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Enron Mail |
A brief summary of Phil Angelides=01, comments during yesterday=01,s Sacram=
ento =20 Press Club lunch: The majority of his speech was about underinvestment in infrastructure=20 rather than energy issues. He did say, however, that the current energy=20 crisis is a manifestation of that underinvestment, which has not allowed= =20 public projects to keep pace with growth. He sees justification for a public power authority in that energy should be= =20 treated as a public need that engenders private progress and goes beyond=20 normal market forces. He offered mortgages as an analogy; home ownership w= as=20 determined to be so important to Americans, he said, that instead of leavi= ng=20 it to the extremes of the market entities such as Fannie Mae, Freddie Mac,= =20 the VA and others were created to ensure that reasonable cost funds would = be=20 available. During the Q&A, Angelides said $4.125 billion in interim financing is line= d=20 up but that the agreement will expire on May 8. The immediate problem is = =20 that because of AB 1, the PUC must take the unusual step of setting the=20 bonding authority needed to back this financing that would buy down the=20 general fund (the Treasurer normally doesn=01,t need special approval by a= n=20 agency). Because of the utilities=01, court challenges, it is unlikely tha= t the=20 PUC will be able to grant legal bonding authority in time to close the=20 financing. Therefore, Angelides is asking the Legislature to give the=20 Treasurer=01,s office authority to issue a bond to at least cover the inte= rim=20 financing. That authority is needed by the end of this week, he said=20 (although some press accounts have changed that to next week). The Treasurer=01,s legal consultants have determined that AB 1 is outside t= he =20 scope of bankruptcy, and that the PUC=01,s ability to act in accordance wit= h AB=20 1 is unaffected by the bankruptcy court. The quicker the general fund gets taken out of the process, the better, =20 Angelides said. Unless he is given authority to secure financing that will = =20 return money to the general fund quickly, the state=01,s ability to meet al= l=20 its other needs will soon be threatened and credit will be downgraded (not= e:=20 S&P announced a downgrade late yesterday). The general fund needs some=20 "breathing room," and he believes bonds can be sold by the end of June tha= t=20 would take the state out of the power purchasing business. He noted that the bond process will require DWR to produce a finance plan = =20 that will lead to public disclosure of many of the arrangements Davis has= =20 kept secret.=20 He concluded by saying that three things must happen to ensure that the=20 state can meet its power and financial needs under current spending=20 projections: 1. The general fund has to be removed as the source of funding for buying = =20 power. He said a plan =01) if there is one =01) should be made public as to= how=20 this will be done. 2. QF=01,s have to get on line =01) he said about 60% are currently on line= .. 3. The price of power has to stay at "obscene" levels, rather than =20 "horrifically obscene" levels.
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