Date: May 21, 2001

Time: 12:30 p.m.

Place: Arizona Corporation Commission, 1200 W. Washington, Pipeline Safety Conference Room 101, Phoenix, Arizona 85007

Attendance: No Quorum of Commissioners. See attendance list in Attachment 1.

Topic: Environmental Portfolio Standard (EPS) Workshop

Matters Discussed:

Ray Williamson of Commission Staff welcomed everyone to the meeting. All participants introduced themselves.

The minutes from the April 20, 2001, meeting were discussed. No changes were made.

The Master Issues List was discussed. The list has been updated from the last meeting. No changes were made.

Carl Dabelstein presented the results of the Accounting Issues Subcommittee's last conference call meeting. Representatives from APS, TEP and Citizens participated in the meeting. Mr. Dabelstein handed out a summary of the results of the last discussion. It was discussed that the committee generally agreed that the affected utilities should account for the EPS program revenues and expenditures in the same manner as other regulated operating revenues and expenditures. Mr. Dabelstein indicated that the accounting issues subcommittee would meet once more before completing a committee report. Please forward any comments regarding the current summary to Mr. Dabelstein.

Dave Rowley gave a presentation regarding the report from the Standards Subcommittee. Mr. Rowley prepared a handout that contained a system sizing matrix, committee recommendations and metering guidelines for PV metering, in-state metered AC sources and metered DC sources. The group discussed the committee?tm)s recommendations at length. Committee recommendation nos. 2 and 9 were discussed without a full consensus being reached. The committee will prepare a report on these recommendations for further comment. The metering guidelines posed by the committee were discussed and various changes were made to these guidelines. It was discussed that all metered DC sources must be delivered in-state and in-state metered AC sources may not be delivered out of state. The committee will make the appropriate changes and submit the guidelines for further comment.

David Berry presented the report from the Tradable Credit Subcommittee. The report identified proposed EPS guidelines. Changes were made to guideline nos. 5 and 6 to clarify that the energy must be sold to Arizona customers to receive the credit. In regards to guideline no. 8, it was suggested that the selection of a retirement date or limited life for certificates would most likely require a change in the rules. Mr. Berry indicated that he will produce a redlined version of the proposed EPS certificate guideline document to be distributed at the next meeting.

The next meeting of the working group will be held on June 29, 2001, at 12:30 p.m. in the Pipeline Safety Conference Room at 1200 W. Washington. The next agenda will include discussion led by the Standards Subcommittee that will address sizing rules and eligibility criteria format. The Tradable Credit Subcommittee will present a redlined version of the certificate guideline report for discussion by the group. Other issues may be discussed as appropriate.

Erinn Andreasen, Utilities Division