---------------------- Forwarded by Jennifer Rudolph/HOU/EES on 05/03/2001 
09:48 AM ---------------------------
From: Jeff Dasovich@ENRON on 04/27/2001 06:17 PM


Date: April 27, 2001
To:  Jan Smutny-Jones, Steven Kelly, Katie Kaplan
Cc:  IEP Board Members
From:  Julee Malinowski-Ball
Re:  Legislative Status Report Week Ending 4/27


RECENT EVENTS

-- Rule #1: Never assume an issue is done until the ink is dry from the
Governor's signature (and even then you never know).  The Senate Republicans
agreed late this week to oppose SB 28x (Sher), which makes several
IEP-sponsored proposals to the siting process, due to a controversial
provision added in the Assembly Appropriations Committee regarding
unemployment compensation.  Assembly Republicans let it slide on process
because CMTA and the Chamber's objections to the egregious language was so
last minute.  Senate Republicans had more time to look at the issue and
agreed not to let it go forward.  Since they control of the final vote in a
bill requiring two-thirds, their united opposition stopped the bill, one
vote shy.  The author was granted reconsideration and discussions will be
on-going over the next week on how to proceed.  The best-case scenario at
this point is getting one Republican to drop from the ranks.  Worst-case
scenario is the bill dies, and our language gets picked up in another
vehicle starting the whole process all over again.  The more likely
scenario, however, lies somewhere in between.  Parties will agree to some
compromise language, send the bill back to the Assembly to make the
appropriate changes, then bring it back to the Senate for a clean vote.

-- Long-term contracting was moved to the front burner this week by Asm.
Wright (AB 57) and Senator Morrow (SB 997), both with different results.
Both measures, which are almost identical, set forth a criteria which, if
followed by an IOU when signing a long-term contract with an energy
supplier, would eliminate the need for a reasonableness review by the CPUC.
AB 57 passed out of the Assembly Utilities and Commerce committee with
little discussion and a few technical amendments.  SB 997 faced a longer,
more difficult hearing in front of Senator Bowen's Energy Committee.  IEP,
along with the three IOUs testified in support of the measure, while TURN
expressed great concerns with the concept of leaving the CPUC out of the
picture.  In the end, the Senate committee agreed to put the bill off for
further discussions, passed a motion in support of getting the appropriate
rule waver so the bill can be heard again after Friday's policy committee
deadline, and scheduled a stakeholder meeting for Thursday morning.  Senator
Burton announced on the Senate Floor Thursday morning, however, that all
requests for rule wavers would be denied.  AB 57 appears to be the only
active vehicle on this issue, and IEP will be at the negotiating table
providing input on the language as it moves forward.

-- AB 60x is scheduled for hearing next week in the Senate Energy Committee.
IEP met with committee staff this week, which revealed some possible
latitude in amending the bill.  IEP and other member company lobbyists will
be pushing hard for an opposed position from the rest of the committee
before the hearing Tuesday afternoon.  At this time, however, we do not have
any alternative language for the bill.  After further review by some IEP
member companies, the previously drafted amendments appear unworkable and
were withdrawn from consideration.  We anticipate on waiting to see where
the committee on Tuesday takes the issue before another attempt at drafting
alternative language.

-- SB 1x (Soto/Scott) was amended this week before its hearing in the Senate
Appropriations committee next week.  The new language finds a backdoor to
the price cap issue by imposing a 100 percent tax on the sale of electric
power that exceeds a base price of $80 per MW/hr.  CMTA, the Chamber and
CalTax will be coordinating strategy for the hearing with IEP and the
generators, but despite the bill's multiple constitutional and legal
problems, most admit the measure will move forward with little trouble.  A
new player on the scene will probably provide the most noteworthy testimony.
InterGen North America, which is developing a 900 MW power plant in Palm
Springs, plans on testifying that if this measure is signed by the Governor,
they will absolutely pull the project and go to Oklahoma.

-- Newly amended this week is AB 67x (Cardoza), which now makes it a felony
for a corporation that sells electricity or natural gas at unjust or
unreasonable rates. Sponsored by Lt. Governor Bustamante, the measure
establishes stiff fines and possible jail time, that could be subject to the
state's "three strikes" law.  AB 67x has already generated opposition from
Republicans and constitutional questions from legal experts.   Although
Cardoza noted that several aspects of the bill are unresolved and could
change, the intent will remain the same, and he insists that energy
companies that take advantage of Californians will still face significant
penalties.

-- SB 6x, (Burton), which establishes a State Power Authority, passed the
Assembly this week by a 48 to 28 vote.  The measure needs the Senate to
concur on the Assembly amendments before it heads to the Governor's desk.

-- Attached are the most recent legislative tracking reports for both the
special and regular sessions.  Please call if you need copies of any of the
bills.

UPCOMING EVENTS

MONDAY, April 30th
Senate Appropriations Committee
SB 1x (Soto) - excess profits tax
SB 30x (Brulte) - local government incentives

Assembly Energy Costs and Availability Subcommittee on Natural Gas Costs and
Availability
Informational Hearing

TUESDAY, May 1st
Senate Energy Committee
AB 60x (Hertzberg) - California First

MONDAY, May 7th
Senate Appropriations Committee
SB 64x (Costa) - biomass incentive

ON THE SENATE FLOOR
SB 28x (Sher) - siting proposals
SB 6x (Burton)  - State Power Authority

--end--

Julee Malinowski-Ball
Senior Associate
Edson + Modisette
916-552-7070
FAX-552-7075
jmball@ns.net





 - 2001 Tracking Report.doc
 - 2001 Tracking Report.special session.doc