davis claims ene willing take haircut fyi attached article gov davis mentions enron one generators agreed accept less 100 cents dollar course one made claim governor say whatever takes make story polling numbers work jim forwarded james steffes na enron 03 01 2001 06 05 pm karen denne 03 01 2001 09 16 jeff dasovich na enron enron richard shapiro na enron enron james steffes na enron enron steven j kean na enron enron mark palmer corp enron enron cc subject merrill lynch report governor davis comes wall street davis saying discussions us taking loss debts conversations w told media yesterday contacted forwarded karen denne corp enron 03 01 2001 09 08 ann schmidt 03 01 2001 08 54 karen denne corp enron enron cc subject merrill lynch report governor davis comes wall street karen fyi ann governor davis comes wall street 3 1 1 9 47 new york e r r l l l n c h research bulletin fixed income research reference number 10906001 united states mar 01 2001 09 47 leo j kelser 1 212 449 7803 highlights issue governor gray davis california met group sell side rating agency analysts new york yesterday governor outlined plan restoring utilities financial viability meet obligations summarize highlights meeting trying fit solution within existing rate structure governor talked need find solution utilities problems within context existing rate structures indicated temporary 9 rate hike january 2000 would made permanent 10 rate reduction went effect january 1998 would reversed march 2002 status negotiations pg e noted february 26 th comment governor reached agreement principle southern california edison eix b 3 cc address utility past collections hopes also agreement pg e within next 30 days suggesting progress made particular last 2 3 days however governor acknowledged reaching agreement pg e difficult due larger collected balance lower rates compared sce generators agree haircut governor indicated couple unnamed generators voluntarily agreed accept less 100 cents dollar past due receivables pressed parties constructive discussions identified williams wmb baa 2 bbb enron ene baal bbb dynegy dyn baa 2 bbb note generators marketers exposure california established reserves possible losses importantly governor said hoped banks bondholders would asked take haircut prospects legislation possibility ballot initiative governor said quite confident reach agreement utilities legislature support although admitted prevent someone proposing ballot initiative governor said end acid test public affects pocket books thus ultimately ballot initiative governor davis optimistic public supportive plan given limited impact electric rates status defaulted utility debt commented past appears unlikely resulting legislation pass required 2 3 majority go effect immediately accordingly several month lag utilities receive cash response question appears state step help utilities pay maturing defaulted commercial paper governor advisers hope legislation provide enough certainty companies get bridge financing essentially appears governor leaving utilities find money banks governor strategy keep lights governor stated key reason deregulation failed california new power plants built state twelve years intervening time demand caught supply response proposed various conservation initiatives trying expedite construction new power plants set goal 20 000 megawatts mws new supply line 2004 addition governor highlighted need additional investment transmission infrastructure particular cited need expand capacity import power arizona well improve ability move power south north within state suggested part rationale state taking utilities transmission grids ensure additional investment takes place also suggested state would lease transmission lines back utilities allow continue operate meantime focus move away california reliance spot market vein calpine cpn bal bb yesterday announced signing two long term contracts state department water resources dwr one contracts sell 1 000 mws ten year term provide 495 mw peaking capacity 20 year contract earlier february cpn reached agreement dwr separate 10 year contract additional 1 000 mws eix wmb mlpf manager recent public offering securities company within last three years copyright 2001 merrill lynch pierce fenner smith incorporated mlpf rights reserved unauthorized use disclosure prohibited report prepared issued mlpf one affiliates approved publication united kingdom merrill lynch pierce fenner considered distributed australia merrill lynch equities australia limited acn 006 276 795 licensed securities dealer australian corporations law distributed hong kong merrill lynch asia pacific ltd regulated hong kong sfc distributed singapore merrill lynch international bank ltd merchant bank merrill lynch singapore pte ltd regulated monetary authority singapore information herein obtained various sources guarantee accuracy completeness additional information available neither information opinion expressed constitutes offer invitation make offer buy sell securities options futures derivatives related securities related investments mlpf affiliates may trade accounts odd lot dealer market maker block positioner specialist arbitrageur securities issuer related investments may opposite side public orders mlpf affiliates directors officers employees employee benefit programs may long short position securities issuer related investments mlpf affiliates may time time perform investment banking services solicit investment banking business entity mentioned report research report prepared general circulation circulated general information regard specific investment objectives financial situation particular needs specific person may receive report investors seek financial advice regarding appropriateness investing securities investment strategies discussed recommended report understand statements regarding future prospects may realized investors note income securities may fluctuate security price 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