Message-ID: <5736934.1075848153003.JavaMail.evans@thyme> Date: Wed, 21 Mar 2001 08:20:00 -0800 (PST) From: susan.mara@enron.com To: alan.comnes@enron.com, angela.schwarz@enron.com, beverly.aden@enron.com, bill.votaw@enron.com, brenda.barreda@enron.com, carol.moffett@enron.com, cathy.corbin@enron.com, chris.foster@enron.com, christina.liscano@enron.com, christopher.calger@enron.com, craig.sutter@enron.com, dan.leff@enron.com, debora.whitehead@enron.com, dennis.benevides@enron.com, don.black@enron.com, douglas.huth@enron.com, edward.sacks@enron.com, eric.melvin@enron.com, erika.dupre@enron.com, evan.hughes@enron.com, fran.deltoro@enron.com, gayle.muench@enron.com, ginger.dernehl@enron.com, gordon.savage@enron.com, harold.buchanan@enron.com, harry.kingerski@enron.com, iris.waser@enron.com, james.steffes@enron.com, james.lewis@enron.com, james.wright@enron.com, jeff.messina@enron.com, jeremy.blachman@enron.com, jess.hewitt@enron.com, joe.hartsoe@enron.com, karen.denne@enron.com, kathy.bass@enron.com, kathy.dodgen@enron.com, ken.gustafson@enron.com, kevin.hughes@enron.com, leasa.lopez@enron.com, leticia.botello@enron.com, mark.muller@enron.com, marsha.suggs@enron.com, marty.sunde@enron.com, meredith.eggleston@enron.com, michael.etringer@enron.com, michael.mann@enron.com, michelle.cisneros@enron.com, mpalmer@enron.com, neil.bresnan@enron.com, neil.hong@enron.com, paul.kaufman@enron.com, richard.zdunkewicz@enron.com, richard.leibert@enron.com, richard.shapiro@enron.com, rita.hennessy@enron.com, robert.badeer@enron.com, rosalinda.tijerina@enron.com, sandra.mccubbin@enron.com, sarah.novosel@enron.com, scott.gahn@enron.com, scott.stoness@enron.com, sharon.dick@enron.com, skean@enron.com, susan.mara@enron.com, tanya.leslie@enron.com, tasha.lair@enron.com, ted.murphy@enron.com, terri.greenlee@enron.com, tim.belden@enron.com, tony.spruiell@enron.com, vicki.sharp@enron.com, vladimir.gorny@enron.com, wanda.curry@enron.com, william.bradford@enron.com, jubran.whalan@enron.com, triley@enron.com, richard.sanders@enron.com, robert.williams@enron.com, dwatkiss@bracepatt.com, rcarroll@bracepatt.com, donna.fulton@enron.com, gfergus@brobeck.com, kathryn.corbally@enron.com, bruno.gaillard@enron.com, linda.robertson@enron.com, ren@enron.com, lazure@enron.com, michael.tribolet@enron.com, phillip.allen@enron.com, christian.yoder@enron.com, jklauber@llgm.com, tamara.johnson@enron.com, mary.hain@enron.com, greg.wolfe@enron.com, jeff.dasovich@enron.com, dirk.vanulden@enron.com, steve.walker@enron.com, james.wright@enron.com, mike.smith@enron.com, richard.shapiro@enron.com, leslie.lawner@enron.com, robert.neustaedter@enron.com, steve.walton@enron.com, psmith3@enron.com, mjackso7@enron.com, janel.guerrero@enron.com, mark.fillinger@enron.com, jennifer.rudolph@enron.com, martin.wenzel@enron.com, wgang@enron.com, joseph.alamo@enron.com, tracy.ngo@enron.com, ray.alvarez@enron.com Subject: FW: Associated Press story: Power spending imperils state's finan cial health, controller says Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Susan J Mara X-To: Alan Comnes, Angela Schwarz, Beverly Aden, Bill Votaw, Brenda Barreda, Carol Moffett, Cathy Corbin, Chris H Foster, Christina Liscano, Christopher F Calger, Craig H Sutter, Dan Leff, Debora Whitehead, Dennis Benevides, Don Black, Douglas Huth, Edward Sacks, Eric Melvin, Erika Dupre, Evan Hughes, Fran Deltoro, Gayle W Muench, Ginger Dernehl, Gordon Savage, Harold G Buchanan, Harry Kingerski, Iris Waser, James D Steffes, James W