-----Original Message-----
From: 	Dasovich, Jeff  
Sent:	Monday, September 17, 2001 3:32 PM
To:	Kean, Steven J.; Belden, Tim; Sharp, Vicki; Blachman, Jeremy; Comnes, Alan; Tribolet, Michael; Walsh, Kristin; Delainey, David; Leff, Dan; Frazier, Lamar; Keeney, Kevin; Gahn, Scott; Swain, Steve; Lavorato, John; Kaufman, Paul; Steffes, James D.; Calger, Christopher F.; Mara, Susan; Black, Don; Richter, Jeff; Kitchen, Louise; Dietrich, Janet; Mara, Susan; Robertson, Linda; Kingerski, Harry; Denne, Karen; Palmer, Mark A. (PR); Shapiro, Richard; Curry, Wanda; Mellencamp, Lisa; Higgason, Kelly; Whalley, Greg
Subject:	California Update--09.17.01

Here is some additional information since the circus closed down in Sacramento on Saturday morning.					

The Senate adjourned early Saturday morning, closing out both the regular session and the second extraordinary session.
The Assembly adjourned a few hours later, closing the regular session, but NOT the second extraordinary session.

The Legislature's options: 
1) The Governor calls them back in two weeks, they continue with the second extraordinary session, and pick up where they left off with the bills they were working on up till Saturday morning.
2) The Governor calls them back in two weeks, the Assembly ends the second extraordinary session, they begin a third extraordinary session, and the bills that were left hanging on Saturday morning must start the process from scratch.  However, they can pass a "waiver," which effectively would allow them to start a 3rd session AND then pick up where they left off on Saturday morning.
3) The Governor calls them back in two weeks and the Legislature meets briefly and shuts down without doing anything, i.e., the Govenor can call them back, but he can't make them vote.

In short, the Legislature has a significant amount of discretion to do what they please.

Where to from here?
Through its actions on Saturday morning, the Senate has sent a strong signal to Davis that the Senate is not inclined to vote out an Edison bailout that differs from the version it passed prior to leaving for summer recess last July.
Just before closing down on Saturday, the Senate also passed a resolution declaring that "...the condition of electric service in California no longer consitutes a 'sudden and severe energy shortage'" and "...that the state of emergency proclaimed by the Governor on January 17, 2001, is at and end."  The resolution seems to send an additional signal that the Senate does not see any great need to bail out Edison.  The Assembly did not pass the resolution, however.  
Given the Senate's view, and the open hositility between Davis and Burton, Davis' only remaining option seems to be to threaten the Senate with vetoes unless the Senate first passes the Davis' Edison bill.  It is unclear at this time whether Davis would play it that tough.
With the Legislature gone, the action turns to the PUC, where a vote on DA suspension is scheduled for Thursday.  We are working with customers and providers to stop DA from being suspended, or at a minimum, to ensure that any suspension date is not retroactive.
Finally, Burton held a news conference this morning at which he said:
Burton and Senator Bowen (Bowen's been taking the lead on DA in the Senate) will ask the California PUC to do a study on how DA can be retained without "adversely affecting homeowners and small businesses."
He doesn't know why "the Governor would waste taxpayers' money to hold a special session."
With all the troubled businesses in California right now, he doesn't know why the State would bail Edison out and not the others.

If all this sounds ridiculous, it is.

We'll report back with additional information as we get it.

Best,
Jeff