Message-ID: <20554599.1075840897410.JavaMail.evans@thyme>
Date: Tue, 28 Aug 2001 11:30:19 -0700 (PDT)
From: britt.whitman@enron.com
To: john.lavorato@enron.com, louise.kitchen@enron.com, david.delainey@enron.com
Subject: California Update 8/28/2001
Cc: f..calger@enron.com, christian.yoder@enron.com, legal <.hall@enron.com>, 
	mike.swerzbin@enron.com, k..allen@enron.com, jeff.dasovich@enron.com, 
	chris.gaskill@enron.com, mike.grigsby@enron.com, 
	tim.heizenrader@enron.com, j.kaminski@enron.com, j..kean@enron.com, 
	rob.milnthorp@enron.com, m..presto@enron.com, 
	claudio.ribeiro@enron.com, richard.shapiro@enron.com, 
	d..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, 
	kelly.holman@enron.com, dana.davis@enron.com, j..sturm@enron.com, 
	doug.gilbert-smith@enron.com, b..sanders@enron.com, 
	andrew.edison@enron.com, kelly.holman@enron.com, 
	nancy.turner@enron.com, tim.belden@enron.com, john.brindle@enron.com, 
	david.cromley@enron.com, kevin.golden@enron.com, dan.leff@enron.com, 
	janet.dietrich@enron.com, kristin.walsh@enron.com, 
	d..baughman@enron.com, doug.sewell@enron.com, terri.clynes@enron.com, 
	robert.johnston@enron.com
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	tim.heizenrader@enron.com, j.kaminski@enron.com, j..kean@enron.com, 
	rob.milnthorp@enron.com, m..presto@enron.com, 
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	d..steffes@enron.com, mark.tawney@enron.com, scott.tholan@enron.com, 
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	rogers.herndon@enron.com, james.lewis@enron.com, don.black@enron.com, 
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	andrew.edison@enron.com, kelly.holman@enron.com, 
	nancy.turner@enron.com, tim.belden@enron.com, john.brindle@enron.com, 
	david.cromley@enron.com, kevin.golden@enron.com, dan.leff@enron.com, 
	janet.dietrich@enron.com, kristin.walsh@enron.com, 
	d..baughman@enron.com, doug.sewell@enron.com, terri.clynes@enron.com, 
	robert.johnston@enron.com
X-From: Whitman, Britt </O=ENRON/OU=NA/CN=RECIPIENTS/CN=BWHITMAN>
X-To: Lavorato, John </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Jlavora>, Kitchen, Louise </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Lkitchen>, Delainey, David </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Notesaddr/cn=28fc501b-22d3a001-62569fb-57caaa>
X-cc: Calger, Christopher F. </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Ccalger>, Yoder, Christian </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Cyoder>, Hall, Steve C. (Legal) </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Shall4>, Swerzbin, Mike </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Mswerzb>, Allen, Phillip K. </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Pallen>, Dasovich, Jeff </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Jdasovic>, Gaskill, Chris </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Cgaskill>, Grigsby, Mike </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Mgrigsb>, Heizenrader, Tim </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Theizen>, Kaminski, Vince J </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Vkamins>, Kean, Steven J. </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Skean>, Milnthorp, Rob </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Rmilnth>, Presto, Kevin M. </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Kpresto>, Ribeiro, Claudio </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Cribeiro>, Shapiro, Richard </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Rshapiro>, Steffes, James D. </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Jsteffe>, Tawney, Mark </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Mtawney>, Tholan, Scott </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Stholan>, Whitman, Britt </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Bwhitman>, Will, Lloyd </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Lwill>, Comnes, Alan </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Acomnes>, Herndon, Rogers </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Rherndo>, Lewis, James </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Notesaddr/cn=160d115f-e3a12228-862564cd-53ae9a>, Black, Don </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Dblack>, Holman, Kelly </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Kholman>, Davis, Mark Dana </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Notesaddr/cn=ab167e54-8eec877d-862564b5-7715f6>, Sturm, Fletcher J. </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Fsturm>, Gilbert-smith, Doug </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Dsmith3>, Sanders, Richard B. </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Rsander>, Edison, Andrew </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Aedison>, Holman, Kelly </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Kholman>, Turner, Nancy </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Nturner2>, Belden, Tim </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Tbelden>, Brindle, John </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Jbrindle>, Cromley, David </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Dcromley>, Golden, Kevin </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Kgolden>, Leff, Dan </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Notesaddr/cn=9bb28634-f7b2062d-862564de-77878a>, Dietrich, Janet </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Notesaddr/cn=384eca1e-36846ef5-62569fb-57dcf1>, Walsh, Kristin </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Kwalsh>, Baughman, Edward D. </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Ebaughm>, Sewell, Doug </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Dsewell>, Clynes, Terri </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Tclynes>, Johnston, Robert </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Rjohnst>
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Please feel free to address any California or western power questions/comme=
nts to G. Britt Whitman at ex: 54014 or Kristin Walsh at ex: 39510.


