Subject: California 7/18
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Date: Wed, 18 Jul 2001 05:24:53 -0700 (PDT)

Time is not on the side of SoCal right now.  Sources suggest they need some form of MOU to pass at least one chamber of the California legislature in order to show at least a  little momentum to creditors.  The legislature appears commited to closing the session for a one month recess on Thursday night and is currently sorting through three bailout plans and the state budget.  Senate Republicans appear to remain opposed to all three bailout plans, meaning that at best, any bailout plan would pass on a non-emergency basis with a 90 day delay for implementation.

Call if you have questions.

RJ x39934

1.	AB82xx and AB83xx--Dueling Bailouts

Expect another lively day in California.  Two bills will be heard in committee at 10am Sacramento time--AB82xx and AB83xx.  AB82xx we tipped you about on Friday--the 80 page "tough medicine" bill for SoCal sponsored by Speaker Hertzberg.  AB83xx is sponsored by Rod Wright, Chairman of the Utility committee and a moderate Republican Keith Richman.  AB83xx is much more generous to SoCal and indeed Wright calls it a "straight bailout with nothing hidden."

2.	Budget Bill and Imminent Legislative Recess Could Sidetrack Both Bills
On top of this dynamic is the Budget Bill and the State Senate. According to my contacts, Senator Burton, the Senate President, is hoping to keep the published schedule and adjourn for a month's recess on Thursday evening. Speaker Hertzberg is reportedly not thrilled with leaving until the Edison issue is resolved. But talk is that once they recess, whether on Thursday or not, they plan to adjourn the Second Extraordinary session, meaning all xx bills passed and signed will go into effect in 90 days, and all others will be dead. 
As for the Budget, it is unlikely that Sen. Burton will recess the Senate on Thursday unless the Senate passes the budget that the Assembly passed last night. However a key Democrat, Sen. Sheila Kuehl, is in Italy and she has a 16 hour flight to return. No one knows if she has been told to return yet. Her vote is crucial to passage of the Budget, though, and she will be needed if they take that bill up tomorrow or Thursday. 
3.	A Third MOU Proposal?
Also, the Sen. Byron Sher proposal for Edison has still not been seen in print, but most people expect it to appear tomorrow, so the Senate can vote on it tomorrow or Thursday. It is likely to receive a waiver to hold an impromptu Senate Energy Committee hearing off the Floor on the , since no Energy committee hearing has been scheduled. This is the proposal that Sen. Burton has said he favors and is seen as the least like a bailout of any current proposals. 
4.	"Price Manipulation" Committee to Meet Today
The one Senate committee that is scheduled to meet tomorrow is the Senate Select Committee to Investigate Price Manipulation of the Wholesale Energy Market - at 9:30 AM -- which is scheduled to review compliance with subpoenas for Duke, Reliant, AES, NRG and Williams. (Interestingly, the hearing notice does not mention Enron, which the committee charged with contempt.)