Message-ID: <23583540.1075840900412.JavaMail.evans@thyme>
Date: Mon, 11 Jun 2001 19:19:00 -0700 (PDT)
From: kristin.walsh@enron.com
To: john.lavorato@enron.com, louise.kitchen@enron.com
Subject: California Update 6/11/01
Cc: christopher.calger@enron.com, christian.yoder@enron.com, 
	steve.hall@enron.com, mike.swerzbin@enron.com, 
	phillip.allen@enron.com, tim.belden@enron.com, 
	jeff.dasovich@enron.com, chris.gaskill@enron.com, 
	mike.grigsby@enron.com, tim.heizenrader@enron.com, 
	vince.kaminski@enron.com, steven.kean@enron.com, 
	rob.milnthorp@enron.com, kevin.presto@enron.com, 
	claudio.ribeiro@enron.com, richard.shapiro@enron.com, 
	james.steffes@enron.com, mark.tawney@enron.com, 
	scott.tholan@enron.com, britt.whitman@enron.com, 
	lloyd.will@enron.com, alan.comnes@enron.com, 
	rogers.herndon@enron.com, james.lewis@enron.com, don.black@enron.com
Mime-Version: 1.0
Content-Type: text/plain; charset=ANSI_X3.4-1968
Content-Transfer-Encoding: quoted-printable
Bcc: christopher.calger@enron.com, christian.yoder@enron.com, 
	steve.hall@enron.com, mike.swerzbin@enron.com, 
	phillip.allen@enron.com, tim.belden@enron.com, 
	jeff.dasovich@enron.com, chris.gaskill@enron.com, 
	mike.grigsby@enron.com, tim.heizenrader@enron.com, 
	vince.kaminski@enron.com, steven.kean@enron.com, 
	rob.milnthorp@enron.com, kevin.presto@enron.com, 
	claudio.ribeiro@enron.com, richard.shapiro@enron.com, 
	james.steffes@enron.com, mark.tawney@enron.com, 
	scott.tholan@enron.com, britt.whitman@enron.com, 
	lloyd.will@enron.com, alan.comnes@enron.com, 
	rogers.herndon@enron.com, james.lewis@enron.com, don.black@enron.com
X-From: Kristin Walsh <Kristin Walsh/ENRON@enronXgate@ENRON>
X-To: John J Lavorato <John J Lavorato/ENRON@enronXgate>, Louise Kitchen <Louise Kitchen/HOU/ECT@ECT>
X-cc: Christopher F Calger <Christopher F Calger/ENRON@enronXgate>, Christian Yoder <Christian Yoder/ENRON@enronXgate>, Steve C Hall <Steve C Hall/ENRON@enronXgate>, Mike Swerzbin <Mike Swerzbin/ENRON@enronXgate>, Phillip K Allen <Phillip K Allen/ENRON@enronXgate>, Tim Belden <Tim Belden/ENRON@enronXgate>, Jeff Dasovich <Jeff Dasovich/NA/Enron@Enron>, Chris Gaskill <Chris Gaskill/ENRON@enronXgate>, Mike Grigsby <Mike Grigsby/ENRON@enronXgate>, Tim Heizenrader <Tim Heizenrader/ENRON@enronXgate>, Vince J Kaminski <Vince J Kaminski/ENRON@enronXgate>, Steven J Kean <Steven J Kean/NA/Enron@Enron>, Rob Milnthorp <Rob Milnthorp/ENRON@enronXgate>, Kevin M Presto <Kevin M Presto/ENRON@enronXgate>, Claudio Ribeiro <Claudio Ribeiro/ENRON@enronXgate>, Richard Shapiro <Richard Shapiro/NA/Enron@Enron>, James D Steffes <James D Steffes/NA/Enron@Enron>, Mark Tawney <Mark Tawney/ENRON@enronXgate>, Scott Tholan <Scott Tholan/ENRON@enronXgate>, Britt Whitman <Britt Whitman/ENRON@enronXgate>, Lloyd Will <Lloyd Will/ENRON@enronXgate>, Alan Comnes <Alan Comnes/ENRON@enronXgate>, Rogers Herndon <Rogers Herndon/ENRON@enronXgate>, James W Lewis <James W Lewis/HOU/EES@EES>, Don Black <Don Black/HOU/EES@EES>
X-bcc: 
X-Folder: \ExMerge - Kitchen, Louise\'Americas\Regulatory
X-Origin: KITCHEN-L
X-FileName: louise kitchen 2-7-02.pst

Executive Summary:
?=09California Claims Victory Over Easing Power Prices =20
?=09California's Budget doesn't Look Good for a Vote on Friday

Power Prices
Sources report that generator's acknowledge that the drop in power prices i=
n California last week was due at least in part to the threat of price cont=
rols.  Generators and traders are reportedly increasingly unwilling to line=
 up power inventory over the next few months, which sources believe is like=
ly to lead to increased volatility.  While Governor Davis issued statements=
 attributing easing power prices to his negotiating long-term contracts and=
 made no note of increased hydrogenation in the northwest and lighter deman=
d from cool weather in California.=20

California Budget has Friday Deadline
Sources indicate that the California legislature missing the June 15th budg=
et deadline, which appears likely, may affect California's ability to secur=
e future financing.  Coupled with poor macroeconomic indicators (such as in=
creasing unemployment), the outlook for the state does not look good.  Sour=
ces report that the budget would have to go to print today in order for it =
to be printed for a vote on Friday.  While not going to print today does no=
t mean that there will not be a vote Friday, sources are pessimistic that t=
he legislature will agree on a budget by Friday. The Republicans are report=
edly concerned that the 12.5 B in revenue bonds will not sell when they are=
 issued.  The Republicans are asking for a $3-$5 B budget reserve as insura=
nce against this possibility.  They want to achieve this by cutting the inc=
reases to programs (such as education, which was increased more than was ma=
ndated by law) while leaving base program amounts alone.  However, to date =
there has been failure to reach agreement among members over which programs=
 to cut.
