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and PG&E reached a Master Settlement Agreement on all pending disputes, including those before the Bankruptcy Court. The Master Settlement Agreement dismissed the lawsuits and the CPUC Proceedings with prejudice, and committed both parties to supporting and implementing what ultimately became the Confirmed Plan. The dismissed CPUC proceedings do not include the 1998 RAP or ABAG POWER's CPUC Complaint. The CPUC action to approve the Confirmed Plan and the Master Settlement Agreement is documented in the opinion issued for Investigation 02-04-026 (Settlement Opinion). The Master Settlement Agreement between the CPUC and PG&E has the following relevant features: 1. The CPUC agreed to include certain cost components in the CPUC's future regulatory and ratemaking proceedings as they affect PG&E. Such cost components included the sum of $2.2 billion designated the °regulatory asset." Rates established by the CPUC must be sufficient to (a) support all of the cost components necessary to PG&E's continued viability as an ongoing public utility and (b) amortize the regulatory asset over a period of ten (10) years. 2. Within the constraints of the Confirmed Plan and the Master Settlement Agreement, the CPUC retains its regulatory authority over PG&E. 3. The current CPUC and future CPUCs are bound by the Master Settlement Agreement. 4, The CPUC acknowledges the continuing jurisdiction of the Bankruptcy Court to enforce the Confirmed Plan. Legal Analysis The potential CPUC regulatory action on the Direct Access Credit can only be triggered by a FERC ordered reduction in wholesale electricity energy prices for 2000. Only PG&E and a Direct Access Credit recipient have standing to initiate an action to recalculate the Direct Access Credit. PG&E and ABAG POWER are estopped from so doing by §4 of the Stipulation and Release (see below). A recalculation of the Direct Access Credit can in theory be initiated by the CPUC, The impetus for a CPUC action is bureaucratic and triggered by FERC ordered price reductions. The central question is whether the CPUC can legally do so in the face of ABAG POWER's objections. The issue of recalculating Direct Access Credits based on FERC ordered refunds was raised by PG&E in a ratemaking action before the CPUC (Application 98-07-003, the "1998 RAP" filed in 1998). The Administrative Law Judge (AU) issued a draft decision on April 3, 2003 but the CPUC has not taken any action on it and it is not currently on the CPUC agenda for consideration, public hearing or further action.5 The 1998 RAP -Draft Decision states in pertinent part: "In our opinion it would be unreasonable to recompute the [Direct Access] credit should FERC order refunds. We are confronted, initially, with three unknown factors: whether FERC will order refunds: when FERC will order refunds (and when the order become[s] final), and the amount of those refunds.' As of this writing, FERC has the matter under consideration. Any order of refunds, if substantial, is expected to be appealed. It is impossible to predict the date of a final order. The period in question, December 28, 2000 to January 18, 2001, is two years old and counting. It is unfair for a No action can be taken without CPUC approval. Draft AU decisions on deregulation matters have had a mixed reception before the CPUC. Some have been adopted as presented. Others have been subject to substantial revision. The draft decision is Opinion Adopting a Post Power Exchange Direct Access Credit for Pacific Gas and Electric Company (1998 RAP -Draft Decision). Wind Up Agreement-Attmt D- 4-28-04 All