California 5/9

1. Bond Authorization Passes Senate On Party Lines; 90 Days Wait for Bond
Money Begins

The Senate just passed bill SB 31X on a vote of 22-15 on party lines.
There was no crossover by Republicans.

*. Sen. Burton indicated that we need to solve the problems and that the
problems were caused by the unfettered greed of the generators. He stated
that if the MOU does move forward, he would insist that the generators take
a 30% haircut on monies owed because that is better than they would get in
bankruptcy court.

*. Republican Opposition: Senators McClintock and Ackerman spoke against
the bill. Arguments were basically about the use of revenue bonds and the
interest that taxpayers would have to pay. They also made arguments about
the fact that the Governor's projections for conservation and rate increases
are not accurate.

*. Senator Peace gave his "usual speech" blaming the FERC for the situation
and indicated that Legislators have sued FERC over their inaction and said
that CA would win that battle and would get its money back.

2. Windfall Profit Tax Bill Goes Down to the Wire

There are indications that the Assembly Democrats intend to try to pass a
significant amount of legislation on Thursday in advance of an end to the
extraordinary session. The priority remains SB 28X, a siting bill that has
been sent back to the Assembly. (Sources report that there is disagreement
about the unemployment compensation terms laid out in this bill.) According
to sources, the windfall profits tax bill, SB 1X, still remains in committee
in the Assembly. It is unclear if this bill could be brought to a vote
tomorrow; we will continue to examine this issue.