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Enron Mail |
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Executive Summary:
?=09California Claims Victory Over Easing Power Prices =20 ?=09California's Budget doesn't Look Good for a Vote on Friday Power Prices Sources report that generator's acknowledge that the drop in power prices i= n California last week was due at least in part to the threat of price cont= rols. Generators and traders are reportedly increasingly unwilling to line= up power inventory over the next few months, which sources believe is like= ly to lead to increased volatility. While Governor Davis issued statements= attributing easing power prices to his negotiating long-term contracts and= made no note of increased hydrogenation in the northwest and lighter deman= d from cool weather in California.=20 California Budget has Friday Deadline Sources indicate that the California legislature missing the June 15th budg= et deadline, which appears likely, may affect California's ability to secur= e future financing. Coupled with poor macroeconomic indicators (such as in= creasing unemployment), the outlook for the state does not look good. Sour= ces report that the budget would have to go to print today in order for it = to be printed for a vote on Friday. While not going to print today does no= t mean that there will not be a vote Friday, sources are pessimistic that t= he legislature will agree on a budget by Friday. The Republicans are report= edly concerned that the 12.5 B in revenue bonds will not sell when they are= issued. The Republicans are asking for a $3-$5 B budget reserve as insura= nce against this possibility. They want to achieve this by cutting the inc= reases to programs (such as education, which was increased more than was ma= ndated by law) while leaving base program amounts alone. However, to date = there has been failure to reach agreement among members over which programs= to cut.
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