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----- Forwarded by Jeff Dasovich/NA/Enron on 05/21/2001 06:11 PM -----
=09Scott Govenar <sgovenar@govadv.com< =0905/21/2001 04:31 PM =09=09=20 =09=09 To: Hedy Govenar <hgovenar@govadv.com<, Mike Day <MDay@GMSSR.com<, B= ev=20 Hansen <bhansen@lhom.com<, Jeff Dasovich <jdasovic@enron.com<, Susan J Mara= =20 <smara@enron.com<, Paul Kaufman <paul.kaufman@enron.com<, Michael McDonald= =20 <Michael.McDonald@enron.com<, Sandra McCubbin <Sandra.McCubbin@enron.com<,= =20 Rick Shapiro <rshapiro@enron.com<, Jim Steffes <james.d.steffes@enron.com<,= =20 Alan Comnes <acomnes@enron.com<, Steven Kean <Steven.J.Kean@enron.com<, Kar= en=20 Denne <kdenne@enron.com<, "Harry.Kingerski@enron.com"=20 <Harry.Kingerski@enron.com<, Leslie Lawner <Leslie.Lawner@enron.com<, Rober= t=20 Frank <rfrank@enron.com<, Ken Smith <ken@kdscommunications.com<, Janel=20 Guerrero <Janel.Guerrero@enron.com<, Miyung Buster <Miyung.Buster@enron.com= <,=20 Jennifer Thome <Jennifer.Thome@enron.com<, Eric Letke <eletke@enron.com<,= =20 Mary Schoen <Mary.Schoen@enron.com<, David Leboe <David.Leboe@ENRON.com<, B= an=20 Sharma <ban.sharma@enron.com< =09=09 cc:=20 =09=09 Subject: Kathleen Connell The following notes are from Ken Smith from State Controller Kathleen Connell's press conference today: California State Controller Kathleen Connell held a press conference today. Although the Dow Newswire said it would be to disclose long-term contracts, the event focused on what she believes will be an additional need for borrowing beyond the energy bonds. She anticipates an additional $4 billion in borrowing will be needed in February to meet expected costs. The borrowing should, she said, be done as Revenue Anticipation Notes (RANs), short-term notes at a lower interest rates (about 4%) that must be paid back by the end of the year, rather than as additional energy bonds. She categorized the current budget situation as =01&the same kind of environment as a bad budget year,= =018 and said California should maintain at least a 3% reserve. She did not comment on individual contracts except to say there are 17 different contracts. Charts her office had prepared showed that $5.136 billion had been spent on energy purchases through 5/17/01; about 99% of that went to spot market purchases. There was also a chart that showed projected expenditures under the Governor=01,s plan to be $8.349 billion for the period January 1-June 1, 2001, with about 89% of that going to spot market purchases. How these numbers work together was confusing =01) I checked with a reporter, who said he was also unclear. I=01,ll try to get this cleared up this afternoon. An easel held a large photocopy of a $533 million check to Mirant, which is the largest energy check written to date. More has been paid to Reliant =01) she put it at about 25% of total expenditures =01) but =01&we = have never written a check to Reliant over $500 million=018 because of the way they invoice. She said the Governor=01,s financial assumptions for power =01&do not fit i= nto the most likely scenario=018 and that summer conditions will greatly affect the actual spending needs. She noted that DWR estimates it will spend $9.2 billion through June 30, 2002, although the PUC has only authorized $7.5 billion. The other significant announcement was that she plans to use her authority with the Board of Equalization to hold hearings to determine whether power plants sold by utilities have been properly assessed for property taxes. Apparently, they are still on the tax rolls at previous rates, but she believes the profits recorded by some generators means the plants may be more valuable than their current assessments. A press release was not distributed at the event, although there may be one issued later today.
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