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Enron Mail |
Thank you. I would have said "governor turkey." =20
-----Original Message----- From: =09Dernehl, Ginger =20 Sent:=09Monday, October 22, 2001 4:15 PM To:=09Alamo, Joseph; Allegretti, Daniel; Allen, Joe; Alvarez, Ramon; Arefie= va, Maria; Assaf, Lisa; Barnes, Lynnette; Bellas, Kirsten; Benson, Eric; Bi= nns, Darran; Bolton, Scott; Boston, Roy; Briggs, Tom; Buerger, Rubena; Burn= s, Stephen; Canovas, Guillermo; Cantrell, Rebecca W.; Comnes, Alan; Connor,= Joe; Cooney, Carolyn; Dasovich, Jeff; Decker, Larry; Dernehl, Ginger; Dres= sler, Jean; Floris, Vinio; Frank, Robert; Fromer, Howard; Fulton, Donna; Go= ttfredson, Bryan; Guerrero, Janel; Hamilton, Allison; Hardy Jr, John; Hartf= ield, Rita; Hawkins, Bernadette; Hemstock, Robert; Hetrick, Nancy; Hoatson,= Tom; Huang, Karen; Hueter, Barbara A.; Hunter, Bevin; Huson, Margaret; Ibr= ahim, Amr; Kaufman, Paul; Kean, Steven J.; Keene, Patrick; Kingerski, Harry= ; Kishigami, Kikumi; Knight, Laurie; Landwehr, Susan M.; Lassere, Donald; L= awner, Leslie; Lawrence, Linda L.; Leibman, Lara; Leonardo, Sam; Levy, Albe= rto; Lindberg, Susan; Linnell, Elizabeth; Long, Chris; Mara, Susan; Maurer,= Luiz; McVicker, Maureen; Migden, Janine; Miller, Terri; Montovano, Steve; = Moore, Bill; Nersesian, Carin; Neustaedter, Robert; Nicolay, Christi L.; No= rd, Sue; Noske, Linda J.; Novosel, Sarah; O'connell, Earlene; Ogenyi, Glori= a; Palmer, Germain; Perez, Carmen; Perez, Gus; Perrino, Dave; Petrochko, Mo= na L.; Pharms, Melinda; Reyna, Margo; Rishe, Frank; Rizzo, Helen; Roan, Mic= hael; Robertson, Linda; Robinson, Marchris; Rodriquez, Andy; Ryall, Jean; S= hapiro, Richard; Shelk, John; Shortridge, Pat; Staines, Dan; Steffes, James= D.; Stephens, Sharonda; Stransky, Joan; Stroup, Kerry; Sullivan, Kathleen;= Sullivan, Lora; Thome, Jennifer; Tiberi, Fino; Twiggs, Thane; Walton, Stev= e; Warner, Geriann; Yeung, Charles; Yoho, Lisa Subject:=09FW: Governor Chicken Below is an article that may be of interest to you. Ginger Dernehl Administrative Coordinator Global Government Affairs Phone# 713-853-7751 Fax# 713-646-8160 -----Original Message----- From: =09Schmidt, Ann M. =20 Sent:=09Monday, October 22, 2001 4:04 PM To:=09Dernehl, Ginger Subject:=09Governor Chicken REVIEW & OUTLOOK (Editorial) Governor Chicken 10/22/2001 The Wall Street Journal A18 (Copyright © 2001, Dow Jones & Company, Inc.) The two politicians who've arguably benefited most from the national focus = on war are both Californians -- Congressman Gary Condit and Governor Gray D= avis. Too bad Mr. Davis is finding he still can't avoid his own chickens co= ming home to roost.=20 Only now are the folks in Sacramento learning that their Governor's "soluti= on" to the energy crisis has been a political sham. A combination of collap= sing budget revenues, foolish spending and bad credit ratings threatens to = plunge the state into a full-fledged financial crisis. Governor Davis's chickens left the roost back in May 2000, when California'= s botched scheme to deregulate electric power encountered a wicked price bu= bble. Wholesale prices, which had been deregulated, shot up, while retail p= rices, which were still regulated, didn't budge. This mismatch, along with = other factors, generated huge supply disruptions and a first-class energy c= risis.=20 The obvious response would have been to let retail rates rise with the mark= et price. Mr. Davis said so himself in his now infamous observation that if= he raised rates, the problem would be solved in 20 minutes. Mr. Davis pref= erred to play the blame game, including a lot of whining that he had inheri= ted the situation.=20 While the Governor complained, California's two largest utilities were push= ed into insolvency and neighboring states endured the double whammy of havi= ng their power sucked into California and seeing their electric rates shoot= up. Californians suffered through rolling blackouts.=20 Finally, this past January -- eight months after the energy crisis began --= the Governor responded: Retail rates were increased twice, and the state s= tarted to purchase power directly from suppliers, using money from its gene= ral fund. At the same time, the state negotiated contracts with suppliers a= t prices that are now well above market prices and for terms as long as 20 = years.=20 And then Mr. Davis got lucky. Although the forecast was for a summer of con= tinued blackouts generated by a strong demand for power, the disaster faile= d to materialize. Not only was the weather cooler than normal, but higher r= ates produced immediate conservation; thus demand was moderate and power su= fficient. Newsweek went out and hailed the Governor as a political Lazarus.= =20 But now here come the chickens. It seems that almost one-quarter of Califor= nia's budget revenues were provided by taxpayers with stock options and cap= ital gains, mostly from Silicon Valley companies. When the dot-com industry= started to implode, so did revenue projections -- to $12 billion this year= , down from $18 billion last year. And this was before September 11 and the= collapse in the Nasdaq market.=20 California would probably be able to absorb this revenue hit were it not fo= r the still outstanding bills from the Governor's electric power fiasco. Co= nsider the toll:=20 -- Somebody is going to have to pay for the $14 billion that the utilities = owe to suppliers for power consumed before the state started buying electri= city.=20 -- Somebody is going to have to repay the $12.5 billion bond issue that Cal= ifornia hopes to float to replenish the money borrowed from its general fun= d.=20 -- Somebody is going to have to pay for those expensive, long-term contract= s that the state negotiated.=20 -- Somebody is going to have to repay the bridge loan of $4.3 billion that = California got from the banks hoping to underwrite the bond offering. (If t= his loan is not repaid by November 1, its interest rate jumps to 7% from 4%= , resulting in an extra $250,000 in interest payments a day.)=20 Whether these bills are ultimately assumed by ratepayers or taxpayers, or s= ome combination of the two, the impact on California's economy and its budg= et will be dreadful. Observers are estimating a budget deficit of almost $1= 0 billion for next year.=20 As for Governor Davis, the problems of the "previous administration" are no= w his own. And Californians know it. A recent statewide poll showed that mo= st voters preferred the former mayor of Los Angeles, Richard Riordan, the l= eading Republican challenger to Mr. Davis, by several points.=20 The Governor's response to the ever-worsening economic situation has been t= ypical. He complains. He vetoes a few spending bills. He announces a $5 mil= lion campaign to persuade Californians to help the local economy by staying= in-state for their vacations. We expect to see a lot of chickens on surfbo= ards. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09
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