Subject: California 7/17 pt.2
From: [email-masked]
To: [email-masked]
Cc: [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked]
Date: Tue, 17 Jul 2001 12:56:51 -0700 (PDT)

Events in California take a bearish turn for SoCal but expect several more twists and turns this week, as there are other more SoCal-favorable bills still in circulation.

RJ

The former bill carrying the original MOU, SB 78XX (Polanco), has now
been gutted and replaced with what appears to be the Senate plan (crafted by Sher) for the MOU.  IN other words, the original MOU crafted by the governor and SoCal in April no longer has a bill carrying it.

*. The newly amended SB 78XX calls for the following:

- There is an option for the state to purchase SoCal's transmission assets at book value.
- Revenue from the rate stabilization bonds may be used as follows:
	- No more than $1.2 billion for bank creditors
	- No more than $1.3 billion for debts owed to QFs
	- Any debts for power purchased from non-QF generators before 1/31/01 is the responsibility of SoCal and its parent company.

*. This deal seems very likely to be seen as unacceptable by SoCal,
especially this final point.