-----Original Message-----
From:  Sanders, Richard B.  
Sent: Thursday, July 19, 2001 9:59 AM
To: Sweet, Twanda
Subject: FW: California Update 7-18-2001
Importance: High


 -----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.