SBX 6 - Passage

SBX 6 (Burton), which would establish a PPA, passed out of the Assembly
Energy, Costs and Availability Committee moments ago on a party line
vote. There were clarifying amendments taken which we will send out as
soon as they become available.

Supporters included: organized labor, Sierra Club, municipal utilities,
PCL, TURN, UCAN, AARP, Gray Panthers, Foundation for Consumer and
Taxpayer Rights. IEP also testified in support of the bill but did
request amendments to clarify the eminent domain provisions. The only
opposition came from a single private citizen.

Committee Chair Rod Wright pointed out that up until recently LADWP had
among the highest rates in the state and that rates in New York are even
higher. Consequently, he believes that the purpose of the PPA is to
ensure reliability, not to lower rates and that those who claim rates
will go down with the PPA will be sorely disappointed. Assemblyman
Wright also highlighted the tremendous amount of private capital
currently entering the state and suggested that this bill must not be
used to supplant this capital. He also implied that a state bureaucrat
must not run the PPA.

According to State Treasurer Phil Angelides who drafted the bill, the
intent of the state would be to provide anywhere between 5,000 to 7,500
in new capacity or conservation measures with $5 billion in bonds. He
also indicated that the state would sell its power at cost based rates
which are specified in the amendments.