A report from ARM's PR firm to the ARM members.

Sue Mara
Enron Corp.
Tel: (415) 782-7802
Fax:(415) 782-7854
----- Forwarded by Susan J Mara/NA/Enron on 03/21/2001 04:12 PM -----

	"Beiser, Megan" <Megan.Beiser@edelman.com>
	03/21/2001 03:00 PM
		 
		 To: "Aaron Thomas (E-mail) (E-mail)" <athomas@newenergy.com>, "Andrea Weller 
(E-mail) (E-mail)" <aweller@sel.com>, "andrew Chau (E-mail) (E-mail)" 
<anchau@shellus.com>, "Bill Chen (E-mail) (E-mail)" <bchen@newenergy.com>, 
"Douglas Oglesby (E-mail) (E-mail)" <doao@chevron.com>, "Fairchild, Tracy" 
<tracy.fairchild@edelman.com>, "Jeffrey Hanson (E-mail) (E-mail)" 
<jeff.hanson@phaser.com>, "jennifer Chamberlin (E-mail) (E-mail)" 
<jnnc@chevron.com>, "john Barthrop (E-mail) (E-mail)" 
<jbarthrop@electric.com>, "John Leslie (E-mail) (E-mail)" <jleslie@luce.com>, 
"Joseph Alamo (E-mail) (E-mail)" <jalamo@enron.com>, "Manuel, Erica" 
<Erica.Manuel@edelman.com>, "'Michael Nelson' (E-mail)" 
<mnelson@electric.com>, "Peter Bray (E-mail) (E-mail)" <pbray@newpower.com>, 
"Rebecca Schlanert (E-mail) (E-mail)" <rschlanert@electric.com>, "Richard 
Counihan (E-mail) (E-mail)" <rick.counihan@greenmountain.com>, "'Robert 
Morgan' (E-mail)" <rmorgan@newenergy.com>, "Sue Mara (E-mail) (E-mail)" 
<smara@enron.com>, "Allen, Stevan" <stevan.allen@edelman.com>, 
arm@phaser.com, "brbarkovich@earthlink.net" <bbarkovich@earthlink.net'>, 
cra@calretailers.com, dennis.flatt@kp.org, dhunter@smithandkempton.com, 
djsmith@smithandkempton.com, Dominic.DiMare@calchamber.com, 
drothrock@cmta.net, gharrison@calstate.edu, hgovenar@govadv.com, 
jackson_gualco@gualcogroup.com, ken_pietrelli@ocli.com, kgough@calpine.com, 
kmccrea@sablaw.com, kmills@cfbf.com, lhastings@cagrocers.com, mday@gmssr.com, 
mmoretti@calhealth.org, nplotkin@tfglobby.com, randy_britt@robinsonsmay.com, 
richard.seguin@kp.org, RochmanM@spurr.org, rrichter@calhealth.org, 
sgovenar@govadv.com, smccubbi@enron.com, spahnn@hnks.com, theo@ppallc.com, 
vincent.stewart@ucop.edu, vjw@ceert.org, "Warner, Jami" 
<jami.warner@edelman.com>, wbooth@booth-law.com, wbrown@lhom.com, 
wlarson@calstate.edu
		 cc: 
		 Subject: State Controller Kathleen Connell Press Conference



> State Controller Kathleen Connell held a press conference today to voice
> her concerns over electricity power purchases' effect on the State's
> general fund and in response to a letter received March 12 from Department
> of Finance Director Tim Gage and Chief Legislative Analyst Elizabeth Hill
> requesting a transfer of money from the General Fund.
> 
> Connell stated that Current financial information related to the purchase
> of electricity and the general fund is as follows:
> *State's general fund surplus has dropped from $8.5 billion in January to
> a current estimated level of $3.2 billion
> *Receipt of a letter from the Department of Finance Director and the Chief
> Legislative Analyst requesting an additional transfer of $5.6 billion to
> the Special Fund for Economic Uncertainties to cover power purchases
> *To cover this transfer, Connell said the state would have to borrow $2.4
> billion
> *Connell: "We started this year with a generous budget surplus; the energy
> crisis has taken much of that away, and this transfer on top of the
> electricity purchases would put the [General] fund at risk."
> *Debt issuance has not occurred to reimburse the General Fund for power
> purchases, while disbursements from the General Fund increase daily
> 
> Controller Connell sent a letter to the Governor today, calling for the
> following steps to be taken:
> 1. DWR to notify the Controller's office of any purchases made and any
> contracts negotiated to date
> 2. DWR to notify the Controller's office of any future purchases and
> contracts within 7 days, regardless of when the invoices are submitted
> 3. Information on purchases in excess of $55 million  should be submitted
> within 24 hours
> 4. DWR should prepare new General Fund cash flow estimates for the next 30
> and 60 days, and for the end of the fiscal year
> 5. DWR should take action to ensure that bond sales are completed by the
> end of May 2001
> 
> The Controller is also ordering an audit of the DWR resources to determine
> the amount of money being spent by the Department.  Currently, Connell
> said, "I have to rely on press reports as valid to determine the amount of
> money spent in power purchases."  She said she needs "acknowledgement of
> the total amount of liabilities made" by DWR. 
> 
> Megan Beiser
> Assistant Account Executive
> Edelman Public Relations Worldwide, Sacramento
> Phone: (916) 442-2331
> Fax: (916) 447-8509
>