Lewis, James Wright, Jeff Messina, Jeremy Blachman, Jess Hewitt, Joe Hartsoe, Karen Denne, Kathy Bass, Kathy Dodgen, Ken Gustafson, Kevin Hughes, Leasa Lopez, Leticia Botello, Mark S Muller, Marsha Suggs, Marty Sunde, Meredith M Eggleston, Michael Etringer, Michael Mann, Michelle D Cisneros, mpalmer@enron.com, Neil Bresnan, Neil Hong, Paul Kaufman, Richard L Zdunkewicz, Richard Leibert, Richard Shapiro, Rita Hennessy, Robert Badeer, Rosalinda Tijerina, Sandra McCubbin, Sarah Novosel, Scott Gahn, Scott Stoness, Sharon Dick, skean@enron.com, Susan J Mara, Tanya Leslie, Tasha Lair, Ted Murphy, Terri Greenlee, Tim Belden, Tony Spruiell, Vicki Sharp, Vladimir Gorny, Wanda Curry, William S Bradford, Jubran Whalan, triley@enron.com, Richard B Sanders, Robert C Williams, dwatkiss@bracepatt.com, rcarroll@bracepatt.com, Donna Fulton, gfergus@brobeck.com, Kathryn Corbally, Bruno Gaillard, Linda Robertson, Ren, Lazure, Michael Tribolet, Phillip K Allen, Christian Yoder, jklauber@llgm.com, Tamara Johnson, Mary Hain, Greg Wolfe, Jeff Dasovich, Dirk vanUlden, Steve Walker, James Wright, Mike D Smith, Richard Shapiro, Leslie Lawner, Robert Neustaedter, Steve Walton, psmith3@enron.com, mjackso7@enron.com, Janel Guerrero, Mark Fillinger, Jennifer Rudolph, Martin Wenzel, wgang@enron.com, Joseph Alamo, Tracy Ngo, Ray Alvarez X-cc: X-bcc: X-Folder: \Steven_Kean_June2001_4\Notes Folders\Discussion threads X-Origin: KEAN-S X-FileName: skean.nsf Sue Mara Enron Corp. Tel: (415) 782-7802 Fax:(415) 782-7854 ----- Forwarded by Susan J Mara/NA/Enron on 03/21/2001 04:19 PM ----- "Beiser, Megan" 03/21/2001 03:42 PM To: "Aaron Thomas (E-mail) (E-mail)" , "Andrea Weller (E-mail) (E-mail)" , "andrew Chau (E-mail) (E-mail)" , "Bill Chen (E-mail) (E-mail)" , "Douglas Oglesby (E-mail) (E-mail)" , "Fairchild, Tracy" , "Jeffrey Hanson (E-mail) (E-mail)" , "jennifer Chamberlin (E-mail) (E-mail)" , "john Barthrop (E-mail) (E-mail)" , "John Leslie (E-mail) (E-mail)" , "Joseph Alamo (E-mail) (E-mail)" , "Manuel, Erica" , "'Michael Nelson' (E-mail)" , "Peter Bray (E-mail) (E-mail)" , "Rebecca Schlanert (E-mail) (E-mail)" , "Richard Counihan (E-mail) (E-mail)" , "'Robert Morgan' (E-mail)" , "Sue Mara (E-mail) (E-mail)" , "Allen, Stevan" , arm@phaser.com, "brbarkovich@earthlink.net" , cra@calretailers.com, dennis.flatt@kp.org, dhunter@smithandkempton.com, djsmith@smithandkempton.com, Dominic.DiMare@calchamber.com, drothrock@cmta.net, gharrison@calstate.edu, hgovenar@govadv.com, jackson_gualco@gualcogroup.com, ken_pietrelli@ocli.com, kgough@calpine.com, kmccrea@sablaw.com, kmills@cfbf.com, lhastings@cagrocers.com, mday@gmssr.com, mmoretti@calhealth.org, nplotkin@tfglobby.com, randy_britt@robinsonsmay.com, richard.seguin@kp.org, RochmanM@spurr.org, rrichter@calhealth.org, sgovenar@govadv.com, smccubbi@enron.com, spahnn@hnks.com, theo@ppallc.com, vincent.stewart@ucop.edu, vjw@ceert.org, "Warner, Jami" , wbooth@booth-law.com, wbrown@lhom.com, wlarson@calstate.edu cc: Subject: FW: Associated Press story: Power spending imperils state's finan cial health, controller says > Power spending imperils state's financial health, controller says > > Updated: March 21, 2001 - 3:11 p.m. > > California's power-buying on behalf of two strapped utilities is gutting > its budget surplus and putting the state at financial risk, the state > controller said Wednesday. > > The surplus dropped from $8.5 billion in January, when the state began > buying electricity for Pacific Gas and Electric Co. and Southern > California Edison, to $3.2 billion now, Kathleen Connell estimates. > > Connell ordered an audit of the state's power-buying, saying > Gov. Gray Davis is withholding key financial information from her office > and the Legislature. > > Wednesday marked the first time in three days the state avoided rolling > blackouts. Power grid officials credited cooling temperatures and the > completion of repairs at several power plants. > > Connell said the energy crunch now imperils the state's budget as well as > its electric grid. > > California has been spending about $45 million a day --$4.2 > billion so far -- to buy power for Edison and PG&E, both denied credit by > electricity wholesalers. > > The two utilities, California's largest, say they are nearly $14 billion > in debt due to soaring wholesale power costs the state's deregulation law > blocks them from recovering from customers. > > Meanwhile, the state has faced high natural gas costs and a > tight power supply driven in part by power plant repairs in > California and scarce hydroelectric power in the Pacific Northwest. > > Standard & Poor's has put the state on a credit watch due to its power > purchases and chastised Davis, the Legislature and state regulators for > not taking more aggressive steps to assure the utilities can pay their > bills. > > On Wednesday, Connell said she is refusing a request by Davis and the > Legislature to transfer $5.6 billion into a "rainy day fund" she said was > set up to impress Wall Street as the state prepares to issue $10 billion > in revenue bonds to cover its power-buying. > > Transferring the money would leave the state general fund $2.4 billion in > debt, Connell said. > > Sandy Harrison, spokesman for the state Department of Finance, and Keely > Bosler of the Legislative Analyst's Office, said such transfers are > routine and required by law. > > They put the state's budget surplus at $5.6 billion. > > "The law says she has to do it. The law does not give her the power to > demand that kind of audit information," Harrison said. > > He said the state's budget isn't in danger because it will be > repaid with the $10 billion in long-term debt. > > Connell said the scope of the proposed transfer is unprecedented and > amounts to a "shell game" that disguises the power purchases' impact on > the state budget. > > Wells Fargo & Co. chief economist Sung Won Sohn said he sees little > progress in efforts to fix the state's power problems and end state > electricity purchases. > > "If we're going to pour money into a bottomless pit, I would > worry about the state's finances," he said. "At some point we're going to > run out of money." > > The controller's criticism of fellow Democrat Davis won support from > Assembly Republicans and Secretary of State Bill Jones, a Republican > considering challenging Davis next year. > > Jones said he wants to announce his own plan to solve the > state's energy woes, but can't unless Davis releases more financial > details. He said his plan may involve giving the utilities low-interest > loans with their transmission lines held as collateral. > > Davis spokesman Steve Maviglio dismissed the criticism. > > "Political grandstanding doesn't generate one more kilowatt of energy for > California in this time of emergency," he said. > > Maviglio said the administration has released the financial > information it can without jeopardizing negotiations for long-term power > contracts with wholesalers. > > -- Associated Press > > >