent System Operator Corporation filed a proposed Grid Management Charge (GMC).  On December 17, 1997, the Commission accepted the proposed charge and established a hearing.  The Joint Movants seek clarification on one issue, i.e. where to litigate the issue of the application of GMC.  The issue is whether the GMC be applied only to load served by the ISO Controlled Grid or to all loads in the ISO Control Area, regardless of whether the transaction uses the ISO Controlled Grid.
The Joint Movants believe that the Commission intended for this issue to be litigated in the hearing ordered in Docket No. ER98-211-000.  The ISO agrees with TANC.  This issue should be litigated in that hearing.
Moreover, the Commission should clarify that this issue should only be litigated in the hearing established in Docket No. ER98-211-000.  As the Joint Movants point out, they have raised this issue in a variety of individual company specific proceedings, including Docket No. ER98-462-000, Southern California Edison’s GMC pass through and scheduling and dispatch charge case and Docket Nos. ER98-556-000, and ER98-557-000, PG&E’s pass through cases.  The issue of the application of the GMC to energy scheduled through the ISO (whether because the ISO is the control area operator or controls specific lines over which transmission service is used) is a generic one which requires consistent resolution.  To litigate this generic issue in individual company specific proceedings raises the possibility in inconsistent decisions, a possibility the ISO has attempted to avoid in other situations.  Thus, this issue should be litigated in only one proceeding.  The related issue of whether the Grid Management Charge may be passed on to a particular customer under a pre-existing contract is, however, appropriately left for individual proceedings.  The ISO does not support broadening the Grid Management Charge proceeding to litigate the meaning of bilateral contracts between the California investor-owned utilities and their customers.
As a related matter, the ISO notes that it will shortly file an amendment to its Tariff to eliminate confusion on this very issue.  That amendment will add a new definition of  “ISO Control Area” and in a number of places clarify whether the Tariff was meant to refer to the ISO Control Area or a subset, the “ISO Controlled Grid.”  That amendment is intricately related to Section 8.3 of the ISO tariff, i.e. the applicability of the GMC.  In that filing the ISO will recommend that any hearing on the amendment  be consolidated with the Phase II hearing set in Docket No. ER98-211-000 on the Grid Management Charge because the issues are substantially identical to those already set for hearing.
In conclusion, the ISO supports TANC’s motion that the Commission clarify that the hearing established in Docket No. ER98-211-000 should be the sole forum to litigate the following issue:  whether the GMC charge should be applied only to load served by the ISO Controlled Grid or to all loads in the ISO Control Area, regardless of whether the transaction uses the ISO Controlled Grid.
						Respectfully Submitted,

						California Independent System
						Operator Corporation

					N. Beth Emery
					Vice President and General Counsel
					California Independent System Operator 							Corporation
					151 Blue Ravine Road
					Folsom, CA  95630
					Telephone:  (916) 351-2334 
					Fax:  (916) 351-2350
					E-Mail:  bemery@caiso.com

						____________________________
						Stephen Angle
						Robert C. Fallon
						Howrey & Simon
						1299 Pennsylvania Avenue, N.W.
						Washington, DC  20004-2402
						Telephone:  (202) 383-7261
						Fax:  (202) 383-6610
						E-Mail:  angles@howrey.com
Dated:	February 3, 1998

Certificate of Service
I hereby certify that I have this day served the foregoing document upon each person designated on the official service list compiled by the Secretary in the captioned proceeding.
Dated at Washington, DC, this 3rd day of February, 1998.

						____________________________
						Robert C. Fallon
						Howrey & Simon
						1299 Pennsylvania Avenue, N.W.
						Washington, DC  20004-2402
						Telephone:  (202) 383-7357