california update 5 / 09 please contact kristin walsh ( 713 ) 853 - 9510 or britt whitman ( 713 ) 345 - 4014 for questions .
executive summary
? california ' s bond inevitability
? davis faces even greater financial woes
? california ' s creditor status debated by court
? windfall profits tax bill ( sb lx / ab 128 x ) passes senate vote , davis expected to sign off
california bond battle
sb 31 x passed the senate today by a simple majority vote , initiating the 90 day wait period on the revenue bonds issuance . sources indicate that contrary to media reports , a possible referendum on the sb 31 x would be unlikely for harvey rosenfield to produce within 90 days due to insufficient funding . he reportedly would need to raise $ 250 , 000 - $ 500 , 000 very quickly . sources believe that it is more likely that harvey will attempt to set up an initiative later this year or in 2002 .
davis financial woes just beginning
it is unclear whether governor davis truly will be able to move money around within the state budget to cover power purchases until august . of the $ 13 . 4 billion bond amount authorized , approximately $ 6 . 7 billion has already been spent on power . it is likely that the state will spend more than the remaining $ 6 . 7 billion on power before the bonds are even issued . sources indicate that most of the long - term contracts davis talks about are unsigned and not really in place . this means that the state may still have to purchase the majority of power on the spot market , which further complicates the situation . as reported earlier , this explains why the republicans wanted to wait for davis to disclose the terms of the contracts before authorizing the bond issuance . given the lack of contracts in place , it appears that the bridge loan and the bonds will be inadequate for all of the state ' s power purchases .
" to be or not to be , " is california a creditor ?
sources indicate that lawyers and members of the generator community reviewing california ' s revenue bond bill sb 31 x , are unclear as to whether the state of california has claims as a creditor . it appears at this time , that the assembly re - wrote senator bowen ' s language so that the bill relies on the existing interpretation of ab lx as to when the state gets paid by the utilities . this exact issue is currently being reviewed in the pg & e bankruptcy case and will most likely settle this ongoing dispute between legislatures and utilities .
windfall profits tax
according to sources , the windfall profits tax bill , sb lx , still remains in committee in the assembly . it is unclear if this bill could be brought to a vote tomorrow given that each house has not reviewed the other ' s version of the bill . sources further indicate that the senate version sb lx , has not yet been referred to an assembly policy committee and that a " significant reconciliation process " between the two bills must occur . for example , unlike the senate version , the assembly version reportedly does not set a price cap based on a firm dollar amount , but instead leaves the decision up to a regulatory committee such as the puc . once the bond issuance passes the senate and is officially authorized , the state will likely be able to get its bridge loan from the lenders . however , sources indicate that the bridge loan is " dead " unless the senate moves before thursday .
california update 5 / 09
please contact kristin walsh ( 713 ) 853 - 9510 or britt whitman ( 713 ) 345 - 4014 for questions .
executive summary
? california ' s bond inevitability
? davis faces even greater financial woes
? california ' s creditor status debated by court
? windfall profits tax bill ( sb lx / ab 128 x ) passes senate vote , davis expected to sign off
california bond battle
sb 31 x passed the senate today by a simple majority vote , initiating the 90 day wait period on the revenue bonds issuance . sources indicate that contrary to media reports , a possible referendum on the sb 31 x would be unlikely for harvey rosenfield to produce within 90 days due to insufficient funding . he reportedly would need to raise $ 250 , 000 - $ 500 , 000 very quickly . sources believe that it is more likely that harvey will attempt to set up an initiative later this year or in 2002 .
davis financial woes just beginning
it is unclear whether governor davis truly will be able to move money around within the state budget to cover power purchases until august . of the $ 13 . 4 billion bond amount authorized , approximately $ 6 . 7 billion has already been spent on power . it is likely that the state will spend more than the remaining $ 6 . 7 billion on power before the bonds are even issued . sources indicate that most of the long - term contracts davis talks about are unsigned and not really in place . this means that the state may still have to purchase the majority of power on the spot market , which further complicates the situation . as reported earlier , this explains why the republicans wanted to wait for davis to disclose the terms of the contracts before authorizing the bond issuance . given the lack of contracts in place , it appears that the bridge loan and the bonds will be inadequate for all of the state ' s power purchases .
" to be or not to be , " is california a creditor ?
sources indicate that lawyers and members of the generator community reviewing california ' s revenue bond bill sb 31 x , are unclear as to whether the state of california has claims as a creditor . it appears at this time , that the assembly re - wrote senator bowen ' s language so that the bill relies on the existing interpretation of ab lx as to when the state gets paid by the utilities . this exact issue is currently being reviewed in the pg & e bankruptcy case and will most likely settle this ongoing dispute between legislatures and utilities .
windfall profits tax
according to sources , the windfall profits tax bill , sb lx , still remains in committee in the assembly . it is unclear if this bill could be brought to a vote tomorrow given that each house has not reviewed the other ' s version of the bill . sources further indicate that the senate version sb lx , has not yet been referred to an assembly policy committee and that a " significant reconciliation process " between the two bills must occur . for example , unlike the senate version , the assembly version reportedly does not set a price cap based on a firm dollar amount , but instead leaves the decision up to a regulatory committee such as the puc . once the bond issuance passes the senate and is officially authorized , the state will likely be able to get its bridge loan from the lenders . however , sources indicate that the bridge loan is " dead " unless the senate moves before thursday .