Update to California Update 07.18.01

The wierdness continues.....

In the Senate:
After Burton's "proclamation" yesterday afternoon that Senate bill 78XX was
"all Edison was getting, period," the bill was voted down in committee and
never made it to the full Senate for a vote.
The bill will be "reconsidered" (i.e., voted on again) today in the same
committee.

In the Assembly:
Hertzberg's bill (82XX) got voted down initially, until Rod Wright switched
his vote and let it get out.
82 XX then went to the appropriations committee, where it was voted out, and
now it's scheduled for a floor vote this morning.
83XX, the bipartisan bill led by Wright (D) and Richman (R), was also voted
out of committee and will go to appropriations today.

Will report back later this AM with any additional information.

Best,
Jeff
----- Forwarded by Jeff Dasovich/NA/Enron on 07/19/2001 09:40 AM -----

Jeff Dasovich
Sent by: Jeff Dasovich
07/18/2001 08:18 PM

To: Richard Shapiro/NA/Enron@Enron, skean@enron.com, Susan J
Mara/NA/Enron@ENRON, Harry Kingerski/Enron@EnronXGate, James D
Steffes/NA/Enron@Enron, Linda Robertson/NA/Enron@ENRON, Susan M
Landwehr/Enron@EnronXGate, mpalmer@enron.com, Karen Denne/Enron@EnronXGate,
Janel Guerrero/Enron@EnronXGate, Paul Kaufman/Enron@EnronXGate
cc:
Subject: California Update 07.18.01

The Senate, the Assembly and the Governor are either poised to engage in very
difficult negotiations, or the three are about to crash and burn and Edison's
going to be left dangling.

In the Senate:
The Senate bill 78XX is with about 90% likelihood going to be voted out of
the Senate tonight---without a vote having taking place in any committee.
Burton announced during one of the two "informational" hearings that "this is
it," despite the view of just about everyone who appeared before the
committees the bill likely won't prevent Edison from going bankrupt.
The key features of the bill are:
Banks and QFs get paid in full.
Edison shareholders would be responsible for debts owed to suppliers
No direct access.
There are conflicting reports about whether the Senate will take up the bill
tomorrow de-linking the bonds from the DWR contracts and whether the
Republicans will go along with it.

In the Assembly:
The Committee is hearing the Wright and Hertzberg bills as we speak, with
Hertzberg's the likely winner.
That bill now provides for Direct Access under certain conditions (the
amendments describing the conditions were faxed today).
We're attempting to get the "July 12" date changed to "the effective date of
the bill" or later.
The Assembly likely won't vote the Hertzberg bill out until tomorrow at the
earliest.

The Problem:
The Assembly and Senate bills are diametrically opposed in the way each
approaches the problem---in short, the bills are two ships passing in the
night.
The Democratic leaders (Governor, Hertzberg, Burton) aren't talking, and
Burton hasn't expressed any interest in talking---to anybody.

The likely outcome given the circumstances:
Burton says he's done what he needs to do (i.e., passed out a "fair" bill);
the Assembly and Senate can't agree; they finish the budget; time runs out;
they leave Friday; and Edison's left twisting.

That said, there's still a chance that the Governor could call Burton and sit
down with Burton and Hertzberg and work something out by Friday, or begin
talking and postpone the recess until they get it worked out. But given
Burton, the chance of that happening seems very slim.

In short, little has changed since yesterday.

Best,
Jeff