california update 7 / 13 / 01 executive summary
ferc settlement developments
socal ed . mou / plan b
the cpuc ' s new rate proposal
ferc developments
ferc ' s publicly recognized autonomy regarding california power talks likely has a less public , less autonomous , role in determining the outcome of debated refunds . the following analysis emphasizes the multiple dimensions and variables now at play in the california settlement negotiations :
the bush administration does have influence over what ferc decides - - especially now that pat wood and other republicans are there . the influence is certainly not formal ( as ferc is supposed to be an independent agency ) , but the commissioners generally do not issue decisions without taking the " political lay of the land " - - particularly regarding the positions of the white house .
bush and davis do not like each other ( no surprise there ) . communication between the davis administration , the white house and ferc is not free flowing . interaction between ferc and white house is frequent - - but with davis only on an as - needed basis . ( staff level contacts are more regular - - especially staff of the democrat commissioners ) .
administrative law judge c . wagner will probably recommend a refund at under or close to $ 1 b - - and the commission will not go higher than what the judge recommends . this would be for october forward . wagner thinks there may be additional refunds ordered later .
wagner has also strongly advised ferc and bush ( as well as his top advisors ) that they will have to put price caps on , stick with them and show real efforts to deal with this issue ( even though those steps run afoul of the " free market " position of the admin - - and his own members ) . he has a great deal of influence with bush .
mou & pan b
late thursday ( 7 / 12 ) assembly speaker robert hertzberg called a briefing for business community leaders regarding a new proposal to alter the terms of the edison mou . the new proposal ( now abxx 82 ) reduces the value of socal ' s transmission system to 2 times book value ( the state had previously agreed to pay 2 . 3 times the book value , or $ 2 . 76 b ) . given the dire financial condition of the socal edison ' s parent company ( eix ) , the legislature now realizes that they are unlikely to see any cash infusion above the $ 420 m already promised by eix . assembly moderate democrats led by keeley and hertzberg feel that a $ 4 . 5 b generator refund , a profit from the state ' s sale of the socal transmission lines , and an additional $ 1 b from a dedicated rate component are all distant , but hopeful possibilities that could fuel progress for a socal bail - out . of course , two thirds of these suggestions require ferc approval .
pg therefore , in order to save socal from bankruptcy , the legislation governing dwr ' s power purchases will likely have to be revised .
california update 7 / 13 / 01
executive summary
ferc settlement developments
socal ed . mou / plan b
the cpuc ' s new rate proposal
ferc developments
ferc ' s publicly recognized autonomy regarding california power talks likely has a less public , less autonomous , role in determining the outcome of debated refunds . the following analysis emphasizes the multiple dimensions and variables now at play in the california settlement negotiations :
the bush administration does have influence over what ferc decides - - especially now that pat wood and other republicans are there . the influence is certainly not formal ( as ferc is supposed to be an independent agency ) , but the commissioners generally do not issue decisions without taking the " political lay of the land " - - particularly regarding the positions of the white house .
bush and davis do not like each other ( no surprise there ) . communication between the davis administration , the white house and ferc is not free flowing . interaction between ferc and white house is frequent - - but with davis only on an as - needed basis . ( staff level contacts are more regular - - especially staff of the democrat commissioners ) .
administrative law judge c . wagner will probably recommend a refund at under or close to $ 1 b - - and the commission will not go higher than what the judge recommends . this would be for october forward . wagner thinks there may be additional refunds ordered later .
wagner has also strongly advised ferc and bush ( as well as his top advisors ) that they will have to put price caps on , stick with them and show real efforts to deal with this issue ( even though those steps run afoul of the " free market " position of the admin - - and his own members ) . he has a great deal of influence with bush .
mou & pan b
late thursday ( 7 / 12 ) assembly speaker robert hertzberg called a briefing for business community leaders regarding a new proposal to alter the terms of the edison mou . the new proposal ( now abxx 82 ) reduces the value of socal ' s transmission system to 2 times book value ( the state had previously agreed to pay 2 . 3 times the book value , or $ 2 . 76 b ) . given the dire financial condition of the socal edison ' s parent company ( eix ) , the legislature now realizes that they are unlikely to see any cash infusion above the $ 420 m already promised by eix . assembly moderate democrats led by keeley and hertzberg feel that a $ 4 . 5 b generator refund , a profit from the state ' s sale of the socal transmission lines , and an additional $ 1 b from a dedicated rate component are all distant , but hopeful possibilities that could fuel progress for a socal bail - out . of course , two thirds of these suggestions require ferc approval .
pg therefore , in order to save socal from bankruptcy , the legislation governing dwr ' s power purchases will likely have to be revised .