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has had extensive involvement in the aggregation rulemaking process and in ~all significant electric regulatory matters before the PUC. Mr. Gay is familiar with all of the PUC proceedings that will impact the determination of non-bypassable charges that must be paid by retail electric providers who intend to compete with affiliates of incumbent utilities. He is being assisted by Dr. Steve Andersen, an economist who has testified in numerous ratemaking matters for cities on cost allocation and rate design issues, and Rick Covington, who is extremely knowledgeable of ERCOT protocols, transmission delivery and pricing issues. Other consultants may be retained after key strategic decisions are made about the best way to structure Requests for Proposals. If a governmental unit opts out of CAPP prior to the RFP, is it possible to recover any of the initial membership fee? No. The initial fee is to pay for organizational start-up costs. However, the initial membership fee will be credited against future administrative fees assessed after December 31, 2003. What advantage is there to joining CAPP as opposed to other aggregation groups? CAPP was formed specifically to provide cities with a vehicle to participate as an aggregation entity in the competitive retail electric market. The organization was established by cities who have been working together on electric matters since 1990. These cities advocated the inclusion of specific aggregation authority in SB 7 and have fully participated in the various dockets and rulemakings before the PUC implementing SB 7. Maximum price advantage should be achieved by maximizing aggregated load. One combined cities aggregation project in a given portion of the state should be able to negotiate a better price than multiple, and perhaps competing, city groups. CAPP is committed to a strategy that tests the viability of a statewide power pumhasing unit against large regional subgroupings. In either event, CAPP should be able to obtain greater price concessions than several cities proceeding on their own. The attorneys and consultants working with CAPP have a greater depth of knowledge on electric issues and municipal concerns than personnel working with other aggregation projects. Moreover, CAPP and its consultants are specifically focused on maximizing economic advantage to cities while preserving long-term options. Maximizing economic advantage will mean focusing on the average cost of power a city pays and whether that average cost can be lowered by preserving price to beat protection or aggregating all city accounts. Long-term options that are likely to be pursued exclusively by CAPP are: (1) Possible extension of aggregation benefits to residential and com- memial residents of municipalities; (2) Possible development of small scale generation units from landfill sites; (3) Possible participation in generation projects as a long-term risk management strategy; and (4) Pursuing price breaks for weather and distance, as well as load diversity. While CAPP intends to recruit participation from political subdivisions other than cities, if necessary, to obtain a better price, it is not anticipated that rates will be designed to (4)