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Content-Type: text/plain; charset=ANSI_X3.4-1968 Content-Transfer-Encoding: quoted-printable X-From: Dasovich, Jeff </O=ENRON/OU=NA/CN=RECIPIENTS/CN=JDASOVIC< X-To: Shapiro, Richard </O=ENRON/OU=NA/CN=RECIPIENTS/CN=RSHAPIRO<, Kaufman, Paul </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Pkaufma<, Steffes, James D. </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Jsteffe<, Mara, Susan </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Smara< X-cc: X-bcc: X-Folder: \JDASOVIC (Non-Privileged)\Sent Items X-Origin: Shankman-J X-FileName: JSHANKM (Non-Privileged).pst Copyright ? The Sacramento Bee <http://www.sacbee.com/about_us/legal<=20 Dan Walters: Edison bailout plan is oddest piece of legislation in recent m= emory (Published Aug. 29, 2001)=20 Senate Bill 78XX may be the most unusual legislation to hit the Capitol in = decades, in terms of both its content and its convoluted political dynamics= .=20 The measure is the latest incarnation of months-long efforts by Gov. Gray D= avis and some legislators to rescue Southern California Edison from joining= its larger cousin, Pacific Gas and Electric, in bankruptcy court. That is = odd unto itself, since state legislation to openly provide billions of doll= ars in benefits to one private corporation may be unprecedented.=20 Literally dozens of versions of legislation to bail out Edison have floated= around the Capitol, ever since Davis announced last spring that he had rea= ched agreement with John Bryson, chairman of Edison International, the util= ity's parent corporation. The Edison deal was announced just a few days aft= er PG&E rejected Davis' overtures and took itself into bankruptcy court. Bo= th utilities ran up many billions of dollars in debts buying power in the l= ast six months of 2000 because the state rejected their pleas to raise reta= il rates.=20 Edison's -- or perhaps Bryson's -- fear of bankruptcy is another puzzling a= spect of the issue, given the almost cheerful manner in which PG&E placed i= tself in receivership. Edison has spent millions of dollars on lobbying, ad= vertising and other forms of political persuasion, trying to nudge the Legi= slature into passing a rescue plan that lawmakers are clearly reluctant to = do.=20 Is avoiding bankruptcy a matter of personal pride for Bryson? Or, as some s= uggest, does it stem from Edison's tardiness in erecting an impregnable fin= ancial fire wall between the utility's assets and those of the parent holdi= ng company, Edison International? Edison scrambled to build a fire wall aft= er bankruptcy loomed, but financial analysts are uncertain that it's as str= ong as PG&E's.=20 The dynamics within the Capitol and among various interest groups are equal= ly odd, following none of the patterns that usually explain why politicians= do what they do. Legislators of both parties are all over the map on the E= dison issue, and factions that are ordinarily allied find themselves at odd= s. One example: Liberal consumer groups are strenuously opposing any bailou= t for the utility, while liberal environmentalists like the current scheme = because it would bring thousands of acres of Edison-owned Sierra watershed = under state control.=20 Perhaps the most mysterious aspect of the Edison situation is why Davis, or= dinarily the most cautious, commitment-averse of politicians, is making suc= h a crusade of keeping the utility out of bankruptcy court. Why would Davis= put so much of his gubernatorial prestige behind such an iffy proposition = that exposes him to leverage from lawmakers seeking other favors from the g= overnor and, polls indicate, is not popular with voters?=20 Harvey Rosenfield, the consumer gadfly who has established a "war room" nea= r the Capitol to fight the Edison scheme, believes that Davis' unusual effo= rts stem from a desire to run for president in 2004 and a fear that Wall St= reet would blackball him if Edison follows PG&E into bankruptcy court.