Exhibit 99.431




?load profile? for the class of customer that they belong.

Due to this crediting mechanism, during the transition period the 3 IOUs end up
being financially responsible for the total load they had before deregulation.
(i.e., if customer has remained with them, receives his electricity at fixed
cost and IOU buy this energy requirement in the PX market or real-time and is
not protected against price volatility. On the other hand, if customer has
selected direct access, still receives a credit based on PX prices.)

A large direct access customer is not assured of any saving on its electricity
bill, if he signs a fixed cost contract with his Energy Service Provider.
Because the credit for energy that he receives from his local utility is not
fixed and is a function of PX prices. Most of these customers, have therefore
selected to sign contracts that the price they pay to their Energy Service
Provider is tied to PX price (say 95% or 98% of PX prices). This way these
customers know for sure there is saving on their electricity bill compared to
staying with local utility.

The question is, then, does this customer have any incentive to reduce his
electricity consumption when the PX prices go up? The answer is no.

Let me give you an example. Assume a large industrial customer is paying 7.5
cents/kWh to the utility and then receives a credit for his energy based on the
PX prices. Assuming that in setting the rate the energy cost was estimated to be
2.5 cents/kWh, then the net received by the utility for costs other than energy
is 5.0 cents/kWh. If the PX price is 3.0 cents/kWh, then the utility will give a
credit of 3.0 cents/kWh and will end up collecting 4.5 cents/kWh from this
customer to cover its non-energy costs. In other words, utility is under
collecting on its stranded cost since the PX price is higher than the energy
price used in calculating the rate in the tariff.

Now assume that this customer has signed a contract that he pays 95% of the PX
price for his energy. If the PX price on average is 2.5 cents /kWh this customer
receives 2.5 cents/kWh of credit from the utility and pays 2.375 cents/kWh to
his new provider. He saves 0.125 cents /kWh i.e., a saving of 1.67% in his total
electricity bill. His bill is:

- - payment to local IOU      7.5
- - credit from IOU for energy     2.5
- - payment to Energy Service Provider   2.375
                                   7.375 cents/kWh

Let us assume that in a given hour the PX price goes up to 100 $/MWh (i.e., 10
cents/kWh). The customer now gets a 10 cent /kWh of credit, but still pays 95%
of 10 cents/kWh, i.e., 9.5 cents/kWh to his energy provider. He is not only
protected against price increased in the PX, actually he gets a larger savings.
His bill for this hour will be

- - payment to local IOU 7.5
- - credit from IOU for energy (10.0)
- - payment to Energy Service Provider 9.5
                                   7.0 cents/kWh

In other words, when price went up from 2.5 cents/kWh to 10 cents/kWh, this
customer?s electricity rate decreased from 7.375 cents/kWh to 7.0 cents/kWh.


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The above calculation was for a customer who has a time of use meter. For
customers who get credit based on ?load profile? and that their Energy Service
Provider has installed a time of use meter, the incentive may be different. Such
customer may be able to reduce his energy consumption in high price period and
reduce his payments to his energy Service Provider but still receives the same
energy credit from his local utility since this credit is based on load profile
of a class rather than the actual usage of this customer.

At the present time most of the load that have ?left? IOU?s are the load of
large customers who have had time of use meters with their local utility and
therefore no incentive to reduce usage of electricity during high price periods
when their contract is tied to PX prices.

As stated earlier, the transition period will end by the end of 2001. There is
going to be a Post Transition Rate Making Procedure at CPUC. Many questions for
the years after transition remain to be discussed and resolved. These will
include how the IOUs will purchase energy for the customers who remain with them
(i.e., through PX or through other markets including bilateral contracts), what
will the procedure to determine that costs for these purchases are reasonable.

There is a good chance that SDG&E will be able to collect their stranded cost
before the end of the transition period. Decision on sales of hydro units by
PG&E and SCE, and the amount they receive from such sales will impact the
stranded cost recovery by these two utilities. In case they do not recover their
stranded cost by the end of 2001, then customers do not have any responsibility
and the remaining stranded cost will have to be written off by IOUs.