EXECUTIVE SUMMARY
?     Legislative Maneuvering Towards a Bail-Out Plan=20

MOU Developments
The Assembly Energy Costs and Availability Committee held hearings yesterda=
y on the SoCal bailout plan, AB 82.  The chairman of the committee, Rod Wri=
ght, has agreed with Hertzberg and Davis to move something out of the commi=
ttee, possibly by mid-week.  Much of the Assembly's efforts to move along a=
 comprehensive plan have been encumbered by the introduction of over 50 ame=
ndments.  Additionally, demonstrations by a group of farmers and resort own=
ers opposing the conservation easement provision included in the bill may a=
lso slow the process.

Three Central Valley Democrats (Reyes, Flores and Canciamilla) on the Assem=
bly Committee on Energy Costs and Availability will likely be paying close =
attention to the demonstrations against the conservation easements, as farm=
ers are significant in their districts.  All three legislators face reelect=
ion.  Reyes has already signaled that, even though she voted for the bailou=
t last time, she is disinclining to do so again.  These three Democrats may=
 impede the progress of the bailout.  There are strong indications that the=
 plan will not come to a vote until it has the necessary votes to pass.  At=
 this point there still appears to be a lack of consensus on the Democratic=
 side.

Another substantive amendment to the current plan has been a call by SoCal =
for "fair market value" of its transmission assets, rather than book value.=
  This value, of course, would have to be estimated and essentially means t=
hat even more money would have to go toward the bailout.  While Committee C=
hairman Wright would not oppose this idea, it will likely be hard for many =
of his colleagues to swallow, particularly on the Senate side.

Once the amendments are disposed of and the bailout plan clears the Assembl=
y Energy Costs and Availability Committee, it will then go to Assembly Appr=
opriations.  The chair of this committee, Carol Migden, is friendly with bo=
th Hertzberg and Governor Davis, so the plan appears unlikely to receive si=
gnificant opposition in her committee.  It will then go to the Assembly flo=
or for a vote.  Since it is likely some sort of bailout plan will pass the =
Assembly, it likely will fall to the Senate to decide ultimately if a SoCal=
 bailout makes it to the governor or not.  Therefore, it becomes important =
to examine what deals might be made between Burton and Davis in order to ge=
t a bailout through the Senate.  For example, Burton wants a change in the =
workers' compensation laws to increase payouts to workers.  This is a very =
important issue.  On the one hand, both trial lawyers and the unions suppor=
t Burton.  On the other hand, he is strongly opposed by the powerful CTMA, =
the Republicans and pro-business Democrats, including Governor Davis.  In f=
act, Davis has already vetoed this legislation at least once and has promis=
ed to do so again.  It is conceivable, though unlikely, that a deal could b=
e struck whereby Burton would allow a SoCal bailout to pass in exchange for=
 Davis signing workers' compensation reform.  However, if this were to happ=
en, both the bailout and the workers' comp reform together would be an enor=
mous burden on California businesses at a time when these businesses are no=
t doing well.  This is why a deal on this particular topic appears unlikely=
 at this time.