=20 Another possible explanation is Davis' decades-long relationship with Bryso= n. The two served together in former Gov. Jerry Brown's administration (Bry= son was Brown's Public Utilities Commission president) and both have strong= ties to the Democratic political organization in West Los Angeles headed b= y Reps. Henry Waxman and Howard Berman, who, in effect, allowed Davis to la= unch his career by winning a West Side state Assembly seat in 1982.=20 The most influential member of Edison's board of directors is Warren Christ= opher, a Democratic elder statesman and former secretary of state. Bryson a= nd Christopher flew to Sacramento late last year to plead with Davis to tak= e command of the energy crisis, allow utilities to raise rates and staunch = the red ink. Davis refused, and nearly a year later finds himself trying to= keep Edison out of bankruptcy court.=20 We may never know why Davis is going to bat for Edison, but we will know, v= ery soon, whether he can pull it off or will wind up with egg on his face.= =20 _____ =20 The Bee's Dan Walters can be reached at (916) 321-1195 or dwalters@sacbee.c= om <mailto:dwalters@sacbee.com<. -----Original Message-----=20 From: Shapiro, Richard=20 Sent: Wed 8/29/2001 5:52 AM=20 To: Dasovich, Jeff; Kaufman, Paul; Steffes, James D.; Mara, Susan=20 Cc:=20 Subject: RE: SBX2 78 - Update Agree- it's all on his shoulders.=20 -----Original Message-----=20 From: Dasovich, Jeff=20 Sent: Wed 8/29/2001 12:31 AM=20 To: Shapiro, Richard; Kaufman, Paul; Steffes, James D.; Mara, Susan=20 Cc: =20 Subject: RE: SBX2 78 - Update=20 With Jim in Sacramento tomorrow, and hearings scheduled to discuss addition= al amendments, seems like a good opportunity for Jim to testify and knock s= ome sense into the damn committee. They won't know what hit 'em. Best,=20 Jeff=20 -----Original Message-----=20 From: Scott Govenar=20 Sent: Tue 8/28/2001 8:42 PM=20 To: Sharma, Ban; Leboe, David; Eric Letke; Thome, Jennifer; Ken Smith; Bev = Hansen; Hedy Govenar; Buster, Miyung; Guerrero, Janel; Robert Frank; Mike D= ay; Lawner, Leslie; Kingerski, Harry; Karen Denne; Kean, Steven J.; Alan Co= mnes; Susan J Mara; Kaufman, Paul; Jeff Dasovich; Steffes, James D.; Rick S= hapiro=20 Cc:=20 Subject: SBX2 78 - Update=20 The Assembly Energy, Costs and Availability Committee heard and voted on=20 amendments to SBX2 78 proposed by many interested parties. Some passed,=20 some failed and most of them served to further confuse the committee=20 members. Eventually the committee stalled on detailed proposals made by=20 TURN and other consumer groups.=20 During the hearing Hedy had the opportunity to speak to Nancy McFadden and= =20 Richard Katz from the Governor=19 s office regarding a couple of issues=20 highlighted by Jeff and Mike Day. Richard said he is willing to make more= =20 technical amendments when the bill gets to Appropriations. Subsequently,= =20 Hedy and I spoke to D.J. Smith at Jeff=19 s request. D.J. agreed that the = bill=20 needs to use the August 24th date as a grandfather date for executed DA=20 contracts, but specifically asked that we (Enron) not speak to Richard abou= t=20 it. He said he will have the business entities request it as a clarifying= =20 amendment. If we request it, he thought Richard would be less likely to=20 believe it's clarifying since he believes our motives to be too=20 self-serving. Also, we spent some time with Lenny Goldberg on direct=20 access. We suggested that =1C shall=1D be changed to =1C may=1D in order t= o give more=20 leeway to the PUC on direct access suspension. He didn=19 t necessarily op= pose=20 the policy, but his position is not to amend a bad bill unless you can=20 totally rewrite it (which he later attempted to do).=20 A lobbyist for a significant generator told us that they are prepared to=20 push Edison into bankruptcy (along with the Canadian government) if this=20 bill passes.=20 There is no consensus that this measure will ever get to the Governor=19 s= =20 desk.=20 The committee will meet again tomorrow at approximately 1:30 p.m. to vote o= n=20 additional amendments and ultimately to vote on the complete bill.=20
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