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Enron Mail |
Here is what we know so far with the recent announcement of a deal between
Socal and the State for the transmission lines: ? The deal may be enough to save Socal from bankruptcy. This will depend on the payment terms as well as how soon Socal can receive a positive cash flow. ? We are not sure if the State can really do a deal without PG&E or a deal for whole grid. It was thought that a transmission asset deal was not possible without PG&E. This may still be the case; the state may still be making the deal contingent upon the purchasing of PG&E's assets. A generator source reports that the state is intending to put pressure on the bankruptcy court to close the deal on PG&E's lines quickly. However, bankruptcy courts usually do not operate in this manner. In most cases the court would have to hold open proceedings, have competitive bids, etc. ? This purchase would need legislative approval, which is not guaranteed. Previously the plan was for the state to purchase SCE's and PG&E's assets at a premium so that they would not have to finance power purchases - the utilities would be able to buy power for themselves. Now they would have to purchase SCE's lines, but still finance power purchases because of PG&E. Additionally, it is possible that Socal swapped the clause allowing then to raise rates in order to recoup past debt in favor for an additional book price. If this any form of a utility bailout - it would probably no gain legislative approval. ? The purchase would also need FERC approval. As stated before, if FERC approves such a plan it would be with several conditions for California.
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