-----Original Message-----
From: 	Whitman, Britt  
Sent:	Wednesday, July 18, 2001 3:48 PM
To:	Sanders, Richard B.; Edison, Andrew
Cc:	Walsh, Kristin
Subject:	California Update 7-18-2001
Importance:	High

If you have any questions, please feel free to contact Kristin Walsh at (713) 853-9510 or G. Britt Whitman at (713) 345-4014.

EXECUTIVE SUMMARY
Multiple MOU Plans Debated
California State Budget Faces One Last Hurdle

Budget 
There is a small possibility that Sen. Burton will not recess the Senate on Thursday unless the Senate passes the budget that the Assembly passed last night (7-17). However a key Democrat, Sen. Sheila Kuehl, has been is in Italy and is on a 16 hour return flight. No one knows if she has been told to return and without her presence, two Republican votes are still needed to pass any urgency measure for the budget.  Kuehl's vote is crucial if they take the bill up on Thursday. 
MOU Mayhem
There are currently three leading MOU plans being resuscitated by the California House and Senate deliberations.  Senator Burton is hoping to keep the published schedule and adjourn for a month's recess on Thursday evening.  Speaker Hertzberg is reportedly not thrilled with leaving until the Edison issue is resolved.  However, rumor is that whether or not they recess on Thursday, their adjournment will mark the end of the Second Extraordinary session and all XX  bills passed and signed will go into effect in 90 days (all others will be dead).  Although Davis has stressed the urgency of passing a comprehensive "bail-out" plan and even threatened to call an emergency session to prevent legislators from taking a 30-day recess on Friday, there is no clear indication that legislators will comply with this request.      
Hertzberg's bill 82XX - Of the more obvious differences from Davis MOU,  82XX proposes to offer SoCal $300 M less for its transmission lines in addition to penalizing Edison if it fails to act in good faith in closing the deal.  It comes as no surprise that during bill deliberations, SoCal raised objections to the bill and warned of impending difficulties (bankruptcy) for So Cal were the bill left unamended.
The Wright-Richman bill 83XX - We reported last week that 83XX remains the only measure fueled by bipartisan support.  AB 83XX was heard in an "informational" hearing yesterday (7-17) and will be heard again today in the Assembly Energy Committee.  Assemblyman Rod Wright, the Chairman of the Committee, presented AB 83xx with Dr. Keith Richman, a Republican Assemblyman from Southern California. They offered 83XX as an Edison bail-out, pure and simple. Wright was clear to distinguish his bill from 82XX, which he said has conservation easements and land requisitions, a renewable portfolio which will add an additional fee on ratepayers, and reasonable review for long term contracts. While the chances of the Richman bill being successful appear slim, reports that that Hertzberg will try to negotiate elements of his own bill (82XX) as amendments to the Wright/Richman measure suggest that at least Hertzberg feels Richman's 83XX stands a chance. 

The Byron Sher bill, SB 78XX (Polanco) - Previously presented by Sen. Polanco on behalf of Governor Davis, SB 78XX has received special attention from Senate President, John Burton.  Although it has never been heard by a committee, SB 78XX is currently on the Senate floor and ready for a vote. The Senate Energy Committee and Senate Appropriations Committee are both scheduled to have informational hearings on this bill today.  Note, the meetings are informational because neither committee has possession of the bill.  These hearings will provide information to committee members, avoid a formal vote, and simultaneously shield Burton/Polanco from claims that the details of SB78XX were never released.  The Senate is scheduled to be in session tomorrow, ostensibly to vote on the state budget and SB 78XX. Given Burton's penchant for wanting to keep on schedule to recess tomorrow, there is no guarantee that he will hold the Senate in session once they hear SB 78XX. Thus, the Senate may never even see AB 82XX and AB 83XX unless either or both bills are passed out of the Assembly today and get special treatment by Burton to be heard tomorrow. Burton has previously adjourned the Senate to keep on schedule once they finish their business, even if the Assembly is behind them.