In an accounting true-up resulting from initial overfunding, the California Public Utilities Commission returned $1 billion to ratepayers to be credited in bills beginning in the next few days. The credit, requested by bond financiers, is in one lump sum and amounts to $0.006\/kWh of use for the last 12-month period. In the September 4 CPUC meeting, the commission released $440 million for Pacific Gas & Electric ratepayers, $422 million for Southern California Edison customers, and $135 million for San Diego Gas & Electric ratepayers-amounting to about a $40 credit on an average residential electric bill. Given the pending recall vote, some cynics said the governor may get some positive political public relations mileage from the credit. But commission president Mike Peevey declared that he had not received a phone call from the governor's office through Richard Katz, governor Davis' energy adviser, to pressure the commission for such a credit decision. Ratepayers will receive their $1 billion in principal back from the state but will not get any interest on that money. In fact, ratepayers have to keep paying interest to the bondholders. State officials were not able to calculate what that interest is. "Our feeling is that the most important thing was to get money back to ratepayers" so they can start circulating it in the economy, said Peevey. "It's the result of restructuring of DWR bonds last fall," explained commissioner Loretta Lynch. The Department of Water Resources took over buying energy for utilities during the energy crisis because utilities were in financial straits and unable to consummate energy contracts. That procurement ability was originally funded out of the state's general fund, but was eventually refinanced through bonds. The bond underwriters demanded that an extra $1 billion be added to the principal on the condition that when and if DWR extricated itself from the energy-buying business, that money would be refunded. The adage "What's a few millions between friends?" may have applied to a CPUC decision on Edison's accounting practices. A vestige of the rate freeze, the transition revenue account, was collecting funds from California Power Exchange credits to offset direct-access customer liability. According to commissioner Geoffrey Brown, Edison had originally calculated the direct-access customer undercollection at $540 million, but the commission rejected that amount. Back at the drawing board, the utility came up with a more refined number of $392 million and subsequently revised it again to $473 million. The commission allowed the latter amount for Edison's accounting. Despite the access to cheap capital at the moment, the commission proceeded to allow PG&E to implement hedging plans to keep the cost of its access to capital manageable. Brown noted that the utility's hedging plans should still be submitted to the commission for approval, but he voted for the bankrupt utility's plan nevertheless. Lynch was annoyed that PG&E pressured the commission to act on its plans, but she couldn't dispute that "every [interest] point saved translates into millions of dollars" for ratepayers. In a decision that a majority of commissioners dubbed "special interest," Sierra Pine still was able to waive its direct-access surcharge because it met criteria set up by AB 1284-a bill written for the company. "Your vote today will save 200 jobs," said commissioner Susan Kennedy. Commissioners Lynch, Carl Wood, and Brown all said they felt "obligated" to vote for the exemption because of the legislature's direction. Sierra Pine had been returned to utility service involuntarily when Enron collapsed, thus exposing it to the $0.027\/kWh exit fee. The company uses energy-intensive methods to recycle wood waste into particleboard. CPUC decision numbers unavailable at press time. All decisions were unanimous.