california update 6 / 1 / 01 below are details of new plan currently being created by california state treasurer phil angelides and supported by sen . burton . the plan is in the initial stages and is not currently on any legislative fast - track . it is also not motivated by a desire to save socal from bankruptcy . the creator ' s goal is to give californians more control over their energy and electric futures as well as giving the tax / rate payers a share of the pie in return for money that has / will go to the utilities . we will continue to monitor this plan , its supporters and progress .
plan z
california state treasurer phil angelides and a powerful group of legislators are finally taking action and are developing a plan to solve california ' s energy crisis this summer . the group is comprised of leftish legislators , environmental advocates , in - state energy company executives and business leaders and they are pulling together a plan z . at the core of the plan is the recently passed authorization to erect a california public power authority that issues bonds , constructs new power plants and buys up transmission lines . there is even talk within this group of using newly legislated authority to buy socal edison for $ 3 . 5 billion ( less than it owes ) although they would face huge obstacles and receive strong opposition from power companies as well as edison itself .
the five - year goal is to have enough power generation capacity to guarantee a 5 % - 15 % " cushion " against energy peak demand . angelides and burton want to create enough capacity to form a buyer ' s market . one of the points of the plan is to replace private sector generation with more public sector generation . this plan may short - circuit private sector plans to build new plants , but the state has the ability to issue $ 5 b in revenue - backed bonds ( in addition to the $ 12 b rate - backed bonds ) . the second key element in the angelides - burton plan z is additional rate hikes for california ' s consumers and businesses . although discussions are still underway between this group and business leaders , angelides is wanting to propose an additional 45 % increase in residential and commercial electricity rates , however , there is immense sympathy for loading a disproportionate share of the burden on businesses . this increase is on top of the 50 % - 60 % already mandated by previous puc decisions this year . these rate increases will do two things : stop the immediate fiscal drain on the state of california and prevent emergency tax hikes ( being serious considered last week ) .
issues to consider in regards to this plan are : ( 1 ) how much will current shareholders be diluted in return for helping the utilities repay long - owed debts ( or what would they get if the state decided to buy up all of socal edison ) ; and ( 2 ) how much will creditors have to " eat " in the legislated repayment plan ? in other words how big will the equity and bond haircuts be ? there is no answer to these questions right now as legislators work to cobble together a plan with numbers that work without triggering a massive and politically destructive rebellion by voters next year .
california update 6 / 1 / 01
below are details of new plan currently being created by california state treasurer phil angelides and supported by sen . burton . the plan is in the initial stages and is not currently on any legislative fast - track . it is also not motivated by a desire to save socal from bankruptcy . the creator ' s goal is to give californians more control over their energy and electric futures as well as giving the tax / rate payers a share of the pie in return for money that has / will go to the utilities . we will continue to monitor this plan , its supporters and progress .
plan z
california state treasurer phil angelides and a powerful group of legislators are finally taking action and are developing a plan to solve california ' s energy crisis this summer . the group is comprised of leftish legislators , environmental advocates , in - state energy company executives and business leaders and they are pulling together a plan z . at the core of the plan is the recently passed authorization to erect a california public power authority that issues bonds , constructs new power plants and buys up transmission lines . there is even talk within this group of using newly legislated authority to buy socal edison for $ 3 . 5 billion ( less than it owes ) although they would face huge obstacles and receive strong opposition from power companies as well as edison itself .
the five - year goal is to have enough power generation capacity to guarantee a 5 % - 15 % " cushion " against energy peak demand . angelides and burton want to create enough capacity to form a buyer ' s market . one of the points of the plan is to replace private sector generation with more public sector generation . this plan may short - circuit private sector plans to build new plants , but the state has the ability to issue $ 5 b in revenue - backed bonds ( in addition to the $ 12 b rate - backed bonds ) . the second key element in the angelides - burton plan z is additional rate hikes for california ' s consumers and businesses . although discussions are still underway between this group and business leaders , angelides is wanting to propose an additional 45 % increase in residential and commercial electricity rates , however , there is immense sympathy for loading a disproportionate share of the burden on businesses . this increase is on top of the 50 % - 60 % already mandated by previous puc decisions this year . these rate increases will do two things : stop the immediate fiscal drain on the state of california and prevent emergency tax hikes ( being serious considered last week ) .
issues to consider in regards to this plan are : ( 1 ) how much will current shareholders be diluted in return for helping the utilities repay long - owed debts ( or what would they get if the state decided to buy up all of socal edison ) ; and ( 2 ) how much will creditors have to " eat " in the legislated repayment plan ? in other words how big will the equity and bond haircuts be ? there is no answer to these questions right now as legislators work to cobble together a plan with numbers that work without triggering a massive and politically destructive rebellion by voters next year .